Lucy Powell has put down a clear marker: stick to the no‑rise pledge on Income Tax, National Insurance and VAT. Speaking to BBC Radio 5 Live on 6 November, the newly elected deputy leader said Labour should follow through on its manifesto and ensure ordinary working people are better off. The timing is pointed, with Budget day three weeks away.

Rachel Reeves, meanwhile, declined to rule out increases to those same taxes in a pre‑Budget scene‑setter on 4 November, saying “necessary choices” are coming. HM Treasury has confirmed the Budget will be held on Wednesday 26 November. For families and SMEs, that’s a short window to stress‑test cashflow.

Why the tension? Because the fiscal rules are tight. Reuters reporting notes Reeves had about £10bn of headroom in March, while the National Institute of Economic and Social Research argues she should target roughly a £30bn buffer to keep the framework credible. That’s why broad‑based tax rises are back on the table.

Powell’s parallel ask is to scrap the two‑child benefit limit entirely. In her interview she called for full removal and warned the policy is pushing around 40,000 more children into poverty each year. Campaign groups including CPAG and analysts at the Resolution Foundation say full abolition is the most cost‑effective route to reduce child poverty.

Full abolition carries a price tag. The Resolution Foundation estimates the eventual cost at about £3.5bn a year by 2029‑30; removing both the two‑child limit and the overall benefit cap takes that closer to £4.5bn but lifts roughly half a million children out of poverty. Treasury compromises being floated include a three‑child limit, reduced amounts for later-born children, or exemptions for working families-options the Foundation says would have smaller poverty impacts.

How might ministers raise money without explicitly lifting headline rates? Freezing thresholds already drags more earnings into tax and remains in place until April 2028. As for rate changes, NIESR‑based estimates reported by the Standard suggest 1p on the basic rate yields around £8bn a year, while 2p could raise about £20bn.

What would that look like on a typical payslip? On a £35,000 salary, taxable income after the personal allowance is roughly £22,400. Adding 1p to the basic rate would cost about £225 a year-around £19 a month; 2p would be roughly £38 a month-using current HMRC thresholds. Scotland’s devolved rates would differ, but the direction of travel is the same.

Business groups are wary of further pressure. Employers’ National Insurance rose to 15% from April and the threshold at which firms start paying was lowered, changes the government paired with a bigger Employment Allowance. The CBI is urging the Chancellor to avoid fresh business‑tax hikes in November, arguing they would undercut investment just as demand stays fragile.

Politically, Powell has latitude. She won Labour’s deputy leadership on 25 October with 54% of votes, beating Education Secretary Bridget Phillipson, weeks after being removed as Leader of the House in the 5 September reshuffle. The deputy prime minister role went to David Lammy, who also serves as justice secretary.

For readers, the takeaway is practical. Assume the 26 November Budget could tighten the tax take one way or another. If you’re on PAYE, revisit pension contributions and ISA usage before April; if you run a payroll, re‑baseline staffing costs and NI with April’s changes in mind. We’ll test all this against the OBR’s numbers the moment Reeves publishes the detail.