UK Risks Bankruptcy Without Benefit Cuts,Badenoch Warns

Conservative leader Kemi Badenoch has warned that if the Labour Party raises taxes without cutting welfare spending, Britain will go bankrupt.

sarah

Nov 18, 2025 - 20:39

UK Risks Bankruptcy Without Benefit Cuts,Badenoch Warns

The Conservative leader accused Chancellor Rachel Reeves of plotting a "hidden tax bomb" to increase welfare payments in next week's budget because she has failed to cut the benefit bill.

He added: "If she returns to imposing more taxes without seriously cutting public spending, especially welfare spending, she will destroy our economy."

Labour said Badenoch's plans would mean a return to austerity and cuts to schools, hospitals, and the police.

Reeves is expected to tackle child poverty by eliminating the two-child benefit limit, meaning low-income families will not receive any further benefits if they have a third or subsequent child.

She is also expected to freeze the income tax threshold to cover the shortfall in her spending plans, which would mean people would be forced to pay more tax as wages rise.

Badenoch said his party would oppose this "every step of the way."

In a speech outlining his party's plans for the economy, he claimed that the government's U-turn on welfare reforms and the potential abolition of the two-child benefit limit would allow the Chancellor to raise an additional £8.5 billion.

After his speech, he told reporters, "If the Labour Party abolishes the two-child benefit limit, a future Conservative government will bring it back."

"This limit ensures that people receiving benefits have to make the same decisions about having children as everyone else. That's justice."

Badenoch reiterated his demand for Reeves's dismissal for breaking a promise made after last year's budget, telling reporters: "If she raises taxes, she should be sacked."

The Tories leader argued that cutting spending is the right course of action according to Christianity, as not doing so would "increase the debt burden on the next generation."

He offered to send "a briefing on the facts" to Dame Sarah Mullally, the new Archbishop of Canterbury, who signed a letter criticizing the two-child benefit cap in 2018.

He claimed, "If we keep spending like this, I fear we will go bankrupt." He added, "There will be no money for those in need."

Reform UK leader Nigel Farage, who supports abolishing the two-child benefit limit, also gave a speech alongside Badenoch, outlining his party's plan to save up to £25 billion annually through spending cuts.

The Tory regional leader attacked Farage's plan to end Universal Credit for EU citizens living in the UK, arguing that it was "utterly ridiculous" for Farage to suggest he could renegotiate this agreement with the EU.

He later told 5's Matt Chorley that these were "hard-won reciprocal rights" that applied to British citizens living abroad and that renegotiating them would risk "reopening Brexit."

Labour Party Chair Anna Turley said: "The Reform and Conservative parties can argue all they want about who will lead us to austerity faster - the truth is that their plans don't match and will be a disaster for Britain."

She claimed that the Conservative Party is proposing £47 billion in spending cuts, which "would mean taking money away from your local hospital, your child's school, and your local police."

Liberal Democrat Treasury spokesperson Daisy Cooper said the Conservative Party's "ironic scale is broken" because they have "burdened people with hidden taxes and broken promises for years."

She added, "Both Labour and the Conservatives are intent on punishing the public rather than boosting growth through a better trade deal with the EU."