Rachel Reeves has been issued with a Budget revolt warning after the Chancellor vowed to make another attempt to reform welfare on November 26.
Ms Reeves, who is expected to slap higher taxes on millions of Britons to fill a £50billion black hole, risks facing a repeat of Sir Keir Starmer's Commons climbdown earlier this year.
Despite putting forward measures to slash Britain's ballooning benefits bill by £5billion, the Prime Minister was forced to make last-minute concessions to Labour rebels to prevent a humiliating defeat at the hands of his own MPs.
The Chancellor is already looking to charm left-wing Labour MPs by abolishing the two-child benefit cap to the tune of £3billion.
Reeves had wanted to introduce a taper system which would have seen eligible families receive reduced payments for third and subsequent children.
However, the Chancellor faced relentless pressure from backbench Labour MPs and Education Secretary Bridget Phillipson.
Ms Reeves also remains committed to introducing wider reforms to welfare.
She claimed the changes would change the welfare system from one “designed to punish, trapping millions of people on benefits rather than helping them into work, into a system designed to help people succeed”.
“She has to hint that something on cutting the bill is coming,” a Labour source added.
“There are so many other audiences out there, it’s not just the [Parliamentary Labour Party].
"They have to say to the PLP ‘we will give you this, but you have to back us on other things’.”
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Peter Kyle: Kemi Badenoch is trying to scare people over 'anti-growth' warning
Peter Kyle swipes at Kemi Badenoch in GB News grilling
|GB NEWS
Kemi Badenoch is trying to scare people by warning against Labour's Employment Rights Bill, Business Secretary Peter Kyle has claimed.
Speaking to GB News this morning, Mr Kyle said: "What Kemi Badenoch is doing is what she always does, and that is she's just trying to scare people.
"The fact is, when the legislation passes, because the Conservatives are blocking it in the House of Lords, we will then move to a period of intense consultation with business over those exact issues."
The Business Secretary also revealed the Government would have 26 different consultations over the legislation, adding that Labour remains both pro-business and pro-worker.
However, Mrs Badenoch is today expected to blast the Employment Rights Bill.
“If the Chancellor had any sense, and any regard for business, she would use the Budget to say, ‘we got this one wrong’ and drop it," the Tory leader is expected to say.
“It would be the cheapest pro-growth measure in the Red Book.
“If she does not, then I will make you this promise.
“At the first opportunity, a Conservative government under my leadership will repeal every job destroying, anti-business, anti-growth measure in this Bill.”
Rachel Reeves 'to spend £15bn on BENEFITS in major Budget splurge' - with working Britons to foot the bill
Rachel Reeves is set to unveil £15billion of benefits spending at Wednesday's Budget - funded by a tax raid on "working people".
The Chancellor opened the door to scrapping the two-child benefit cap last week, with reports she would commit to this emerging over the weekend.
She is set to frame the move - estimated to cost taxpayers £3billion per year - as a way to lift hundreds of thousands of children out of poverty.
Ms Reeves is then set to boost payouts for "working-age benefits" like Universal Credit, Personal Independence Payment (PIP) and child benefits up in line with inflation, or 3.8 per cent, from April.
EXPLAINED: What will happen when Labour scraps the two-child benefit cap?
Rachel Reeves is expected to announce the end of the two-child benefit cap in a bid to stave off fears from the left of the Labour Party.
Abolishing the cap, which was introduced by the Tories in 2017, would enable parents to claim child tax credits or universal credit for more than two children.
The Institute for Fiscal Studies believes abolishing the cap could take 630,000 children out of absolute poverty, with other estimates standing at 250,000.
Scrapping the two-child benefit cap would also cost £3billion, putting further pressure on Britain's ballooning benefits bill.
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