Chancellor Rachel Reeves has promised to “grip the cost of living” in the budget next week.

Writing in The Mirror newspaper, she acknowledged that high prices “hit ordinary families most” and that the economy “feels stuck” for too many.

But at the same time, she is expected to raise taxes when she sets out economic policies on 26 November as she seeks to bridge a multibillion-pound gap in her spending plans.

“Delivering on our promise to make people better off is not possible if we don’t get a grip on inflation,” Ms Reeves wrote in The Sunday Times.

“It is a fundamental precursor to economic growth. It is essential to make families better off and for businesses to thrive.

“There is an urgent need to ease the pressure on households now. It will require direct action by this government to get inflation under control.”

She said reforms would change the welfare system from “trapping millions of people on benefits” to one “designed to help people succeed”.

It comes as the government announced that rail fares will be frozen for the first time in 30 years.

The fare freeze applies to England and services run by English train operators.

And it will save commuters on more expensive routes more than £300 a year.

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Among the rumoured measures in the budget is an extension of the freeze on income tax thresholds, which would see more people dragged into paying tax for the first time or shifted into a higher rate as their wages go up.

However, Conservative leader Kemi Badenoch said Ms Reeves should “have the balls” to admit that such a move would breach Labour’s manifesto promise not to raise taxes on working people.

Nathan Gill’s actions were “treasonous” but people should not “besmirch everyone else at Reform”, the party’s head of policy Zia Yusuf has said.

Gill, the former leader of Reform UK in Wales, was jailed for 10 and a half years last week after he admitted accepting tens of thousands of pounds in cash to make pro-Russian statements to the media and European Parliament.

Asked by Sky News’s Sunday Morning with Trevor Phillips if the case showed the party was soft on President Vladimir Putin, Mr Yusuf said that would be an “incredibly unreasonable position to take”.

He said: “Nathan Gill, what he did was treasonous, it was horrific, it was awful. He’s been dealt with by the authorities and he deserves the sentence that he got.”

He added: “As far as we’re concerned he is ancient history. I’ve never met him, I had never heard about him until I saw he was in the newspapers. It is unreasonable to besmirch Reform and the millions of people around the country who support Nigel and support our party.”

Gill, 52, was announced as the leader of Reform UK in Wales in March 2021, but quit the party a few months later after he failed to be elected to the Senedd.

He previously led the Welsh wing of UKIP (UK Independence Party) between 2014 and 2016, then ran by Nigel Farage, and was a member of the Senedd between 2016 and 2017, as well as an MEP between 2014 and 2020.

Gill left UKIP in 2019 to join Mr Farage’s new Brexit Party – later rebranded as Reform UK.

Following an investigation by counter-terrorism police, officers said they believe Gill likely took a minimum of £40,000 in cash.

Prime Minister Sir Keir Starmer demanded an investigation into links between Reform UK and Russia following the case.

Mr Farage’s position on Russia has come under scrutiny in the past. He faced a backlash during the general election campaign when he spoke about the incursion of NATO and how “we provoked this war” in Ukraine.

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Speaking to Trevor Phillips, Mr Yusuf insisted his boss has never supported or been sympathetic to Russia’s decision to invade Ukraine, saying it is “not Nigel’s position that ‘we provoked the war’.”

He said: “When he [Farage] was pressed as to how he would respond if he was prime minister and Russian jets encroached into NATO airspace, his view was that those planes should be shot down. We are crystal clear about our position.

“I would also say this: the notion that Vladimir Putin, the murderous dictator, is making decisions based on what Nigel Farage is saying here in England, I think is for the birds.

“We are now in a situation where Ukraine’s sovereignty has been violated, and Vladimir Putin needs to be brought to heel.”

But Labour accused Reform of “pandering to Moscow” following the interview.

Anna Turley, chair of the Labour Party, said Mr Farage has previously called Mr Putin “the leader he most admired and has repeatedly parroted Kremlin talking points”.

She added: “Reform must urgently allow an independent investigation to root out pro-Russia links, to assure the public that Putin holds no sway over their party or its representatives.”

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Police have confirmed Mr Farage has not been part of the investigation into Gill.

Mr Farage said on Friday: “An investigation into Russian and Chinese influence over British politics would be welcome.”

The Reform UK MP for Clacton had previously described his former colleague as a “bad apple” and said he was “shocked” after Gill pleaded guilty to bribery.

He said: “Any political party can find in their midst all sorts of terrible people.

“You can never, ever guarantee 100% that everyone you meet in your life, you shake hands with in the pub, is a good person.”

It feels like the most torturous build-up to any budget in recent history.

After a slow and painful climb up the mountain of manifesto-busting income tax increases, a hasty and inglorious retreat.

There’s been endless speculation about the two-child benefit cap, tax thresholds, mansion taxes, exit taxes, energy bills, and pension schemes. Now, finally, we’re just days away.

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Chancellor Rachel Reeves has set out her final stall in an opinion piece for The Sunday Times, in a bid to reclaim the iron mantle of fiscal discipline which has become somewhat skew-whiff amid the confusion.

She argues that increasing public debt is not a Labour virtue and insists her focus on Wednesday will be to grip inflation and address the cost of living – citing plans to freeze rail fares as an example of dealing with both.

But perhaps most interesting is her claim that controlling public spending “will require us to reform our welfare system too.” The government’s previous efforts to reform welfare and save £5bn ended in an inglorious failure.

Another bloody battle looms

Now with a new secretary of state in charge of the Department of Work and Pensions, government fixer Pat MacFadden, Ms Reeves is clearly signalling that she wants to try again.

While not exactly a surprise, it sets the stage for another bloody battle with the party’s increasingly rebellious backbenchers.

Perhaps scrapping the hated two-child benefit cap will be the quid pro quo offered to show she’s listening to left-wing concerns.

Transport Secretary Heidi Alexander, who had the unenviable job of avoiding questions about the budget on the Sunday morning broadcast round, was careful to frame the idea of increasing government spending on child poverty within the context of welfare reform.

Heavy hint two-child benefit cap to be axed

While she technically refused to be drawn on reports the chancellor is set to scrap the cap, she heavily hinted that was to be the case.

“Tackling child poverty is in the DNA of the Labour Party. Nobody wants to see kids going without,” she told Sky News’ Sunday Morning with Trevor Phillips.

“And we know that three-quarters of children who are living in poverty at the moment are in working households and growing up in poverty has consequences that last a lifetime.”

It would be odd to make such a passionate pitch for the party’s anti-poverty credentials if the government is about to reject a policy which charities say would be the single most cost-effective measure to reduce child poverty.

How much would axing the cap cost?

Scrapping the cap is estimated to cost between £3bn and £4bn.

When challenged by Trevor Phillips on the fact that polling shows the majority of voters believe the two-child benefit cap is morally right, she responded “and that is why we are all so determined to make sure that our welfare system is fair” – before going on to outline the work Mr McFadden is doing to encourage people into employment rather than a life on benefits.

The Tories don’t believe the Labour Party has any hope of getting welfare cuts past its rebellious backbenchers.

“I want to see the chancellor stand up and explain how she is going to control public spending, particularly welfare,” said shadow chancellor Sir Mel Stride.

“In order to make sure that we’re not having to put up taxes, and she’s not going to be breaking all these promises that she’s made, yet again.”

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Autumn of disastrous headlines

After an autumn of disastrous headlines from the accidental release of foreign prisoners and Angela Rayner’s stamp duty to Peter Mandelson’s links to convicted sex offender Jeffrey Epstein, the authority of both the prime minister and the chancellor is much shakier now than it was even after the previous welfare rebellion.

A review into Personal Independence Payments launched as part of the fallout to those efforts is unlikely to recommend cuts.

Getting a greater share of the 6.5 million people currently reliant on benefits into the workplace has long been the holy grail for chancellors looking to boost economic growth – and scale back a spiralling health-related benefits bill which looks set to top £100bn by the end of the decade.

But multiple governments have failed to get a handle on the issue.

It seems unlikely at this moment of such fractious internal party relations that Rachel Reeves can really rely on the prospect of any serious welfare savings to help balance the books.

But she’s keen to highlight to both voters and the bond markets that she wants to try.