“The tax reforms announced are still just tweaking the current unfair system which will not generate anywhere near the funding necessary to deliver the transformational change needed in our society.”
By the PCS Union
PCS welcomes the scrapping of the two-child limit but more must be done on the cost-of-living crisis and to tackle the unfairness of our tax system.
Moves in the chancellor’s Budget today to cut energy bills and freeze rail fares are welcome, but our members will be hit by the extended freeze in the income tax threshold.
The chancellor said just last year that extending the freeze on income tax thresholds hurts working people. However, today she confirmed that income tax thresholds will be frozen until 2030-31. The Resolution Foundation says the income tax threshold freeze extension means basic rate taxpayers pay £140 more in 2029-30.
Commenting on this decision, PCS general secretary Fran Heathcote said: “At a time when thousands of the government’s own workforce are balloting for strike action over poverty pay, the chancellor should think again on taking more from basic rate income taxpayers.”
PCS members in DWP will be balloted in a statutory ballot for industrial action in January 2026. DWP’s overall offer (in line with the Treasury pay remit guidance of 3.25% plus an additional 0.5%) failed to prioritise the issues of chronic low pay. In the lowest three grades, there are 25,000 workers whose pay will be flattened from 1 April 2026 and level with the National Living Wage. Instead of addressing this, DWP used the additional 0.5% to address anomalies in higher grades.
Our DWP members are on the frontline of social security service delivery, many claiming the benefits they deliver. They care about it professionally and personally. We will be launching a new policy document in parliament on Tuesday 2 December that sets out how we can rebuild a social security system that genuinely does provide social security for all.
PCS welcomes the overdue removal of the two-child limit within Universal Credit from April 2026. The government estimates that this will reduce child poverty by 450,000 by 2029-30.
Tax reforms don’t go far enough
The tax reforms announced today are still just tweaking the current unfair system which will not generate anywhere near the funding necessary to deliver the transformational change needed in our society.
The high value tax council tax surcharge on properties worth over £2m is welcome, but the government has again fallen short of what is required to ensure those with the broadest shoulders pay their fair share.
PCS has put forward a number of proposals that would deliver both economic stability and the provision for a decent standard of living for all. This includes:
- Aligning capital gains tax with income tax rates could raise up to £12 billion.
- Reinstating the investment income surcharge could generate £18 billion more.
- Introducing an annual wealth tax for individuals with wealth exceeding £10 billion could yield as much as £22 billion.
These are not radical ideas; they are common sense steps to ensure fairness and sustainability. MPs will be debating the Budget over the coming days in parliament. You can use our e-action to call on your MP to support our calls for tax justice.
- This article was originally published by the PCS on 26 November 2025.
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