A Cabinet minister has defended the pre-Budget process, saying it has taken place on “shifting sands” amid fears about the economic impact of the weeks of speculation about what it will contain.

Transport Secretary Heidi Alexander also declined to deny that the Chancellor is planning a pay-per-mile scheme for electric vehicle (EV) drivers, even as she boosts a grant that cuts the upfront costs for buyers.

Speaker of the House Lindsay Hoyle has criticised what he called the “hokey cokey” Budget and called out ministers for leaking key announcements ahead of the Chancellor’s statement on Wednesday.

Rachel Reeves abandoned expected plans to hike income tax rates after a press conference and behind-the-scenes briefings aimed at preparing the country for the manifesto-busting move.

The apparent U-turn was said to have come about because of improved economic forecasts.

Transport Secretary Heidi Alexander, when asked on the BBC’s Sunday With Laura Kuenssberg programme whether speculation about tax rises has damaged the economy, said: “The review that the Office for Budget Responsibility have done about the productivity forecasts has meant that this whole process has really taken place on shifting sands to start off with, and we’ve got a very challenging global economic environment.”

Former Bank of England chief economist Andy Haldane said the “fiscal fandango” of the past months had caused “paralysis” among businesses and consumers.

“Next week, we need a decisive action that puts to bed and beyond reproach any notion of further tax rises,” he told the programme.

Ms Alexander declined to reveal Budget details, but did not deny that drivers of electric vehicles could face a pay-per-mile charge as the Chancellor adds £1.3 billion to a grant cutting upfront costs for buying EVs.

She said: “We need a fair vehicle taxation system for all motorists, because EVs, like drivers of petrol and diesel cars, they’re driving on roads that require maintenance.”

The Chancellor has pledged to get a grip on the cost of living in her Budget next week.

Making people better off is a “fundamental precursor to economic growth”, she wrote in The Sunday Times.

“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 wrote.

But at the same time Ms Reeves is widely expected to raise taxes in an effort to bridge a multibillion-pound gap in her spending plans.

Ms Reeves is grappling with weak economic growth, persistent inflation and an expected downgrade to official productivity forecasts as she prepares her statement.

The Treasury said she would raise £1.2 billion by March 2031 by extending a crackdown on fraudulent and mistaken universal credit payments via the targeted case review (TCR) scheme.

In an example of one move aiming to ease the pressure on people’s finances, rail fares are to be frozen for the first time in 30 years, saving commuters on more expensive routes more than £300 a year.

But an extension of the freeze on income tax thresholds is also among rumoured measures and would see more people dragged into paying tax for the first time or shifted into a higher rate as their wages go up.

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

Ms Reeves is also expected to scrap the two-child benefit cap, in a move that could cost more than £3 billion.

The Conservatives, who put the cap in place, are against the move.

Shadow chancellor Mel Stride told Sky News’s Sunday Morning With Trevor Phillips programme: “I want to see the Chancellor stand up and explain how she is going to control public spending, particularly welfare, 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.”

Reform UK’s Zia Yusuf said the Chancellor was “prioritising foreign nationals” by raising taxes on UK nationals.

“We have laid out £25 billion of savings that could be made by this Chancellor, and by choosing not to do that, Trevor, and choosing to raise taxes on people in this country, she is prioritising foreign nationals over UK citizens,” he told the programme.

Green Party leader Zack Polanski has said scrapping the two-child benefit cap in the Budget would be a “victory” but urged the Chancellor to go further and “tax the rich”.

“When are we going to see tough choices for multi-millionaires and billionaires? It’s time to tax the rich,” he told Kuenssberg.

Funding of £48 million for 350 new planners to boost Government efforts to build 1.5 million new homes is also reported.

A Treasury source said the Chancellor is expected to announce all care leavers would be guaranteed full student loan support, worth up to £13,500 each.

Other measures expected include £5 million for secondary schools to buy more books for their libraries, an £18 million scheme to revamp playgrounds in England, and a crackdown on shops selling illegal vapes.