UK Politics

Millions more people will be dragged into paying higher income tax after Rachel Reeves bet her political future on a £26bn tax raid on the middle classes in her make-or-break second Budget.In what she branded a “Labour values” Budget, the chancellor moved to appease the left in her party with a package of measures that included 43 separate tax rises – according to shadow chancellor Sir Mel Stride – taking the tax burden in the UK to its highest level in history. But she finally brought an end to the much-criticised two-child benefit cap, which campaigners say will help lift thousands of children out of poverty, and announced a £73bn splurge in welfare spending.The decision to freeze tax thresholds in this Budget from 2028/29 onwards, to help fill a £20bn black hole in public finances, will raise £8bn in 2029-30 and drag one in four workers into the highest tax band. A further 780,000 people will pay tax for the first time. Reeves branded the Budget one of ‘Labour values’ More

A letting agency director has accused Rachel Reeves of waging a war on landlords – and warned that tenants will face higher rent as a result of her attacks.During Wednesday’s Autumn Budget speech, the chancellor announced a two percentage point rise in tax rates on rental income for landlords as part of her overall package set to raise £26bn in tax hikes. The additional levy, Ms Reeves said, was only fair because no National Insurance was charged on property income.But the move has been criticised by landlords who say they are already in the firing line on a range of measures, including the Renters’ Rights Bill that will eliminate Section 21 “no fault” evictions from May next year.Deshal Raja, who owns 50 rental properties and is director of a letting agency, has criticised Rachel Reeves’ measure to tax landlords more on their income More

Kemi Badenoch has launched an extraordinary personal attack on Rachel Reeves just moments after the chancellor delivered her widely anticipated Budget, accusing her of “whining” over misogyny claims.The Conservative leader diverted from criticising Labour’s raft of tax hikes on Wednesday to tell MPs the chancellor was “wallowing in self-pity”. Responding to the chancellor’s wide-ranging economic announcement, Ms Badenoch told the Commons, “people are not complaining because she is female, they are complaining because she is utterly incompetent”.It comes after Ms Reeves, who is the UK’s first female chancellor, called out “misogynistic” criticism she faced in the build-up to the Budget, telling The Times she was “sick of people mansplaining how to be chancellor to me”.Kemi Badenoch accused Ms Reeves of ‘wallowing in self-pity’ More

“It’s not enough,” said pensioner Elaine Yates, when asked about Rachel Reeves’ pledge to raise the state pension in her second Budget.The 75-year-old will be one of 13 million pensioners to benefit from an above inflation rise next April, receiving an extra £575 a year, the equivalent of around £10 a week.But for the retried factory supervisor, who lives on her own and survives off the state pension, more help is needed, particularly for paying for rising energy bills.Despite being in line for the Winter Fuel Payment, Ms Yates told The Independent she can not afford to have the heating in her bungalow on overnight.“From 9.30pm to the morning I have the heating turned off,” she said. “I wake up cold, sometimes shivering, it’s a cut-back I have to make because I can’t afford to keep the house warm, what with prices going up so much.“The extra money each week in the pension is not enough to cover it.”Also as part of the Budget announced on Wednesday, Ms Reeves said there would be a change to energy levies that will save the average household £150 a year.Elaine Yates says she can’t afford to keep her heating on overnight More

Independent readers were quick to voice their frustration – and, in many cases, outright anger – at a Budget they felt serves Labour’s political interests rather than the country’s needs. Many in our community felt Rachel Reeves’s £26bn package of tax rises lands hardest on those already feeling squeezed by a cost of living crisis, piling new burdens onto taxpayers who say they are running out of financial headway.With income tax thresholds frozen until 2030–31 and more than 1.7 million people set to be dragged into higher bands, several readers questioned how a government elected on a promise to protect “working people” could justify what amounts to a sweeping stealth tax. Others pointed to the pension contribution changes and cuts to ISA allowances as further evidence that those who save, plan and work hard are being treated as an easy target.The scrapping of the two-child benefit cap proved especially contentious, with many accusing the government of rewarding some households while demanding greater sacrifices from others. And yet, alongside these hikes, growth forecasts have weakened – leaving Across the board, readers were doubtful that the pain of this Budget will restore confidence in the economy.Here’s what you had to say:Kick in the teethAs a middle-class worker currently being taxed at around 62 per cent, I find it completely unacceptable that Labour is lifting the two-child cap. Having children is a personal choice, one that should be taken responsibly. Also, hitting pensions through salary sacrifice is another kick in the teeth. I’m all for fair taxation, but we’re so far from it now. Not shocked, but still deeply disappointed.AnunakiSqueezed middleThis Budget is an unmitigated disaster that punishes responsibility and rewards irresponsibility. Rachel Reeves’s decision to extend the freeze on income tax thresholds is a brutal stealth tax on working people, the very group Labour swore to protect. It’s a blatant betrayal that will slowly bleed households dry.Get a free fractional share worth up to £100.Capital at risk.Terms and conditions apply.Go to websiteADVERTISEMENTGet a free fractional share worth up to £100.Capital at risk.Terms and conditions apply.Go to websiteADVERTISEMENTMeanwhile, the move to tax pension contributions over £2,000 and cap the cash ISA allowance is a direct assault on aspiration and financial prudence. It tells anyone trying to save and provide for their future that they are the new piggy bank for a government with no pro-growth vision.But the most galling measure is the scrapping of the two-child benefit cap. This is not compassion; it is economic illiteracy. It actively incentivises irresponsible behaviour by signalling that the state will foot the bill for having more children, regardless of one’s ability to provide for them. It is a policy that will encourage larger families at the direct expense of hard-working taxpayers, who are already being squeezed by the other tax hikes. The Tories are right on this one: this is a Budget for Benefits Street, and it’s being paid for by the squeezed middle who play by the rules. A truly disastrous set of priorities.ThomasDesperate to please party membersGiven the spectacular mismanagement of the lead-up to this Budget, it seemed rather fitting that the OBR joined in and accidentally released a link to their report two hours before the Chancellor even got to her feet. After weeks of expectation management of breaking their manifesto by increasing income tax, yet another eleventh-hour U-turn. As the saying goes, you may as well be hung for a sheep as a lamb – and this Budget has all the hallmarks of a Chancellor who is more desperate to please her own party members and hang on to her own position than do the right thing for the economy and the country, which would have been to increase income tax transparently and not behind the smokescreen of yet more fiscal drag.We have a welfare bill that is accelerating out of control, yet she has lifted the cap on child benefit; a stagnant economy and a tax burden already at its highest since the 1940s; yet more disingenuous income tax rises through fiscal drag, which will not only hit the very poorest in society but once again target the same group of middle and higher earners whose spending is needed to generate economic growth.VickiGIncompetence or unwillingness?Reeves could have brought England into line with Scotland, and brought back the highest brackets of income tax that only apply to those with the highest incomes. But that would break a promise not to raise taxes on working people, so instead she breaks that same promise but in a way that increases the tax on the lowest paid. Is this incompetence, or unwillingness to bend to pressure from the Tufton Street oligarchs that appear to dictate the policies of this cabinet? Judging by the combination of intentional and unintentional leaks, it may well be both.JayA reckless policyScrapping the two-child cap is a reckless policy. Handing an average of £5,310 to 560,000 larger families rewards personal choices while ignoring other households under the same cost-of-living squeeze. It’s unfair and risks encouraging inflation, making life even harder for everyone, including the poor.MusilLooking after their ownMost of the people affected will be Labour voters, so they are looking after their own if they make this change. However, taxpayers will not be amused, so they will probably lose votes overall. The people they are rewarding would probably vote for them anyway; the people they are ripping off will swing to some degree.AnalyseThisSavers want stabilityDoes Reeves really think that by cutting the ISA allowance it will change people’s way of thinking? “Oh yes, we must immediately invest in stocks and shares.” Wrong. In these turbulent times, pensioners and savers want stability. This will have no effect other than to rub people up the wrong way. Sorry, but Labour haven’t a clue and you have lost my vote.CatsWhiskerChaos in messagingSo she’s charging electric car drivers (which they want more of) while freezing the cost for petrol drivers (which they say they want less of). The usual chaos in messaging from this Tory-light government.They should use a fix on the higher levels of tax (which would include me, for the record) to increase the lower level of tax, to bring more people out of poverty – not push even more there, as people with lower levels of income will now have to pay tax.At least they say they are putting more money into the NHS and are getting rid of Police and Crime Commissioners.BryanWe want more but won’t pay for itPeople in this country constantly want more and more and more, but aren’t prepared to pay for it. We have lower taxes (still) than most Scandinavian countries, but we’re constantly looking over at them and asking how they do it. You get what you’re willing to pay for.Icarus57Reducing demand will reduce taxesReducing household incomes by an average of £1,250 by 2025–26 by deploying fiscal drag will reduce demand, which in turn will reduce taxes. Was there ever a more clownish government than this, which clearly needs to go because it can’t work out the basic implications of its fiscal policy?forumPenalising those who got an educationAs predicted, Reeves is taxing workers and savers and handing over to those that don’t. Another Labour Budget penalising those that got themselves an education, qualifications or useful skills to hand their taxes over to those that didn’t bother.This will take the tax burden on workers over 38%, a new record. Same old, same old with Labour… until, of course, workers get fed up with handing over more and more of their hard-earned cash.ChrisMatthewsSome of the comments have been edited for this article for brevity and clarity.Want to share your views? Simply register your details below. Once registered, you can comment on the day’s top stories for a chance to be featured. 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