UK Politics

Rachel Reeves hit out at the “grotesque” rape clause tied to the two-child cap policy during her Budget speech.Speaking to the Commons on Wednesday (26 November), the Chancellor slammed the policy, which means a parent or carer has to prove a child was conceived non-consensually to receive a benefit.“I will not tolerate the grotesque indignity to women of the rape clause any longer. It is dehumanising. It is cruel,” she said.She said she would remove the two-child benefit cap from April, a move that will increase the benefits for 560,000 families by an average of £5,310, the OBR has calculated. More

Rachel Reeves has announced an extension to the freeze on income tax thresholds at today’s Budget, meaning more earners will be soon be made to pay extra tax by “stealth”.Originally set to be frozen until 2028, the chancellor has opted to extend the freeze for three more years, the Office for Budget Responsibility’s (OBR) fiscal outlook has revealed.The tax-free personal allowance was first frozen at £12,570 by the previous Conservative government from 2022. Freezing tax thresholds can create what economists call “fiscal drag” – more people are pulled into higher tax brackets as average earnings increase, but the thresholds stay the same.Both the personal allowance and National Insurance contribution threshold are frozen and will now remain so until 2030/31. The measure will raise £8bn for the treasury in 2029/30, the OBR says.Here we tell you all you need to know about the changes:How will the extension affect me?More workers will begin paying higher rates of tax than they otherwise would have following the change. It will mean 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate taxpayers by 2029/30 than was forecasted by the OBR in March, the spending watchdog finds.Basic-rate employees will pay £140 in extra tax each year from April 2028. However, one million-plus earners whose income is above £125,140 – and so already pay the top rate of income tax – will not be affected.What is income tax?Income tax is a tax paid on income, though not all types of income can be taxed. How much income tax a person pays is based on how much they earn above their personal allowance and how much of their income falls within each tax band.The standard personal allowance has been £12,570 since 2021. This means that earners do not pay tax on the first £12,570 of their earnings in a financial year. The rate of tax then increases depending on how much they earn.What are the thresholds and income tax bands?The income tax bands More

Reeves to ensure ‘wealthiest contribute most’ in tax reformsRachel Reeves has confirmed a freeze in income tax thresholds will be extended as part of a package of £26bn tax hikes, as she also scrapped the two-child benefit cap.Salary sacrifices into pensions above £2,000 will be taxed while the annual cash ISA allowance will be capped at £12,000, the chancellor also revealed in her eagerly-awaited Budget speech.The tax hikes come as Ms Reeves battles a downgrade in forecast economic growth, delivered in a report by the Office for Budget Responsibility (OBR) published by mistake before the speech.Ms Reeves told the Commons: “I am asking everyone to make a contribution.”Other measures announced include drivers of battery electric cars facing a 3p per mile tax from April 2028 and a high-value council tax surcharge on properties worth more than £2 million.The two-child benefit cap being removed at an estimated cost of £3 billion by 2029/30.Tory leader Kemi Badenoch said the package of measures were a “smorgasbord of misery”. She added: “Labour are hiking taxes to pay for welfare. This is a Budget for Benefits Street, paid for by working people.” Shelter: Budget ‘cold comfort’ for families on brink of losing homesHomelessness charity Shelter is one of a number of organisations reacting to the chancellor’s Budget todya.Sarah Elliott, chief executive of Shelter, said the Budget is “cold comfort” to families on the brink of losing their homes.“The Chancellor raised the scandal of children in damaging temporary accommodation, but the failure to unfreeze local housing allowance rates will condemn thousands to another grim winter without a secure home,” she said.“Even more people will find it impossible to either avoid or escape homelessness in the months ahead unless the government throws them a lifeline.“Housing benefit is meant to help struggling families afford a roof over their heads, but it’s too far out of sync with the real cost of renting. For the government’s upcoming homelessness strategy to help children out of temporary accommodation, it must do the right thing and unfreeze local housing allowance.” ( More

After months of speculation and briefings, Rachel Reeves has unveiled £26bn worth of tax rises in her much-anticipated Budget. But in an unprecedented leak just minutes before the chancellor got to her feet, the Office for Budget Responsibility (OBR) published its response to the statement, leaking her entire plan before she even had a chance to unveil it.The tax hikes, which will leave her with £22bn in fiscal headroom, come on top of the £40bn of tax rises unveiled last year and are set to be delivered by freezing personal tax thresholds and a host of smaller measures. It brings the tax take to an all-time high of 38 per cent of GDP in 2030-31. Here are the key takeaways from the chancellor’s long-awaited – but much-trailed – budget. Economic growth The OBR has predicted that economic growth will be weaker than expected from 2026 to the end of the current Labour government, despite having increased its forecast for economic growth this year from 1 per cent to 1.5 per cent. In 2026, growth has been downgraded from 1.9 per cent to 1.4 per cent; in 2027 from 1.8 per cent to 1.5 per cent; in 2028 from 1.7 per cent to 1.5 per cent and in 2029 from 1.8 per cent to 1.5 per cent. The news will come as a blow to the Labour government, which has put economic growth at the heart of its mission in office. A freeze on income tax thresholds More than 1.7 million people face paying more income tax as she froze thresholds until 2030-31, meaning people will be dragged into paying for the first time or shifted into higher bands as earnings increase.The OBR said the freeze would result in 780,000 more people paying the basic rate, 920,000 more the higher rate and 4,000 more additional-rate income tax payers in 2029/30. The body also estimated this will raise around £7.6bn by 2029/30.Ms Reeves acknowledged the freeze in tax thresholds would hit “working people” – the group Labour had promised to protect – but she was “asking everyone to make a contribution”.Pension tax raid Pension contributions made under salary sacrifice schemes of more than £2,000 per year will now be hit with national insurance contributions from 2029, for both employers and employees, the chancellor announced. Rachel Reeves is unveiling her Budget in the Commons More

Rachel Reeves has announced an end to the two-child benefit cap at today’s Budget, following months of intense pressure from backbenchers, campaign groups and political opponents.The move will increase the benefits for 560,000 families by an average of £5,310, the Office for Budget Responsibility’s (OBR) fiscal outlook has calculated.Set to come into effect from April 2026, the government estimates that the change will reduce the number of children living in poverty by 450,000 by 2029/30. The government estimates that the change will reduce the number of children living in poverty by 450,000 by 2029/30 More

Watch live from the Commons after Rachel Reeves delivered her Budget speech on Wednesday (26 November).The Chancellor unveiled a raft of tax hikes as she tries to plug an estimated £30billion black hole in public finances.Before the 2024 election, Labour promised not to increase income tax, National Insurance or VAT for “working people”.In her speech, Reeves announced the first rail fares freeze for 30 years, slash green levies on energy bills and scrapped of the controversial two-child benefit cap.She also reduced the annual tax-free allowance in cash Individual Savings Accounts (ISAs) to £12,000, unveiled a new mansion tax on properties over £2million, and put a cap on salary sacrifice pension contributions.On Tuesday (25 November), health secretary Wes Streeting announced a “milkshake tax” as the drinks will now be hit by the sugar levy, whilst communities secretary Steve Reed unveiled a “tourist tax” which will allow mayors to levy a charge on overnight stays.The Chancellor also confirmed that low-paid workers are to get a pay rise of 4.1% from April next year as minimum wage rates go up.Ahead of her speech, Ms Reeves released a pre-recorded message on social media where she said she will make “fair and the necessary choices” to “deliver on [Labour’s] promise of change”. More

When Rachel Reeves got to her feet in the chamber, there was an enormous cheer from her colleagues. But that was about the high point for the chancellor – with faces behind her on the Labour benches soon turning to misery as she began unveiling her long-awaited Budget. It took almost an hour for another big cheer, coming after she announced the end of the two-child benefit cap.The problem may well have been that she had nothing new to tell them – because what little of this Budget had not been pre-briefed to the media had been released in error by the Office for Budget Responsibility (OBR) less than an hour before Ms Reeves’ big moment. The staggering blunder sparked outrage in parliament from MPs who will not be allowed copies of the OBR report, or the Budget red book, until Ms Reeves has sat down.Follow our live Budget updates HEREThe chancellor’s Budget was released early by the Office for Budget Responsibility More

Rachel Reeves made a jab at “hypnotherapist” Zack Polanski whilst announcing her Budget on Wednesday (26 November).Speaking in the Commons, the Chancellor said the Greens leader “believes he can achieve remarkable things using the power of his mind”.“Unfortunately the only things getting bigger under his approach would be the deficit and the rate of inflation,” she said as the chamber jeered.In September, Mr Polanski was forced to apologise for claiming to have been able to help women increase the size of their breasts using his mind. More