UK

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

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

Speculation about Rachel Reeves’ upcoming Budget continues to mount as she prepares to outline measures to address the deficit in public funds today.The chancellor has told the public she has no “easy choices” on Wednesday, after the Institute for Fiscal Studies (IFS) estimated she needs to find at least £22bn to fill the gap in the public finances. The lead up to the fiscal event has been rife with rumours about what could be to come, including the expectation – and then apparent U-turn on – an increase to income tax.It looked as if Ms Reeves would break Labour’s election-winning manifesto and increase income tax. She later abandoned that plan, following more optimistic forecasts received by the Treasury from the budget watchdog.We already know some measures which will feature in Wednesday’s announcement. Rail fares will be frozen in the Budget, saving commuters on pricier routes more than £300 a year, and the cost of an NHS prescription in England will also be frozen at £9.90.Ms Reeves is expected to reaffirm Labour’s commitment to the triple lock on state pensions, and confirm that 13m pensioners are set to benefit from an above inflation rise next April.Here, we look at how other measures in the Budget could affect pensioners.Freezing income tax thresholdsSir Keir Starmer refused to rule out freezing income tax thresholds at the Budget, which could result in people paying more tax by “stealth”.At Prime Minister’s Questions last Wednesday, Sir Keir declined to answer a number of questions from opposition leader Kemi Badenoch on the issue of threshold freezes.The tax-free personal allowance was frozen at £12,570 until 2028 by the previous Conservative government. Frozen tax thresholds can be used to raise more money for the Treasury, in effect rising taxes by stealth.Even if income tax rates are not increased, people could end up paying more tax as a result of the freezes. 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.As mentioned earlier, Ms Reeves is expected to reaffirm the government’s commitment to the triple lock on state pensions in the Budget. But frozen tax thresholds could affect a rising state pension.The state pension has been £11,973 per year since April 2025 and, as a result of the triple lock, it is expected to rise to at least £12,578 per year in April 2027.The triple lock means the state pension increases annually, by whatever is highest of inflation, average growth in earnings or 2.5%.On Wednesday, the Chancellor will reveal the Government’s latest set of tax and spending policies More

Several arrests have been made after tractors were driven in Whitehall for a protest on farm inheritance tax on Budget day, as farmers defied a ban on the agricultural machinery by the Metropolitan Police.The police action prompted Nigel Farage to post his support for those arrested, claiming his party Reform UK would provide legal support to “every farmer protesting peacefully today”.More than a dozen tractors parked up outside Parliament in the latest act of protest against measures introduced by Rachel Reeves last year to apply an inheritance tax of 20 per cent to agricultural property valued over £1m.The demonstration came on the day the chancellor is preparing to deliver her second Budget, against a backdrop of sluggish economic productivity and expected tax rises.The gathering of agricultural machinery took place despite the Met Police placing restrictions on them; only allowing them to remain in Richmond Terrace. A force spokesperson said the ban was due to “serious disruption” they could cause to the local area.Shortly before lunchtime, a spokesperson said: “Anyone breaching conditions by bringing vehicles, including tractors or agricultural vehicles, to today’s farmers protest will be asked by officers to leave. If they refuse to comply with the conditions, officers will have to make arrests for offences under the Public Order Act.”They added: “We have already spoken to a number of individuals this morning to advise them of the conditions. The majority have listened to officers and complied with the conditions, however, several arrests have been made.”For updates on the Budget and reaction – click here for our live blogPolice officers speak to farmers taking part in a protest with their tractors in Westminster, London, ahead of Rachel Reeves Budget More

As the UK prepares for the budget announcement, familiar debates are taking shape. Should Chancellor Rachel Reeves cut welfare spending? Or reform the “triple lock” on state pensions?Other debates focus on revenue: how should she raise money without breaking Labour’s manifesto promise not to increase taxes on working people? But these discussions are being held in a strange vacuum, where the three enormous expenditures that led the UK to this point are not mentioned.COVID debt, energy support schemes and Brexit have fundamentally shaped the UK’s financial woes. Yet voters and politicians alike seem determined not to talk about them. Instead, they’re treated as shocks imposed on the country, although they involved hugely consequential political choices.Gloomy vibes accompany this Advent budget, and Britain’s awkward collective amnesia is preventing the country from learning the lessons needed for future crises and from talking honestly about the best route forward.Chancellor Rachel Reeves will outline her next Budget in the Commons on 26 November More