As it happened: Reeves fails to rule out another tax raising Budget after £26bn hike
Chancellor Rachel Reeves delivered speech after Office of Budget Responsbility leaked forecast early
Rachel Reeves declined to rule out another tax-raising Budget after adding £26 million in today's Autumn finance plan.
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The Chancellor gave her Budget speech after the Office for Budget Responsibility apologised and launched an investigation, admitting it had published its economic forecast half an hour before her speech.
More than 1.7 million people will face paying more income tax as she froze thresholds, meaning people will be dragged into paying the tax for the first time or shifted into higher bands as earnings increase.
The OBR confirmed Rachel Reeves’s Budget “raises taxes by amounts rising to £26 billion in 2029/30, through freezing personal tax thresholds and a host of smaller measures”.
“I can keep that contribution as low as possible because I will make further reforms to our tax system today to make it fairer and to ensure the wealthiest contribute the most,” Ms Reeves said.
But despite this, there could be more tax rises in future Budgets.
The Chancellor said on a visit to University College Hospital: “I can’t write future budgets, but if you are asking ‘is this a Budget I wanted to deliver today’ well, I would have rather the circumstances were different.
“But as Chancellor, I don’t get to choose my inheritance and I have to live in the world as it is, not the one that I might like it to be.
“And I believe that I made the fair and the necessary choices given the fiscal circumstances.”
Of the leaked report, she said: “It is my understanding that the Office for Budget Responsibility’s economic and financial outlook was released on their website before this statement.
“This is deeply disappointing and a serious error on their part. The Office for Budget Responsibility have already made a statement, taking full responsibility for their breach.”
Measures announced by Ms Reeves will mean more than 1.7 million people will face paying more income tax.
She froze thresholds, meaning people will be dragged into paying the tax for the first time or shifted into higher bands as earnings increase. She has said there will be minimum wage increases, frozen rail fares and NHS prescriptions, as well as tax hikes on high-value homes.
As part of Wednesday's speech:
- Personal tax thresholds have been extended until 2030-31, in what many have branded a "stealth tax,"
- A £2m mansion tax was announced,
- The two-child benefit cap is being removed at an estimated cost of £3 billion by 2029-30
- The amount of money that can be saved tax-free each year in cash Isas has been cut to £12,000 from April 2027
- Electric vehicle drivers will be charged 3p per mile on top of other road taxes from 2028.
Read LBC's coverage here.
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Rachel Reeves delivered her Budget on Wednesday to the House of Commons,
In a shambolic error, the Office for Budget Responsibility (OBR) leaked its assessment of the Chancellor's fiscal plans 30 minutes before she was due to unveil them,
The speech contained details of £26 billion in tax rises,
Reeves has imposed a mansion tax on properties over £2million,
Previously, farmers descended on Westminster to protest an inheritance tax on farming land and businesses
'I made my choices yesterday': Chancellor refuses to rule out more tax rises in next year's Budget
The chancellor refused to rule out more tax rises in next year’s Budget after dropping a £30bn tax bomb on Britain yesterday.
Asked by Nick Ferrari this morning whether there would be “no more tax increases as when you present next year’s Budget,” she said: “No chancellor can predict the future or write next year’s Budget.
“I made my choices yesterday."
She said she made “fair and necessary choices” adding “Chancellors have to respond to events.”
Hard-working Brits were clobbered with a manifesto-shattering series of tax rises, with a £13bn freeze on income tax and national insurance thresholds lasting three years as part of a £30bn package of increases largely targeting the middle classes.
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'Reeves and Starmer are using our money to save their jobs', says Badenoch
The Tory party leader has accused the Chancellor of using the Budget to save her political career.
She had been accused LBC caller Dom in Broadstairs if she thought it acceptable to "make a personal attack at the dispatch box."
Mrs Badenoch replied: "Rachel Reeves was extremely personal in her budget speech towards the Conservatives."
She later added that Ms Reeves and Keir Starmer are "trying to bribe their backbenchers so they don't get rid of them."
"That is terrible. That's our money they're using to save their jobs. That's wrong."
Badenoch defends 'aggressive' attack on Chancellor after Budget
Kemi Badenoch has defended her response to the Budget in which she launched a scathing attack on in the House of Commons.
The Conservative Party leader was asked by an LBC caller whether she thought her attack was too "aggressive".
She replied: "they were very personal about us. She was very personal about Conservatives in her Budget speech, but she also uses her person as a means of defence.
"I was quite surprised at how much she blamed her being a woman on the criticism that she's been getting. The weekend papers were full of, 'oh, it's all misogyny, it's mansplaining'. And I had to tell her, woman to woman, it's got nothing to do with mansplaining. You're just not doing a good job.
"What I don't do is say 'oh, it's because I'm a woman, that they're criticising me', or 'it's because I'm black', or just using identity as a shield, I think it's very dangerous. I think I have a duty to make sure that people see that women, ethnic minorities, others get their jobs on merit. And Rachel Reeves does us no favours".
Badenoch vows to reverse two child benefit cap
The Tory leader said Labour is "wrong" to scrap the two child benefit cap after the Chancellor axed it on Wednesday.
Taking calls on LBC, Kemi Badenoch said: "We have said that we will reverse this decision. If the economy is getting lots of growth then that means that everybody is going to be lifted up.
"We have said that we would reverse it. We think what Labour is doing is wrong.
"They are taxing other people to pay more benefits. Other people are going to be pushed into poverty to pay for benefits for others. I don't think that's fair".
'We are looking at taxes', Badenoch says as she vows to keep triple lock
Conservative Party leader Kemi Badenoch has admitted the Tories are looking at tax measures - as she blasted the Chancellor's £26billion tax raid unveiled in the Budget today.
Speaking to LBC's Iain Dale, Ms Badenoch said she would stick to the Tories' commitment to keep the triple lock, but did admit the Conservatives "are looking" at taxes.
But she added: "We need to stop slicing and dicing and cutting everything and start growing our economy", she said.
She took aim at Labour's increase in welfare spending - and the measure to scrap the two-child benefit cap in a move that could take nearly half a million children out of poverty.
Manifesto breach?
Chief secretary to the Treasury James Murray told Andrew Marr on LBC that the Budget does not represent a breach of Labour’s manifesto.
He said: “We stuck to our manifesto. Let me tell you exactly what our manifesto says, which is that we will keep taxes on working people as low as possible. And if you look at what Rachel set out today in her Budget that she delivered in the House of Commons, she set out how we're asking everyone to make a contribution. We're being very upfront about that, but we're keeping that contribution of working people as low as possible, thanks to the other tax decisions that we're taking.”
Labour must 'win the argument for Budget', Chancellor tells MPs
Labour must "win the argument for the Budget", the Chancellor has told the party's MPs.
Rachel Reeves told a meeting of the Parliamentary Labour Party: "Let me say what we achieved today.
"I said that I wanted this to be a Budget that cut the cost of living, cut NHS waiting lists and cut the debt and the borrowing - and we've achieved all of those."
She added: "Today, we delivered the Budget. Now, we've got to win the argument, and we've got to win the argument every single day.
"We have to win the argument for the Budget. We've got to campaign on the Budget - and that is what we must now do."
Money freed up due to scrapping of two-child benefit cap will be used to fight poverty, First Minister pledgeds
Money freed up in Holyrood's Budget as a result of Chancellor Rachel Reeves scrapping the two-child benefit cap will be used to fight poverty, Scotland's First Minister pledged.
John Swinney made the commitment after the Chancellor said the UK Government would abolish the controversial policy, which means families can only claim benefits for their first two children, from April this year.
Some 95,000 children in Scotland will benefit from the move, the UK Government said.
But with the Scottish Government having already pledged to mitigate the benefit cap, campaigners against child poverty said Holyrood ministers would now have about £150 million more to spend in 2026-27.
Mr Swinney meanwhile said "the UK Government will be implementing a policy that Scotland was planning to implement already", adding that this will "free up resources" for other purposes.