Rachel Reeves declined to rule out another tax-raising Budget after adding £26 million in today’s Autumn finance plan.
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.
By William Mata
