Chancellor Rachel Reeves has unleashed what critics are calling a £30 billion tax bomb on Britain, with a series of measures that are hitting strivers and business owners across the country.
Budget Breakdown: Where the Money Comes From
The Labour Chancellor bowed to Left-wing demands and shattered her party's manifesto pledges on tax with a £13 billion freeze on income tax and National Insurance thresholds that will last for three years. This move alone is expected to drag millions of workers into higher tax brackets as wages increase with inflation.
In a dramatic shift from Labour's election promises, the Budget also included a £4.7 billion raid on salary sacrifice pensions schemes and the introduction of a new mansion tax that will see owners of properties valued over £2 million paying up to £7,500 annually from 2028.
The Office for Budget Responsibility delivered a sobering assessment, warning that economic growth under Labour would be even lower than forecast last year and that none of the 88 measures unveiled by Ms Reeves would have a "material impact" on boosting GDP.
Voices from the Frontline: How Britons Are Affected
Business owners, working families, and professionals have shared how the new tax measures feel like "being knocked back" and represent a "real kick in the teeth" for those trying to get ahead.
Katie and Tom Rollings, who run Fishers Farm Park in West Sussex, expressed concern about rising costs. "As the minimum wage increases, we have to raise all our wages," said Mrs Rollings, 38. The family business employs 100 local staff, many of them young people, and may need to increase ticket prices to remain profitable.
Karen Burke, a 55-year-old recruitment consultant from Tunbridge Wells, earns £34,000 but commission payments often push her into the higher tax rate. "I work hard to support my adopted daughter," she said. "That's money that could go on school uniform bills or fixing the car, especially when I don't have a partner with another salary coming in."
Zahid Razzaq, a 41-year-old IT contractor from Manchester, was "gobsmacked" by the announcement of a 3p pay-per-mile tax on electric vehicles. "We got our first EV around four years ago on the basis that it was meant to be road tax-free," he explained. "The Government is clamping down on all the benefits it advertised."
Political Fallout and Economic Consequences
The Budget has sparked fierce political criticism, with former cabinet minister Kemi Badenoch branding it "a Budget for Benefits Street, paid for by working people." Reform UK's Nigel Farage condemned the measures as "an assault on aspiration and saving."
Official figures revealed that Labour will push the tax burden to an all-time high of 38.3% of GDP by the end of the decade. Meanwhile, total welfare spending is forecast to top £400 billion annually – representing a 22% increase.
Other significant measures include:
- Fuel duty rises scheduled for next year alongside the new 3p-a-mile road pricing scheme for electric vehicles
- The annual cash Isa allowance being slashed from £20,000 to £12,000 for those under 65
- £1.8 billion set aside for the development of Labour's controversial digital ID cards
- Inflation forecast to remain above target throughout next year
The decision to scrap the two-child benefit cap was cheered by Labour MPs and could help secure the short-term political survival of both Ms Reeves and Prime Minister Sir Keir Starmer, despite the broader backlash from business owners and taxpayers across the country.
