Chancellor Targets Tax Fairness in New Budget
Chancellor Rachel Reeves has unveiled her second Budget, introducing a series of tax increases designed to address a significant shortfall in public finances. The central announcement was a two percentage point rise in tax rates applied to property, savings, and dividend income.
Addressing a 'Black Hole' and Inequality
Delivering her statement to the House of Commons on Wednesday 26 November 2025, Reeves stated her intention to ensure the wealthiest contribute more. She highlighted a stark inequality within the current system, using a powerful example to illustrate her point.
"Currently, a landlord with an income of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary," Reeves told MPs. She attributed this discrepancy to the fact that no National Insurance is charged on property, dividend or savings income.
The Rationale Behind the Reforms
The Chancellor was clear on the reasoning for the uniform increase across these income streams. "It’s not fair that the tax system treats different types of income so differently," she asserted, framing the move as a necessary step towards creating a more equitable fiscal landscape.
Despite these increases, Reeves sought to reassure the majority of savers. She confirmed that after the reforms are implemented, 90 per cent of taxpayers will still pay no tax at all on their savings, protecting those with more modest means.
