Chancellor Rachel Reeves delivered her Budget speech on Wednesday after the Office for Budget Responsibility (OBR) report was accidentally published an hour early, undermining the theatrical impact of the event. The decision not to raise income tax rates had also been leaked to the Financial Times two weeks prior. Reeves began by attributing the early release to the OBR, a move that drew criticism given her history of blaming others.
Despite the awkward start, Reeves presented a strong speech, but the content revealed difficult choices. She announced the lifting of the two-child limit for families on benefits, a reversal of her previous stance that the policy could not be afforded. The move drew cheers from Labour MPs but faces public opposition from taxpayers who question funding such measures.
Reeves also extended the freeze on income tax thresholds for another three years, effectively raising taxes without altering rates—a breach of the manifesto promise according to critics. She acknowledged the measure would affect working people, defending it as a necessary contribution. The Budget increased spending on disability benefits, abandoning a plan to slow growth after Labour MPs revolted in the summer.
The OBR had revised upward its forecast for tax revenue, citing a shift towards 'tax-rich' economic activity, suggesting higher spending rather than lower growth drove the need for tax increases. Reeves also froze fuel duty and announced a £150 discount on energy bills, measures aimed at offsetting the impact on voters. However, critics argue the Budget prioritises internal party pressures over national interest, with spending decisions aimed at appeasing Labour MPs.
