Rachel Reeves has admitted she has asked “working people to contribute a bit more” after she hiked taxes by £26bn - but denied breaking Labour’s manifesto pledge.
The chancellor’s measures, including a freeze on income tax thresholds that will mean 1.7 million people paying more, take the tax burden to an all-time high, according to the Office for Budget Responsibility (OBR).
Speaking on Thursday morning, Ms Reeves refused to admit the Budget meant Labour has broken its promise not to raise taxes on working people - arguing the manifesto pledge specifically referred to the rates of income tax, national insurance and VAT.
But she added: "I do recognise that that will mean that working people pay a bit more".
The tax hikes come in response to downgraded economic forecasts but also increased welfare spending because of the abolition of the two-child benefit cap and the Labour revolt over attempts to curb the benefits bill.
In an unprecedented blunder, full details of Ms Reeves’s plans were published by the OBR more than half an hour before she stood up in the Commons chamber.
Read MoreMillions more dragged into paying higher income tax in Reeves’s £26bn Budget squeeze
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Tax calculator: See how Rachel Reeves’ Budget will affect you
From mansion tax to cash ISA changes: Key announcements in Reeves’ Budget
Key Points
- Reeves admits ‘working people will pay more’ - but denies breaking manifesto tax pledge
- Analysis: The most chaotic Budget in living memory
- Income tax thresholds to freeze
- Reeves scraps George Osborne’s controversial two-child benefit cap
- Reeves boosts Budget headroom to £22bn
Budget 'unlikely to benefit economic growth', tax experts say
08:33 , Athena StavrouEconomists have said it is unlikely Rachel Reeves’ Budget will “benefit economic growth”.
Chantal Van Stipriaan, partner at tax firm Blick Rothenberg, said her overall assessment of yesterday's Budget is one of chaos - adding it will be remembered for “many years to come”.
“The stress that has been caused by leaking throughout this process has been a disaster and has caused undue stress for working people, pensioners, and businesses,” she said.
“The freezing of the thresholds for an extra three years, a classic stealth tax, will mean not only the middle class families are going to pay more tax, many additional relatively low income individuals will be brought into the tax net, including people who will have to file tax returns for the first time, such as pensioners.”
She added: “The Budget will most likely result in a higher inflation and a higher unemployment and it’s unlikely it will benefit the economic growth of the country.”
Watch: Reeves fails to admit breaking Labour manifesto but says working people will have to contribute more
08:24 , Athena Stavrou'You're not going to write my obituary today': Reeves hits back at critics
08:12 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
Rachel Reeves has hit back at critics of her budget, warning: "Lots of people have tried to write me off over the last 16 months, and you’re not going to write my obituary today”.
Speaking to Times Radio, she added: “I’m not going to apologise for lifting the two-child limit."When it was put to the Chancellor that she had raised tax on working people in order to put it into welfare, she said: “I don’t accept that.
“The OBR say that their revisions to productivity, reflecting the Conservatives’ legacy, is going to mean £16bn less tax revenue, and as a result, we have to fill that gap. But if we can grow the economy, as I’m determined to do, we can get that money back.”
She insisted she was “determined that we’re going to beat” the watchdog’s growth forecasts.
'This was my budget' Reeves hits back at accusations budget was for Labour backbenchers
07:56 , Athena StavrouRachel Reeves has hit back at accusations that yesterday's budget was an attempt to appease restless Labour backbenchers and save her job, after the government hiked taxes to pay for more welfare spending.
She told Sky News: "This was my budget yesterday, focused on my priorities and the government's priorities, cutting the cost of living, cutting NHS, waiting lists, and cutting borrowing and debt."
Reeves says OBR chief 'let me down' with breach
07:48 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
OBR chief Richard Hughes "let me down" with yesterday's unprecedented Budget leak, Rachel Reeves has said, but insisted that she still has confidence in him.
The chancellor said there will be an investigation into the leak, which saw the OBR's response to the Budget published online around an hour before Ms Reeves addressed the Commons.
Asked if she still has confidence in the chair of the OBR, the chancellor told Sky News: "Richard Hughes wrote to me yesterday evening apologising for their error."
It was a serious error and a serious breach. They have announced an investigation which will report to me very quickly, but I do have confidence in Richard and the OBR, they do important work."But what happened yesterday, it did let me down and and it shouldn't have happened and it must never happen again."
Reeves refuses to admit Labour has broken manifesto pledge
07:31 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
Rachel Reeves has refused to admit Labour has broken its manifesto pledge not to raise taxes on working people by freezing tax thresholds.
It comes despite the UK's leading economic think tank, the Institute for Fiscal Studies, on Thursday accusing the chancellor of breaching Labour's manifesto commitments on tax.
When it was pointed out to her that Labour's manifesto says the party “will not raises taxes on working people”, the chancellor added: “And then we go on to list those taxes” - arguing the manifesto pledge specifically referred to the rates of income tax, national insurance and VAT.
She added: “But I do recognise that yesterday, I have asked working people to contribute a bit more by freezing those thresholds for a further three years from 2028. I do recognise that that will mean that working people pay a bit more.”
Pressed again on whether Labour had broken the manifesto pledge not to raise taxes on working people, she said: “If you go on to read the next line, it talks about the rates, but I am not denying that this has an impact on working people.”
Reeves challenged over rise in welfare spending
07:27 , Tom BarnesRachel Reeves told a radio presenter challenging her over rising welfare spending that “lots of people have tried to write me off over the last 16 months, and you’re not going to write my obituary today”.
“I’m not going to apologise for lifting the two-child limit,” Mr Reeves told Times Radio.
When it was put to the Chancellor that she had raised tax on working people in order to put it into welfare, she said: “I don’t accept that.
“The OBR say that their revisions to productivity, reflecting the Conservatives’ legacy, is going to mean £16 billion less tax revenue, and as a result, we have to fill that gap. But if we can grow the economy, as I’m determined to do, we can get that money back.”
She insisted she was “determined that we’re going to beat” the watchdog’s growth forecasts.
Millions more dragged into paying higher income tax in £26bn squeeze - full report
07:00 , Jane Dalton Millions more dragged into paying higher income tax in Reeves’s £26bn Budget squeeze
Budget assault on squeezed middle, say LibDems
06:00 , Jane DaltonThe Liberal Democrats have branded Labour's Budget an "assault on the squeezed middle", pointing to forecasts by the Office for Budget Responsibility that one in four workers will pay the higher or additional rate of income tax by 2030-31.
The party's Treasury spokeswoman Daisy Cooper said: "This Budget was an assault on the squeezed middle. This Labour Government is abandoning the very voters who put them into power and hammering them with years more of unfair tax hikes.
"There's an easy way to get out of this vicious cycle and give people hope: go for growth through a much closer trade deal with the EU, including a customs union to tear up red tape and back British businesses."
Asylum could cost £1.4bn extra in three years, says watchdog
05:00 , Jane DaltonThe asylum system would cost an extra £1bn pounds by 2028-29 if spending remained at last year's level, the budget watchdog has said.
The Government has promised to end housing asylum-seekers in hotels by the next election and cut spending on asylum by £1.1bn.
But the forecast by the Office for Budget Responsibility (OBR) said the number of migrants arriving by small boat and asylum-seekers in supported accommodation has risen by 19% and 8% respectively on last year.
It said there could be an extra pressure of £1.4bn by 2028-29 if spending remained at 2024-25 levels.
The watchdog said: "The Home Office Spending Review settlement was made on the basis that the Home Office would fully stop the use of hotels for asylum-seekers in this Parliament, and asylum spending would be £1.1bn lower at £2.5bn in 2028-29 compared to 2025-26 plans.
"So far this year, the number of migrants arriving by small boat and asylum seekers in supported accommodation has risen by 19 and 8%, respectively, compared to last year.
"If spending on asylum remained at its 2024-25 level, this would imply £1.4bn of additional pressure on the Home Office budget by 2028-29."
Cash ISA options after Budget cut – and one exemption
04:00 , Jane Dalton Your cash ISA options after Budget cut – and the exemption you need to know about
Editorial: Budget will squeeze working people till it hurts
03:05 , Jane Dalton This Budget will squeeze working people until it hurts
Budget papers over cracks, say economists, as growth forecasts downgraded
02:10 , Jane Dalton Budget ‘papers over cracks’, say economists as UK growth forecasts downgraded
Opinion: Budget was like the office whip-round nobody could avoid
01:10 , Jane Dalton Reeves’s Budget was like the office whip-round nobody could quite avoid
Plan to shake up Lifetime Isa
00:15 , Jane DaltonA consultation will also be published in early next year on a "new, simpler" Isa product to support first-time buyers, Rachel Reeves announced..
Once available, the new product will be offered in place of the Lifetime Isa (Lisa).
Money expert Martin Lewis explains:
I know many LISA holders are asking questions. A few facts may clarify things
— Martin Lewis (@MartinSLewis) November 26, 2025
1. There are no imminent changes due with LISAs
2. A consultation is due next year on a new first time buyer isa. That is unlikely to happen until Apr 27 or 28
3. Even if there is a new product, the…
Watch: Key things you need to know about Budget
Wednesday 26 November 2025 23:15 , Jane DaltonVeteran Tory MP urges scrapping of pensions triple lock
Wednesday 26 November 2025 22:15 , Jane DaltonMPs have been urged to show "courage" by agreeing to end the pensions triple lock.
The country's longest continuously serving MP described the policy as unsustainable, after Chancellor Rachel Reeves unveiled a 4.8% increase in the basic and new state pension next year.
Sir Edward Leigh told the Commons: "We all know that the triple lock is unsustainable. You cannot have a situation where people of my generation are consuming an ever-greater proportion of national wealth through the state pension.
"Frankly, our government never dared tackle it having brought it in because they knew that the Labour Party would crucify them at the ballot box.
"Now the Labour Party is caught in the same bind.
"The fact is, it is completely unfair on younger people if the burden of older people, through the triple lock, increases year by year."
The 75-year-old Conservative MP said he would "get into trouble" for criticising the policy, brought in by the coalition government.
It guarantees the state pension will rise each year in line with either average earnings growth, CPI (Consumer Prices Index) inflation, or 2.5% - whichever is highest.
Father of the House Sir Edward added: "We all have children, we all have grandchildren. We all see our own children struggling to get on the housing market."
Oil and gas extraction near North Sea fields to be allowed
Wednesday 26 November 2025 21:20 , Jane Dalton UK Government to allow oil and gas extraction near existing North Sea fields
Dropping child benefit cap calms Labour backbenchers
Wednesday 26 November 2025 20:50 , Jane DaltonScrapping the two-child benefit cap appears to have calmed discontented Labour backbenchers as the Chancellor urged MPs to "win the argument" on the Budget.
Recent weeks have seen growing backbench anger with the Labour leadership but Rachel Reeves' announcement was broadly welcomed by Labour MPs, who highlighted the decision to axe the two-child limit as a key achievement.
The Tribune Group of "soft left" MPs, which includes former transport secretary Louise Haigh and former whip Vicky Foxcroft, who resigned over welfare cuts, said the Budget was "a Labour Budget, demonstrating Labour values".
Millions more dragged into higher income tax band - full report
Wednesday 26 November 2025 20:25 , Jane Dalton Millions more dragged into paying higher income tax in Reeves’s £26bn Budget squeeze
Badenoch admits Tories made mistakes
Wednesday 26 November 2025 19:57 , Jane DaltonKemi Badenoch has admitted the Conservatives made mistakes in office.
“I do believe the Conservatives will come back,” she said.
“They made a lot of mistakes. Don't get me wrong, I'm fixing that.
“We're under new leadership, and I'm working very hard to win back people's trust, but I do worry about how big the mess they're [Labour] leaving will be, and that restricts the amount of promises that we can make, because we will have to tackle that mess first.”
Join live Q&A with money expert on everything from taxes to savings
Wednesday 26 November 2025 19:52 , Jane Dalton Join a Budget Q&A with money expert Gabriel Nussbaum
Lifting child benefit cap will drive others into poverty, says Tory leader
Wednesday 26 November 2025 19:23 , Jane DaltonKemi Badenoch has claimed people are going to be pushed into poverty to pay for the lifting of the child benefit cap.
The Tory leader said her party would reverse the £3bn Budget move.
“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 didn't think that's fair,” she told LBC.
“How much should other people have to pay in order to subsidise a different group. And we are getting to a point where more and more people are net takers from the state, and fewer and fewer people on net contributors...
“What's happening is that the country is borrowing so much that we are now spending more on interest than we are on education, on so many other budgets. Who's going to pay for that? It's those same children who we should be thinking about. Why should we leave them with our debts?”
Reeves whacking people with random taxes, says Badenoch
Wednesday 26 November 2025 19:15 , Jane DaltonKemi Badenoch has accused the chancellor of “whacking” people with all sorts of random taxes.
“I will have constituents who have gone and bought an electric vehicle because they maybe had a subsidy from the previous government,” she told LBC.
“They live in a rural area, and they don't think that they have to pay fuel duty.
“They've been whacked with something. Landlords have been whacked over their taxi. It's just everything - holidays, milkshakes, just all sorts of random things. There's 43 taxes in this budget that's going to hit a hell of a lot of people.”
Badenoch mocks Reeves over misogyny complaints
Wednesday 26 November 2025 18:54 , Jane Dalton Badenoch takes aim at Reeves over chancellor’s complaints of misogyny
Watch: Reeves refuses to rule out further tax rises
Wednesday 26 November 2025 18:37 , Jane DaltonSchools could face spending cuts when 'special needs' costs shift, OBR warns
Wednesday 26 November 2025 18:20 , Jane DaltonSchools could face a fall in spending due to the Government taking on the cost of special educational needs and disabilities (Send) provision centrally from 2028-29, the Office for Budget Responsibility (OBR) has warned.
The Government announced in the Budget on Wednesday that local authorities will not be expected to fund future Send costs.
No savings have been identified to offset the estimated £6 billion pressure taking on Send spending, the OBR said.
If the £6 billion needed comes from the Department for Education's core schools budget in 2028/29, it could mean a 1.7% real fall in spending per pupil in mainstream schools, the OBR said, rather than the 2.4% increase the Government had planned.
How the Budget will affect you: The four biggest policy changes
Wednesday 26 November 2025 18:09 , Harriette BoucherTax calculator: See how Budget will affect you
Wednesday 26 November 2025 17:59 , Jane Dalton Tax calculator: See how Rachel Reeves’ Budget will affect you
Watch: Reeves dodges question on her future
Wednesday 26 November 2025 17:40 , Jane DaltonOBR chief apologises and launches investigation into blunder
Wednesday 26 November 2025 17:28 , Jane DaltonThe head of the Office for Budget Responsibility (OBR) has apologised and launched an investigation after it prematurely published the contents of Rachel Reeves' Budget.
Richard Hughes, chairman of the independent watchdog, said its fiscal outlook was accidentally published shortly before midday, half an hour before Ms Reeves announced the measures.
The OBR earlier said a "technical error" in the organisation was to blame.
Shadow chancellor Sir Mel Stride told MPs the leak was outrageous, adding that the document included market-sensitive information and the leak might constitute a criminal offence.
Sir Mel later told journalists that he was not calling for the resignation of Mr Hughes "at this point".
Ms Reeves described the leak as deeply disappointing and a serious error on their part.
‘A kick in the teeth’: Readers say Reeves punishing responsibility
Wednesday 26 November 2025 17:25 , Jane Dalton ‘A kick in the teeth’: Readers say Reeves’ Budget ‘punishes responsibility’
Reeves hails benefits reforms
Wednesday 26 November 2025 17:04 , Jane DaltonRachel Reeves said the Government would not leave the welfare system unchanged.
Asked about the benefits bill, the Chancellor said: "We're not going to leave the welfare system unchanged...
"I made some reforms today so that if you live abroad, you can't pay nominal amounts of money to access the state pension, more face-to-face assessments for disability benefits... reforming Motability, so it meets its original purpose of affordable leases for disabled people, not subsidising a Mercedes Benz.”
She said she had introduced funding for a youth guarantee, which means that a young person would be guaranteed a place at college, an apprenticeship or personalised support, and if, after 18 months they did not have work, they would be guaranteed a job, but not benefits.
"And that, again, is an important reform to help deal with the issue of too many young people, not in education, employment or training."
Electric car drivers to pay for every mile, including abroad
Wednesday 26 November 2025 16:54 , Jane DaltonThe chancellor has confirmed a new tax for electric vehicle drivers, eventually designed to replace fuel duty.
Like that levy, the amount motorists pay will vary based on the amount they drive.
What will not be exempted, however, is when they drive abroad.
The Treasury says it had decided not to charge people based on when or where they drive “to protect motorists’ privacy”.
Instead cars will have their mileage checked at their annual MoT.
Ministers have decided this means mileage driven overseas by UK registered cars will be included, for the sake of simplicity.
Shadow chancellor brands Budget 'dog's breakfast'
Wednesday 26 November 2025 16:47 , Jane DaltonShadow chancellor Sir Mel Stride has compared Rachel Reeves' Budget to a "dog's breakfast".
Sir Mel said: "“It has been this smorgasbord that’s turned out to be a bit of a dog’s breakfast, in which she’s had to straddle around and put up all sorts of different taxes and these are ultimately going to be borne by hardworking people up and down the country.”
He said the chancellor's position was untenable.
Rachel Reeves said she wasn't coming back for more.
— Mel Stride (@MelJStride) November 26, 2025
She just has.
£26 billion of new taxes. pic.twitter.com/yQ4nLa5HQW
How the Budget will affect you: Winners and losers
Wednesday 26 November 2025 16:33 , Jane Dalton How the Budget will affect you: Winners and losers from Reeves’ speech
Reeves refuses to rule out further tax rises
Wednesday 26 November 2025 16:31 , Jane DaltonRachel Reeves has refused to rule out coming back for more tax rises, saying: “I can’t write future budgets”.
The chancellor broke a promise she made last year to not come back for more.
Explaining her decision to go back on her word, she said: “Last year, I had to fill the £22bn black hole in the public finances. What we didn’t know then was that actually productivity growth was weaker than the OBR had forecast”.
She added: “I believe we can beat those forecasts… the Conservatives’ legacy is not our country’s destiny but we also all know that if you ignore the forecasts you pay a huge price in the cost of government borrowing.”
