Overview
- The budget’s biggest revenue move extends the freeze on income tax thresholds for three more years from 2028, which the OBR projects will raise about £26 billion by 2029–30 after its details were posted early in a “technical error.”
- Targeted measures include a mansion levy on properties over £2 million, higher capital gains and gambling taxes, a new charge on electric vehicle use, and reduced tax‑free allowances for private pensions.
- Cost‑of‑living steps feature an increase in state pensions, a higher minimum wage, a freeze on rail fares, cuts to green levies on household energy bills, and the abolition of the two‑child benefits cap.
- Rachel Reeves acknowledged the package breaks the spirit of Labour’s 2024 pledge not to raise workers’ income tax and argued it is the fairest credible option given the fiscal gap.
- Political fallout intensified as the Conservatives denounced the plan and Kemi Badenoch urged Reeves to resign, with polling pressure on Labour and speculation growing about strain on Keir Starmer’s leadership.