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Reeves admits Budget will mean working people will have to ‘contribute a bit more’ - but denies breaking manifesto pledge
Athena Stavrou,David Maddox,Kate Devlin,Millie CookeThursday 27 November 2025 09:47 GMTComments
CloseReeves fails to admit breaking Labour manifesto but says working people will have to contribute more
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The chair of the Office for Budget Responsibility (OBR) has warned “none of the measures” in Rachel Reeves’ Budget will boost growth, after the chancellor hiked taxes by £26bn.
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 OBR.
The independent body for economic and fiscal forecasting, Richard Hughes, said Reeves’ policies will not have a “material affect” on growth.
"In this particular Budget, none of the measures either positive or negative... would have a material affect on our forecast," he said.
Speaking on Thursday morning, Ms Reeves refused to admit the Budget meant Labour has broken its promise not to raise taxes on working people - but acknowledged it would mean working people had to “contribute 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.
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Key Points
- None of Reeves' Budget measures boost growth, warns OBR chief
- 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
Tax calculator: See how Rachel Reeves’ Budget will affect you
After weeks of leaks and frenzied speculation, Rachel Reeves revealed her second Budget in a speech in the House of Commons on Wednesday afternoon.
Use The Independent’s Budget calculator, created by tax advisory firm Blick Rothenberg, to work out what the announcements mean for you:
Tax calculator: See how Rachel Reeves’ Budget will affect you
Use our Budget calculator to determine whether Reeves’ package of measures will leave you better or worse offAthena Stavrou27 November 2025 09:47So, what does the Budget mean for your money?
The 2025 Budget has now been announced, with major changes affecting everything from income tax and ISA limits to pensions, property, and savings.
With inflation still high and the government unveiling £26bn of new tax rises – including a freeze on personal tax thresholds, changes to salary sacrifice schemes, cash ISA allowances and dividends, and a mansion tax for homes over £2 million – households, savers, and investors could all feel the impact.
Personal finance expert Gabriel Nussbaum will be breaking down the details for readers during a live question and answer session at 1pm today – explaining what each change means for your money, when it takes effect, and how you can plan ahead.
If you'd like to ask a question, please submit it here.
Athena Stavrou27 November 2025 09:33Analysis: Budget eases pressure on one party leader - Badenoch
The Independent’s Whitehall Editor Kate Devlin reports:
Tory MPs were delighted with a speech by the Conservative leader attacking the Budget.
Ms Badenoch’s position has been under pressure amid dire poll ratings and lacklustre performances in the House of Commons.
But her speech, in which she said the Budget is a “total humiliation” for the chancellor and called for her to resign, has eased nerves among her own backbenches.
Polling expert and Tory peer Lord Hayward told The Independent: “Ironically, the budget may have been about saving Rachel Reeves’ and Keir Starmer’s jobs - but may have done more to save Kemi’s.”
(House of Commons)Athena Stavrou27 November 2025 09:21Reeves refuses to rule out further tax rises
The Independent’s political correspondent Millie Cooke reports:
The chancellor has refused to rule out coming back for more tax rises next year, telling BBC Radio 4's Today programme: “I'm not going to write future budgets.”
She added: “There's been plenty of speculation ahead of this budget... I am now determined to grow the economy so that we have the money for public services that we can get taxes down.”
(PA Wire)Athena Stavrou27 November 2025 09:08None of Reeves' Budget measures boost growth, says OBR chief
The Independent’s political correspondent Millie Cooke reports:
OBR chair Richard Hughes said "none of the measures" in Rachel Reeves' Budget will "have a material affect" on growth.
"In this particular Budget, none of the measures either positive or negative... would have a material affect on our forecast," he said.
"Both taxes and spending are up significantly in this Budget.
Asked about his comments, the chancellor to BBC Radio 4's Today Programme: "What they say in the documents is none of them meet the threshold that they now require for a single policy to be scored. So they haven't scored the India trade deal, the EU trade deal, the US trade deal, the Planning and Infrastructure Bill that in December will get royal assent, the pensions reform, the entrepreneurship package that I set out.
"They said that none of them individually... meet their 0.1 threshold. But I'm confident that the growth policies that we're pursuing will grow our economy."
(PA Wire)Athena Stavrou27 November 2025 08:49Budget 'unlikely to benefit economic growth', tax experts say
Economists 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.”
(PA Archive)Athena Stavrou27 November 2025 08:33Watch: Reeves fails to admit breaking Labour manifesto but says working people will have to contribute more
Reeves fails to admit breaking Labour manifesto but says working people will have to contribute moreAthena Stavrou27 November 2025 08:24'You're not going to write my obituary today': Reeves hits back at critics
The 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.
(House of Commons)Athena Stavrou27 November 2025 08:12'This was my budget' Reeves hits back at accusations budget was for Labour backbenchers
Rachel 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."
(Sky News)Athena Stavrou27 November 2025 07:56Reeves says OBR chief 'let me down' with breach
The 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."
Athena Stavrou27 November 2025 07:48Newer1 / 5OlderMore about
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