Summary

  • Chancellor Rachel Reeves tells the BBC she would not want to repeat the £40bn tax rise Budget and she wants faster growth than has been forecast by the Office for Budget Responsibility (OBR)

  • Employers will bear the brunt of the £40bn in tax rises unveiled earlier by Reeves - the biggest increase in a generation

  • The OBR, which assesses the health of the UK's economy, said the package of economic measures unveiled by Reeves would ultimately "leave GDP largely unchanged in five years" - read the key announcements here

  • Analysis: This is what you might call a kitchen-sink Budget, which includes one of the biggest single tax-raising measures in history, writes economics editor Faisal Islam

  • On spending, Reeves announces a £22.6bn increase in the "day-to-day health budget" for the NHS and £5bn in house building investment

  • Reacting to the Budget, Tory leader Rishi Sunak calls it "an enormous borrowing spree" which contains "broken promise after broken promise"

Chancellor says Budget will raise taxes by £40bn

Live Reporting

Edited by Emily Atkinson

  1. BBC Verify

    How significant are the chancellor's tax rises?

    By Anthony Reuben

    Rachel Reeves started by saying that her Budget would raise taxes by £40bn.

    To put that into context, it is a very large increase in taxes from a single Budget – the biggest ever in cash terms.

    As a share of the size of the economy measured by GDP, it’s the biggest since Norman Lamont’s Budget in 1993.

    The Institute for Fiscal Studies (IFS) says the announcements amount to just under 1.2% GDP and you can see in the chart below how big an increase that would be.

    Bar chart showing that taxes have tended to rise after elections
  2. Analysis

    Carer's allowance announcement will be welcome by many

    Alison Holt
    Social affairs editor

    Many unpaid family carers struggle financially, so the chancellor’s announcement of an increase to the amount of money they can earn before they lose carer’s allowance will be welcome.

    There has been an increasingly vocal campaign calling for change to the benefit.

    The £81.90 a week allowance goes to people who care for someone who is older or disabled for more than 35 hours a week.

    Currently, carers who get the benefit are only allowed to earn up to £151 a week. Anyone who goes over that, even by a few pennies, faces a cliff edge, which means they lose all their allowance.

    The government can then clawback any overpayment. It is a confusing system which has left some already vulnerable people facing significant debts.

    Now, carers will be able to earn an extra £45 a week – allowing overall earnings of up to £10,000 a year - without losing any of the benefit.

    The chancellor has also said the financial cliff-edge will be looked at.

  3. I nearly cried when I heard about the extra money, carer says

    Eleanor Lawrie
    Social affairs reporter

    Amina Mitchell and her motherFamily Handout

    The chancellor has confirmed carers will be able to earn £45 more a week without their Carer’s Allowance being stopped.

    Amina Mitchell - who has cared for mother Lesley since her stroke 12 years ago - says the boost to her earnings will make a “huge difference”.

    She earns £108 working eight hours a week as a passenger assistant in West London, transporting people to day-care centres.

    Her earnings limit will increase from £151 a week to about £196 a week.

    “I nearly started crying when I heard about the announcement. It means at the end of the month I won’t be struggling, worried or anxious,” she says.

    “If I want to get extra food that month I can, I won’t have to ask my nan for extra funds.

    “It gives me comfort to know I can take on extra shifts - £45 can make a huge difference to some people’s lives and it definitely would for me.”

    Carers UK described the increase as “a really important poverty prevention measure”.

  4. Need a recap? Here are nine key takeaways from the Budget

    Phew that was a lot in an hour. Here are some of the key things we learned as Chancellor Rachel Reeves delivered her first Budget:

    National Insurance: Employers' National Insurance contributions will rise from 13.8% to 15%, and the threshold at which they have to pay it will drop from £9,100 to £5,000. But there's some relief for employers in that employment allowance - which allows companies to reduce their NI liability - will increase from £5,000 to £10,500

    Income tax: Despite predictions that Reeves might continue the freeze in income tax thresholds beyond 2028-29, she said that after that they would go up in line with inflation.

    Capital Gains Tax: For higher rate tax payers, on assets such as shares this will go up from 20% to 24%, for lower rate tax payers, it will rise from 10% to 18%. On residential property, the rates will remain at 24% and 18%.

    Non-dom taxation: The non-dom tax regime will be abolished from April 2025

    Carer's Allowance: Full-time carers will be able to earn more without losing their allowance - the maximum earnings threshold will rise from £151 to £195 a week

    Alcohol duty: Tax on draught drinks will be cut by 1.7%, while non-draught drinks will see a rise in line with RPI - the higher measure of inflation

    Fuel duty: The 5p cut to fuel duty on petrol and diesel, due to end in April 2025, will be kept for another year

    Stamp duty: From tomorrow, the stamp duty land surcharge for second-homes raises by 2% to 5%

    Air passenger duty: On private jets, Reeves is increasing the rate of air passenger duty by a further 50%

    Read more: Key points at a glance

  5. Analysis

    Big taxes, big borrowing and big spending

    Chris Mason
    Political editor

    I said this morning this Budget would be big. And big is exactly what it is.

    We got a sense of that very early on from the chancellor, when she said: "This Budget raises taxes by £40bn."

    To state the bloomin' obvious, that is a massive amount of money. The thrust of what we are hearing is very much in line with what we reported in advance – with one or two tax rises suggested in some places that aren't actually happening.

    So the thresholds at which various levels of tax are paid, which are frozen until 2028, will be unfrozen then – the opposite of what was expected.

    Frozen thresholds contribute towards what is known as "fiscal drag" and amount to big tax rises – where people can be hauled into paying a tax, or a higher rate of it, courtesy of inflation.

    But it is worth remembering that Rachel Reeves could have unfrozen the thresholds before 2028 and chose not to, and could later choose to maintain the freeze.

    The other tax rise many thought could happen but didn’t was fuel duty.

    But put these two to one side – this is a massive tax raising budget. Alongside it, where they will spend some of that money – on the NHS and schools in England, for instance.

    Big taxes, big borrowing and big spending.

    But also projected pretty anaemic growth and inflation above its 2% target.

    There is one big question – will all this make enough difference that people think their lives are getting better?

  6. Send our experts your Budget questions

    A banner which reads: 'Get in touch'

    With the Budget over, it's time to drill down into the detail of all the measures announced.

    Do you have a question you’d like our experts to answer on the Budget? You can get in touch in the following ways:

    In some cases a selection of your comments and questions will be published, displaying your name and location as you provide it unless you state otherwise. Your contact details will never be published.

    We'll be doing a live Q&A from 16:00 GMT - join us then.

  7. 'You name it, they'll tax it!'

    Taxes are going up across the board, Sunak says.

    Taxes will rise for small business owners, for the energy sector, for young couples saving for their first home, and for families, he says.

    “They’re taxing your job, they’re taxing your business, they’re taxing your savings. You name it, they’ll tax it," Sunak says.

    That brings Sunak's response to the Budget in the Commons to an end. MPs are now debating what has just been announced, and while they're doing that, we're going to bring you more reaction and analysis, so stay with us.

  8. Tory leader accuses Reeves of 'breaking promise' on taxing working people

    Sunak says that Sir Keir Starmer had promised Labour would not raise taxes during the election campaign, and that the Conservatives had warned that that was not true.

    "Never in the history of our country will taxes be higher than they are under this Labour government," says Sunak.

    He says Labour specifically promised that they "wouldn't raise taxes on working people" - but instead have increased National Insurance, thus "breaking that promise".

    Sunak on Budget: Broken promise after broken promise

  9. 'Tidal wave of anti-business measures'

    Today, Sunak says, the OBR has forecast growth will be lower than it was forecast to be under Conservatives

    This is what happens when people with no experience of business lead the government, Sunak jibes, adding it has delivered a "tidal wave" of anti-business measures.

  10. Sunak: Tax rises on jobs and enterprise will 'hobble growth'

    Sunak says that, as Labour's plans became clear, survey after survey showed business confidence plummeting.

    He says the government's own assessment show its "French-style" labour laws will impose a £5bn cost on business.

    Tax rises on jobs and enterprise announced in the Budget will "hobble growth", he says.

  11. Sunak says Reeves has no plan to rein in welfare spending

    Reeves has “failed to get a grip on public spending," Sunak says.

    The chancellor has no plan to rein in welfare spending, he says. “If we simply got working age welfare spending” back to pre-pandemic levels, that would manage spending

    “This is not her inheritance – they’re her choices," Sunak says.

  12. Chancellor unleashes borrowing 'splurge', Sunak says

    Sunak speaking in the commonsUK PARLIAMENT

    Sunak says that Reeves has "unleashed a splurge" of borrowing, saying she is trying to cover it up by "fiddling the fiscal rules".

    He says that the chancellor had specifically said she wouldn't change the debt target - "she has gone back on her word," he says.

  13. Economy will be more exposed to shocks, Sunak warns

    Sunak says that during the election Labour promised they had no plans to raise taxes and that the Budget would balance the books - which he says it doesn't do.

    He accuses the chancellor of having launched an "enormous borrowing spree".

    Sunak adds that Reeves's Budget will leave the economy more exposed to future shocks and has led the OBR today to forecast higher inflation predictions.

  14. Sunak rubbishes Labour's claims over state of finances

    Labour's claims about how bad the situation they inherited is are "nonsense", Sunak says.

    He says inflation is back to its 2% target, there is low unemployment and the UK as the fastest growing advanced economy in the world.

    Labour has not acknowledged that they made "tough choices" during Covid and the Ukraine, saying Labour supported those decisions and encouraged them to go further.

    Labour's claims are purely "ludicrous", he says encouraging them to take responsibility for their choices.

  15. Reeves has sought to 'politicise' independent OBR - Tory leader

    Sunak argues that the OBR does not back up the government's claim of a £22bn black hole, saying it does not appear in their report.

    Reeves “has sought to politicise the independent OBR that should be above politics”, he says.

    Playing politics has “done real damage to our economy” Sunak charges. The prime minister and chancellor are damaging the country “for political purposes”.

  16. Sunak accuses Labour of using 'cynical political device' to justify Budget

    "They don't like it, but this is the truth," continues Sunak. "They have fiddled the figures and raised tax to record levels."

    He says that the chancellor and prime minister are trying to say they had no choice but to take these measures, but their claims are a "cynical political device".

    Sunak says today's situation is much better than what the Conservatives inherited from the last Labour government in 2010.

  17. Chants of 'up' from Tories as Sunak lists 'broken promises'

    Rishi Sunak speaking in the CommonsUK PARLIAMENT

    Leader of the Opposition Rishi Sunak stands up to deliver his response to Labour's Budget.

    He says Starmer said on his first day he wanted to restore trust with actions not words. Today, he says, the public can see the Budget contains "broken promise after broken promise".

    He says the Budget shows that Labour will tax and spend far more than they promised.

    He lists them, to big cheers from his party who chant "up" along with him.

    "They have fiddled the figures!" he exclaims.

  18. Ending her statement, Reeves says Budget will 'restore stability and rebuild Britain'

    Reeves finishes her Budget by saying the choices she has made today are the "right" ones.

    They will restore stability, protect working people, fix the NHS and rebuild Britain, she says.

    They are "responsible," she says, but not easy.

    She says if the opposition parties disagree with her choices, what choices "would they make?"

    "Would they again choose the path of irresponsibility?"

  19. Chancellor lists NHS budget increases

    Speaking on the NHS, Reeves says that there will be a 10-year plan to address the health system in the spring. The NHS will receive new funding under this Budget, she adds.

    She announces a £22.6bn increase in the day-to-day health budget, and a £3.1bn increase in the capital budget, which she says is the largest increase in spending outside of Covid since 2010.

    The measures will bring down waiting lists and increase the capacity for procedures in the NHS.

  20. Analysis

    Reeves surprises on personal tax thresholds

    Dearbail Jordan
    Business reporter

    Real curveball from Reeves on personal tax thresholds. Under the Tories, they were set to remain in place until 2028.

    It had been expected that she would freeze them for another year, but no. "I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips," she says.

    It means from from 2028-29 "personal tax thresholds will be uprated in line with inflation once again".

    They have been in place since 2022.