Chancellor Rachel Reeves tells the BBC it's likely her tax-raising Budget may affect wage growth for workers, as businesses will have to absorb the costs of paying more National Insurance or give out smaller pay rises
Asked about the impact of increasing NI contributions for employers by 1.2% from April 2025, she says: "I said that it will have consequences"
The government says it will raise £25bn from the measure - but the Institute for Fiscal Studies think tank claims it will raise just £16bn, because businesses will scale back wage rises
In a visit to a hospital in the West Midlands alongside Reeves, PM Keir Starmer says NHS funding in the Budget is a "down payment" on the health service's future, but adds staff workload will "likely to go up, not down"
Key takeaways: Labour's first Budget in 14 years features tax rises worth £40bn to fund the NHS and other public services - read the main measures here
'Right thing' for businesses and wealthiest to pay more - Reeves
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.
Image source, UK PARLIAMENTSunak 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.
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.
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.
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”.
"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.
Image source, UK PARLIAMENTLeader 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.
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?"
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.
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.
Branwen Jeffreys
Education editor
One of the most pressing issues in schools in England has been given a cash injection by the chancellor, with a £1bn increase for special educational needs and disabilities.
It’s just a few days since the official spending watchdog warned the system was financially unsustainable.
This 6% increase will be welcome easing of pressure, but it does not address the deficits of more than £4bn that have built up in local authorities.
The core education budget is also going up by £2.3bn, and the £300m for further education will be welcomed by colleges who often feel overlooked.
On schools, Reeves promises a £6.7bn capital investment to the Department for Education next year, which she says is a 19% real-terms increase on this year. This includes over £1.4bn to rebuild 500 schools "in the greatest need", she says.
She adds that the government will provide £2.1bn more to improve school maintenance, which she says is an increase of £300m on this year.
Overall the chancellor says, the government will invest £100bn in capital spending over the next five years.
The OBR says this will increase GDP by 1.4% in the longer term.
Reeves says the government will establish GB Energy, providing funding next year to set up the institution at its new home in Aberdeen, Scotland.
The government is committing to "making Britain a clean energy superpower," Reeves says.
There will be a new, multi-year investment into carbon capture and storage.
Funding will be provided to 11 new green hydrogen projects across England, Scotland and Wales.
They’ll be among the first commercial-scale projects in the world, and will be established in several communities, including Bridgend, East Renfrewshire and Barrow-in-Furness, she says.
The chancellor says the single bus fare cap applied to many routes in England will be raised from £2 to £3 - as first revealed by Prime Minister Keir Starmer on Monday - extending it for a further year until December 2025.
The cap was introduced under the previous Conservative government and was due to expire at the end of December.
Reeves says potholes on roads are a reminder of "our failure to invest as a nation".
She promises a £500m increase for road maintenance next year to deliver on the commitment to fix an additional one million potholes each year.
On HS2 - the high speed rail project - Reeves says they are committing the funding to begin tunnelling work between Old Oak Common, in west London, and Euston.
It was one of the sections of the multi-billion pound rail project that had been scrapped by the Conservative government.
Without the link to Euston, people travelling between Birmingham and London would arrive at Old Oak Common and have to take another train to travel into the centre of the capital.
"The past government made a number of promises on transport, but it failed to fund them," the chancellor says.
Reeves announces the government is securing the delivery of the Trans-Pennine upgrade to connect York, Leeds, Huddersfield and Manchester, "delivering fully electric local and regional services between Manchester and Stalybridge by the end of this year."
She also says the government will deliver East-West Rail to drive growth between Oxford, Milton Keynes and Cambridge.
Reeves says they will give £1bn to accelerate the removal of dangerous cladding on homes, following the Grenfell Tower report.