The Chancellor Rachel Reeves has delivered her Budget. Here we will post a selection of responses from the Opposition and ThinkTanks.
Drip, drip, drip. In the run up to Labour’s Budget there was leak after leak of all the tax measures Reeves was considering, so it is only fitting that almost an hour before she rose to announce the full Budget in the Commons chamber, the Office for Budget Responsibility’s (OBR) economic and fiscal outlook was accidentally published in an unprecedented leak.
Numerous Tory MPs, with the OBR report on their phones, were waving it at the Prime Minister and the Chancellor from the opposition benches. Up from the press gallery you could hear the hoards of Tory MPs heckling: “She should resign.”
It is Tory Party leader Kemi Badenoch’s time to do her first Budget response for the opposition. With shadow chancellor Mel Stride sat to her left, shadow chancellor to the duchy of Lancaster Alex Burghart and shadow business secretary Andrew Griffith to her right, and former Treasury minister now PPS John Glen behind her, she has been receiving updated lines to go on the attack.
Her policy chief Neil O’Brien recently passed over a folder detailing the key points from the leaked OBR report, meaning for the first time the Leader of the Opposition is able to deliver the Budget response with full facts and figures – usually there is no advanced sight.
Fundamentally, as we now know from the leaked OBR report, the tax-burden will hit an all-time high at more than 38 per cent of GDP and welfare spending will continue to rise after Labour’s welfare cut reversals and lifting the two-child limit. Best of luck everyone.
Leader of the Conservative Party Kemi Badenoch responded to the Chancellor:
“May I congratulate the right honourable lady on delivering her second Budget. I hope she enjoyed it, because it really should be her last. It is a total humiliation. Last year she put up taxes by £40bn. The biggest tax raid in history. She promised that she wouldn’t be back for more. She swore it was a one-off. She told everyone that from now on it will be stability and she will pay for everything with growth. Today she has broken every single one . If she had any decency she would resign.”
Shadow Housing Secretary James Cleverly wrote on X:
“Rachel Reeves says she isn’t increasing income tax, while increasing the tax take from working people by £15bn. Stealth tax on working people.”
Head of the Tory’s policy renewal Neil O’Brien responded:
“Reeves has totally lost control of spending – it is £179 billion a year higher in 2028/29 than the forecast she inherited. That’s £2,578 more per person or £10,296 for a family of four. No wonder tax is at record levels!”
John Glen, Kemi Badenoch’s PPS, said:
“Labour had no plan for Government, that has been clear from day one. They have proved themselves incapable of controlling spending, held hostage by their militant backbenchers. The Chancellor could have reset her fiscal strategy today, but she left herself with only one place to go – taxes. It’s 1970s Labour again, your hard-earned money to pay for their ‘freebies’, a direct consequence of the lack of a sound economic plan, and weak political leadership.”
Head of communications and external affairs at the Adam Smith Institute, Joanna Marchong, said:
“It was bold of the Chancellor to open her speech by revisiting everything she claimed to stand for at the last Budget, because the public will just as quickly recall everything she said then but clearly didn’t mean. Not least keeping to manifesto commitments, which is clearly in tatters. Understanding that growth should be a priority is an improvement from the last budget, but thinking it can be done by more spending, regulation and a flotilla of stealth taxes, fiscal drag and policy tinkering will achieve nothing close to stability, but only more pain for the economy. Individually, the measures may look modest. But without properly addressing the ballooning welfare bill, missed house building targets, the effect of stealth taxes on workers and our plummeting productivity Britain’s economic stability will continue to be questioned.”
Joe Shalam, Policy Director at the Centre for Social Justice, said:
“Loading yet more taxes onto the British public like a game of buckaroo is not the same as doing the hard work to repair broken Britain. One million young people are not in a job or training, five million have been written off as unable to work at all, and children growing up without seeing a parent go out to work in the morning is rising at the fastest rate on record. A government with a majority of 169 has set out a Budget penned by its backbenchers. But throwing money at the problem, paid for by a squeeze on the workers and savers of middle England, will eventually cause a kick. We welcome extra apprenticeships but ministers must urgently return to proper welfare reform to rescue the nation’s creaking bank balance and, more importantly, the lives of millions who have been thrown on the scrapheap. There is no time to lose.”
Ben Ramanauskas, Senior Research Fellow in Economics at Policy Exchange:
“This Budget could be even more damaging than the last. The increase in public spending has seen the Chancellor introduce a hodgepodge of taxes and freezing Income Tax thresholds in a desperate attempt to raise revenue. These tax hikes will see working people paying more tax, stifle growth, and could raise less revenue than claimed by the Treasury, meaning that the Chancellor would be forced to come back next year with even more tax rises. The increases to the Minimum Wage – combined with the Employment Rights Bill and last year’s hike to Employers’ National Insurance Contributions – will have a negative impact on the labour market, with young people being most adversely affected. Instead of tax rises, the Chancellor should address the dreadful state of our public finances by supply side reforms to increase productivity, and by cutting public spending – including abolishing the Triple Lock, returning welfare spending to pre-pandemic levels, reforming public sector pensions, and other measures set out in Policy Exchange’s report, ‘Beyond Our Means’.”
Centre for Policy Studies Director Robert Colvile said:
“This was a bad Budget in every way. Bad because it raises tax to post-war highs. Bad because it puts off difficult decisions until the final years of the forecast period. And bad because it avoids any attempt at reforming and simplifying the tax system, in favour of making it even more complicated and anti-growth. For all the talk of a “smorgasbord” of measures, the heart of the Budget was a perpetuation of the freezes to tax thresholds that Rachel Reeves promised not to extend – and indeed said would be an explicit breach of Labour’s manifesto. At £66.6 billion, the cumulative cost of the freeze to tax thresholds, since its introduction by the Conservatives in 2022-3, makes it the largest tax rise in the last 60 years, at least according to the OBR’s own calculations.”
Sir Simon Clarke, Director of Onward and Former Chief Economic Secretary to the Treasury, responded:
“Today’s Budget compounds the damage inflicted a year ago: slower growth and lower productivity alongside higher taxes and more welfare spending. It outlines huge tax rises, choosing to extend the freeze on income tax thresholds, increase taxes on dividends, savings and property income, and tighten the rules on salary sacrifice pension schemes. The OBR now expects that by 2030 around one in four adults will be higher or additional rate taxpayers, compared with fewer than one in six in 2021. Yet welfare spending continues to rise, without measures to lift employment, skills or business investment to pay for it while higher earners flee. Once again, the biggest tax rises and savings are pushed into 2028-29 and 2029-30, even without further damaging measures like the Employment Rights Bill being scored for their impact on jobs and growth. The risk is that the UK drifts further into a high tax, low growth, high welfare equilibrium, rather than using this Budget to set out a credible long term plan to raise productivity, support work and make the tax system more clearly pro growth.”
John O’Connell, chief executive of the TaxPayers’ Alliance, said:
“The chancellor’s budget benefits bonanza will be paid for by hard working taxpayers through their incomes, pensions, property, savings and beyond. The pettiness of this government and its unquenchable thirst for cash even extends to milkshakes. And the catastrophic content of this budget is only matched by the utter shambles that has been the process, capped off by the extraordinary leak from the OBR. Rachel Reeves needs to urgently change course, by drastically reducing the benefits bill, bringing in targeted, growth generating tax cuts and deregulating the economy. We are now dangerously close to the cliff edge.”
Callum Price, Director of Communications at the Institute of Economic Affairs said:
“The Chancellor has raised the white flag in the battle for economic growth. Instead of putting it front and centre of her plans, taking the necessary radical action to fix our tax system and strip back public spending to a sustainable level, she has instead prioritised keeping her backbenchers onside and doing her best to avoid painful headlines. The result is a mess of painful tax rises on working people, exactly the same people she pledged to protect, and the very people and businesses who drive economic growth. Where there should be a real vision and tangible plan to return economic dynamism to Britain, deliver the growth that could end our doom loop and improve the livelihoods of every Briton, we have been given yet another record high tax burden being used to support yet further swelling of the state.”
Sam Hall, Director of the Conservative Environment Network, responded:
“Rachel Reeves’s investment-crushing budget deepens Britain’s decline and exacerbates our biggest environmental challenges. Modest changes to green levies funding are welcome, but will barely touch the sides. Her failure to tackle the root causes of mounting electricity prices will not only prolong the cost of living crisis and cripple economic growth. They will also sink decarbonisation efforts, as clean electric-powered technologies are made less appealing and more expensive. Her overzealous EV tax will add insult to injury, slowing sales, boosting inflation, and undermining the British car industry. The Chancellor chose more state intervention and a sticking plaster for high bills. She should have reined in Ed Miliband’s costly statism, embodied in the 2030 clean power target, GB Energy, and his drive for clean energy unionisation, taken bolder action to reduce unnecessary taxes and levies on electricity bills, and backed proposals to streamline nuclear red tape instead.”
Chairman of the Growth Commission, Shanker Singham, said:
“This Budget tinkers at the edges of revenue enhancements which are relatively small and which impose significant GDP per capita losses going forward. Rachel Reeves has ignored the elephant in the room which is the massive negative GDP per capita impact of the Government’s energy policy and labour market policies (such as the Employment Rights Bill) whose impacts dwarf the minor gains she seeks to eke out. This Treasury zero-sum thinking is doing real damage to the Prime Minister’s growth objectives for the British economy. Continued static growth will drown the UK in a sea of red ink.”
Mark LIttlewood, Director of Popular Conservatism, said:
“This is a predictably disappointing Budget which will dampen growth, discourage enterprise and eat away at productivity. The Government’s inability to stem incontinence in its spending plans means we are in a doom loop of stagnation, debt and higher tax rates. We will be back next year – probably with a new Chancellor – facing yet another black hole to fill. The cycle of decline will continue.”
Ryan Shorthouse, Executive Chair of Bright Blue, commented:
“There is no serious attempt to cut government spending. In fact, there are unnecessary and unjustifiable increases in public spending, such as freezing rail fares and extending free breakfast clubs to all primary schoolchildren. And so, worryingly, net public debt will rise to 96 per cent of GDP by the end of this decade; twice the level of an average advanced economy.
“Working taxpayers and government bond investors who are paying for all this public spending are voting with their feet: turning away from Labour, turning away from the country, turning away from British bonds. A confident performance today will give the Chancellor some temporary respite, but Labour Ministers are still too scared of their own shadows, unwilling to do what is right for our country above what is popular in the polls.”