UK’s Reeves unveils tax plan amid embarrassing budget leak
In an unprecedented error, the UK’s financial watchdog apologised for publishing budget forecasts before they were delivered in parliament
Britain’s unpopular centre-left Labour government sought to seize the political narrative on Wednesday with a tax-raising budget that it hopes will boost economic growth by fostering a stable debt outlook, reduce child poverty and ease cost-of-living pressures.
But the entire contents of the budget were leaked half an hour before Treasury chief Rachel Reeves delivered the budget statement in the House of Commons, in a sign of the chaos that has engulfed the government during weeks of mixed messaging and political infighting.
The government was elected in a landslide victory in July 2024 on a promise not to raise taxes on income for working people. Reeves acknowledged some of the budget’s £26 billion (US$34 billion) in tax hikes, largely to increase the buffer available to the government in the event of any future shocks, broke the spirit of that pledge and would face criticism.
But, she said, “I have yet to see a credible or a fairer alternative plan for working people. These are my choices – the right choices for a fairer, a stronger, and a more secure Britain.”
The biggest change in terms of money raised is freezing the thresholds at which earners pay Britain’s different income tax levels for a further three years from 2028, meaning as wages rise, more people fall into higher tax brackets.
Other measures included a mansion tax over £2 million (US$2.6 million), changes to the capital gains tax regime, higher gambling taxes, a new levy on electric car use and a cut to tax-free provisions for private pensions.