The chancellor is to face questions about her budget within the hour, after she hiked taxes by £26bn, and froze income tax thresholds, while scrapping the two-benefit child cap. Follow updates below.
Thursday 27 November 2025 06:29, UK
Good morning and welcome back to the Politics Hub this Thursday, 27 November.
It’s the day after yesterday, the day after the budget – but the chancellor is not out of the woods yet.
Today, we’ll get a more rounded analysis of the policies set out by Rachel Reeves yesterday.
These included freezing income tax thresholds, scrapping the two-child benefit cap and new taxes on properties worth more than £2m, gambling, electric vehicles and cash ISAs, among other things.
In total, the chancellor unveiled a budget that raised taxes by £26bn.
The Institute for Fiscal Studies (IFS), the Labour-friendly Resolution Foundation, and the National Institute of Economic and Social Research (NIESR) will all publish their analyses of what those policies will mean for the economy, and for people in Britain, in full this morning.
The IFS has already said Reeves unveiled a “spend now, pay later” budget, with tax rises being increasingly relied upon over time. It also accused her of breaching Labour’s manifesto commitments.
Meanwhile, the Resolution Foundation has been more supportive, saying it will help families with the cost of living through the scrapping of the two-child benefit cap and £130 off energy bills for the next three years.
But it also warned that freezing income tax thresholds is actually worse than if she had raised income tax rates, as Reeves had originally planned.
In short, Reeves still faces plenty of questions about her budget.
Luckily for us, we will be speaking to the chancellor live on Sky News in the next hour – so do stay tuned.
Also speaking to Sky News this morning are:
Of course, we’ll bring you all the day’s news from Westminster, right here on the Politics Hub.
That’s all from us for tonight.
Join us again in the morning.
Over and over again, in the run-up to the election and beyond, the prime minister and the chancellor told voters they would not put up taxes on working people – that their manifesto plans for government were fully costed and, with the tax burden at a 70-year high, they were not in the business of raising more taxes.
On Wednesday the chancellor broke those pledges as she lifted taxes by another £26bn, adding to the £40bn rise in her first budget.
She told working people a year ago she would not extending freezing tax thresholds – a Conservative policy – because it would “hurt working people”.
On Wednesday she ripped up that pledge, as she extend threshold freeze for three years, dragging 800,000 workers into tax and another million into the higher tax band to raise £8.3bn.
Rachel Reeves said it was a Labour budget and she’s right.
In the first 17 months of this government, Labour have raised tens of billions in taxes, while reversing on welfare reform – the U-turn on the winter fuel allowance and disability benefits has cost £6.6bn.
Reeves even lifted the two child benefit cap on Wednesday, at a cost of £3bn, despite the prime minister making a point of not putting that pledge in the manifesto as part of the “hard choices” this government would make to try to bear down on the tax burden for ordinary people. The OBR predicts one in four people would be caught by the 40% higher rate of tax by the end of this parliament.
Those higher taxes were necessary for two reasons and aimed at two audiences – the markets and the Labour Party.
Away from the budget, the government has sizeably increased the amount of time that the House of Lords will have to debate the assisted dying bill.
With more than 1,000 amendments to the bill tabled in the upper chamber, proponents argued it could essentially be filibustered.
Opponents say the bill has not had enough scrutiny.
Speaking in the Lords, government chief whip Lord Roy Kennedy said it was “clear the House needs additional time to scrutinise the Bill” given the high number of amendments.
He told peers: “I have always been clear that as this government is neutral on the bill any additional time will not come from government time.
“I also believe given the importance of the subject and the number of colleagues wishing to participate, that this scrutiny could not take place in the grand committee, as some have suggested to me.
“I have therefore arranged for the House to sit on an additional eight additional Fridays in the new year in addition to the three Fridays already announced.”
Lord Charlie Falconer, who is steering the bill through the Lords, said the extra dates mean that up to 24 April, there would be 16 days in total for consideration of the legislation through the Lords.
By Paul Kelso, business and economics correspondent
Hitchin in Hertfordshire does well in the polls.
On the edge of the Chilterns and 30 minutes from central London by train, it’s Britain’s most expensive market town for first-time buyers. It’s also been voted one of the top 10 best, and top 20 happiest, places to live in the country.
Last summer Labour did well in the polls here too. Hitchin’s 35,000 inhabitants, with above average earnings, levels of employment, and higher education, ejected the Conservatives for the first time in more than 50 years.
Having swept into affluent southern constituencies, Rachel Reeves is now asking them to help pay for her plans via a combination of increased taxes on earnings and savings.
While her first budget made business bear the brunt of tax rises, the higher earners of Hitchin, and those aspiring to join them, are unapologetically in the sights of the second.
Kai Walker, 27, runs Vantage Plumbing & Heating, a growing business employing seven engineers, all earning north of £45,000, with ambition to expand further.
He’s disappointed that the VAT threshold was not reduced – “it makes us 20% less competitive than smaller players” – and does not love the prospect of his fiancee paying per-mile to use her EV.
Police have arrested a number of farmers who protested in central London against the government today, despite the conditions imposed on them.
The Metropolitan Police had said yesterday: “Anyone breaching conditions by bringing vehicles, including tractors or agricultural vehicles, to today’s farmers’ protest will be asked by officers to leave.
“If they refuse to comply with the conditions, officers will have to make arrests for offences under the Public Order Act.”
In a statement today, the force said: “We have already spoken to a number of individuals this morning to advise them of the conditions.
“The majority have listened to officers and complied with the conditions, however, several arrests have been made.”
Reform leader Nigel Farage said: “The farmers’ planned protest on Whitehall has been cancelled by the police at the last moment.
“They have come to London and are now being arrested. This is outrageous.
“Reform UK will provide full legal support to every farmer protesting peacefully today.”
We’re now well into the evening, so let’s take a moment to recount what happened today.
Things all started on plan, with Chancellor Rachel Reeves posing outside Downing Street at around 11.20am with her red box.
But shortly after, things went off script.
At around 11.40am, it emerged that the OBR’s forecast for the budget – containing all the key policy announcements and their impacts on the economy – had been published hours early.
This document is normally published when the chancellor finishes speaking, so it went up about two hours before it should have.
Journalists, economists and the market starting poring over the document.
You can rewatch that moment here…
At midday, Prime Minister’s Questions began, with Sir Keir Starmer and Kemi Badenoch facing down across the Commons.
This saw a fairly bog standard Wednesday showdown, with the Conservatives criticising the workings of Number 10.
But in the background – literally – Reeves could be seen being told that her big moment had been ruined.
When she did get up to speak at around 12.30pm, Reeves acknowledged the error from the OBR, and confirmed it was very much the mistake was from the watchdog instead of her own department.
The chancellor went on to deliver her budget, but by this point everyone was only keeping half an ear on her as they were already looking through the details in the OBR forecast.
After sitting down, Reeves then had to receive the response from Badenoch, who used it as a chance to go in studs up against the chancellor.
The Tory leader used her platform to call for Reeves to resign and generally attacked Labour.
With the main Commons proceedings over, ministers and other dancers in the budget show began their afternoon commitments.
Richard Hughes, the chair of the much embarrassed OBR, for example, had to give a news conference in which he was pressed repeatedly if his position was in jeopardy due to the organisation’s mess up.
The independent financial analysts at the Institute for Fiscal Studies stated they believed the government had breached its pledge not to increase taxes by freezing thresholds.
This point was put to Reeves by Sky News political editor Beth Rigby, who didn’t engage with questions about if she should resign.
But the chancellor did admit that “ordinary people” are going to be left paying more because of her budget.
At this point, the digestion of the budget was well underway and it was becoming clear what had been announced.
Borrowing was going up in the short term to keep spending in place, and then the fabled “smorgasbord” of tax rises would come into place by the end of this parliament.
It became clear that billions had needed to be found due to the government’s failure to reform welfare, and increase the headroom.
The government’s narrative about this being a budget for the NHS, cost of living and reducing borrowing came under question as some of those details didn’t seem to match up to reality.
However, the market for government debt seemed to be welcoming the fiscal event – making borrowing cheaper for the government at least for now.
Some also began to describe the budget as one for Labour back benchers, with the two child benefit cap scrapped and welfare protected.
The increase in taxes may make it less popular with the electorate though.
And that brings us to now.
At this point, we and the government will be waiting to see how the budget lands in the papers.
An educated guess would suggest that only the Mirror – and maybe the Guardian – will celebrate it, with the rest commenting on the chaos or the tax rises.
Alongside the budget today, the government has also formally announced that it is closing the Office for Value for Money (OVfM).
The independent organisation was created by the chancellor at the budget a year ago, with the aim of ensuring every pound of government money spent was worth it.
And today, Rachel Reeves has declared “mission accomplished”, formally closing the organisation.
In a document published on the government website, the chancellor wrote: “The OVfM was set up as a small, time-limited organisation, with a clear remit that allowed it to target longstanding value for money issues in public spending.
“It was not intended to be a permanent addition to, or to duplicate the work of, the existing structures and frameworks across government that are designed to deliver value for money.
“As the OVfM’s work comes to a close, its reforms will become part of HM Treasury’s and the rest of government’s business as usual.”
The announcement comes on the day that Reeves announced a raft of tax rises to fill a black hole in the government’s budget, and to scrap the two-child benefits cap.
We’ve just been hearing from the Conservative shadow work and pensions secretary, and she said Rachel Reeves needs to resign as chancellor.
Helen Whately said that position is “perfectly reasonable because she has misled people, lied to people”.
“I don’t like using that word, but the fact is, in the run-up to the election, Labour and Rachel herself told the country that they weren’t going to put up taxes on working people.
“At the last budget, she said she wasn’t going to do this again, that it was going to be a one-off event, and then what do we see? She’s come to the country again today, and she’s whacked up taxes on working people.”
Whately added that Reeves is “whacking working people with higher taxes to pay for ‘benefits Britain’”.
The senior Tory conceded that her party has previously broken manifesto promises on tax, but noted that Reeves has twice been explicit that she would not raise taxes.
Whately staunchly defended her party’s record in government, and said she is “perfectly happy” to “own the things that we got wrong”.
Dan Tomlinson is exchequer secretary to the Treasury, one of the ministers working under Chancellor Rachel Reeves.
He has come on Sky News to be questioned by our economics and data editor Ed Conway about the budget.
Standing in front of Ed and his charts, Tomlinson defends the decisions made in the budget and since Labour won the election.
As is pointed out by Ed, there are several questionable claims being made by the government.
For example, of the £30bn or so in spending announced today, the vast majority is going on welfare and there is very little for the NHS.
This is despite the government saying this is a budget for the NHS.
Tomlinson then points to the budget last year and the money they gave to the health service last year.
He also claims that Labour has avoided cutting the NHS budgets this year.
This is just one of the challenges to the minister, which you can watch below.
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