Words by Caitlin Hoyland
The November 2025 UK Budget unfolded under intense political pressure after what was widely described as a chaotic pre-announcement period. The turmoil began when the Office for Budget Responsibility inadvertently released its economic forecasts before the Chancellor, Rachel Reeves, delivered her statement to the House of Commons. The leak was traced to an error involving a WordPress add-on that made a supposedly private link publicly accessible.
The OBR later confirmed that the confidential material had been accessed 43 times from 32 devices in the hour before the Chancellor’s speech. The subsequent inquiry described the incident as the “worst failure” in the organisation’s history. In the wake of the scandal, OBR chair Richard Hughes resigned, prompting questions about why the Chancellor had not also considered her position.
The leak intensified an already heated political dispute. Opposition critics claimed Reeves had misled the public by presenting the public finances as weaker than they were in order to justify tax rises. Furthermore, some Conservative figures argued that Hughes had effectively been forced out for highlighting that the OBR had in fact projected a £4 billion surplus. The government rejected these accusations. Reeves insisted she had been clear about the need to build a fiscal buffer and the Prime Minister argued that downgraded productivity forecasts had removed £16 billion from the government’s expected headroom.
Whilst Sir Keir Starmer acknowledged that ministers had at one point believed they might have to break a manifesto pledge on taxation, he said that improving figures during the pre-Budget process made this unnecessary. He described the final package as consisting of necessary and fair choices. Although he accepted that tax rises make life harder for households, he said the alternative would have been damaging cuts to services, increased child poverty or additional borrowing.
Despite the controversy, the Budget set out a wide-ranging programme of tax and welfare reform. Income tax and national insurance thresholds will remain frozen until 2028, a continuation of a policy that will gradually push more earners into higher tax bands. Reeves said this would affect working people but argued that overall changes will ensure the wealthiest make the largest contribution. VAT and national insurance rates will remain unchanged, consistent with Labour’s manifesto pledges.
A series of revenue-raising measures target wealth and consumption. These include a mansion tax, a two-percentage point increase in property tax, a council tax surcharge for properties valued at £2 million or more, an expansion of the sugar tax to include dairy-based drinks, higher gambling duties and a mileage-based levy on electric vehicles. Together these measures are expected to raise around £26 billion.
The most significant social policy announcement is the abolition of the two-child benefit limit, a reform expected to lift 450,000 children out of poverty. The Budget also increases the national minimum wage by 85 pence per hour for workers aged 18 to 20-year-olds, and by 50 pence an hour for those aged 21 and over. Fuel duty will remain frozen until September 2026, after which it will rise in line with inflation, and new excise charges will apply to electric cars. Additional changes include the scrapping of the Conservatives’ home insulation scheme and adjustments to disability benefits that critics warn may make mobility vehicles less accessible.
Overall, the Budget aims to stabilise the public finances, reduce child poverty and shift the tax burden towards wealth, although the political fallout from the OBR leak continues to overshadow the government’s broader intentions.
