Live: Rachel Reeves delivers tax-raising Budget

1.13pm

The Chancellor reiterated the Government’s commitment to the pension triple lock, telling the Commons: “This commitment means that while working-age benefits will be uprated in line with CPI at 1.7%, the basic and new state pension will be uprated by 4.1% in 2025-26.

“This means that over 12 million pensioners will gain up to £470 next year.”

She added: “The pension credit standard minimum guarantee will also rise by 4.1% from around £11,400 per year to around £11,850 for a single pensioner.”

1.11pm

The headline rates of capital gains tax will increase, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%, the Chancellor has announced.

1.10pm

Ms Reeves has announced she will continue the freeze on fuel duty next year and maintain the existing 5p cut as she said that increasing it “would be the wrong choice”.

1.09pm

Employers’ national insurance contributions will rise by 1.2 percentage points to 15% in April 2025, and the threshold for paying them will fall from £9,100 per year to £5,000, the Chancellor has announced.

1.08pm

Ms Reeves said she will crack down on fraud in the UK’s welfare system, as part of reforms to ensure welfare spending is “more sustainable”.

She told the Commons: “Today, I am also taking three steps to ensure that welfare spending is more sustainable.

“First, we inherited the last government’s plans to reform the work capability assessment. We will deliver those savings as part of fundamental reforms to the health and disability benefits system that the Work and Pensions Secretary (Liz Kendall) will bring forward.

“Second, I can today announce a crackdown on fraud in our welfare system often the work of criminal gangs. We will expand DWP’s (Department of Work and Pensions) counter-fraud teams using innovative new methods to prevent illegal activity and provide new legal powers to crackdown on fraudsters, including direct access to bank accounts to recover debt. This package saves £4.3 billion a year by the end of the forecast.

“Third, the Government will shortly be publishing the “Get Britain Working” White Paper tackling the root causes of inactivity with an integrated approach across health, education and welfare.

“And we will provide £240 million for 16 new trailblazer projects targeted at those who are economically inactive and most at risk of being out of education, employment or training to get people into work and reduce the benefits bill.”

1.08pm

Ms Reeves vowed to crack down on unpaid taxes to raise £6.5 billion by the end of the forecast period.

“Before a government considers any change to a tax rate or threshold, it must ensure that people pay what they already owe,” she told the Commons.

“So we will invest to modernise HMRC’s systems using the very best technology and recruit additional HMRC compliance and debt staff. We will clamp down on those umbrella companies who exploit workers, increase the interest rate on unpaid tax debt to ensure people pay on time, and go after promoters of tax avoidance schemes.

“These measures to reduce the tax gap raise £6.5bn by the end of the forecast.”

1.06pm

Rachel Reeves has announced a Covid Corruption Commissioner will be appointed.

The Chancellor said: “As set out in our manifesto, I will shortly be appointing our Covid Corruption Commissioner, leading our work to uncover those companies that used a national emergency to line their own pockets.

“Because that money belongs in our public services. And taxpayers want it back.

“And I can confirm today that David Goldstone has been appointed as the Chair of the new Office for Value for Money to help us realise the benefits from every pound of public spending.”

1.03pm

The weekly earnings limit for carers allowance will rise to the equivalent of 16 hours a week at the national living wage, the largest increase since the allowance was introduced, the Chancellor has announced.

1pm

The Chancellor said every Budget she delivers will be “focused on our mission to grow the economy”, saying the key pillars of the Government’s strategy include seeking to “restore economic stability”.

She added increasing investment and building new infrastructure is “vital for productivity”.

Ms Reeves, turning to the fiscal rules, said: “I am confirming those today – our stability rule and our investment rule.

“The stability rule means we will bring the current Budget into balance so that we do not borrow to fund day-to-day spending. We will meet this rule in 2029-30 until that becomes the third year of the forecast.

“From then on, we will balance the current budget in the third year at every budget, held annually each autumn.”

Ms Reeves said this will provide a “tougher constraint” on day-to-day spending to ensure “difficult decisions cannot be constantly delayed or deferred”.

12.59pm

Ms Reeves, turning to household finances, said: “Today, the OBR says CPI inflation will average 2.5% this year, 2.6% in 2025, then 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2% in 2029.

Ms Reeves said the Budget “marks an end to short-termism”, adding the Office for Budget Responsibility (OBR) has published a “detailed assessment” of the growth impacts of the Government’s policies over the next decade.

She said: “The OBR forecast that real GDP growth will be 1.1% in 2024, 2% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029. And the OBR are clear: this Budget will permanently increase the supply capacity of the economy, boosting long-term growth.”

12.58pm

The Government is setting a “two per cent productivity, efficiency and savings target for all departments to meet next year”, Ms Reeves said.

12.54pm

Chancellor Rachel Reeves told the Commons “this Budget raises taxes by £40 billion”.

She said: “The leadership campaign for the party opposite has now been going on for over three months, but in all that time not one, single apology for what they did to our country – because the Conservative Party has not changed.

“But this is a changed Labour Party and we will restore stability to our country again.

“The scale and seriousness of the situation that we have inherited cannot be underestimated.

“Together, the black hole in our public finances this year, which recurs every year, the compensation payments which they did not fund, and their failure to assess the scale of the challenges facing our public services means this Budget raises taxes by £40 billion.

“Any chancellor standing here today would face this reality, and any responsible chancellor would take action. That is why today, I am restoring stability to our public finances and rebuilding our public services.”

12.52pm

The Budget “raises taxes” by £40 billion, Chancellor Rachel Reeves has said.

12.50pm

Rachel Reeves said the Government would publish a “line-by-line breakdown of the £22 billion black hole that we inherited”, saying this showed “hundreds of unfunded pressures on the public finances”.

The Chancellor told MPs: “The Office for Budget Responsibility has published their own review of the circumstances around the spring budget forecast.

“They say that the previous government, and I quote, ‘did not provide the OBR with all the available information to them’ and that had they known about these ‘undisclosed spending pressures that have since come to light’ then their spring budget forecast for spending would have been, and, I quote again, ‘materially different’.”

Ms Reeves added: “Let me make this promise to the British people: never again will we allow a government to play fast and loose with the public finances and never again will we allow a government to hide the true state of our public finances from our independent forecaster.

“That’s why today, I can confirm that we will implement in full the 10 recommendations from the independent Office for Budget Responsibility’s review.”

12.49pm

Conservatives have “learned absolutely nothing” from their general election defeat this year, the Prime Minister said ahead of Wednesday’s Budget.

At the despatch box, Sir Keir Starmer told the Commons: “No one did more damage to rural constituencies than his nearby predecessor whose disastrous mini-budget crashed the economy and hurt his constituents.

“I do note that she’s been tweeting approval of the current shadow chancellor’s (Jeremy Hunt’s) attacks on the independent OBR (Office for Budget Responsibility), just showing the party opposite have learned absolutely nothing.”

Ben Goldsborough, the Labour MP for South Norfolk, had asked the Prime Minister “what action our Government will be taking to back British farming”. Former Conservative prime minister Liz Truss was the MP for nearby South West Norfolk.

12.47pm

The Government will set aside £11.8 billion to compensate those affected by the infected blood scandal and £1.8 billion to compensate victims of the Post Office Horizon scandal, the Chancellor has announced.

12.46pm

The Labour Party will rebuild Britain, Chancellor Rachel Reeves has said.

She told the Commons: “This is not the first time that it has fallen to the Labour Party to rebuild Britain.

“In 1945, it was the Labour party that rebuilt our country out of the rubble of the Second World War. In 1964, it was the Labour Party that rebuilt Britain with the white heat of technology. And in 1997, it was the Labour Party that rebuilt our schools and our hospitals.

“Today, it falls to this Labour Party, this Labour Government to rebuild Britain once again.”

12.46pm

Chancellor Rachel Reeves told the Commons: “While this is the first Budget in more than 14 years to be delivered by a Labour Chancellor, it is the first Budget in our country’s history to be delivered by a woman.

“I am deeply proud to be Britain’s first-ever female Chancellor of the Exchequer. To girls and young women everywhere, I say: Let there be no ceiling on your ambition, your hopes or your dreams.

“And along with the pride that I feel standing here today there is also a responsibility to pass on a fairer society and a stronger economy to the next generation of women.”

Ms Reeves accused the Conservatives of having “failed this country”, saying: “Their austerity broke the National Health Service. Their Brexit deal harmed British businesses. And their mini-budget left families paying the price with higher mortgages.

“The British people have inherited their failure. A black hole in the public finances, public services on their knees, a decade of low growth and the worst parliament for living standards in modern history.”

12.45pm

Chancellor Rachel Reeves opened her Budget speech by stating that her “belief in Britain burns brighter than ever”.

She told the Commons: “On July the 4th, the country voted for change. This Government was given a mandate: to restore stability to our country and to begin a decade of national renewal. To fix the foundations and deliver change through responsible leadership in the national interest. That is our task and I know we can achieve it.

“My belief in Britain burns brighter than ever and the prize on offer is immense.

“As the Prime Minister said on Monday, change must be felt: more pounds in people’s pockets, an NHS that is there when you need it, an economy that is growing, creating wealth and opportunity for all because that is the only way to improve living standards.

“And the only way to drive economic growth is to invest, invest, invest.

“There are no shortcuts and to deliver that investment we must restore economic stability and turn the page on the last 14 years.”

12.36pm

Deputy Speaker Nusrat Ghani has reprimanded the Government for the early disclosure of Budget details.

She told the Commons: “I am disappointed by comments made by Government spokespeople believing they can use precedent as an excuse.

“I am telling them today that they are entirely wrong.”

12.31pm

Rishi Sunak has urged Sir Keir Starmer to find his “inner tech bro”, and support British technology businesses.

The outgoing Conservative leader said: “Our two predecessors, Sir Tony Blair and Lord Hague, have repeatedly come together and powerfully argued in their joint reports that it is vital for the future prosperity of Britain’s economy, society and public services for us to be a world leader in technology and innovation.

“Now, the Prime Minister may not yet be at our joint report-writing stage yet, but in a similar spirit of cross-party agreement, can I ask him to find his ‘inner tech bro’ and continue to support emerging British tech businesses and establish our country as the home of AI (artificial intelligence) growth and innovation?”

The Prime Minister replied: “Yes, and this is a really important point. The Leader of the Opposition held a summit last year on AI which was very important.”

12.31pm

Mr Sunak went on to ask Sir Keir Starmer if he will ensure provision for cricket in state schools, joking that he has “a lot more time to practise now”.

Mr Sunak told the Commons: “Yorkshire is not just famous for its walks, but also for being home to some of England’s greatest cricketers. Now, sadly, no one’s going to put me on that list, but who knows, I’ve got a lot more time to practise now?

“But cricket does have the power to bring people together from all communities and give them fantastic opportunities, as shown so powerfully by Andrew Flintoff’s recent documentary.

“Now we also lead the world in female participation, and that will stand us in good stead when we host the Women’s World Cup in 2026 and when cricket becomes an Olympic sport in 2028, so could I therefore ask the Prime Minister to continue Government support for the England and Wales Cricket Board’s new initiative to get cricket into vastly more state schools, fostering a whole new generation of cricketers for us all to cheer on at every level?”

The Prime Minister replied: “Yes is the answer to that question, and the point is a really important one.

“We celebrate cricket. It does bring communities together, but it’s also really important for children and young people to enjoy sport.”

12.28pm

Rishi Sunak has thanked Speaker of the House Sir Lindsay Hoyle and Prime Minister Sir Keir Starmer during his final PMQs, and said he will be spending more time in Yorkshire – “the greatest place on earth” – once he is no longer leader of the Conservatives.

The outgoing Leader of the Opposition, who is MP for Richmond and Northallerton in North Yorkshire, told MPs: “Mr Speaker, thank you for your kind words, and indeed, thank you to the Prime Minister for his kind words.

“Indeed, no prime minister looks forward to PMQs, but I always did like this pre-Budget one, because it was for a change, nice not to be the main event and just the warm up act.

“But today is my last appearance at PMQs, and I’m happy to confirm reports that I will now be spending more time in the greatest place on earth where the scenery is indeed worthy of a movie set, and everyone is a character – that’s right, if anyone needs me, I will be in Yorkshire.

“And as an adopted Yorkshireman, I’m particularly looking forward to doing the coast to coast walk that runs through my constituency and many others. Since 2015 we’ve made significant progress with a campaign to make it a National Trail, and indeed, Natural England are close to concluding their work.

“So can I ask the Prime Minister to ensure that the Coast-to-Coast (walk) does indeed become Britain’s greatest National Trail, and in preparation for my return to the back benches, would he meet with me to discuss it?”

Sir Keir Starmer replied: “I thought he was about to ask me to join him on the walk, but certainly I will meet him.”

12.20pm

Sir Keir Starmer thanked former prime minister Rishi Sunak for his “decency” during Prime Minister’s Questions.

The Prime Minister said: “I wish everyone celebrating in the UK and around the world a joyful Diwali, a time to come together to celebrate and focus on a brighter future.

“Last Diwali, the leader of the opposition and his family lit the diyas outside 10 Downing Street.

“It was a significant moment in our national story: the first British-Asian prime minister is a reminder that this is a country where people of every background can fulfil their dreams, and it makes us all proud to be British.

“This is our last exchange across the despatch boxes. I wanted to take this opportunity to thank the Leader of the Opposition for his service.

“Now, of course, we’ve had political disagreements, ideological disagreements, we’ve argued at some length, but I want to thank him for his hard work, for his commitment and for his decency in everything that he has done, and I too, wish him and his family the very best for whatever the future may hold for them.”

12.16pm

Opening Rishi Sunak’s final appearance at Prime Minister’s Questions in the Commons, Speaker Sir Lindsay Hoyle thanked the former prime minister for their “working relationship”.

Sir Lindsay said: “I would like to mark the fact that this is the last time (Mr Sunak) will appear at the despatch box during PMQs, he has a bit more to do afterwards, but he has spoken at this despatch box as chancellor of the Exchequer, the prime minister, leader of the opposition, and after today, we all look forward to his continued contributions from the back benches.

“We wish him and his family well in their future endeavours, and I say personally, thank you for our working relationship.”

12.15pm

Before PMQs began Speaker Sir Lindsay Hoyle warned MPs should not make any reference to the Southport case in the Commons to avoid prejudicing the legal process.

He told MPs: “I wish to remind the House that, following the horrendous terrible incident in Southport on July 29, a suspect is awaiting trial having been charged with multiple offences. That means the House sub judice resolution is engaged and references should not be made to the case.

“I know that all honourable members wish to see justice done in this case. It is therefore of paramount importance that nothing is said in this House which could potentially prejudice a proper trial or lead to it being abandoned.”

12.09pm

11.58am

Rachel Reeves will deliver her Budget at around 12.30pm, following PMQs. Mr Sunak will then offer his response before MPs being debating.

He was previously appointed Chancellor of the Exchequer from February 13 2020 to July 5 2022 and chief secretary to the Treasury from July 24 2019 to February 13 2020.

11.40am

Prime Minister Sir Keir Starmer is heading to the Commons where he will take questions from Conservative leader Rishi Sunak before Rachel Reeves delivers her Budget. It will be Mr Sunak’s final PMQs as party leader.

11.29am

11.17am

10.30am

9.30am

One of the key Budget announcements has already been confirmed, with Rachel Reeves saying on Tuesday the minimum wage will rise to £12.21 an hour next year, a 6.7% increase.

The Chancellor described the move as a “significant step” towards delivering on Labour’s manifesto promise to introduce a “genuine living wage for working people”.

It will mean an extra £1,400 a year for a full-time worker earning the main minimum wage rate, known as the national living wage, from April 2025, but will still fall short of the £12.60 per hour UK living wage calculated by the Living Wage Foundation.

The Chancellor also announced that the minimum wage for people aged 18-20 would rise to £10 an hour, an increase of £1.40.

9am

Rachel Reeves has posted on X to mark her first Budget delivery, saying: “Politics is about choices. This Labour government chooses investment over decline.”

On Tuesday, she tweeted a photo from her office in 11 Downing Street putting the final touches to her speech, which will be delivered in the Commons at about 12.30pm, following Prime Minister’s Questions.