Before Rachel Reeves could present the Budget in the Commons, significant details were leaked. The Chancellor was scheduled to reveal the Budget at 12:30 pm, but the Office for Budget Responsibility (OBR) unintentionally published its economic and fiscal report ahead of Reeves’s speech.
Following the leak, Rachel Reeves expressed deep disappointment and labeled it a serious mistake on the part of the OBR. She made it clear to MPs that the breach was their responsibility, which they acknowledged.
The leaked OBR document disclosed key Budget measures, including a total of £26 billion in tax increases and the elimination of the two-child benefit restriction. The OBR apologized for the inadvertent release, attributing it to a technical error, and initiated an investigation into the incident.
According to the OBR report, tax hikes amounting to £26 billion by 2029-30 are anticipated. This will involve extending the freeze on personal tax thresholds for an additional three years until 2030-31, even though Reeves had previously warned about the negative impact on working individuals. The document also mentions that the two-child benefit limit will be removed starting April next year.
The OBR revised its economic growth forecast for the current year from 1% to 1.5%, while predictions for the following years were downgraded. Labour, which pledged not to increase taxes on working people in its manifesto, might face challenges as the freeze in income tax thresholds could push individuals into higher tax brackets.
During Prime Minister’s Questions, the leak from the OBR was termed unprecedented by Tory leader Kemi Badenoch. Lib Dem leader Sir Ed Davey also questioned the PM regarding the tax increases outlined in the leaked OBR document.
In a recent statement, Keir Starmer mentioned that the Budget would reflect Labour’s values and cater to families concerned about the rising cost of living. He emphasized the focus on providing support to families struggling with expenses and outlined plans for initiatives like free breakfast clubs, childcare, and school meals.
The OBR issued an apology for the premature release of its economic and fiscal report and assured that the full documentation would be released after Reeves’s speech.
