Budget 2025 live: OBR chief warns Rachel Reeves none of her measures boost growth as chancellor defends tax rises

The Independent’s Whitehall Editor Kate Devlin reports:

Tory MPs were delighted with a speech by the Conservative leader attacking the Budget.

Ms Badenoch’s position has been under pressure amid dire poll ratings and lacklustre performances in the House of Commons.

But her speech, in which she said the Budget is a “total humiliation” for the chancellor and called for her to resign, has eased nerves among her own backbenches.

Polling expert and Tory peer Lord Hayward told The Independent: “Ironically, the budget may have been about saving Rachel Reeves’ and Keir Starmer’s jobs – but may have done more to save Kemi’s.”

The Independent’s political correspondent Millie Cooke reports:

The chancellor has refused to rule out coming back for more tax rises next year, telling BBC Radio 4’s Today programme: “I’m not going to write future budgets.”

She added: “There’s been plenty of speculation ahead of this budget… I am now determined to grow the economy so that we have the money for public services that we can get taxes down.”

The Independent’s political correspondent Millie Cooke reports:

OBR chair Richard Hughes said “none of the measures” in Rachel Reeves’ Budget will “have a material affect” on growth.

“In this particular Budget, none of the measures either positive or negative… would have a material affect on our forecast,” he said.

“Both taxes and spending are up significantly in this Budget.

Asked about his comments, the chancellor to BBC Radio 4’s Today Programme: “What they say in the documents is none of them meet the threshold that they now require for a single policy to be scored. So they haven’t scored the India trade deal, the EU trade deal, the US trade deal, the Planning and Infrastructure Bill that in December will get royal assent, the pensions reform, the entrepreneurship package that I set out.

“They said that none of them individually… meet their 0.1 threshold. But I’m confident that the growth policies that we’re pursuing will grow our economy.”

Economists have said it is unlikely Rachel Reeves’ Budget will “benefit economic growth”.

Chantal Van Stipriaan, partner at tax firm Blick Rothenberg, said her overall assessment of yesterday’s Budget is one of chaos – adding it will be remembered for “many years to come”.

“The stress that has been caused by leaking throughout this process has been a disaster and has caused undue stress for working people, pensioners, and businesses,” she said.

“The freezing of the thresholds for an extra three years, a classic stealth tax, will mean not only the middle class families are going to pay more tax, many additional relatively low income individuals will be brought into the tax net, including people who will have to file tax returns for the first time, such as pensioners.”

She added: “The Budget will most likely result in a higher inflation and a higher unemployment and it’s unlikely it will benefit the economic growth of the country.”

The Independent’s political correspondent Millie Cooke reports:

Rachel Reeves has hit back at critics of her budget, warning: “Lots of people have tried to write me off over the last 16 months, and you’re not going to write my obituary today”.

Speaking to Times Radio, she added: “I’m not going to apologise for lifting the two-child limit.”When it was put to the Chancellor that she had raised tax on working people in order to put it into welfare, she said: “I don’t accept that.

“The OBR say that their revisions to productivity, reflecting the Conservatives’ legacy, is going to mean £16bn less tax revenue, and as a result, we have to fill that gap. But if we can grow the economy, as I’m determined to do, we can get that money back.”

She insisted she was “determined that we’re going to beat” the watchdog’s growth forecasts.

Rachel Reeves has hit back at accusations that yesterday’s budget was an attempt to appease restless Labour backbenchers and save her job, after the government hiked taxes to pay for more welfare spending.

She told Sky News: “This was my budget yesterday, focused on my priorities and the government’s priorities, cutting the cost of living, cutting NHS, waiting lists, and cutting borrowing and debt.”

The Independent’s political correspondent Millie Cooke reports:

OBR chief Richard Hughes “let me down” with yesterday’s unprecedented Budget leak, Rachel Reeves has said, but insisted that she still has confidence in him.

The chancellor said there will be an investigation into the leak, which saw the OBR’s response to the Budget published online around an hour before Ms Reeves addressed the Commons.

Asked if she still has confidence in the chair of the OBR, the chancellor told Sky News: “Richard Hughes wrote to me yesterday evening apologising for their error.”

It was a serious error and a serious breach. They have announced an investigation which will report to me very quickly, but I do have confidence in Richard and the OBR, they do important work.”But what happened yesterday, it did let me down and and it shouldn’t have happened and it must never happen again.”

The Independent’s political correspondent Millie Cooke reports:

Rachel Reeves has refused to admit Labour has broken its manifesto pledge not to raise taxes on working people by freezing tax thresholds.

It comes despite the UK’s leading economic think tank, the Institute for Fiscal Studies, on Thursday accusing the chancellor of breaching Labour’s manifesto commitments on tax.

When it was pointed out to her that Labour’s manifesto says the party “will not raises taxes on working people”, the chancellor added: “And then we go on to list those taxes” – arguing the manifesto pledge specifically referred to the rates of income tax, national insurance and VAT.

She added: “But I do recognise that yesterday, I have asked working people to contribute a bit more by freezing those thresholds for a further three years from 2028. I do recognise that that will mean that working people pay a bit more.”

Pressed again on whether Labour had broken the manifesto pledge not to raise taxes on working people, she said: “If you go on to read the next line, it talks about the rates, but I am not denying that this has an impact on working people.”

Rachel Reeves told a radio presenter challenging her over rising welfare spending that “lots of people have tried to write me off over the last 16 months, and you’re not going to write my obituary today”.

“I’m not going to apologise for lifting the two-child limit,” Mr Reeves told Times Radio.

When it was put to the Chancellor that she had raised tax on working people in order to put it into welfare, she said: “I don’t accept that.

“The OBR say that their revisions to productivity, reflecting the Conservatives’ legacy, is going to mean £16 billion less tax revenue, and as a result, we have to fill that gap. But if we can grow the economy, as I’m determined to do, we can get that money back.”

She insisted she was “determined that we’re going to beat” the watchdog’s growth forecasts.