Overview
- The package raises roughly £26bn through a prolonged freeze of income tax thresholds to 2030/31, a 3p-per-mile charge on electric vehicles from April 2028, a high‑value council tax surcharge, National Insurance on salary‑sacrifice pensions above £2,000 from 2029, and cuts to ISA allowances alongside other levies.
- The two‑child benefit cap is scrapped from 2026, costing around £3bn a year by 2029/30 and estimated to lift about 450,000 children out of poverty.
- The OBR lifted its 2025 growth forecast to 1.5% but downgraded later years, said no announced measures materially boost growth, and launched an internal probe after accidentally publishing its assessment before the Chancellor’s speech.
- The Resolution Foundation says people earning under £35,000 will pay more than if rates had risen by 1p, and the IFS branded the plan back‑loaded and reliant on fiscal drag, with most of the tax take arriving from 2028–2030.
- Reeves and Starmer argue the burden is shared to protect services and cut living costs, pointing to an expected energy bill reduction of roughly £130–£150, a one‑year rail fare freeze, and a minimum wage rise to £12.71 for over‑21s from April.