Budget 2025: Reeves to face further questions after being accused of broken promises

Rachel Reeves will face further questions this morning after being accused of presiding over a manifesto-busting budget, having raised taxes by £26bn.

The chancellor has acknowledged she is "asking ordinary people to pay a little bit more" following her series of announcements yesterday, including extending the freeze on income tax bands.

But when challenged by Sky News political editor Beth Rigby that this amounted to a breach of Labour's manifesto, she argued it didn't because the rates themselves had not changed.

Ms Reeves said the party's election document was "very clear" about not raising the rates of income tax, national insurance, and VAT.

But she added: "If you're asking does this have a cost for working people? I acknowledge it does."

The chancellor - who will be questioned on Mornings With Ridge And Frost from 7am - is set to inflict a record tax burden upon Britain.

Her other measures include:

• A "mansion tax" on properties worth over £2m;

• New taxes on the gambling industry to raise more than £1bn;

• A new mileage tax for electric vehicles from April 2028;

• Slashing the amount you can save in a tax-free cash ISA from £20,000 to £12,000, except for over-65s;

And in a move that will prove particularly unpopular with savers, people paying into a pension under salary sacrifice schemes will face national insurance on contributions above £2,000.

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Budget key points at a glance
What the budget means for you

The tax rises - which were published by the Office for Budget Responsibility (OBR) ahead of time in an unprecedented blunder - are needed to pay for increased welfare spending.

Ms Reeves announced the abolition of the two-child benefit cap, expected to lift 450,000 children out of poverty.

You should resign, says Badenoch

Tory leader Kemi Badenoch accused her of "hiking taxers on workers, pensioners, and savers to pay for handouts", claiming the budget will increase benefits for 560,000 families by £5,000 on average.

Ms Reeves had sought to cut the welfare bill earlier this year, but the government was forced into a damaging retreat after backbench Labour MPs rebelled.

"What she could have chosen today is to bring down welfare spending and get more people into work," Ms Badenoch told the Commons on Wednesday.

"Instead, she has chosen to put a tax up to tax after tax."

She called on the chancellor to resign.

From our experts:
Ed Conway: This was a historic budget
Beth Rigby: Labour's credibility might be shot
Sam Coates: It's not clear if Reeves will survive

Under fire from left and right

Labour MPs cheered raucously at the two-child benefit cap announcement, but one backbencher told Sky News: "We are effectively doing government by consent of the PLP, if not the cabinet - a bad place to be.

"The Tories did it for years, and it can only lead to the death of us at the general election."

Liberal Democrat leader Sir Ed Davey, meanwhile, warned Ms Reeves cannot "tax her way to growth", while Reform's Nigel Farage described the budget as an "assault on ambition and saving".

Greens leader Zack Polanski criticised the budget for not raising taxes on the "super wealthy".

Read more: A town that feels betrayed

Sky's Sophy Ridge and Wilfred Frost won't be the only ones putting the chancellor under more scrutiny today - two influential economic think tanks will also give their full verdicts.

The Institute for Fiscal Studies (IFS) and the left-leaning Resolution Foundation have already been critical, with the former describing the budget as "spend now, pay later", with tax rises being increasingly relied upon over time.

It also accused Ms Reeves of breaching Labour's manifesto commitments on tax.

'More bracing budgets' likely in future

The Resolution Foundation welcomed support to help families with the cost of living, including the lifting of the benefit cap, and said families would enjoy a £130 annual cut to energy bills for the next three years.

But it said freezing tax thresholds would hurt.

Chief executive Ruth Curtice: "Ironically, sticking to her manifesto tax pledge has cost millions of low-to-middle earners, who would have been better off with their tax rates rising than their thresholds being frozen."

Ms Curtice also warned of "more bracing budgets" to come so long as economic growth remains elusive.

As well as the chancellor, also facing more questions today is the head of the OBR, as he remains under pressure over how its forecast of Wednesday's announcements were published ahead of time.

Follow live updates on the fallout from the budget in the Politics Hub and Money through the day.

(c) Sky News 2025: Budget 2025: Reeves to face further questions after being accused of broken promises