Budget 2025 live: IFS warn Rachel Reeves she is ‘disincentivising growth’ after Starmer defends tax rises

The Independent’s political correspondent Millie Cooke reports:

Downing Street said it did not “recognise” a figure putting the cost of the digital ID scheme at £1.8 billion over three years.

The prime minister’s official spokesman said: “The number in the OBR forecast was an initial early estimate spread over a number of years.

“We don’t recognise it as an accurate cost of the programme, the scope of which is yet to be decided, let alone costed.

“Any costs in this spending review period will be met within existing settlements. The government will run a full consultation in due course.”

The Independent’s Whitehall editor Kate Devlin reports:

Asked how Labour can improve growth, IFS director Helen Miller called on the government to “step back”.

“I think a lot of what we need to do is step back”, as many part of the tax system currently “disincentivise” growth, she told a post-Budget briefing.

She also warned: “The chancellor, like her predecessors, continues to shy away from meaningful tax reform that could move the dial. This felt mostly like the Budget of a Government trying to scrape through.

“Of course, no fiscal event can do everything, and reform is hard. But given the scale of the challenges we face, and given the Government’s lofty rhetoric about change, and its ambitions on growth, I think we’re entitled to ask for more.”

The Independent’s political correspondent Millie Cooke reports:

Robert Jenrick has accused David Lammy of doing “the complete opposite” of his previous views now he is in government as he attacked proposals to scrap jury trials for all cases except rape, murder and manslaughter cases.

The shadow justice secretary told the Commons “Jury trials are fundamental to the justice system.

They are fundamental to our democracy and we must protect them.

Not my words, those are the justice secretary’s himself. And this time he was right.

He added: “There is wisdom in 12 ordinary citizens pooling their collective experiences of the world. But now he’s in government, he is doing the complete opposite.”

It comes after Mr Lammy, in a social media comment posted five years ago, said jury trials are a “fundamental part of our democratic settlement”, adding that “Criminal trials without juries are a bad idea.”

The Independent’s political correspondent Millie Cooke reports:

The Treasury has once again refused to rule out coming back for more tax rises, saying “no government would write future budgets now”.

But the chancellor’s official spokesperson added: “The chancellor has doubled the headroom, she has set out reforms to the tax system to make it both fairer and more sustainable.”

Asked about the OBR’s decision not to rate any of the government’s policies positive for growth, the spokesperson said: “Just because they’re not necessarily scored in the spreadsheet doesn’t meant they’re not the right thing to do… I think [the chancellor] would say forecasts are there to be beaten.”

The Independent’s political correspondent Millie Cooke reports:

The government has failed to rule out hitting farms with its new mansion tax, which will be applied to properties worth more than £2m.

The prime minister’s official spokesperson, asked whether farms would be covered, pointed to the upcoming consultation on the tax, saying he would not get ahead of that.

It comes after outrage from the agricultural industry after the government last year announced that farms worth more than £1m would be subject to 20 per cent inheritance tax.

The Independent’s Whitehall editor Kate Devlin reports:

The IFS says that when it comes to the Mansion Tax, which will hit all properties worth £2m and above from 2028, nearly a quarter of them – 23 per cent – will be in just three London boroughs – Kensington and Chelsea, Camden and Westminster.

The IFS describes this as a “very geographically concentrated tax base”.

Leading domestic abuse charity Refuge has called Rachel Reeves’ Budget a “profound disappointment”.

“The Autumn Budget was a critical moment for the Government to demonstrate its commitment to women and girls,” Ellie Butt, Head of Policy and Public Affairs at Refuge said.

“Instead, it marks yet another missed opportunity to show survivors that it is serious about its pledge, with the Chancellor once again failing to prioritise VAWG in the Budget.”

New research from the charity has revealed just 1 in 6 believe the government will spend enough to meet it’s violence against women and girls pledge.

The data, commissioned via YouGov, also found that nearly half (49%) say the Government is not investing enough, while 35% are unsure.

Ms Butt added: “The VAWG sector is in a worse position than ever. Some services have been pushed beyond breaking point and are now being forced to close, and we still have no sign of the long-anticipated VAWG strategy. Although the funding gap pre-dated this Government, continued delays have caused lasting – and in some cases irreversible – damage to vital services.”

If you have questions over any aspect of yesterday’s Budget affecting your personal finance – ISAs, pensions, taxes, benefits and anything else related – then now’s the time to jump over to our Ask Me Anything on the Money page.

You can join Gabriel Nussbaum (ThatMoneyGuy on Instagram and TikTok) live for the next hour following the below link – ask your questions in the comments section and he’ll be answering as many as possible.

An “external person” may have been able to access the link to the Office for Budget Responsibility (OBR)’s fiscal outlook which was published prematurely before the Budget, the head of the watchdog has said.

The document revealed the contents of Rachel Reeves’ Budget and was accidentally published shortly before midday on Wednesday, half an hour before the Chancellor announced the measures.

In an interview with BBC Radio 4’s Today programme on Thursday morning, OBR chairman Richard Hughes said of the investigation into the incident: “Well, the documents weren’t published on our webpage itself.

“It appears there was a link that someone was able to access – an external person.

“We need to get to the bottom of what exactly happened. We’re going to do a full investigation.”

Sir Keir Starmer has said that the Budget “asked everybody to make a contribution” in order to protect public services and help people struggling with the cost of living.

The prime minister said he was “not going to apologise for lifting half a million children out of poverty”, as he hit back at claims the measure was announced to appease restive Labour MPs.

Asked by the BBC if Labour had broken its manifesto commitment not to raise headline taxes on working people, the Sir Keir replied: “We made a number of commitments in our manifesto which we have kept, but I accept that… we have asked everybody to make a contribution.

“I tell your viewers precisely why that is: to make sure that we can protect our NHS, which needs to be there for them and their families when they need it. Everybody understands that.”