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Rachel Reeves will face further questions this morning after being accused of presiding over a manifesto-busting budget that rose 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.”

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Beth Rigby asks Reeves: How can you stay in your job?

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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What is a ‘salary sacrifice’?

Read more:
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 mostly 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

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How will the budget impact your money?

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

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What does the public think?

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 in their immediate verdicts, 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.

The Resolution Foundation warned of a hit to living standards because of Ms Reeves’s measures, though she has said policies aimed at cutting household energy bills and freezing rail fares and prescription charges will help people.

She also claimed her decisions would help cut NHS waiting lists and the national debt.

Also facing more questions today is the head of the OBR, as he remains under pressure over how its forecast of the chancellor’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.

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Budget 2025: Reeves urged to ‘make the case’ for income tax freeze – as PM hits out at defenders of ‘failed’ policy

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Budget 2025: Reeves urged to 'make the case' for income tax freeze - as PM hits out at defenders of 'failed' policy

Rachel Reeves needs to “make the case” to voters that extending the freeze on personal income thresholds was the “fairest” way to increase taxes, Baroness Harriet Harman has said.

Speaking to Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, the Labour peer said the chancellor needed to explain that her decision would “protect people’s cost of living if they’re on low incomes”.

In her budget on Wednesday, Ms Reeves extended the freeze on income tax thresholds – introduced by the Conservatives in 2021 and due to expire in 2028 – by three years.

The move – described by critics as a “stealth tax” – is estimated to raise £8bn for the exchequer in 2029-2030 by dragging some 1.7 million people into a higher tax band as their pay goes up.

Rachel Reeves, pictured the day after delivering the budget. Pic: PA
Image:
Rachel Reeves, pictured the day after delivering the budget. Pic: PA

The chancellor previously said she would not freeze thresholds as it would “hurt working people” – prompting accusations she has broken the trust of voters.

During the general election campaign, Labour promised not to increase VAT, national insurance or income tax rates.

Sir Keir Starmer has insisted there’s been no manifesto breach, but acknowledged people were being asked to “contribute” to protect public services.

He has also launched a staunch defence of the government’s decision to scrap the two-child benefit cap, with its estimated cost of around £3bn by the end of this parliament.

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Prime minister defends budget

‘A moral failure’

The prime minister condemned the Conservative policy as a “failed social experiment” and said those who defend it stand for “a moral failure and an economic disaster”.

“The record highs of child poverty in this country aren’t just numbers on a spreadsheet – they mean millions of children are going to bed hungry, falling behind at school, and growing up believing that a better future is out of reach despite their parents doing everything right,” he said.

The two-child limit restricts child tax credit and universal credit to the first two children in most households.

The government believes lifting the limit will pull 450,000 children out of poverty, which it argues will ultimately help reduce costs by preventing knock-on issues like dependency on welfare – and help people find jobs.

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Budget winners and losers

Speaking to Rigby, Baroness Harman said Ms Reeves now needed to convince “the woman on the doorstep” of why she’s raised taxes in the way that she has.

“I think Rachel really answered it very, very clearly when she said, ‘well, actually, we haven’t broken the manifesto because the manifesto was about rates’.

“And you remember there was a big kerfuffle before the budget about whether they would increase the rate of income tax or the rate of national insurance, and they backed off that because that would have been a breach of the manifesto.

“But she has had to increase the tax take, and she’s done it by increasing by freezing the thresholds, which she says she didn’t want to do. But she’s tried to do it with the fairest possible way, with counterbalancing support for people on low incomes.”

Read more:
Labour’s credibility might not be recoverable
Budget 2025 is a big risk for Labour’s election plans

She added: “And that is the argument that’s now got to be had with the public. The Labour members of parliament are happy about it. The markets essentially are happy about it. But she needs to make the case, and everybody in the government is going to need to make the case about it.

“This was a difficult thing to do, but it’s been done in the fairest possible way, and it’s for the good, because it will protect people’s cost of living if they’re on low incomes.”

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Twenty two stadiums and 4.5 million tickets – home nations submit bid for 2035 Women’s World Cup

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Twenty two stadiums and 4.5 million tickets - home nations submit bid for 2035 Women's World Cup

The football associations of England, Northern Ireland, Scotland and Wales have officially launched and released more details about their joint bid for the 2035 Women’s World Cup.

If the bid is successful, it would be the first football World Cup hosted in the UK since 1966, and the largest single-sport event ever staged in the country.

The bid includes 22 proposed stadiums – 16 in England, three in Wales, two in Scotland and one in Northern Ireland – across 16 host cities.

Organisers claim it would be the most accessible tournament ever, with 63 million people living within two hours of a proposed venue.

They predict the tournament would generate 4.5 million ticket sales and have a projected global TV audience of 3.5 billion.

The tournament would involve 104 matches contested by 48 teams over 39 days, with 48 team base camp training sites, 82 venue-specific training sites and 32 FIFA Fan Festival Sites proposed.

In April, FIFA president Gianni Infantino revealed that the home nations had submitted the only valid bid for tournament.

More on Football

In a joint statement, the CEOs of the various football associations, said: “We are proud of the growth that we’ve driven in recent years across the women’s and girls’ game.”

They added that: “A Women’s World Cup in the UK has the power to turbo charge the women’s and girls’ game both in the UK and globally.”

Where would the matches be played?

The bid details the host cities and stadiums as follow:

• Belfast – The Clearer Twist National Stadium at Windsor Park

• Birmingham – The Sports Quarter Stadium and Villa Park

• Brighton & Hove – The American Express Stadium

• Bristol – Ashton Gate

• Cardiff – Cardiff City Stadium and Principality Stadium

• Edinburgh – Easter Road

• Glasgow – Hampden Park

• Leeds – Elland Road

• Liverpool – The Hill Dickinson Stadium

• London – Chelsea FC Stadium, Emirates Stadium, Selhurst Park, Tottenham Hotspur Stadium and Wembley Stadium connected by EE

• Manchester – Etihad Stadium

• Trafford – Old Trafford

• Newcastle – St James’ Park

• Nottingham – The City Ground

• Sunderland – Stadium of Light

• Wrexham – STōK Racecourse

However, some of the stadiums mentioned above were merely the ones put forward in the official bid and are likely to change after the construction of new stadiums are completed.

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Have you seen this nutcracker? CCTV shows thief stealing festive statue in Edinburgh

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Have you seen this nutcracker? CCTV shows thief stealing festive statue in Edinburgh

The manager of an Edinburgh cocktail bar will speak to police today over the “catastrophic” theft of an eight-foot tall nutcracker figure from outside his venue.

In what can only be described as a total nightmare before Christmas, a person riding an e-bike guaranteed a place on the naughty list by stealing the Copper Blossom’s festive statue on Monday.

They are seen on CCTV placing the soldier across their lap and riding off into the night down George Street towards St Andrew Square.

The thief was wearing a dark hoodie
Image:
The thief was wearing a dark hoodie

Speaking to The UK Tonight on Sky News, manager Paul Paxton said it was a massive financial blow for his bar.

“The individual nutcrackers are about £900 each,” he revealed.

The stolen one is named Nolan, while his “brother” Nelson remains “safe and sound”.

They were part of the Copper Blossom’s outdoor Christmas display, and Nelson has now been moved into the foyer.

Mr Paxton said he would be speaking to police about their investigation, with sightings having been reported “around Edinburgh” later on the night of the incident.

Nolan, who the owner described as “massive”, was taken at around 10.10pm. The CCTV footage shows the thief removing the statue and dragging it on to their bike.

You can see Nolan being taken away in this shot
Image:
You can see Nolan being taken away in this shot

As if losing a £900 nutcracker wasn’t bad enough, a table costing hundreds of pounds was also broken.

“It’s pretty catastrophic,” said Mr Paxton.

The bar had originally put out an appeal that said “if you return it, we’re all good” – but he admitted he doesn’t expect Nolan’s return any time soon.

Paul Paxton is dwarfed by his nutcracker soldiers
Image:
Paul Paxton is dwarfed by his nutcracker soldiers

And while he’d “never want someone to go into harm’s way”, he told Jayne Secker he was a little disappointed no witnesses alerted him or his staff to the theft.

“There were about 12 or 13 people who walked past,” he said.

“Even if someone had run in, that could have helped. It wasn’t a quick process – he fell off his bike.

“A heads-up would have been lovely.”

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