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.”

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.

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

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 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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Will you be better or worse off than you were before Chancellor Rachel Reeves announced her tax and spending plans in her long-awaited budget?

From the minimum wage and scrapping of the two-child benefit cap to ISA caps and tax threshold freezes, Niall looks at how the budget will impact you with personal finance expert Iona Bain.

Producers: Tom Gillespie and Araminta Parker
Editor: Wendy Parker

In at least two respects – one expected, the other not – this was a historic budget.

The bit no one expected came just before midday. Normally on budget day, the documents containing all the measures and the official forecasts from the Office for Budget Responsibility (OBR) are published online when the chancellor has finished her speech.

The minute she sits down in the House of Commons, traders, journalists and economists around the country start frantically refreshing their browsers, hoping for first sight of this critical document.

It’s critical because often there is a striking gap between what the chancellor says in her speech and the details inside the document.

Money latest: What the budget means for your money

Take, for instance, one of the chief money-raising measures in this year’s budget: the decision to limit the amount of money people can put into salary sacrifice schemes – something that affects most private sector pensions.

To judge from the chancellor’s speech alone, you might have thought this was a somewhat minor move designed to close a loophole used mostly by wealthy people. But the document shows that, on the contrary, this is a massive tax-raising measure that will bring in a whopping £4.7bn the first year it’s properly instituted.

That is a lot of money – a lot. And whenever the government raises those kinds of sums it invariably means a lot of people will end up paying quite a bit more money in tax. So you see the point: it’s only when you get the final document that you can see the grisly details in black and white.

And those details are more than academic. The contours of the numbers contained in the OBR’s Economic and Fiscal Outlook (EFO) – to give it its proper name – are enormously market-sensitive. They are sometimes the evidence base upon which gilt traders decide whether or not to invest in UK securities.

All of which helps explain why, when the OBR accidentally published its EFO online, nearly an hour before the chancellor stood up to deliver her speech, it caused an extraordinary flurry in markets.

The cost of government debt yo-yoed dramatically as investors hurriedly downloaded the documents and tried to work out what this budget meant for the UK economy.

This was the biggest budget leak in history and doubtless we will hear more in the coming weeks about how it happened and about the consequences. But, as I said at the start, it was not the only historic thing about this budget.

Because it also commits the government to a set of economic policies that take Britain into uncharted territory. The total level of taxation in the UK was already high before this budget – indeed, it was already heading up to the highest level in at least 70 years (actually it’s really the highest level ever – it’s just that the numbers only go back to the 1940s). But this budget supercharges the rise.

As a result of the policies contained in it, as well as the ones in last year’s budget, this parliament is, according to the Institute for Fiscal Studies, heading towards being the biggest tax-raising Parliament in modern history (the numbers in this case only go back to 1970).

Those higher taxes were, the chancellor judged, necessary for two reasons. First, they help her meet her fiscal rules, which in turn means investors begin to charge Britain less to borrow. And the early signs on this were promising: the yield on UK government debt dropped in the hours after that initial OBR-fuelled roller-coaster.

Second, they give her enough money to finance extra spending, much of which is going into extra welfare, in part to fund the abolition of the two child benefit cap. In short, this government is taxing more to spend more.

Read more:
Main budget announcements at a glance
Reeves reveals £26bn of tax rises
Cash ISA limit slashed – but some are exempt

That raises at least two questions. First, how successful will it actually be in raising those taxes? After all, Britain has never been as highly taxed as it will be at the end of this decade. Will Britons be content to become a high tax economy – like many of our European neighbours – or is the government being too sanguine about what this will mean for growth and, more to the point, its coffers.

Second, having spent much of its first 18 months trying and failing to control welfare spending – forced along the way into U-turns over its plans – can it really be depended on to keep to its expenditure plans off into the future?

The short answer is: no-one really knows. But now that the flurry of excitement over that historic leak is over, this big budget will be thoroughly scrutinised and thoroughly tested in the coming weeks and months.