Chancellor Rachel Reeves tells the BBC she would not want to repeat the £40bn tax rise Budget and she wants faster growth than has been forecast by the Office for Budget Responsibility (OBR)
Employers will bear the brunt of the £40bn in tax rises unveiled earlier by Reeves – the biggest increase in a generation
The OBR, which assesses the health of the UK's economy, said the package of economic measures unveiled by Reeves would ultimately "leave GDP largely unchanged in five years" – read the key announcements here
Analysis: This is what you might call a kitchen-sink Budget, which includes one of the biggest single tax-raising measures in history, writes economics editor Faisal Islam
On spending, Reeves announces a £22.6bn increase in the "day-to-day health budget" for the NHS and £5bn in house building investment
Reacting to the Budget, Tory leader Rishi Sunak calls it "an enormous borrowing spree" which contains "broken promise after broken promise"
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Chancellor says Budget will raise taxes by £40bn
Edited by Emily Atkinson
Emily Atkinson
Live page editor
Addressing the Commons as Britain's first female chancellor, Rachel Reeves pledged to make good on Labour’s promise to voters in July’s general election.
This Budget, Reeves declared at the top of her speech, will "drive economic growth" and “invest, invest, invest”.
What followed was a real “kitchen-sink” Budget, as our economics editor Faisal Islam put it – piled high with big spending plans and tax decisions.
It’s time for us to log off, so we’ll leave the summarising to our politics colleagues. You can find their Budget 2024: Key points at a glance here.
For deeper dives into the core announcements, and more on what they mean for you, there's plenty on offer across the BBC News website.
To highlight just a handful…
Otherwise, that's it from us. Our early team will be firing this page back up from 06:00 GMT tomorrow to take in all the day-two reaction, so join us then.
Chancellor Rachel Reeves delivered Labour's first Budget in 14 years today, announcing tax rises worth £40bn.
Here's a digest of the key developments from across the day:
Millie Trenholm
BBC Newsbeat
Anna Zakis is a student at the University of Leeds, and is worried about rising costs.
“Since I’ve been at uni, my rent has been going up more and more. And it’s starting to get out of control.”
She’s also noticed rises to grocery costs and, as a result, the pool of money for her to spend is smaller.
“It is harder for me to spend money on myself, in places I can enjoy things.”
Anna, 22, is happy about the minimum wage increase and feels it’s “a step in the right direction”.
But she adds she wants to see government investment in local venues.
James Cook
Scotland editor
Campaigners for Scottish independence often argue that Britain is broken.
The UK, they say, is stuck in a doom loop of low growth and high inequality which piles pressure on the public services while also starving them of investment.
The new Labour chancellor, Rachel Reeves, is determined to prove them wrong by generating growth while improving health and education.
Her party’s first big electoral test will come in 18 months at the Scottish Parliamentary elections.
That's one reason why Reeves made a point of mentioning the £3.4bn additional funding for Scotland in 2025/26 which she says will flow north as a result of her budget.
It will be up to the Scottish government to decide how to spend that money. Already some in the Scottish National Party (SNP) say they are concerned about how much of it will go on public sector pay.
But during their 17 years in power at Holyrood, the SNP have chosen to expand the scope of the Scottish state, funding university tuition, prescriptions for all, personal care for the elderly and so on, while also offering more generous welfare payments than elsewhere in the UK.
The next year and a half will see a battle for credit and blame over the state of Scotland's economy and public services.
The verdict of Scottish voters may help shape the fate not just of the First Minister John Swinney but of the Prime Minister Sir Keir Starmer too.
Millie Trenholm
BBC Newsbeat
Adam Bricklebank, a cafe and bar owner from Leeds, says he’s worried about what the announcements could mean for his business.
He is in favour of the wage increases announced by the chancellor, but says it will likely lead to higher prices.
Adam, 24, has calculated the increases mean “an additional £27,000 per year” across his team that will need to be paid.
“To operate and stay afloat, we need to be within a certain margin, so prices are going to need to increase.”
There is also concern about any additional taxes on hospitality.
“It’s important people do understand… if your coffee does increase, it’s not because we’re greedy, it’s because we have a whole load more that we need to pay.
“It’s a nightmare for small businesses and will be a headache,” he says.
Tarah Welsh
Housing reporter
Housing groups have broadly welcomed the government's plans to build 1.5 million new homes and commitment to support the Build to Rent sector.
But landlords say the decision to raise stamp duty to 5% on second homes will push up already record-high rents.
Ben Beadle, from the National Residential Landlords Association, says: “What tenants needed was a Budget to boost the supply of new, high-quality rental housing. What we got is a recipe for less choice and higher rents.”
Paul Johnson, from the Institute for Fiscal Studies, posted on X , externalthat the move made him “despair”.
Rents and competition for homes have soared across the UK in recent years.
Charity, Renters’ Reform Coalition, says it is “disappointing the government have left Local Housing Allowance frozen”.
The chancellor and deputy prime minister smiled when committing to building “tens of thousands” of new homes. But people will only agree when they can afford to rent them.
Kate McGough
Education producer
Most families with children with special educational needs won't be exempt from the VAT charge on private school fees that'll kick in in January.
Kath’s 12-year-old son has ADHD and dyslexia, and until this week was thriving at a private school in Norwich which could accommodate his SEN needs.
After facing a 16.5% increase in fees, Kath made the decision to pull him out of private school. He starts at a local state school on Monday, but Kath has lost £10,000 in fees already paid for next term.
She thinks it’s “appalling” that the VAT is being applied from the middle of the school year and feels “angry, sad and worried” about the disruption for her son.
“It’s a wrench for him leaving the environment he knows. Education should never be taxed,” she says.
Some of those opposed to the policy say it'll mean lots of families trying to move from private to oversubscribed state schools. But the government and independent forecasters say the impact won't be significant.
Simon Browning
Transport producer
The chancellor has chosen not to alter fuel duty, after lots of speculation there would be changes which would see the cost of petrol rise for drivers across the UK.
Reeves said: “To retain the 5p cut and to freeze fuel duty again would cost over £3bn next year. At a time when the fiscal position is so difficult, I have to be frank with the House this is a substantial commitment to make."
“I have concluded in these difficult circumstances, whilst the cost of living remains high, increasing fuel duty would be the wrong choice for working people. It would mean fuel duty rising by 7p per litre," she added.
“So I have decided today to freeze fuel duty next year and I will maintain the 5p cut for another year too. There will be no higher taxes at the petrol pumps next year.”
Simon Williams, the head of the RAC motoring organisation, said drivers would breathe an "enormous sigh of relief".
"Eight-in-10 drivers tell us they are dependent on their vehicles for the journeys they need to make, while 70% of commuters who live in rural areas have no other feasible alternatives to get to work beyond taking the car," he said.
“It’s also worth remembering that, even as of today, 56% of the total price of a litre of petrol is already tax in the form of fuel duty, and the VAT that is charged on top," he added.
Michael Buchanan
Social affairs correspondent
Spending on health and disability benefits is set to surpass £100bn in the next few years.
Forecasts by the OBR show the government will spend £100.7bn in 2029/30 on the benefits, up by a third on this year.
Spending on disability benefits alone is forecast to increase by even more, 44%, over the same time period, £7.2bn higher than the estimate published in March.
The OBR say the increase is explained by higher awards for personal independence payment and higher demand for disability living allowance and attendance allowance.
David Sillito
Media and Arts correspondent
The BBC World Service is to receive an increase in funding from the government, but the amount of that increase has not yet been made public.
In 2024/25 the government contributed £104m towards the £366m cost of the BBC’s World Service, but the BBC said it was increasingly unable to fund services. In March, the BBC Director General Tim Davie said: "We cannot keep asking UK Licence Fee payers to invest in (the World Service) when we face cuts to UK services.
"We will need to discuss a long-term funding solution for the World Service that comes from central government budgets.”
Funding of the BBC World Service was for most of its history fully funded by the British government until it was announced in 2010 that the cost would be passed onto the BBC.
In 2016, the Government awarded the BBC a grant of £291m to cover the years 2020 to 2024 to help with the World Service’s modernisation and made further contributions in the years after.
Ben King
Business reporter, BBC News
Who picks up the tab for higher employers' National Insurance Contributions?
The answer is… more than three quarters of it will eventually come from workers' incomes.
The OBR reckons that just under a quarter of it will come out of company profits.
Employers will pass the rest on through lower wages and higher prices, which both eat into workers' spending power.
Alison Holt
Social affairs editor
A “massive disappointment” is how the older people’s charity, Age UK, describes the Budget.
It hoped there would be “measures to safeguard” pensioners on low and moderate incomes who are losing their annual winter fuel allowance.
In the summer, the government announced that only pensioners on the lowest incomes, who receive extra help through pension credit, would get the winter fuel payment this year.
It is worth either £200 or £300 depending on the person’s age.
Caroline Abrahams, Age UK’s charity director, says “it comes to something when the best policy option older people on tight budgets now have left is to hope and pray for a mild winter”.
Justin Rowlatt
Climate editor
The Budget is designed to remake the UK as a “clean energy superpower”, the chancellor said.
She highlighted £2.3bn for hydrogen production, £2.7bn for the nuclear plant at Sizewell and £100m for Great British Energy as well as the cash for carbon capture and storage announced earlier this month.
There were changes to taxation too. The windfall tax on oil and gas companies was raised, passenger duty on private jets was up 50% to £450 per passenger and company car tax incentives for electric vehicles were maintained.
But there was no increase to fuel duty – maintaining a freeze in place since 2010 and a 5p cut in the tax made in 2022.
Analysis last year by Carbon Brief, a climate new website, year suggested the failure to raise fuel duty in line with inflation could have increased UK carbon dioxide emissions by up to 7%.
Paul Johnson, the director of the Institute for Fiscal Studies, an influential think tank, has weighed in on the tax and spending plans laid out in Rachel Reeves' Budget in comments posted on the institute's website, external.
Here's what he said:
Chris Mason
Political editor
This was a huge, change-making budget – one way or the other.
Don’t let anyone tell you there isn’t much difference between the main parties at Westminster; this was a Budget with Labour’s instincts and worldview stamped throughout it.
The tax rises visible from near earth orbit, self imposed borrowing rules shredded and re-written – yes, to allow more borrowing; big wads of spending for the NHS for starters.
But note one disjuncture in all this: a government with a central mission of driving economic growth, and yet projections of just that that appear stubbornly anaemic.
Oh and the insistence from Labour in the election campaign about "no plans" for tax rises beyond a select few has turned out to be comprehensive baloney; the books were worse than we thought, Labour’s mitigating plea, garnished with a we won’t do it again insistence from the chancellor in my interview with her tonight.
“This is not the sort of Budget we would want to repeat,” Rachel Reeves told me – whether you are of the same view, is your call.
A bit more now from the chancellor's interview with the BBC's Chris Mason.
Asked if the NHS might be seen as a "bottomless pit" for investment, Reeves explains the government believes it is important to prioritise capital investment.
“We have to deliver change across public services. That’s why we’re prioritising capital investment so our workers in the NHS are working with the best technology and equipment," Reeves says.
She says that during a visit to a hospital in south London, NHS workers told her they were working with diagnostic equipment that was bought under the last Labour government.
That equipment should have been written off years ago, she says, but because of that lack of investment in equipment, hospitals still have to use it.
“That affects productivity, and that affects standards and that affects the ability of the NHS to deliver the service we want it to deliver.
“That’s why we are prioritising capital investment, whether that’s in our schools, our hospital or indeed the investment alongside business in things like energy and transport and digital technology," the chancellor says.
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This is not a Budget that we want to repeat – Reeves
In a sit-down interview with the BBC’s Chris Mason, Chancellor Rachel Reeves says that she has higher ambitions for growth and that the difficult decisions made in today's Budget were necessary to ensure economic stability.
“This is not the sort of Budget we would want to repeat, but this is the Budget that is needed to wipe the slate clean … under the fiction of previous plans,” Reeves says, adding the government had to take these decisions “to put the economy on a firm footing”.
“We’re fixing the foundations and ensuring that businesses and families can look ahead, plan for the future with confidence,” she says.
Mason asks about growth projections from the Office for Budget Responsibility (OBR) that he says “don’t look great”.
The OBR, which assesses the health of the UK's economy, said the package of economic measures unveiled by Reeves would ultimately "leave GDP largely unchanged in five years".
In response, Reeves says she “absolutely” accepts the projections do not represent “the summit of my ambitions", adding she wants the economy to grow faster.
She also points to the OBR looking ahead to the next ten years for the first time in its forecast.
“It’s really important because often governments make short-term decisions because parliaments last five years and they don’t think about what will happen in years seven, eight, nine and 10.”
By Robert Cuffe
In his response to the Budget, Rishi Sunak said: “The OBR has forecast growth is going to be lower under this government than it was forecast to be under the Conservatives."
Under March's forecasts, the economy was set to grow by nearly 8.5% between 2024 and 2028. Under today's forecasts, it is set to grow by nearly 8.2%.
It’s a mistake to read too much into a difference of 0.3 percentage points in five years: you can't really forecast the size of the economy that far ahead that precisely.
So, overall, there's little change in the forecasts.
A special interview with money saving expert Martin Lewis, hosted by Matt Chorley and BBC Radio 5 Live, is being broadcast live in our stream now.
You can follow along by tapping watch live at the top of this page.
This afternoon, Chancellor Rachel Reeves unveiled the first Labour Budget in 14 years. She told the nation that the government could "fix the foundations" of the UK but warned that they have inherited Tory failure.
Some of the main announcements included the hiking of National Insurance contributions for employers, introducing VAT on private school fees and an extra £22.6bn for day-to-day spending on the NHS in England.
In response, outgoing Tory leader Rishi Sunak said Reeves had launched an "enormous borrowing spree" and denied that the situation Labour inherited was as bad as they say.
The BBC's Faisal Islam says this Budget delivers one of the largest ever tax rises.
For more key points on the Budget, we’ve summarised them here. For how it will affect you, there’s a separate handy guide.
And of course, we are still here with live updates.
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