Name: UK budget: Taxes rising to curb debt, fund public services
Uploaded: 2025-11-27T02:47:12.816Z
Duration: 2 min 10 s
Description: UK unveils a tax-raising budget to stabilise debt and support public services amid economic and political pressure.

UK unveils a tax-raising budget to stabilise debt and support public services amid economic and political pressure.

London

The UK finance minister Rachel Reeves has introduced a budget that raises taxes on workers, pensioners, and savers, and freezes income tax thresholds, resulting in more people moving into higher tax brackets as wages rise. While the budget is expected to generate £26 billion in additional revenue, most of these funds will be used to maintain a financial buffer rather than directly increase public service spending.

The budget also lifts the two-child benefit cap, increasing welfare spending—a move welcomed within the Labour party but less popular with the general public. Critics argue that the budget is designed to stabilize political leadership rather than drive economic growth, as growth forecasts have been downgraded and the impact on quality of life remains uncertain.

UK budget: Taxes rising to curb debt, fund public services

As they blocked central London, farmers had a clear message for the UK finance minister – no more tax rises. But that's exactly what Rachel Reeves' budget delivered. After months of leaks and speculation, she unveiled a sweep of new levies on workers, pensioners and savers. Today's budget builds on the choices that we have made since July last year. To cut NHS waiting lists, to cut the cost of living and to cut debt and borrowing. No doubt we will face opposition again, but I have yet to see a credible or a fairer alternative plan for working people. Central to that plan – a freeze on income tax thresholds. Meaning that as wages rise with inflation, tax bans stay fixed, pulling more people into higher brackets. A major revenue raiser, but not funding what most would expect. We're going to get £26bn worth of tax rises, but very little of that is going to be going into things like public service provision. The vast majority is going to be going into just satisfying the headroom requirements, for example. Headroom, the financial buffer carved in a budget to avoid breaking finance minister's pledge not to borrow more if costs in the economy rise. But while taxes went up, so did welfare spending. The two-child benefit cap was lifted. A policy hugely popular with the Labour party, but not so much, according to the polls with the electorate. The central criticism of this budget is that a lot of it seems to have been focused on appeasing Labour backbench MPs. And while that might work to steady the political ship at a time when both Rachel Reeves and Keir Starmer's authority is being questioned, critics say that it will do very little to drive growth or tackle the wider challenges facing the economy. Reeves says she'll tackle those challenges and cut hospital waiting lists, with health the big winner of her budget. But economic growth forecasts have been downgraded and whether the quality of life improves for people will be the real test of this Labour government. Milena Veselinovic, Al Jazeera, London.

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