Rachel Reeves Budget Includes Known Proposals

Rachel Reeves will deliver her make-or-break second Budget on Wednesday, with voters braced for a wave of tax increases as she tries to fill a black hole of between £20 and £30 billion in the public finances.

The chancellor is under huge pressure to deliver a financial statement that appeals to voters while not spooking the international money markets.

It is not an overstatement to suggest that her job – and that of her next door neighbour Keir Starmer – could rest on whether or not the Budget is a success.

The build-up to the big day has been far from plain sailing for Reeves, who dramatically U-turned on plans to raise billions by breaking Labour’s manifesto pledge not to put up income tax.

That has left her exploring a “smorgasbord” of options to raise the money she needs to balance the books.

Although nothing will be officially confirmed until Reeves delivers her statement at around 12.30pm on Wednesday, here is what we already will be in it.

The government announced over the weekend that rail fares in England will be frozen next year – the first time in 30 years.

The freeze will apply to regulated fares – including season tickets and off-peak returns – until March 2027.

It only applies to services run by England-based train operating companies, but the government said it intends to “directly limit inflation” and hold down a “major component of everyday costs”.

Patients will be able to save around £12 million next year as the chancellor intends to extend the freeze on NHS prescription charges.

The cost of a single prescription will remain at £9.90.

Labour will regularly name and shame employers who breach the national minimum wage rules.

A Treasury source said this is meant to protect vulnerable workers and prevent companies from hiding by hitting them with fines.

More than 200 play areas are meant to be benefitting from this injection of £18m of cash.

It comes after the government’s Pride in Place programme has offered £5 billion for communities to regenerate public spaces.

Budget Force and HM Revenue & Customs will now be able to seize illegal vapes and issue £10,000 fines.

If business owners break the rules, they could face prison time.

From October 2026, all vapes will have to have a digital duty stamp with a QR code so they can be scanned to check which are fake.

Shops will have a six-month grace period to sell any unstamped stock.

Reeves claims she will be able to rack up £1.2 billion of savings as officials continue cracking down on incorrect Universal Credit payments up until 2031.

There is reportedly a team of 6,000 at the Department for Work and Pensions who have reviewed more than a million cases and already saved the taxpayer £1 billion.

The chancellor is set to announce that 13 million pensioners will benefit from an above inflation rise to the State Pension next April, equating to more than £550 a year more.

It’s part of the government’s commitment to the triple lock, which means increasing the State Pension every year according to the highest of one of three figures: inflation, average earnings growth or 2.5%.

From next April, the rate of the full new State Pension will increase to just over £240.

Every secondary school in England is expected to benefit from a £5 million boost for school libraries – which works to around £1,400 per school.

Every child, regardless of their background, would then have access to a wide range of books.

Reeves is expected to put aside an extra £48 million to recruit 350 new planners as part of the government’s plan to “get Britain building”.

The chancellor would reportedly look at hiking up the number of graduate planners and launching a Planning Careers Hub.

Reeves will promise care leavers up to £13,500 of student loan support – the full amount – to level the playing field.

Only 14% of young people who leave care go to university at the moment, compared to 50% of the wider population. They are more likely to drop out due to financial barriers, too.

The current system limits maximum student support to those on the lowest incomes, under 25, who do not have a partner,

The Times reported Reeves intends to use the current council tax system as the basis for a new property tax for large properties by revaluing the most valuable homes across council tax bands F, G and H.

Supposedly the government will allow homeowners to defer paying the tax until they move house or die.

This will hit 100,000 properties and supposedly raise £400-450 million from the levy.

Labour is widely expected to lift the two-child benefit cap, which prevents family from claiming more of universal credit on any children after their second.

This is likely to cost £3 billion. The government did choose to keep the Tory policy in place during their first Budget last year, but subsequent backlash from the left-wing of Labour has likely played in encouraging Reeves to drop the cap.

Reeves is widely expected to freeze the income thresholds at which income tax rates start to apply in a move which would raise around £8 billion for the Treasury.

It’s referred to as a “stealth tax” because workers end up being dragged into a higher tax bracket when they get a pay rise in line with inflation.