Polly Toynbee: This was radicalism disguised as conservatism

Here comes Labour defining itself at last with the biggest tax-raising budget in a lifetime: the £70bn in new spending – with £40bn coming from raised taxation – is big enough to see from space. This should lift the public mood, after the chancellor committed to economic change with her “invest, invest, invest” message. She demolished the Tory legacy after the OBR’s verdict: they had hidden debts – and now they have run for the hills. Her tone of authority rang out to the markets, responding at first by setting their prices in her favour. Then they wavered: will they settle?

The rich got their noses pinched, and were scorched for their private jets, private schools, capital gains and non-dom status, while losing inheritance tax perks on pension pots and farmland. These crowd-pleasers that polled very well would have made the “intensely relaxed about the filthy rich” Blair government faint with shock. How cleverly the stolid Reeves-Starmer show of sober solidity disguised their radicalism in a generally market-calming performance. Mind you, her speech didn’t talk of squeezing the rich till the pips squeak (these were only minor pinches to their wallets). We know now who Labour thinks working people are, protecting them with no rise in fuel tax, 1p off a pint in a pub, and no change to income tax or national insurance thresholds: pretending they might continue freezing those thresholds for working people was a clever pre-budget feint.

The great taxation, the springboard out of austerity, takes most from larger businesses so that small hairdressers or corner shops with four or few employees are saved from higher national insurance contributions. The eye-watering sum raised for the NHS must yield falling waiting lists fast: almost everything for Labour depends on this. Schools get a welcome lift. There’s little for the poor box: wait for that taskforce report in the spring spending review, they say. Then they must remove the two-child cap. For now, change needs to show itself soon to raise the spirits of a glum and cynical public. But everyone now knows the true nature of this government.

Frances Ryan: Forget the election campaign – tax is no longer a dirty word for Labour

It is an age-old truth that the purpose of a Labour government is to clear up the Conservatives’ mess. For the party’s first budget in nearly 15 years, the chancellor, Rachel Reeves, had two dilemmas: how is Labour going to rebuild Britain – and who is going to pay for it?

Forget the tight-lipped election campaign, taxes are no longer a dirty word. They will boost the minimum wage, help the broken special educational needs and disabilities (Send) system and pay for breakfast clubs for kids. The flatlining NHS will get £22bn worth of CPR.

Reeves targeted those with the broadest shoulders through capital gains and inheritance tax changes, while lifting the freeze for middle earners. But she missed the chance to raise cash from a wealth tax. Polling by YouGov before the budget found eight in 10 Britons support raising income tax for the super-rich.

Large-scale investment in infrastructure will be a lifeline for a country that’s crumbling. But meagre 1.5% raises for government departments expose a spending double standard: it’s prudent to fix a road but wasteful to ease child poverty.

Reducing debt repayments from universal credit will be welcomed but knowing that changes to the work capability assessment are to come means an anxious wait for many disabled people.

Much punditry today will focus on whether Reeves has broken Labour’s manifesto tax pledge. But that’s a distraction. The real issue is not the semantics of who is or isn’t a “working person”. It’s what is a fair way to rebuild a broken public realm.

Now the maths is done, Labour will need to sell the narrative it should have started with in the election: tax is not a burden – it’s the price of Tory failure.

Sahil Dutta: A crucial question – who will own this new infrastructure?

Despite progress on public investment, Labour’s budget still reflects a failed status quo. The £40bn increase in tax is needed but falls more on businesses employing people than it does the wealthy hoarding economic resources.

Rejecting broader questions of how money is made in the economy and by who, Labour instead treats infrastructure investment – especially housing, transport and energy – as the ultimate problem to solve. After three decades when Britain has invested less than its G7 partners, it is right to address this. But how investment happens is as important as how much.

Here Labour has shown little sign of changing the current model where critical infrastructure is provided by private firms. Many of these companies have shunned investment for the past three decades, while ramping up dividends, buybacks and executive pay. Rather than confront why, Labour’s priority seems to be sweetening investors and developers with more money available on better terms.

This is what drives Rachel Reeves’s new “investment rule”. That an accounting tweak can suddenly release £50bn for public investment shows how political “economic realities” really are, but the updated framework still restricts extra fiscal capacity to subsidising capital projects.

By excluding “day-to-day” spending, Labour has undervalued our social infrastructure. Work in sectors such as healthcare, childcare, education and adult social care is as vital for a functioning economy as new train lines and energy plants. What use are new machines in the NHS when hospitals are filled with elderly patients needing community care? Though these essential services have gained today, their forecasted budgets are very tight.

It is telling that many of these essential services – staffed by Britain’s 21st-century working class – will scrap for support while the big business suppliers of capital infrastructure projects can look forward to more subsidies. If the budget is a window into where power lies in the country, this shows how far Labour has to go.

John Redwood: The intentions are good, but can Starmer and Reeves deliver?

Many of us welcome and support the main budget aims of securing more growth, making good investments and helping more people into work. The question is: will the many tax rises and spending increases achieve the desired results?

In order to achieve the government’s growth ambitions through increased investment there needs to be a big uplift in private sector investment, alongside new government projects. That, in turn, requires a competitive tax regime as the UK seeks to attract crucial investment from around the world. It also needs a way of taxing the wealthy and successful to ensure, as now, they pay substantial tax without setting rates and rules that lead to many of them leaving the country. Ahead of the budget, we read that many very rich non-doms left, taking their businesses and spending power with them. We cannot afford to lose too many from our talent pool.

The strategy based on a big expansion of public sector investment needs to be carefully planned and executed. Doubtless more AI and computers could raise standards and reduce costs, but we do not need another very expensive computerisation scheme like the Post Office one, which landed the taxpayer with huge bills for compensation. The idea that the state should put £19bn into carbon capture and storage worries true green campaigners, and leaves the rest of us concerned that this will not be an investment that will pay a return. Trying to rescue HS2 as a new link to the north could prove to be costly and difficult, as it has defeated the well-paid management so far to deliver it on time and anywhere near the original large budget.

Many of the projects the government brings forward will be familiar: the announced improvements to schools and new hospitals (which the last government said it wanted but did not get done) are presumably there with some advanced plans. I wish them well in trying to get us more energy, better schools and hospitals, and a rail system that pleases the passengers; but Keir Starmer and Rachel Reeves are going to need new thinking on how to manage these matters, and some better public sector managers to carry them through.

Sharon Graham: It’s disappointing Labour didn’t adopt our proposal for a wealth tax

There are some positive announcements, no doubt. For instance, the increases in government spending, a decent increase to the minimum wage, and a loosening of the fiscal rules – a move I have been calling for these past months – so we can borrow to invest. But for everyday people to feel change, a much clearer timeline of concrete action will be needed.

Here is the real challenge this government faces. How does it deliver a serious industrial strategy that creates jobs and supports communities? On investment, the chancellor still left the fundamental question unanswered. Where are the 650,000 green jobs? Too much is left unknown.

Investment can’t end up being a handout for multinational banks and corporations, with no job guarantees attached. That doesn’t work. It isn’t working with the PetroChina and Ineos oil refinery at Grangemouth.

That’s the cold, hard truth about the world we now live in. A world in which billionaires and global markets have the whip hand. They couldn’t care less about UK infrastructure, about our jobs and communities.

But governments should and could do more. They can use the resources they have to take stakes and drive investment – to lead, not just follow, the market.

On public services, this budget marked the beginning of a long path towards renewal. Substantial investment in education and our NHS is to be welcomed. But we need to make sure that the investment is in people, not just technology. Scanners without staff are of no use.

The government chose not to bite the bullet and adopt our proposal for a wealth tax. Instead of raising corporation tax to 28%, as we had proposed (and as Kamala Harris is proposing for the US), the government has gone for the backdoor option of a company NI rise, knowing that many employers will pass it on to their workers.

What workers expect from a Labour government is to use all the power it has to fight their corner and truly be their voice. That’s the test Labour faced in this budget, and that’s the test it will face through the next five years. They may only have one shot. They need to make it count.

Sharon Graham is the general secretary of Unite

Brian: There’s nowhere near enough help for people living in poverty

Today’s autumn budget was an opportunity for the new Labour government to show it is determined to help and support people living on low incomes. Far from that, the focus on “working people” excluded and alienated disabled people, and those unable to work due to health conditions, who already are living on benefits that are inadequate. As a single parent unable to work, and claiming universal credit, I know how difficult it is to try to make these payments stretch while living in poverty.

While the announcement of lowering the maximum debt deductions from universal credit – going from 25% to 15% – is welcome, this is still far too much for people living on the lowest incomes. Similarly, raising the earnings threshold for carer’s allowance and extending the household support fund are positive steps, but they do not tackle the core issues of inadequacy within our social security system. Clear opportunities were missed: the removal of the two-child limit policy, if carried out, would lift more than 500,000 children out of poverty.

If the government intends to invest in the future of this country, it should start by helping struggling families like mine. Announcements like the increase of 50% on the bus fare cap does the opposite: hitting people on low incomes hardest.

• Brian is a parent taking part in Changing Realities, a collaboration between parents and carers living on a low income, researchers at the University of York and Child Poverty Action Group

Farmers across the UK have met the news that inheritance tax relief for farms will be limited to £1m with anger.

The National Farmers’ Union said it had been a “disastrous budget” for family farms, that would “snatch away the next generation’s ability to carry on producing British food” and see farmers forced to sell land to pay the tax.

Many have gone onto social media to express their dismay, as well as broadcasters Jeremy Clarkson and Kirstie Allsopp, who said the decision showed the government had “zero understanding of what matters to rural voters”.

The government said it was still committed to supporting farmers and “the vital role they play to feed our nation”.

In Wednesday’s budget, the Chancellor announced that, while there would continue to be no inheritance tax due on combined business and agricultural assets worth less than £1m, above that there would be a 50% relief, at an effective rate of 20%, from April 2026.

For years, the APR tax relief has enabled small family farms – including land used for crops or rearing animals, as well as farm buildings, cottages and houses – to be handed down through the generations.

Somerset farmer Richard Payne told the BBC that he had already told his son to think of going into something other than farming, as the business would become “completely unviable” as a result of inheritance tax.

He added that the £1m limit would only cover the smallest farms and that the change could result in more land being bought up by bigger businesses, changing the future shape of UK farming.

“Right across the land there will be a sea-change for the worse. Everyone says they don’t like mega-farms and they don’t want factory farming, but I can see that will be one answer out of all of this,” he explained.

Fellow Somerset farmer Holly Purdey, who is vice-chair of the Nature Friendly Farming Network England, said “longevity and generational thinking” were often key motivators for farmers to care for the land – and that could be lost.

But, she added, any forced sale of land from larger farms as a result of the tax relief changes could help more newcomers get into farming.

On X, many farmers said the decision would mean the end of smaller family farms.

Jeremy Clarkson, who presents the TV programme Clarkson’s Farm, posted – telling farmers not to despair but “just look after yourselves for five short years and this shower will be gone”.

Broadcaster Kirstie Allsopp said the Chancellor had destroyed farmers’ “ability to pass farms onto their children, and broken the future of all our great estates”.

“It’s an appalling decision which shows the government has zero understanding of what matters to rural voters,” she added.

Shadow secretary of state for rural affairs, Steve Barclay, said on X that Labour had “broken a clear promise they made to our farmers” by changing the tax relief.

Victoria Vyvyan, president of the Country Land and Business Association, said the change was “nothing short of a betrayal”, as Secretary of State Steve Reed had last year said: “We have no intention of changing APR.”

She added that it was estimated 70,000 farms could be adversely affected by the £1m cap: “This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment.”

Tom Bradshaw, president of the NFU, said: “It’s been a disastrous budget for family farmers.

“The shameless breaking of clear promises on agricultural property relief will snatch away the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”

But the government said the change was only expected to affect around 2,000 estates each year.

Following Wednesday’s budget announcement, the government said it would be maintaining the £2.4bn farming budget for England in 2025/26.

Food Security Minister Daniel Zeichner said: “Our commitment to farmers and the vital role they play to feed our nation remains steadfast.”

The cost of vaping and smoking will increase following tax rises announced in Chancellor Rachel Reeves’ Budget.

A new tax on vapes of £2.20 per 10ml of e-cigarette liquid will kick in from October 2026.

That will be accompanied by an equivalent increase of £2.20 per 100 cigarettes in tobacco duty to “maintain the financial incentive to switch from tobacco to vaping”.

Reeves also set out immediate above-inflation increases of 2% on tobacco and 10% for hand-rolled tobacco.

On alcohol duties, she said that, from February 2025, there would be a 1.7% reduction in draught beer duty, to shave “a penny off a pint in the pub”.

However, rates on non-draught products, such as wine and spirits, will rise by the higher RPI measure of inflation.

Defending the rise, the chancellor said “two-thirds of alcoholic drinks sold in pubs are served on draught”.

The UK Spirits Alliance (UKSA) called the hike a “kick in the teeth”, adding: “Today’s decision won’t stop thousands more pubs and distillers closing down.”

However, Katherine Severi of the Institute of Alcohol Studies welcomed the move saying it would “help narrow the widening gap in affordability between pub and supermarket alcohol”.

“There are both public health and economic reasons to move people back to drinking in pubs and not at home.”

In its last Budget before losing the election, the previous Conservative government said it wanted to introduce a vaping tax and set up a consultation on the changes.

The consultation said the tax aimed to make vaping “less accessible to young people and non-smokers while also raising revenue for funding vital public services like the NHS”.

It had proposed different levels of tax based on the amount of nicotine in the vaping liquid. However, Reeves has instead opted for a flat rate.

Head of the UK Vaping Industry Association John Dunne called the vape tax a “nonsensical move” that penalised people who used vapes as a method to give up smoking.

He said: “Some three million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS millions of pounds in treating patients with smoking related conditions.”

The new Labour government had already said it wanted to stop vapes being branded to appeal to children, and has announced a ban on single-use vapes, due to come into effect in England in June 2025.

Ministers have also pledged to continue plans, set out by former Prime Minister Rishi Sunak, to ban people born in or after 2009 from buying cigarettes.

In a measure aimed to encourage manufacturers to reduce sugar content in drinks, the Budget confirmed an increase to the Soft Drinks Industry Levy.

The existing exemption for milk-based drinks will be reviewed.

I said this morning this Budget would be big. And big is exactly what it is.

We got a sense of that very early on from the chancellor, when she said: “This Budget raises taxes by £40bn.”

To state the obvious, that is a massive amount of money.

The thrust of what we have heard is very much in line with what we reported in advance – with one or two tax rises suggested in some places that are not actually happening.

So, the thresholds at which levels of income tax and National Insurance contributions are paid, which are frozen until 2028, will be unfrozen then.

That’s the opposite of what was expected.

Frozen thresholds contribute towards what is known as “fiscal drag” and amount to big tax rises – where people can be hauled into paying a tax, or a higher rate of it, courtesy of inflation.

But it is worth remembering that Rachel Reeves could have unfrozen the thresholds before 2028 and chose not to, and could later choose to maintain the freeze.

The other tax rise many thought could happen but did not was fuel duty.

But put these two to one side – this is a massive tax raising budget.

Alongside it, where they will spend some of that money – on the NHS and schools in England, for instance.

Big taxes, big borrowing and big spending.

But also projected pretty anaemic growth and inflation above its 2% target.

There is one big question – will all this make enough difference that people think their lives are getting better?