In a surprising turn of events, critical information from the Budget was prematurely disclosed before Rachel Reeves could present her financial statement to the Commons. The Chancellor was expected to unveil the Budget to MPs at 12:30 pm, but the Office for Budget Responsibility (OBR) mistakenly released its economic and fiscal report ahead of Reeves’s address.
Expressing disappointment and labeling the leak as a significant error, Reeves asserted the breach was on the part of the OBR, which has since taken responsibility for the mishap. The leaked OBR document unveiled key Budget measures, such as a total of £26 billion in tax hikes and the elimination of the two-child benefit restriction.
Despite concerns raised by Reeves regarding the impact on working individuals, the OBR disclosed that the Budget would introduce tax raises amounting to £26 billion by 2030-31, primarily through extending the freeze on personal tax thresholds for an additional three years. This move is anticipated to elevate the tax revenue to a record high of 38% of GDP by 2030-31.
Moreover, the OBR document confirmed the discontinuation of the two-child benefit limit starting from April next year, with an estimated cost of £2.3 billion in 2026-27 and £3 billion in 2029-30. The OBR also revised its economic growth forecast for this year from 1% to 1.5%, although projections for the subsequent four years were downgraded.
The leak prompted reactions from various political figures during Prime Minister’s Questions, with Tory leader Kemi Badenoch describing it as unprecedented. Additionally, Lib Dem leader Sir Ed Davey pressed the PM on the tax increases detailed in the leaked OBR report.
In response to the leak, the OBR issued a statement acknowledging the premature release of their economic and fiscal outlook document on their website and initiated an investigation into the incident. They assured that the full report would be made public after the Chancellor’s speech.
The Budget was heralded by Keir Starmer as reflective of Labour values, aimed at addressing the financial concerns of families grappling with the rising cost of living. Starmer emphasized the Budget’s focus on initiatives like free breakfast clubs, childcare, and school meals, along with commitments to reduce NHS waiting lists, national debt, and the overall cost of living.