𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has been mauled over her “Budget for benefits street” as she punished hard working Britons with a £26billion tax bombshell. The Chancellor was accused of stealing the wallets of workers after ramping up welfare spending and trapping the country in the biggest tax squeeze since World War Two.

Her blitz of 43 tax rises reignited calls for her to be sacked after promising that last year’s £40billion Budget had “wiped the slate clean” and would not require more hikes. And it plunged Labour deeper into crisis with fed-up voters as the party’s poll ratings went down the plug hole. To make matters worse, Ms Reeves was forced to deliver her crunch financial package amid farcical scenes after it was leaked before she even had a chance to deliver it to MPs.

Her massive raid includes an eye-watering £12.7billion from extending the tax threshold freeze for another three years, a move described as a “hammerblow” for pensioners.

It means around a quarter of the working population will be paying higher or top rate tax by the end of the decade.

Up to half a million more OAPs will be forced into the tax net because of the measure.

Ms Reeves will use the money to pay for an extra £9billion on welfare – including the £3billion cost of abolishing the two-child benefit cap.

She also announced higher taxes on pension sacrifice schemes, betting, electric cars and large homes to plug her financial black hole.

But fuel duty will be frozen for a 15th consecutive year and the 5p cut maintained in the short term.

Addressing MPs in a febrile House of Commons the Chancellor said she was asking everyone to “contribute”, despite pledging just 12 months ago that the threshold freeze would not be prolonged.

Ms Reeves defiantly insisted: “I have protected our NHS – maintaining public investment and driving efficiency in government spending.

“I have taken action on our broken welfare system – rooting out waste and lifting children out of poverty.

“And I have cut the cost of living – with money off bills and prices frozen. All while keeping every single one of our manifesto commitments.

But Tory leader Kemi Badenoch blasted: “This is a Budget for Benefits Street paid for by working people.”

She added: “She could have chosen today to bring down welfare spending and get more people into work.

“Instead she has chosen to put up tax after tax after tax, taxes on workers, taxes on savers, taxes on pensioners, taxes on investors, taxes on homes, holidays, cars, I think even milkshakes. Taxes on anyone doing the right thing.”

Ms Reeves’ speech was thrown into chaos when her entire Budget was mistakenly published early by the Office for Budget Responsibility.

In an unprecedented blunder, market sensitive tax and spend policies were put into the domain around half an hour ahead of time.

The extraordinary leak came just minutes after Ms Reeves brandished her red box outside 11 Downing Street.

Images from the Commons appear to show the moment during PMQs that she was handed a phone by minister Torsten Bell, informing her of the development.

The Chancellor sought to throw the blame entirely on the watchdog, which has since apologised, saying it was “deeply disappointing and a serious error on their part”.

One of her Labour predecessors, Hugh Dalton, quit in 1947 after details were published in an evening newspaper before his speech.

The two-child benefit cap is set to be axed in a bid to placate mutinous Labour MPs, leaving around 18,000 large families in line to pocket an extra £14,000

The OBR said 560,000 families will receive extra cash, costing around £3billion a year.

Alarmingly, the Government said annual spending on welfare per year is forecast to rise from £333billion in 2025-26 to £389.4billion in 2029-30.

That is higher than the previous forecasts of £326.1billion in 2025-26 and £373.4billion in 2029-30, reflecting the bumper sums being added by Ms Reeves

Spending on health and disability benefits per year is now forecast to rise from £83.1billion in 2025-26 to £103.6billion in 2029-30.

That is up from the previous forecasts of £81.2billion in 2025-26 and £97.7billion in 2029-30.

It also revealed the decision to freeze income tax thresholds for three years – longer than the two years expected – will drag 780,000 more people into paying the basic rate and 920,000 into the higher rate band.

That is compared to the original plan for the freeze to end in 2028.

Dennis Reed, director of Silver Voices, a campaign group for the over-60s, said the longer-than-expected extension will mean more pensioners being dragged into paying tax.

“This is a hammerblow delivered to virtually every older person in the country over the extension of the lower tax threshold by an extra year than was expected.

“The lower tax threshold will be frozen until 2031 which will mean virtually every pensioner in the country is taxed on their basic state pension.”

John O’Connell, chief executive of the TaxPayers’ Alliance, said: “The chancellor’s budget benefits bonanza will be paid for by hard working taxpayers through their incomes, pensions, property, savings and beyond.

“Rachel Reeves needs to urgently change course, by drastically reducing the benefits bill, bringing in targeted, growth generating tax cuts and deregulating the economy. We are now dangerously close to the cliff edge.”

The Chancellor’s new “mansion tax” will see higher value properties revalued.

A surcharge of £2,500 will be placed on those worth between £2million and £2.5million.

The highest band of £5million-plus will be hit with a £7,500 charge, which will be uprated by inflation every year.

Fuel duty will be frozen for five months until September, but the government has told the OBR that from then the 5p relief introduced by Rishi Sunak in 2022 will be phased out.

From April 2027, fuel duty is due to be uprated annually by RPI.

In a tiny glimmer of good news the OBR has upgraded its growth forecast from 1% to 1.5% this year.

However, there were grim downgrades for every year after that.

Forecasts showed inflation and unemployment are set to be higher than expected in 2025 and 2026.