The Business Rachel Reeves’s high tax, high spend budget
Nov 27, 2025
Helen Miller, Director at the Institute for Fiscal Studies, dissects Rachel Reeves's budget, highlighting £26bn in tax rises and a larger fiscal buffer despite a looming debt. Steve Rigby from the Rigby Group shares family business perspectives on missed growth opportunities and the impact of rising minimum wages. Richard Fletcher, Business Editor of The Times, provides insights on market reactions and critiques the absence of substantial tax reform. The discussion shifts towards AI's potential to enhance productivity ahead of the election, leaving listeners with a surprising note of optimism.
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High Tax, Higher Spending Budget
- Rachel Reeves presented a "tax and spend" budget with around £26bn of tax rises and higher borrowing in the short run.
- The OBR leak showed larger-than-expected headroom which softened market reaction and allowed more spending now.
Headroom Doubled To Buy Flexibility
- Helen Miller said the budget raised taxes to increase spending and to build a larger fiscal buffer against rules.
- Headroom doubled from about £10bn to £22bn, reducing immediate pressure on fiscal targets.
Backloaded Taxes And Stealthy Fiscal Drag
- Major tax rises are backloaded into later years and paired with pencilled-in spending cuts pre-election.
- Freezing tax thresholds creates stealth revenue that will flow without obvious payroll shocks.