The new Chancellor of the Exchequer, Rachel Reeves, unveils an ambitious budget marked by tax hikes and bold social reforms.

On Wednesday, November 26, 2025, UK Chancellor of the Exchequer Rachel Reeves presented her first budget to Parliament amid sluggish economic growth and pressure from financial markets. The budget, partially leaked by mistake on the Office for Budget Responsibility (OBR)’s website before the official speech, includes several major fiscal and social measures.

One of the key announcements is the freezing of income tax thresholds from 2028, expected to raise £7.6 billion by 2029–2030. Reeves also introduced a new surcharge on luxury homes, reaching up to £7,500 for properties valued over £5 million.

Another landmark reform is the removal of the two-child cap on social benefits, originally implemented in 2017. This measure, welcomed by social advocacy groups, is expected to cost around £3 billion annually.

The government will also maintain the freeze on fuel duties, in place since 2011, while a new mileage-based tax on electric and hybrid vehicles will come into effect in 2028 to offset the long-term decline in fuel tax revenues.

Additional measures include an increase in dividend tax rates, higher taxes on gambling, an overhaul of commercial property taxes, and reforms to the Motability scheme for people with disabilities.

This budget reflects the Labour government’s intention to broaden the tax base while addressing certain inequalities inherited from the Conservative era.