#budget-2025

#budget-2025

Rachel Reeves has said she put the public finances on a firm footing at the last budget - but argued that, since then, "the world has thrown even more challenges our way". The chancellor has once again left the blame at the door of the previous government, pointing to "Liz Truss's disastrous mini budget and the 22 billion pound black hole in the public finances". She also pointed to Donald Trump's tariffs and the demand for increased defence spending as she set the stage for sweeping tax rises expected in three weeks time.

"I'm leading the child poverty task force and I've been doing that work from government. "But I'm clear about what needs to happen. I'm clear about what the evidence tells us. And I'm clear about what we need to do." She added: "There's a real urgency about this because every year that passes, as children are born, as they move into that system, the numbers go up, child poverty rates increase. So we have to tackle it."

She added that any borrowing from the reserve - which amounted to £9 billion last year but is being halved in 2025 - would have to be repaid. The Reserve is intended for "genuinely unforeseen, unaffordable and unavoidable pressures" but has in recent years been used to fund public sector pay deals and compensation settlements.