Autumn Budget 2025 live: OBR boss apologises for Budget error

Reeves was well aware of the Budget leak by the time she addressed the Commons – but only after a last-minute tip-off from a colleague.

The Chancellor is thought to have been unaware of the mistake by the Office for Budget Responsibility (OBR) until she found out the bad news from Torsten Bell who handed her his phone in Parliament.

Video footage broadcast live at 12.11pm showed Ms Reeves anxiously looking at the phone while Sir Keir Starmer was speaking during Prime Minister’s Questions.

Moments later the Chancellor and Mr Bell were spotted exchanging notes, with the Parliamentary Secretary for the Treasury telling Ms Reeves: ‘It’s fine, it’s fine.’

Watch the bizarre clip:

Budget day has spelled doom and gloom for many millions across the country, with extensive spending plans funded by a £30 billion tax raid, made up predominantly of ‘stealth’ taxes.

So on a lighter note, here is the BBC’s political editor Chris Mason reacting to the news that the year’s biggest fiscal event had been leaked before the chancellor Rachel Reeves even got the opportunity to read it to her fellow MPs.

Earlier today, members of the Office for Budget Responsibility issued an apology for accidentally publishing details of the Budget before Reeves gave her much-anticipated speech.

More Labour reaction to the Budget, as backbenchers hail the end of the two-child benefit cap.

Divisions have been intensifying in recent weeks over briefings against Cabinet ministers and changes to asylum policies.

But Reeves’s announcement was broadly welcomed by Labour MPs, who highlighted the decision to axe the two-child limit on benefits as a key achievement.

The Tribune Group of ‘soft left’ MPs, which includes former transport secretary Louise Haigh and former whip Vicky Foxcroft, who resigned over welfare cuts, said the Budget was ‘a Labour Budget, demonstrating Labour values’.

Describing the decision to abolish the cap as both ‘the right and moral choice’ and ‘economically sensible’, they said the Budget ‘may reduce child poverty more than any Budget this century’.

Another Labour rebel, Neil Duncan-Jordan, who lost the party whip for four months earlier this year, also welcomed the Budget, saying it had begun to address ‘the concerns of the British people’.

There has been much talk about how this Labour government can afford its various spending increases, including on welfare and special educational needs and disabilities.

A surge in the tax burden to its highest level in history is expected to plug the gap somewhat, but

, the country’s longest continuously serving MP, thinks scrapping the pensions triple lock – one of his Conservative government’s own policies – could free up more funds.

He told the Commons today: ‘We all know that the triple lock is unsustainable. You cannot have a situation where people of my generation are consuming an ever-greater proportion of national wealth through the state pension.

‘Frankly, our government never dared tackle it having brought it in because they knew that the Labour Party would crucify them at the ballot box. Now the Labour Party is caught in the same bind.

‘The fact is, it is completely unfair on younger people if the burden of older people, through the triple lock, increases year by year.’

The policy guarantees the state pension will rise each year in line with either average earnings growth, CPI (Consumer Prices Index) inflation, or 2.5 per cent – whichever is highest.

Special educational needs and disabilities (SEND) spending will become the Government’s responsibility from 2028/29, likely adding more billions to the balance sheet.

And schools could be on the receiving end of some penny-counting down the line, the Office for Budget Responsibility (OBR) has warned.

No savings have been identified to offset the estimated £6 billion pressure taking on SEND spending will cost in 2028/29, the OBR said.

If the £6bn needed comes from the Department for Education’s core schools budget, it could mean a 1.7 per cent real fall in spending per pupil in mainstream schools, the OBR said, rather than the 2.4 per cent increase the Government had planned.

The Government has since said the SEND pressure will not be absorbed from the schools budget, and said the OBR estimate does not account for Government decisions about improving the SEND system.

The chancellor said a key goal of today’s Budget was to ‘cut NHS waiting lists’, claiming she is ‘protecting and strengthening’ the health service with her plans.

But experts say Reeves’s boasts are overblown failed to allocate any additional funding for tackling waiting lists, dealing with the cost of doctors’ strikes or covering a potential rise in drug prices.

It means hospitals will have to make cuts to patient care in the event of another walkout by medics as they ‘cannot continue to absorb the cost’, bosses warn.

The health service now faces one of the ‘tougher periods for funding’ in its history with a ‘modest’ increase of 2.2 per cent next year that ‘harks back to the slow growth’ under 2010’s austerity, the Nuffield Trust think tank says.

Meanwhile, ‘stealth tax hikes’ are likely to deter doctors from taking on extra shifts at a time when ‘the NHS needs all the manpower it can get’, medical accountancy firm Ramsay Brown added.

Read more on why Reeves’s heavy spending Budget might not be as good for the NHS as first believed:

The Government’s official forecaster has downgraded its growth predictions for the next four years, in light of today’s fiscal announcments.

And many economists have reacted with concern over a Budget which raises taxes and piles more money into welfare.

Oxford Economics’ Andrew Goodwin said the Budget ‘papers over the cracks but can’t hide the fiscal risks’.

Elsewhere, economists at Pantheon Macroeconomics said: ‘Despite the positive spin from the Chancellor today, the fiscal outlook remains perilous.’

In its economic outlook report, the Office for Budget Responsibility said the UK economy was set to grow by 1.5 per cent in 2025.

But this was set to slow to 1.4 per cent next year. The forecaster had previously predicted a reading of 1.9 per cent for the year.

It also downgraded growth in 2027 from 1.8 per cent to 1.5 per cent, in 2028 from 1.7 per cent to 1.5 per cent, and in 2029 from 1.8 per cent to 1.5 per cent.

Today’s Budget poured more money into government spending, particularly through benefits payments.

And it all means total government public spending is forecast to remain between 44 and 45 per cent of GDP for nearly the entire decade to come.

This is almost five percentage points higher than before the Covid-19 pandemic.

It also represents the longest sustained period of spending at this level since the Second World War.

Spending at the end of the last century, during Labour PM Tony Blair’s first premiership, stood at just 34.6 per cent of GDP.

Meanwhile, debt remains at levels last seen in the early 1960s – between 95 and 97 per cent of GDP. And it will stay that way for the rest of the decade.

This level of debt was last seen at the end of the financial year 1962/63, when debt stood at 98.2 per cent of GDP: a time when Harold Macmillan was Conservative prime minister, there were only two television channels in the country, and The Beatles had just released their debut album Please Please Me.

Debt at the end of the last century, in 1999/2000, stood at just 32.4 per cent of GDP.

Yearly spending on health and disability benefits is likely to pass £100 billion for the first time, rising from £83.1bn in 2025/26 to £103.6bn in 2029/30.

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

The latest forecasts have been calculated on the assumption that the number of people requiring these benefits will continue to rise, but at a slower pace than recently.

However, if growth continues at rates seen since the pandemic, this could increase spending in 2029/30 by around £11bn, the OBR added.

Total government spending on welfare per year is forecast to rise from £333.0bn in 2025/26 to a new all-time high of £389.4bn in 2029/30.

The UK’s tax burden was already set to hit record levels in the years ahead, but new data shows the figure peaking even higher than previously thought.

The tax burden is a measure of how much the Government collects in taxation, as a proportion of the total value of the economy.

When Reeves delivered her spring financial statement in March 2025, the Office for Budget Responsibility forecast the tax burden to soar to 37.7 per cent of GDP by 2027/28 – the highest level since records began in 1948.

The OBR is now forecasting it to reach 37.6 per cent by 2027/28 but then go on climbing to an even higher record of 38.3 per cent in 2030/31.

This is more than five percentage points above the pre-pandemic level of 32.9 per cent in 2019/20.

The main reason for the escalating level of tax is Reeves’s move to freeze income tax and national insurance thresholds in her ‘stealth’ tax drive.

Speaking to the parliamentary Labour Party of MPs, Reeves made an early attempt to curry favour for her Budget, which is expected to raise taxes by up to £30m.

Let me say what we achieved today. I said that I wanted this to be a budget that cut the cost of living, cut NHS waiting lists and cut the debt and the borrowing – and we’ve achieved all of those.

Today, we delivered the Budget. Now, we’ve got to win the argument, and we’ve got to win the argument every single day.

We have to win the argument for the budget. We’ve got to campaign on the budget – and that is what we must now do.

One of the Budget’s many welfare-based reforms will see the Government take on the full cost of children with special educational needs and disabilities (SEND).

Education and social care make up 78.3 per cent of councils’ budgeted spending for this fiscal year, and many local authorities are finding it increasingly difficult to meet SEND demands.

This has been exacerbated by a doubling in the number of children issued with support plans for SEND since 2019.

To relieve the pressure on councils, Reeves announced the Government would be taking on this responsibility from 2028, a burden projected to cost £4.9bn by then.

The Government has already been funding coucils’ SEND deficits since 2020, allowing councils to boast a balanced budget, while overspending by millions.

A concerned Office for Budget Responsibility wrote in its report: ‘The government has stated that the full cost of SEND provision will be absorbed within departmental budgets from 2028-29, but no savings have been identified to offset the estimated £6bn pressure this will create.’