Britain's Labour government announced sweeping tax increases on Wednesday, 26 November 2025, as part of a budget aimed at reducing public debt while addressing strained healthcare systems and cost-of-living pressures. The measures come alongside revised growth forecasts indicating slower economic expansion through 2030.
Chancellor of the Exchequer Rachel Reeves unveiled £30 billion in new annual tax revenues by 2030-2031, primarily through frozen income-tax thresholds that push more workers into higher brackets. The budget also introduces levies on online gambling platforms, luxury properties, and electric vehicle usage, while capping pension benefits for high earners.
Prime Minister Keir Starmer framed the measures as essential to fulfilling Labour's 2024 election promises to revitalize the National Health Service and stabilize household finances. The announcement follows recent polling showing gains by the right-wing Reform UK party, adding urgency to Labour's economic strategy.
"These are my choices – not austerity, not borrowing, not turning a blind eye to unfairness," Reeves told Parliament, addressing concerns about the government's reversal on earlier tax pledges. The budget aims to close a £20-billion fiscal gap while maintaining spending on public services.
Analysts note the growth downgrade reflects global economic headwinds and domestic productivity challenges. Business groups have expressed mixed reactions to the corporate tax adjustments first introduced in Reeves' 2024 budget.
