Commentary: Rachel Reeves delivers the Autumn Budget

"Even before the Office for Budget Responsibility accidentally released its fiscal document early and effectively leaked the entire Budget, this Budget was set to face intense scrutiny and scepticism. Despite Chancellor Rachel Reeves taking a cautious approach, critics will still find plenty to target in what is undeniably a tax-heavy package.

"The Budget increases the government’s ‘headroom’ to £22bn and keeps to the Chancellor’s pledge not to raise the basic or higher rates of income tax. Even so, the familiar trend continues, with productivity forecasts downgraded yet again.

"The biggest driver of extra revenue is the ongoing freeze of tax thresholds, expected to raise £8.3bn in 2029/30. This will drag more people into higher tax bands and push up effective tax rates, leaving workers taking home a smaller share of their pay. If the freeze runs to 2031 as planned, thresholds will have been static for almost a decade, something that would have been hard to imagine in previous eras.

"Motorists will notice the changes too. Electric vehicle drivers face a new 3p-per-mile surcharge, rising with inflation. For someone driving 10,000 miles a year, that adds roughly £300 to annual costs. It raises the obvious question of whether this will slow the shift to EVs, especially given that fuel duty has been frozen again.

"Aside from families with more than two children, who will no longer be subject to the two-child benefit cap from next April, there are few obvious ‘carrots’ in this Budget, especially for the so-called squeezed middle. Measures aimed at wealthier households may play well politically, such as an annual mansion tax, a 2-point rise on dividend, property and savings income, and a new rule forcing any cash ISA contributions above £12k a year into stocks and shares. But these raise far less than the threshold freeze.

"Reeves also announced £5bn of public sector ‘efficiencies’ by 2031, a polite way of saying job cuts. We are told the savings will be redirected to the NHS, but it remains to be seen whether voters are willing to give the government until 2031 to deliver."