Quick Read
- Rachel Reeves, UK Chancellor, has not ruled out tax rises ahead of the 2025 budget.
- Beth Rigby, Sky News political editor, highlights potential for breaking Labour’s manifesto promises.
- Income tax, inheritance tax, LLP charges, and VAT are under active consideration.
- Property taxes, pension reforms, and social benefit changes may also feature in the budget.
- Public backlash and political risks are central concerns, according to Rigby’s reporting.
Beth Rigby at the Heart of Budget 2025: Political Stakes and Taxpayer Realities
As the clock ticks down to Rachel Reeves’ second budget statement, the UK finds itself at a crossroads. On the surface, the chancellor’s cautious words suggest continuity. But beneath, the currents of change are unmistakable. With the country still reeling from years of economic headwinds, speculation about tax rises and spending cuts has reached a fever pitch. Beth Rigby, Sky News’ political editor, stands at the center of the conversation, probing the government’s intentions and decoding the signals for millions of British households.
Tax Rises: What’s Really on the Table?
In a rare pre-budget address, Reeves refused to rule out breaking Labour’s core promises not to raise income tax, national insurance, or VAT. Speaking directly to Beth Rigby, Reeves acknowledged the gravity of the moment: “Your viewers can see the challenges that we face, the challenges that are of a global nature.” With this, the chancellor set the stage for what could be a watershed moment in UK fiscal policy.
The prime minister echoed these sentiments, warning of “tough choices” amid a “difficult economic backdrop.” As Rigby noted, any move to raise taxes on working people would be both “difficult and contested.” Last year, Reeves unveiled the largest tax-raising budget since 1993, framing it as a “once in a parliament event.” Yet, with public finances under strain, the government may be forced to revisit those tough decisions.
Inside the Policy Debate: From Income Tax to Wealth Tax
One of the most hotly debated options involves freezing income tax thresholds for another two years—a move recommended by the Fabian Society and described as a “stealth tax.” As wages rise, more people would be pushed into higher tax brackets, increasing revenue without directly raising rates. The Resolution Foundation, a think tank close to government, has suggested cutting national insurance by 2p and adding it to income tax to raise £6bn while “protecting workers’ pay packets.”
Inheritance tax is also in the spotlight. The Treasury is reportedly considering a lifetime cap on the value of gifts, with a possible threshold around £100,000. Extending the period before inheritance tax applies—from seven to ten years—could further tighten the rules. The taper relief rate, which offers discounts for living several years after giving a gift, is under review as well.
Limited liability partnerships (LLPs), used by lawyers, GPs, and accountants, may face a new charge to raise £2bn. VAT changes are rumored, including the possibility of ending lower or zero rates on essentials like food and children’s clothes, or lowering the threshold for business VAT registration. Each measure carries risks, notably inflationary pressures and public backlash.
Rigby’s analysis is clear: “MPs will be fearing a massive backlash should manifesto promises on not raising income tax (and VAT and national insurance) for working people be broken.” The tension between fiscal necessity and political accountability is palpable.
Property, Pensions, and Perks: The Next Frontiers
The government is considering a new tax on property sales above £500,000, shifting the burden from buyers to sellers. Local property taxes could replace council tax, and landlords may see a new 8% national insurance charge on rental profits, potentially raising £2.3bn a year.
On social benefits, Reeves is expected to lift the two-child benefit cap, exploring options for higher caps or tapered systems for larger families. Pension reform, a perennial topic, may finally see action, with the Institute for Fiscal Studies advocating a flat 30% rate of tax relief for all, replacing the current tiered system.
Cash ISAs could see their annual tax-free limit cut from £20,000 to £10,000, encouraging investment in stocks and shares. The “British ISA” would offer an additional £5,000 tax-free for UK-listed shares. Fuel duty, frozen since 2011, could rise by 1p or 2p per litre, and the Motability scheme may face tighter eligibility criteria next year.
Gambling taxes, championed by the Institute for Public Policy Research and former PM Gordon Brown, could earn the Treasury an extra £3.2bn. While a wealth tax is not currently on the table, the chancellor is reportedly exploring a mansion tax—a 1% annual charge on property values above £2m—and capital gains tax on main home sales for the most expensive properties.
On energy bills, Reeves may cut the 5% VAT rate to zero, saving households around £80 a year but costing £2.5bn to implement.
Political Risks and Public Reactions: Beth Rigby’s Perspective
Beth Rigby’s reporting highlights the political risks inherent in each policy proposal. The shadow of last year’s budget looms large, with MPs wary of breaking promises to voters. Yet, as Rigby observes, government figures argue that “the chancellor has to level with the public about the hard choices ahead and what is driving her decision-making.”
In interviews and analysis, Rigby has emphasized the importance of transparency and trust. The public is watching closely, and any sense of backtracking on key commitments could fuel political instability. The upcoming budget is not just a financial exercise—it’s a test of leadership, communication, and public confidence.
Beth Rigby’s Reporting: Context and Credibility
Rigby’s role in shaping the budget debate cannot be overstated. Her interviews with Reeves and other senior figures have brought clarity to a complex and often opaque process. By asking tough questions and refusing to accept vague assurances, Rigby ensures that viewers are informed about the stakes and the possible outcomes.
Her coverage, cited by Sky News and supported by analysis from the Resolution Foundation, Fabian Society, and the Institute for Fiscal Studies, provides a roadmap for understanding the choices ahead. Whether Reeves opts for incremental changes or more radical reforms, Rigby’s insights will help the public navigate the shifting landscape.
Beth Rigby’s analysis underscores a central truth: budgets are not just about numbers—they are about values and priorities. As Reeves prepares to unveil her plans, the tension between economic necessity and political promise will define not only the fate of the budget, but the direction of the country itself.