Today’s budget strikes a balance between fiscal responsibility and delivering on key manifesto promises, especially around the cost of living and public services. Facing a challenging economic backdrop—including downgraded long-term growth forecasts—the government needs to raise billions in revenue through targeted tax increases rather than raising the headline rates of Income Tax, VAT, or National Insurance.

A core revenue-raising measure is the three-year extension to the freeze on income tax thresholds, which will draw more working people into higher tax brackets due to “fiscal drag.” While this breaks the spirit of the manifesto pledge not to raise taxes on working people, the Chancellor argued it was a necessary choice to avoid austerity or reckless borrowing.

Conversely, measures designed to demonstrate “Labour values” include a high-value council tax surcharge (dubbed a “mansion tax”) on properties worth over £2 million, and significant reforms to help the poorest families, such as scrapping the controversial two-child benefit cap. Further support for households was provided through raising the National Living Wage and cutting certain levies on household energy bills.

Overall, the budget is about “fair and necessary choices” to fund priorities like cutting NHS waiting lists and a horrendous national debt, whilst fostering economic stability in spite of difficult economic forecasts.

For a concise perspective on the budget, the Guardian has produced this show t video summary: Budget 2025: key points at a glance.