A major leak of official Budget documents has revealed that Chancellor Rachel Reeves is set to raise taxes by £26 billion, triggering uproar in Westminster and prompting calls for an immediate inquiry.
The Office for Budget Responsibility (OBR) said the publication was the result of a “technical error” and apologised after its economic outlook was briefly made accessible online ahead of Reeves’s statement to the Commons.
According to the prematurely released forecasts, the tax burden will climb to a record 38.3% of GDP by 2031. Much of the increase is attributed to a three-year extension of the income tax threshold freeze, projected to raise £8.3 billion by 2030–31.
The documents also indicate that the Treasury will proceed with a levy on properties valued above £2 million, remove National Insurance relief on pension contributions over £2,000, a measure worth £4.7 billion, and end the long-standing freeze on fuel duty. Additional changes include a £2.1 billion rise in taxes on dividends, savings, and rental income, as well as tighter capital gains tax relief expected to bring in a further £900 million.
Shadow business secretary Andrew Griffith condemned the handling of the Budget, calling the episode “a fiasco from start to finish” and branding the leak “the final embarrassment”.
The OBR’s inadvertent release also shed light on wider fiscal plans. Reeves is expected to increase her Budget headroom to £22 billion, while the projected cost of sickness and disability benefits is set to surge by £109 billion by the next parliament. The report shows a sharp fall in the cost of servicing national debt, and forecasts that borrowing will decline from 4.5% of GDP in 2025–26 to 1.9% by 2030–31.
Despite falling borrowing projections, the leaked analysis suggests public debt will edge up from 95% to 96% of GDP by the end of the decade. Markets reacted swiftly: long-dated gilt yields rose, with 30-year yields up as much as seven basis points to 5.39%. Ten-year yields also increased, while sterling slipped 0.2% against the dollar.
The disclosure ignited immediate controversy in Parliament. Former Conservative Cabinet minister Sir Mel Stride demanded an inquiry, warning that the release of “market sensitive information” could amount to a criminal offence. He questioned what powers the Commons could use “to force a leak inquiry”, arguing that MPs should be given access to the documents since they had already circulated outside Westminster.
Political tensions intensified during Prime Minister’s Questions, where Labour were attacked the government over the leak. Rachel Reeves sought to downplay the incident, insisting responsibility lay with the OBR, though he appeared visibly irritated by the disruption overshadowing the Budget.
The OBR, in its statement of apology, confirmed it had launched an internal investigation and would report to its Oversight Board, the Treasury, and the Commons Treasury Committee. It pledged that the full economic and fiscal outlook would be formally published only after Reeves delivered her speech.
The episode marks an embarrassing stumble in the run-up to one of the most significant fiscal events of the year, adding to political pressure on a Treasury already navigating difficult economic terrain.
