Novara Live Rachel Reeves Raises UK Taxes To All-Time Highs
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Nov 26, 2025 In this discussion, economist James Meadway breaks down the implications of Rachel Reeves' historic tax increases and critiques the government’s fiscal approach, emphasizing the stealthy effects of frozen tax thresholds. Journalist Steven Methven shares insights on the contentious Palestine Action judicial review, raising alarms about judicial transparency and potential biases. Together, they explore the implications of drastic legal reforms in the UK, including the proposal to scrap jury trials, and the intersection of economic policy and justice issues.
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Taxes At Record Highs
- Rachel Reeves' budget raises taxes by £26bn and pushes tax revenue to 38% of GDP by 2029.
- The increase largely comes from freezing income tax thresholds and new levies like a £2m+ property tax.
Fiscal Headroom Explained
- Fiscal headroom focuses on balancing current spending over a multi-year rolling basis, not total public borrowing.
- Capital spending and interest payments sit outside that specific rule, letting governments borrow for long-lived investments.
Threshold Freezes Are A 'Stealth' Tax
- Freezing income tax thresholds is a stealth tax that captures wage rises via inflation and raises about £8bn.
- James Meadway calls it politically stealthy and less honest than an explicit rate rise.