The Rest Is Politics — Ep. 474

Does Reeves' Budget Really Change Anything? What It Means For You
Date: November 26, 2025
Hosts: Alastair Campbell & Rory Stewart

Overview

In this episode, Alastair Campbell and Rory Stewart deliver an in-depth analysis of Chancellor Rachel Reeves' latest UK budget. They explore whether Reeves’ measures truly represent change, who the budget is intended to reassure, and the difficult economic and political landscape facing Labour. The conversation ranges from budget leaks and market reactions to the effectiveness of Reeves' performance, the opposition’s response, and the broader outlook for Britain’s political and economic future.

Key Discussion Points & Insights

1. Budget Drama: Leaks and Parliamentary Protocol

• Budget Leak Fiasco ([03:16]-[04:15])
  • The Office of Budget Responsibility (OBR) accidentally published key budget documents early, causing chaos. Reeves began her speech visibly angry due to this error.
  • Alastair: "She started off in a pretty foul mood, I would say." ([03:45])
  • The hosts recall historical budget leaks (e.g., Hugh Dalton, 1947) and how leaks could move the markets.

2. Summary of Budget Measures

Major Moves and Revenue-raisers ([06:36]–[09:45])

• Reeves stuck to the New Labour playbook of promising growth rather than direct tax rises, echoing Blair/Brown era caution.
• Rory: “She did raise taxes, though, by 26 billion, but she did it through a range of different measures, and the biggest one is that she froze the thresholds...” ([07:39])
• Key tax and spending measures:
  • Threshold freezes: Leads to “fiscal creep” as more taxpayers are pulled into higher rates.
  • Private pension changes: “...if you're in the private sector, you're going to lose tens of thousands of pounds.” ([09:06])
  • Mansion tax (council tax surcharge): Targets properties over £2 million for modest revenue.
  • New taxes on property savings and dividends, corporation tax tweaks, and a new mileage-based charge on electric vehicles.
  • Rory: “That might mean...470,000 fewer vehicles will be sold. Electric vehicles.” ([10:12])
  • Gambling and fuel duty changes.
  • Increased tax administration and debt collection efforts.

3. Who Is the Budget For? — Main Audiences

([05:06]–[05:45])

• General public (medium/long-term expectations)
• Labour MPs and party base
• Business community
• Markets — described as perhaps the most crucial audience on budget day

4. The Market Response: Stability and Caution

([11:45]–[14:39]):

• The markets responded positively, largely due to Reeves increasing fiscal headroom (from £9bn to £22bn).
• Rory: “...we don't care whether it comes through tax and spend, but what we do care about is seeing the bigger headroom. And that's why the markets seem to have reacted quite well.” ([11:45])
• The OBR, however, indicated a 50% chance Reeves may need to come back for more tax or spending changes.
• Discussion of the bond market’s power and its effect on government policy.
• Rory: “Our debt to GDP is about 100%, and we are spending currently £100 billion a year on servicing our debt interest.” ([13:31])

5. The OBR and Media Messaging

([16:11]–[17:37])

• OBR’s projections have become a controlling factor over government spending and tax due to new fiscal rules.
• The speech, the Treasury “red book,” and the OBR report often tell different stories, making it hard for the public to understand the full picture.
• Alastair: “By the time people had scrabbled around, read the red book...he was still driving the narrative.” ([16:11])

6. Performance & Political Theatre

Reeves in the Commons

• Described as resilient and “punchy” on a “difficult wicket” ([19:11], [20:38]).
• Her big announcement — scrapping the two-child benefit cap — rallied Labour backbenchers [19:52].
• However, her messaging was criticized as sometimes unclear for the broader public.
• Alastair: “...the one thing, you know, we've talked a lot about, Keir Starmer's got resilience. Rachel Reeve showed a lot of resilience today...” ([20:38])

Kemi Badenoch’s Response

([22:03]–[23:48])

• Tory response was unexpectedly effective and aggressive.
• Alastair: “It was brutal stuff...all this whining about mansplaining. It's not mansplaining that people don't like for. It's because you're completely useless.” ([23:19])
• House was energized; attack lines circled around welfare, taxes, and the credibility of Reeves and Starmer.
• Rory: “It was one of the moments where Kemi Badenoch, I think, has provided a very, very effective speech on television and social media...” ([22:13])

7. Interpretation and Public Impact

• Labour's budget is seen as one of stability, rather than immediate growth or a real break from Tory plans.
• Reeves leans on arguments about “Tory mismanagement” and “stability, investment, reform,” but these may not translate to clear gains in public opinion ([21:31]–[21:39]).
• Alastair: “...the public would have had a sense of somebody...fighting hard to project a sense of a forward plan for the economy. What I think you'd struggle to do...is...clarity...” ([20:51])

8. Business, Growth, and Productivity

([25:17]–[30:53])

• Conservative narrative: Labour taxed too much and is not business-experienced, a chance to relaunch as the party of business.
• Tax as a share of GDP is at near-record highs, while productivity growth has slowed.
• OBR's own forecast: “None of these measures...are going to lead us to adjust our growth forecast.” ([27:18])
• Lack of radical or bold changes on business costs, Brexit, energy, or AI.
• Rory: “If productivity had remained at the levels...from late Thatcher through Gordon Brown, we'd be about 30% richer.” ([30:00])

9. Public Services, Fairness, and Reform

([32:13]–[34:15])

• The tax burden is highly progressive but unusual for a country spending so much on public services.
• Rory: “We have this very odd situation where we're spending like a Scandinavian country, but most income is coming from the top.” ([32:23])
• Public services struggling to deliver quality commensurate with high taxes, especially visible in the NHS and local government.

10. Missed Opportunities and Structural Issues

([38:53]–[40:47])

• Defense and security were barely mentioned, despite the increased international threat environment.
• Deregulation, especially in nuclear energy, could have saved billions but remains largely unaddressed.
• No substantial moves on Brexit impact or strategy, AI, or genuinely bold pro-growth or pro-business reform.

11. Questions & Listener Reactions

([41:50]–[51:36])

• Is this Reeves’ last budget? Listeners split nearly 50/50.
• Rory: “If you're a young person listening to this, what you want to hear is a sense of hope and a sense of direction. And I'm afraid stability, investment, reform doesn't quite...make me think this is a country that's going places.” ([44:36])
• Triple lock sustainability, housing affordability, and intergenerational fairness are pressing unfinished business.
• AI, according to Rory, is the biggest economic story that received virtually no attention in the budget.

12. Final Judgments

• Rory: “This was a budget that basically could have been delivered by Theresa May.” ([50:22])
• Alastair: “If I had one big picture criticism...were they doing this budget today, artificial intelligence would have been at the heart of it...the second thing...was defense...Brexit...taken a very large chunk out of the economy...” ([50:46])
• Both felt the budget failed to seize opportunities or set a transformative vision.

Notable Quotes & Memorable Moments

• On market sensitivity of budget leaks:
  Alastair: "The budget and the documents that go with it are rammed full of market sensitive information which can move currencies, can move the markets, and so that's why it's such a big deal." ([04:15])

• On fiscal drag and threshold freezes:
  Rory: “...the biggest one is that she froze the thresholds...as inflation kicks in...you are more likely to enter those tax brackets.” ([07:39])

• On OBR's influence:
  Alastair: "I think there should be a debate about the OBR. I think to some extent it has become way too important in our politics and our economics." ([15:37])

• On the political mood and spectacle:
  Alastair: "The big moment for the backbenchers really looking like they were embracing the whole thing, was the 2 child benefit cap getting rid of that." ([34:48]) Rory: "AI is the biggest economic story in the world...a really bold chancellor would be thinking much more front and center about AI." ([49:07])

• On the budget’s lack of radicalism:
  Rory: “…this is a budget could have been delivered in 2017...it feels like it could have happened almost 10 years ago.” ([51:13])

Important Timestamps

| Time | Segment/Quote | |----------|--------------------------------------------------------------------------------------------------------------| | 03:16 | Discussion of budget leaks, Hugh Dalton 1947 resignation | | 05:45 | Rory and Alastair outline the audiences for the budget | | 06:36 | Analysis of Reeves’ budget strategy and tax choices | | 09:45 | Mansion tax & new EV mileage tax explained | | 11:45 | Market reaction to Reeves’ budget | | 13:31 | The bond market’s power and importance explained | | 16:11 | Role of OBR, narrative control, how public understands the budget | | 19:11 | Rachel Reeves’ mood and performance in the Commons | | 20:38 | Scrapping the 2 child benefit cap as the big backbencher applause line | | 22:03 | Kemi Badenoch’s aggressive response | | 25:17 | Tax revenue as share of GDP, business perceptions, productivity crisis | | 27:18 | OBR: “None of these measures in this budget...lead us to adjust our growth forecast.” | | 32:13 | Unusual progressiveness of UK tax system & implications for fairness | | 34:48 | PLP response and Labour’s political challenge with slow or ambiguous growth messages | | 38:53 | Missed focus on defense, deregulation, and nuclear spending | | 44:36 | What will make young people stay in the UK? The budget’s pitch to youth | | 49:07 | AI’s importance, and its omission from the budget | | 50:22 | Rory’s final judgment: budget could have been delivered by Theresa May | | 50:42 | Alastair’s final critique: misses on AI, defense, and Brexit |

Summary

• This episode offers an intelligent, sometimes skeptical breakdown of Reeves’ budget: seen by the hosts as competent but cautious, stabilizing rather than transformative, pragmatic for the markets but uninspiring for growth, business, or young people.
• The consensus: Reeves avoided catastrophe but missed opportunities for bold reform — on growth, tech, business, or public service improvement.
• The biggest criticism is that this “change” budget felt too much like more of the same, lacking answers for the fundamental challenges facing the UK: low productivity, Brexit fallout, public service malaise, and technological disruption.

Recommended for listeners who want to dig deep into UK policy, fiscal politics, and the insider realities behind Westminster’s biggest economic set-piece.