But Reeves claimed any “responsible chancellor” would have been forced to do the same to “fix the foundations” of the economy.
In a marathon 76 minute speech, she said Labour would fulfil its promise to voters in July’s election to “invest, invest, invest” to “drive economic growth”.
Labour had said that their number one “mission” was growth – and that they would achieve the highest rate of growth of any G7 country within five years.
However, the Office for Budget Responsibility’s assessment was that the package of economic measures ultimately “leave GDP largely unchanged in five years”.
Labour’s first Budget since 2010 sees the second biggest increase in taxes in UK history.
As measured by amount of tax raised relative to the size of the economy, it is slightly smaller than Conservative Chancellor Norman Lamont’s 1993 Budget.
But in a surprise move, Reeves decided not to continue a freeze on income tax thresholds beyond 2028, which would have dragged millions of people into the tax system for the first time or pushed them into paying higher rates.
And she announced changes to Labour’s self-imposed borrowing rules to allow the government to pump billions into the UK’s infrastructure and fund improvements to crumbling schools and hospitals.
She also froze petrol duty for next year – and retained a 5p cut introduced by the Tories that was due to expire in April.
But she said a £22bn “black hole” inherited from the previous government meant tax rises were needed.
