The most searched questions about Rachel Reeves — answered with data.
Why are taxes rising while public services decline?
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The UK tax burden has hit a post-war high of 37.6% of GDP, yet public satisfaction with services continues to fall. The OBR attributes this to rising debt interest costs (now £296bn/yr), which consume an increasing share of tax receipts before any public services are funded. In 2026/27, debt interest alone is larger than the entire education budget.
Why are tax thresholds frozen until 2031?
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The October 2024 Budget extended the freeze on income tax thresholds — originally introduced by the Conservatives — until 2031. As wages rise with inflation, more income is dragged into higher tax bands without any rate change. The OBR estimates this will create 1.7 million new taxpayers and push hundreds of thousands into 40% tax by 2030.
Why are energy bills still so high despite government promises?
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The average annual energy bill stands at £1,923 in 2026/27 (Ofgem). Net Zero levies and standing charges — which the government controls — add approximately £350/year to bills. Labour's promise to cut bills by £300 has not materialised, and Ofgem's April 2026 review maintained the higher price cap for the third consecutive quarter.
Why is borrowing increasing while taxes are at record levels?
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Despite raising taxes by £40bn in October 2024, public borrowing remains at £124.1bn in 2026/27 (OBR). This is because public sector pay settlements, NHS spending commitments, and rising debt interest costs have outpaced tax receipts. The structural deficit — spending that exceeds tax revenue — has not been closed.
Why is productivity stagnant despite record tax receipts?
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OBR forecasts UK productivity at -0.3% in 2026/27, against a target of +1.5%. Business confidence has collapsed to -18 on the CBI index following the employer NI rise and Business Rates changes. Investment in automation and capital equipment has fallen as firms prioritise higher wage bills and tax costs. The UK now has the lowest business investment rate in the G7.