Return of tax and spend

Chancellor raises spending by £70bn a year over next five years Huge injection of funds into NHS and cash boost for schools

- Larry Elliott Pippa Crerar

Reeves tells business it must bear brunt of £40bn in tax increases Chancellor raises spending by £70bn a year over next five years Huge injection of funds into NHS and cash boost for schools

Rachel Reeves used her budget debut yesterday to announce a massive package of tax, spending and borrowing increases as she gambled on voters rewarding the government for patching up Britain's crumbling public services.

Insisting that she was delivering on the choices the public made in July's general election, the chancellor told businesses and the better off that they must bear the brunt of £40bn of tax increases needed for an emergency NHS cash injection and to plug the hole in the public finances inherited from the Conservatives.

The chancellor raised £25bn by increasing employer national insurance contributions and hit those on higher incomes through increases in capital gains and inheritance tax, and changes to the rules covering wealthy foreign individuals living in Britain.

Reeves said she was making good on her pledge not to hit the pockets of working people, refusing to raise fuel duty for motorists and knocking a penny off the price of a pint of beer. Despite speculation, she also decided against extending the freeze on tax allowances and thresholds.

Addressing a meeting of Labour MPs after her Commons speech, she said: "At this budget, the Labour government made our choices. They're not easy choices, but they are the responsi ble choices in the national interest, and we now need to take the fight to the Tories."