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OBR leak, tax freeze and political chaos as Reeves prepares for ‘tight’ Budget

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The Herald looks at what’s in the Budget for Wales

LIFE in Wales could be shaped for years by today’s UK Budget after the Office for Budget Responsibility (OBR) accidentally published its full economic forecasts online, confirming a prolonged income tax freeze, weak growth and rising debt before the Chancellor, Rachel Reeves, even reached the despatch box.

The leak — the most serious fiscal breach in recent memory — appeared briefly on the OBR website early this morning. It was removed within minutes, but not before journalists downloaded the full 100-page outlook.

The fallout has stretched deep into Westminster, with senior ministers now confirming that the “riot act” has been read to those suspected of leaking details of the Budget to the media.

Income tax thresholds frozen until 2030–31

The OBR documents confirm that all income tax thresholds will remain frozen for another three years, extending the freeze to 2030–31.

This long-term fiscal drag means more people paying higher taxes without any formal rise in tax rates.

For Wales — where wages lag behind the UK average — the impact will be felt quickly:

  • More Welsh workers pushed into basic and higher-rate bands
  • Inflation-linked pay rises partially wiped out
  • Household budgets squeezed at a time of rising rents, food prices and energy bills

The OBR estimates the policy will raise £8.3bn in 2029–30 alone.

Income tax rate rise scrapped after internal backlash

One of the most dramatic overnight developments was confirmation that a proposal to raise income tax rates for the first time in 50 years has been dropped.

The Financial Times reported that the measure was under consideration until late in the process but abandoned after strong internal resistance and fears of breaking Labour’s manifesto commitments.

This followed a highly unusual press conference from Rachel Reeves yesterday, in which she warned that sticking to Labour’s spending promises would be impossible without either tax rises or “deep cuts” to investment.

Westminster row: ‘Riot act’ read to MPs and Government insiders

The Budget has been engulfed by political turmoil.

Chief Secretary to the Prime Minister, Darren Jones, confirmed this morning that ministers and parliamentarians have been reprimanded over leaks, telling LBC:

“There have been some leaks which are unacceptable… We’ve had to read the riot act to people in Government.”

Pressed on whether MPs were involved, he replied:

“I think so.”

The comments underline the scale of internal frustration as revelations continue to emerge ahead of the Chancellor’s speech.

Record-high tax burden confirmed

The leaked OBR forecasts verify that the overall UK tax burden will reach a post-war high by the end of the decade.
Ed Davey, the Liberal Democrat leader, accused the Government of “raising taxes by stealth”.

For Welsh businesses — particularly hospitality firms already battling rising wage bills, energy costs and weaker footfall — the measures will intensify pressure. Some small breweries and pubs have already warned they are “on the edge”.

Weak growth and rising debt: tight years ahead for Wales

According to the leak, UK GDP will average just 1.5% growth over the forecast period, while public debt rises from 95% to 96% of GDP by 2030.

Because Welsh Government funding is tied to UK spending through the Barnett formula, this means:

No major uplift for NHS Wales

Council budgets in Pembrokeshire, Ceredigion and Carmarthenshire remain under strain

School funding pressures continue

Delays expected for transport and road upgrades

Rural support programmes remain uncertain

Public services already struggling with inflation and backlogs face further tightening.

Borrowing reduction relies on stealth taxes

The leak shows borrowing falling from 4.5% of GDP in 2025–26 to 1.9% by 2030–31, but the improvement is almost entirely due to the extended tax threshold freeze, not stronger economic growth.

What Reeves is expected to announce today

Although full details will not be confirmed until this afternoon, the Chancellor and Prime Minister have signalled several measures:

  • A UK-wide rail fare freeze
  • Minimum wage increases from April
  • Support for childcare expansion
  • Progress toward free school breakfasts

But Welsh hospitality operators warned this morning that wage hikes could push some businesses into closure, with more than 100 breweries shutting down in the past year.

What it all means for Wales

Based on the OBR leak and overnight political briefing, Wales should prepare for:

  • Higher effective taxes for millions of workers
  • No major improvement in Welsh Government spending power
  • Slow growth and weak job creation
  • Tough choices on public services
  • Ongoing pressure on councils, the NHS, rural communities and small businesses

Rachel Reeves will deliver her Budget in the Commons later today — but the leaks, warnings and political chaos already paint a clear picture: a tight Budget, rising taxes by default, and little immediate relief for Wales.

Crime

Man spared jail after baseball bat incident in Milford Haven

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Judge says offence was so serious only a prison sentence was justified

A 44-YEAR-OLD has been given a suspended prison sentence after admitting carrying a baseball bat in a public place during an incident in Milford Haven.

Ian Parker, of Cwrt Garreg, Cefn Glas, Bridgend, appeared for sentence at Haverfordwest Magistrates’ Court on Tuesday (Dec 9).

The court heard that on Tuesday (Oct 29), Parker travelled to Prioryville, Milford Haven, where he was found in possession of an offensive weapon — a baseball bat — without lawful authority or reasonable excuse.

Earlier hearings were told that Parker believed his son was at risk and had travelled from Bridgend to Milford Haven. During the incident, another man was struck with the bat before Parker left the scene. Parker later admitted the offence and entered a guilty plea on November 18, with sentencing adjourned for a pre-sentence report.

Passing sentence, District Judge M Layton said the offence was so serious that only a custodial sentence could be justified.

Parker was sentenced to 36 weeks’ imprisonment, but the sentence was suspended for 24 months after the court accepted there was a realistic prospect of rehabilitation.

He will be subject to 24 months of supervision and must complete 200 hours of unpaid work within 12 months. The court also imposed a rehabilitation activity requirement of up to 25 days, requiring Parker to attend appointments and take part in activities as directed by probation services.

The baseball bat was ordered to be forfeited and destroyed under the Prevention of Crime Act 1953.

Parker was also ordered to pay £85 in prosecution costs and a £187 surcharge, to be paid in full within 28 days.

The judge warned that any breach of the suspended sentence order could result in the prison term being activated.

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Business

Independent brewers join call for business rates relief as pub closures feared

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INDEPENDENT brewers have joined growing calls for urgent, pub-specific relief on Business Rates amid fears that community pubs across west Wales and beyond could be forced to close.

The Society of Independent Brewers and Associates (SIBA) has warned that changes announced in the Autumn Budget will see pub costs rise sharply over the next three years, with the average pub facing a 76% increase in Business Rates. By comparison, large warehouse-style premises operated by online and technology giants are expected to see increases of around 16%.

The issue will be discussed at a meeting taking place on Monday in Saundersfoot, where local publicans, small brewers and business representatives are due to come together to examine the impact of rising Business Rates and escalating operating costs. The meeting is expected to focus on the future sustainability of community pubs, particularly in coastal and rural areas where they often act as vital social hubs as well as key local employers.

Independent breweries are particularly exposed, SIBA says, as the vast majority of their beer is sold through local community pubs. Many small breweries also operate their own pubs or taprooms, meaning they are hit twice by rising rates. Some independent brewers have reported rateable value increases of up to 300%, creating new costs they say will be extremely difficult to absorb.

New industry research published on Thursday (Dec 12) suggests that introducing a pub-specific Business Rates relief of 30% from April 1, 2026 could protect around 15,000 jobs currently under threat in the pubs sector and help prevent widespread closures.

The call for action follows an open letter sent last week by SIBA’s board, expressing deep concern at the impact of the Budget’s Business Rates decisions on the hospitality sector.

Andy Slee, Chief Executive of SIBA, said: “The last orders bell is ringing very loudly in our community pubs after the shock changes to Business Rates in the Budget.

“Publicans and brewers feel badly let down by a system that still isn’t fairly addressing the imbalance between big global tech companies and small business owners.

“We were promised proper reform of Business Rates in the Labour manifesto last year and a rebalancing of the tax regime, but this has not been delivered. Pubs therefore need urgent help to address the planned increase in costs through a pub-specific relief, followed by full and meaningful reform.”

Those attending Monday’s meeting in Saundersfoot are expected to consider how local voices can feed into the national debate and press for urgent action to protect community pubs across Pembrokeshire.

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Community

Annual charity carol service raises funds for good causes

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MID and West Wales Fire and Rescue Service held its annual Charity Carol Service on Wednesday (Dec 10) at Ebeneser Baptist Chapel in Crymych.

The event brought together members of the local community alongside Fire Service staff for an evening of carols, readings and festive refreshments, marking the Christmas season in a warm and inclusive atmosphere.

This year’s service supported two important charities — the Fire Fighters Charity and Cancer Research Wales — with all proceeds going directly towards their ongoing work.

A total of £597 was raised on the night, which will be shared equally between the two charities.

The Service thanked the congregation at Ebeneser Baptist Chapel for hosting the event, as well as everyone who gave their time, support and generosity to make the evening such a success.

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