Autumn budget live: Rachel Reeves says taxes will rise by £40bn as she delivers budget

The news that the UK’s fiscal rules will now target Public Sector Net Financial Liabilities, PSNFL, (known as “persnuffle” in economic circles), confirms the Guardian’s report from last week.

It means the UK will now account financial assets, including student loans and company shares, alongside government debts, freeing up potentially £50bn of extra borrowing within the fiscal rules, as this chart shows:

Reeves says she will be left with £15.7bn of headroom at the end of the OBR’s forecast period, under PSNFL.

That’s “much lower than expected”, reports Paul Johnson of the Institute for Fiscal Studies.

Reeves says, under the Tories, public investment was set to fall from 2.5% of GDP to 1.7% of GDP.

She says her new debt rule – called the investment rule, because the definition of debt is changing to allow more investment – will address this.

She confirms that the government will move to public sector net financial liabilities (PSNFL) as the debt measure. This is a metric that has been measured since 2016, she says.

She says four “guardrails” will be in place.

First, our portfolio of new financial investments will be delivered by expert bodies like the National Wealth Fund, which must, by default, earn a rate of return at least as large as that on gilts.

Second, we will strengthen the role of institutions to improve infrastructure delivery.

Third, we will improve certainty setting capital budgets for five years and extending them at every spending review every two years.

Finally, we will ensure that there is greater transparency for capital spending with robust annual reporting of financial investments based on accounts audited by the National Audit Office and made available to the office for Budget Responsibility at every forecast.

Taken together with our stability rule, these fiscal rules will ensure that our public finances are on a firm footing, while enabling us to invest prudently.

Reeves says she is tripling investment in breakfast clubs.

And she announces a £1bn uplift in special educational needs funding – an increase of 6% year on year, she says.

There was speculation that Reeves would extend the freeze on income tax and national insurance thresholds put in place by the last government. But Reeves has decided not to, she says.

The previous government froze income tax and National Insurance thresholds in 2021 and then they did so again, after the mini budget, extending their threshold freeze for a further two years …

Having considered this issue closely, I have come to the conclusion that extending the threshold freeze would hurt working people would take more money out of their pay slips. I am keeping every single promise on tax that I made in our manifesto. There will be no extension of the freeze in income tax and national insurance thresholds beyond the decisions by the previous government.

From 2028-29, personal tax thresholds will be uprated in line with inflation once again.

Reeves turns to air passenger duty.

There will be a small adjustment, worth no more than £2 for economy, short-haul flights.

But there will be a different approach for private jets. Their air passenger duty will rise by 50%, she says.

Making a joke about Rishi Sunak, she says this would be the equivalent of £450 per passenger for a flight to California.