The Chacellor has shaved £6.1bn from day-to-day government spending by 2029-30 and confirmed that the health element of universal credit will be cut for new claimants by 50% and then frozen
Reeves confirmed that the OBR has halved growth forecasts from 2% to 1% for 2025-26, attributing the fall in growth to global uncertainty but added that this rate of growth was not acceptable
It has also forecast that inflation will average 3.2% this year, before falling to 2.1% in 2026 and then 2% from 2027
However it also says that interest rates will now be 0.25% higher than previously expexted, falling from 4.5% to 3.6% from mid-2026 onward
Rachel Reeves says OBR has scored the government’s planning reforms, which is seen as a significant win for the Treasury
Reeves told the House that the OBR concluded that the reforms will ‘permanently increase the level of GDP’ by 0.2% in 2030, and by 0.4% within 10 years
She says it is the biggest growth rise ever reflected by the OBR ‘for a policy with no fiscal cost’
The Office for Budget Responsibility also forecast that Labour’s planning reforms will increase GDP permanently by 0.2% in 2029/30, representing an additional £6.8 billion and pushing housebuilding to a “40-year high”,
Delivering her spring statement she announces that she is increasing capital spending by around £2bn a year and confirmed that defence spending will be increased to 2.5 per cent of GDP
Reeves said that 10% of increased defence equipment budget will be spent on “novel technologies including drones and AI enabled technology adding that the government plan is to make the UK “a defence industrial superpower”
The Chancellor told the Commons the government is investing £1 billion to help people back into work.
“We are investing £1 billion to provide guaranteed, personalised employment support to help people back into work and £400 million to support the Department for Work and Pensions to deliver these reforms effectively and fairly, taking total savings from the package to £3.4 billion”
Opening her speech Reeves says global uncertainty demands an active government, a government ‘not stepping back but stepping up’ and told MP’s that uncertainty in the global economy requires action
The says Britain has the strength ‘to do just that’ as one of World’s largest economies and a hub for innovation
Reeves emphasised that her fiscal rules are “non-negotiable” and confirmed that her £9.9bn surplus 2029/30 was forecast to a deficit of £4.1bn adding that she has restored it to £9.9bn
The Chancellor says public finances have deteriorated by £14bn since the budget last autumn and the Treasury will spend £105.2bn this year servicing government debt
‘The British people have seen what happens when a Government borrows beyond their means!’
She added that the OBR say in total Chancellor will save £4.8bn through all of the cuts taken together
Reeves announced further investment into HMRC’s technology to crack down on tax evaders.
When working people are paying their taxes whilst still struggling with the cost-of-living, it cannot be right that others are evading what they rightly owe in tax.’
Reeves said the Government’s transformation fund will introduce “voluntary exit schemes to reduce the size of the civil service”.
She told MPs: “That is money brought forward now to bring down the costs of running Government by the end of the forecast period by making public services more efficient and more productive”
