Chancellor Rachel Reeves will outline the government’s economic plans for the coming year in her spring statement, with a focus on promoting growth and raising living standards.
The UK spring statement, due to be delivered by Chancellor Rachel Reeves on March 26, is expected to outline the government’s economic plans for the coming year. The speech will provide an opportunity for Reeves to discuss progress since last October’s budget and how the government aims to raise living standards.
Rachel Reeves is a British Labour Party politician serving as the Member of Parliament (MP) for Leeds West since 2005.
She was previously the Shadow Chief Secretary to the Treasury from 2011 to 2013 and the Shadow Minister for Care and Older People from 2013 to 2016.
Reeves has been involved in various policy areas, including education, health, and social care.
According to her parliamentary profile, she has spoken on over 800 debates and asked over 2,000 written questions since entering Parliament.
Spending Changes Ahead
Reeves is set to announce a further £5 billion in public spending cuts, with the details not expected until this summer’s spending review. She has already promised to stick to her fiscal rules, which include balancing day-to-day spending and borrowing extra funds only for investment. The ‘Office for Budget Responsibility (OBR)’ has predicted that October’s projections have veered into the red, leaving a £10 billion shortfall from higher debt financing.
Tax Changes
Labour’s election manifesto pledged no changes to income tax, national insurance, or VAT, so there are no expected tax rises in the spring statement. However, Reeves will discuss a crackdown on tax avoidance and evasion, aiming to generate an extra £1 billion by 2029-30 through recruiting more staff at ‘HMRC’.
Borrowing and Debt
Reeves is expected to blame the deteriorating public finances on the global rise in borrowing costs, which have increased due to rising interest rates. The yield on 10-year gilts has risen from 4% a year ago to 4.7%, with some blaming domestic factors as well.
Promoting Growth
Reeves will spend much of the statement discussing initiatives to promote growth and how there are many more plans to come. She will champion projects such as the newly approved ‘Lower Thames Crossing’ and allocate £2 billion for building 18,000 new social and affordable homes.
Local Government Spending
The chancellor is not expected to directly address the pressure on local government budgets, with services struggling due to years of underfunding from previous governments. Cuts could affect rural communities, adult and child social care provision, and road maintenance budgets.
Key Announcements
-
Further £5 billion in public spending cuts
-
Increased defence spending to 2.5% of national income by 2027
-
Crackdown on tax avoidance and evasion to generate an extra £1 billion by 2029-30
-
Recruitment of more staff at ‘HMRC’ to tackle tax evasion
-
Cuts to civil service jobs, with around 10,000 expected to go
