British Chancellor Of The Exchequer Rachel Reeves has delivered her Spring Statement which helped to set out and reaffirm plans for the UK economy and ensure that the country strengthened it’s financial situation. There had been a number of worries from different sectors of the House Of Commons who felt that the Labour party was going against it’s core values and taking money away from those who really needed it i.e. the workers and people who were disabled or on low incomes. These plans had been set out in the budget last October so there had been a lot of anxiety to see if the government would be sticking to its plans or changing course in a bid to ensure that the markets had confidence in the way different sectors of the economy were being run.
In the speech, the Chancellor delivered a number of different welfare changes to try and get more people working and be able to be independent and look after themselves. This would leave them to be less reliant on the benefits system and have the ability to put money back in to the British economy by buying their own goods and services. The main changes to the welfare system included:
Health-related universal credit for new claimants, which was already due to be cut from £97 to £50 per week from April 2026 under measures announced last week, will now not rise with inflation until after 2030
Under-22s will no longer be able to claim the health-related element of universal credit
As outlined last week, for existing claimants health-related payments will be frozen at £97 per week until 2030, with a new top-up payment introduced for those with the most severe conditions
The standard allowance for universal credit will rise by £14 a week by 2030, instead of £15 a week as announced last week
There will also be a stricter eligibility test for personal independence payments (Pips), the main disability benefit, from November 2026
The lack of confidence in the way different services are being run around the country has led the Office For Budget Responsibility to downgrade it’s growth forecast for this year from 2% to 1%. However it has increased it’s forecast for the next four years to 1.9% next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.
The chancellor says this means the OBR is predicting the economy will be larger by the end of the forecast compared with what it was predicting at the time of her Budget last October
Inflation is forecast to average 3.2% this year, up from 2.6% previously forecast, before falling back to 2.1% in 2026 and then hitting the government’s 2% target in 2027.
The OBR has estimated changes to England’s planning system announced last year will boost housebuilding by 170,000 over five years
The changes are forecast to grow the size of the economy by 0.2% by 2030, and 0.4% by 2035
£625m will be spent in England over four years to boost existing schemes to train workers in the construction sector
Spending rules
The OBR says that without action, the government would have missed its spending rule – for taxes to cover day-to-day expenditure in 2030 – by £4.1bn
It says cuts and extra tax from the planning changes mean a £9.9bn financial buffer against that rule, which had been wiped out by higher debt costs since the Budget, should be restored by 2030
The forecaster says there is now a 54% chance the government will meet its spending rule, up slightly from a 51% likelihood in October
The chance of meeting the government’s other rule, for public debt to be projected to be falling as a share of the economy, remains unchanged at 51%
Defence and overseas aid
Defence spending, which had been due to rise £2.9bn next year, to increase by a further £2.2bn
The Treasury says this will take military expenditure to 2.36% of national income next year, a “down payment” on plans to raise it to 2.5% by 2027
Ministers say the spending will be funded by reducing overseas aid from 0.5% to 0.3% of gross national income in 2027, and from the Treasury’s reserves
Public services
Day-to-day government spending to fall by £6.1bn per year by 2030, growing by 1.2% in real terms (after taking account of inflation) after 2026, instead of 1.3%
Target to reduce the administrative costs of government departments by 15% by 2030
About 10,000 civil service jobs are expected to go, including staff working in HR, policy advice, communications and office management
Other measures
A pledge to hire 400 more HMRC staff to tackle “wealthy offshore non-compliance” – estimated to bring in an extra £500m over five years
A new US-style scheme to be launched later this year, under which tax avoidance “informants” will get a slice of any money recovered
The cuts to the welfare system introduced in the Spring Statement have led to holding a protest at Downing Street to try and bring home the point that the majority of disabled people are really struggling and are unable to work. They want to reinforce the point that they have not chosen to be disabled and on benefits but it is something that they have had to do to ensure that they survive in today’s market place.
Reeves said the policies are intended to push disabled and unwell people into work and off benefits.
“More than 1,000 people qualify for personal independence payments every single day and one in eight young people are not in employment, education or training,” she told parliament.
“If we do nothing, that means we are writing off an entire generation. That cannot be right. It is a waste of their potential and it is a waste of their futures.”
“Labour should be ashamed of their proposed cuts,” said Linda Turnip, co-founder of Disabled People Against Cuts (DPAC). “They will push disabled people into even greater poverty and destitution.
“Disabled people will not allow themselves to be made scapegoats for Robber Reeves’ cuts while millionaires remain untouched.”
MP John McDonnell – the former Labour shadow chancellor who was suspended from the party after voting to scrap the two-child benefit cap – also spoke at the protest.
“Disabled people are facing the biggest cuts to their benefits in a decade, causing immense harm,” he said. “Full support to DPAC which is standing up against this attack.”
