Here’s our breakdown fo the key points from today’s spring statement:
Spring statement: Rachel Reeves announces deep cuts to welfare and public services
Rachel Reeves blamed “global uncertainty” as she announced swingeing cuts to welfare and other public spending designed to plug a fiscal hole caused by soaring borrowing costs and sluggish economic growth.
The chancellor told the Commons that the UK’s growth forecasts for this year had been halved from 2% to 1% by the Treasury watchdog, which concluded that the chancellor would have missed her goal of balancing the books if she did not act.
Striking a defiant tone, Reeves set out measures in her spring statement she said would turn a predicted £4.1bn hole in the public finances back into a £9.9bn surplus within five years. This would restore “in full” the headroom against her self-imposed fiscal rules, she said.
In a pointed message to her cabinet colleagues and Labour backbenchers who have privately argued for the fiscal rules to be revisited, Reeves said they were “non-negotiable” and “an embodiment of this government’s unwavering commitment to bring stability to our economy”.
She suggested that abandoning those fiscal rules would be an irresponsible move akin to Liz Truss’s disastrous mini-budget.
The chancellor said the cuts she announced would be offset by billions of pounds in long-term investment to grow the economy, with a particular focus on the building of millions of new homes and supporting higher spending on defence.
