On 26 March 2025, Chancellor Rachel Reeves presented her Spring Statement to parliament. Despite a backdrop of low economic growth and increasing government borrowing costs, the Chancellor remains committed to her ‘non-negotiable’ fiscal rules that aim to bring stability to the economy and security for working people.
With further borrowing ruled out and a determination not to announce further tax changes, her focus has been on government spending.
Headlines included:
- An ongoing commitment to generate economic growth, despite short-term forecast growth levels being revised downwards from 2% to 1%.
- Confirmation of increased defence spending in a rapidly changing world.
- Changes to the welfare system, including stricter tests for personal independence payments.
- Streamlining the civil service, with an accelerated new Transformation Fund.
- Increased investment in social and affordable housing.
- Tackling skills shortages, including in the construction sector
- A crackdown on tax evasion.
The results of a spending review will be announced on 11 June 2025. This will allocate government spending for the three years from 2026/27 to 2028/29.
