Rachel Reeves framed her Spring Statement around the insistence that Labour’s Plan for Change was already working, which meant that any changes she was having to make today had to be framed as small ‘adjustments’, rather than the sort of change of course that would allow the Conservatives to claim she was delivering an ‘emergency budget’.
She insisted that she was sticking to only one fiscal event a year, but the Chancellor did have to make a number of admissions in today’s speech, chief among them that the OBR had cut its growth forecast for the year from 2 per cent to 1 per cent. She said she was ‘not satisfied with these numbers’, and that the government was ‘serious about taking the action needed to grow our economy, backing the builders, not the blockers’. So any good news is a sign the Labour plan is working, and any bad news is the fault of the blockers and the Tories.
Reeves also had to announce she was having to make more welfare cuts than previously announced after the OBR said her original package wouldn’t save enough money. She told the Chamber that the universal credit standard allowance will increase from £92 per week in 2025-26 to £106 pounds a week by 2029-30 while the universal credit health elements will be cut to the new claimants by around 50 per cent and then frozen. She described this as ‘final adjustments’ following the initial package of cuts, rather than a response to the spending watchdog finding that the Chancellor was not going to reach the £5 billion a year in cuts by 2030 that she had aimed for.
There is of course a risk in the Conservatives calling what Reeves was doing today an ‘emergency budget’, and she highlighted this in her response to Mel Stride. She pointed out that the only real ‘emergency budget’ in recent years had been delivered by the Tories after the disaster of Liz Truss’s mini-budget. At some point the electorate will stop paying attention to the Truss legacy. But Reeves is clearly banking on that being as far off in the future as the distance between Liam Byrne’s infamous ‘no money’ note in 2010 and Labour being seen as economically credible again.
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