Rachel Reeves is delivering her spring statement.
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The chancellor’s statement is not a formal budget – as Labour pledged to only deliver one per year – but rather an update on the economy and any progress since her fiscal statement last October.
Ms Reeves told MPs “the world has changed” since her first budget just under five months ago, and that was to blame for the string of cuts and downgrades she is outlining in the Commons.
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But critics have said today’s update is a direct consequence of her decisions since taking office in July.
Here are the key takeaways from the spring statement:
The chancellor said the government is “reforming our welfare system” adding that they will make it more sustainable, protect the most vulnerable and support people back into work.
Ms Reeves says the independent Office for Budget Responsibility (OBR) has found that the government’s overall cuts and changes to welfare will cut the budget by £4.8bn overall – but the cuts go deeper than was announced last week.
She tells the House: “The Universal Credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30, while the Universal Credit Health element will be cut by 50% and then frozen for new claimants.”
She adds that Labour is “investing £1bn to provide guaranteed, personalised employment support to help people back into work”.
Ms Reeves said the statement does not contain any further tax increases, before highlighting work needed to tackle tax evasion.
She told the Commons: “Today, I go further continuing our investment in cutting-edge technology, investing in HMRC’s capacity to crack down on tax avoidance and setting out plans to increase the number of tax fraudsters charged each year by 20%.
“These changes raise a further £1bn taking total revenue raised from reducing tax evasion under this government to £7.5bn.”
She says that reducing tax evasion will raise an extra £1bn for the economy.
The chancellor recapped the prime minister’s announcement earlier this month to increase defence spending by cutting foreign aid.
She confirmed the government met its pledge to spend 2.5% of GDP by 2027.
The Ministry of Defence will get an additional £2.2bn next year “a further downpayment on our plans to deliver 2.5% of GDP”, Ms Reeves said, adding that the investment will support the government’s growth agenda.
She said: “This additional investment is not just about increasing our national security but increasing our economic security, too.
“As defence spending rises, I want the whole country to feel the benefits. So I will set out the immediate steps that we are taking to boost Britain’s defence industry and to make the UK a defence industrial superpower.”
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