Putting warfare over welfare will never be forgiven, even if growth follows
Will Labour’s monumental capital investments bear fruit and turn the economic tide? About £100bn worth of wind, solar and nuclear energy, with the rebuilt grid, will carry electricity to the projects coming on stream. The Office for Budget Responsibility confirms 1.3m new homes are possible – “within touching distance” of the manifesto’s 1.5m target, as Rachel Reeves put it. The massive shift into defence engineering, investing in skills, promises good jobs where they are needed most, from Thanet to Sunderland. Everything from now on depends on getting spades in the ground fast enough for this unprecedented capital investment. The OBR, halving growth this year, scores it a higher upgrade every year afterwards, promising £500 more in people’s pockets by the next election.
But investing in warfare with money stolen from welfare will never be forgotten or forgiven. Wheelchairs beaten into armaments will be an abiding image that may stay with this government. Even if promises to take children out of poverty are fulfilled when the poverty review reports in the summer, even if people feel better with wages rising faster than inflation and a 7% minimum wage raise in April, the stories of brutal losses further hitting people on personal independence payments will define Labour.
No new taxes, the chancellor said. That was the choice Labour made. Tax reliefs for the well off stayed untouched, mega-millionaires untroubled, no taking back the national insurance cut the Tories gave away in a failed pre-election tax bribe. It’s technically not austerity, says the Institute for Fiscal Studies about overall spending – but it will feel austere in most public services.
People know this new dangerous era needs emergency defence spending: this is a time when the nation could be asked to contribute to its security.
Guardian columnist
Balancing the books at the cost of sick and disabled people
In the spring statement, Rachel Reeves said “the Labour party is the party of work”.
But for those too sick or disabled to work, Labour has chosen their backs on which to balance the public finances. After feedback from the Office for Budget Responsibility that the first round of cuts did not go far enough to bring down public spending, the chancellor has made changes that would save £3.4bn in total. The universal credit health element will be cut for new claimants and then frozen. According to the government’s official assessment, families will lose an average of £1,720 a year. An extra 250,000 people will be pushed into relative poverty by 2029-30, including 50,000 children.
And what of disabled people who wish to work? The pledge to put £1bn into job support for people is a positive – though it remains to be seen how much this will help disabled people specifically, with a nine-month wait for the Access to Work scheme that forces many disabled people out of their jobs. Labour has promised fewer assessments for disability benefits, but the reform leaves out most redundant assessments disabled people face in other parts of government. Why not create a more efficient, joined-up system?
Disabled people already in work will see changes to the eligibility threshold to personal independence payment (Pip, which is not an out-of-work benefit) that may push them out of employment. Many use it to cover the extra costs of working with a disability, such as buying assistive devices or paying for taxis. (It is worth noting that this government seems to have scrapped the pledge to put accessibility at the heart of new rail policy.)
Cutting Pip eligibility will also cause appeals to soar, offsetting any savings this government hopes for. (Last year, the DWP spent £50m on Pip appeals.) The Disability Policy Centre has also forecast £1.2bn in additional costs to the NHS and other services.
Will Labour’s give and take enable more disabled people to work or fewer? Right now, it seems poised to cost more than it saves.
Disability justice activist and researcher
From a green superpower to a defence superpower – this is a betrayal
This spring statement is an assault on our generation’s future. From a “clean energy superpower”, as Keir Starmer once put it, to the “defence industrial superpower” Reeves spoke about today, the rhetoric of this government has shifted dramatically since the election.
Labour surged in the polls talking about a greener fairer future, and they were elected on a platform that promised green jobs, warm homes, cheaper bills, and GB Energy – one of the few flagship policies they consistently pushed, and one that remains popular with voters.
But since coming into power, its talk of “growing the economy” has involved sweeping cuts hurting those who need support most, and a hawkish obsession with the defence sector, with an extra £2.2bn for the Ministry of Defence. People want to see investment in industries that will create jobs and cut bills. The renewable energy sector can do both, unlike building more tanks and weapons.
Labour was right to put green policies at the heart of its original plans for growth. The green economy grew by 10% in 2024, generating £83bn. So if this government is serious about growth, why are they not investing properly in its strongest, most sustainable pathway? And why isn’t it considering other fairer ways to generate the money we need, such as taxing wealth?
Co-founder and co-director of Green New Deal Rising
Where are the tax rises for people like me?
It’s incredibly disappointing that while repeating that the government is on the side of working people, the chancellor has in fact delivered to them another financial blow.
The chancellor said: “We can’t tax and spend our way to prosperity”, minutes after confirming welfare and aid cuts. We cannot cut our way to prosperity either. Many disabled and vulnerable people are now living in fear. Meanwhile, patriotic millionaires like me – the people with the broadest shoulders – are telling MPs we can and should contribute more.
We need to tax the super rich. While it’s good news that the government plans to invest more in HMRC and crack down on tax evasion, it’s simply not enough. A tax of just 2% on assets over £10m would alone raise £460m a week and would affect only 0.04% of the population. Based on recent statements none of us expected that reform today, but we’ll be looking to the autumn budget for more ambition, as the country can’t afford to wait.
The chancellor claims people will be £500 a year better off from 2029. It’s not good enough – the British people need a better deal right now. Seven in 10 millionaires and three quarters of the public support higher taxes on wealth – as do many MPs. If the chancellor really does want a stronger economy, she needs to get serious about fairly taxing wealth.
Julia Davies is a millionaire investor, lawyer and a member of Patriotic Millionaires
Labour’s problem runs much deeper than the fiscal rules
Blame Tony Benn. The requirement for the government to publish at least two official economic forecasts each year, enshrined in his 1975 Industry Act, has collided with the chancellor’s commitment that those forecasts be consistent with her fiscal rules. Without that we wouldn’t really need a spring statement all.
The government has promised a spending review, an industrial strategy and an immigration white paper, all to come, not to mention a reset of our relationship with the EU. After that we will know the policy specifics behind the government’s strategy. Meanwhile, largely outside our control, we will also get a much better idea of just how much damage Maganomics will do.
So it would have been far better to wait until October and look at tax and spending in the round. Instead, alongside some really positive improvements to help support people into work, the government has hastily thrown together a package of cuts to disability benefits to “balance the books”. The problem isn’t the fiscal rules themselves, although the need to get within their lines twice a year is unnecessary. Ultimately, the constraint that government should balance tax and spending over the medium to long term, while borrowing to invest, can’t really be dodged, rules or no rules.
By October the numbers will have shifted again, but the basic challenge will remain the same: how to restore productivity growth and improve living standards, while repairing Britain’s public services and addressing what should in any civilised society be unacceptable levels of poverty and destitution, all in the face of an ageing population. There is some genuinely good news in today’s statement – on planning reform, further increases to capital investment, and on training. But more will be required – not just higher taxes, but major tax reforms, and willingness to take some difficult political decisions on social care, immigration, EU relations and much more.
Professor of economics and public policy at King’s College London and a former senior civil servant
Civil servants want reform – but not like this
Civil service reform was one of the key themes of this spring statement, with a series of interventions by ministers culminating in the announcement of a target for a 15% reduction in civil service administration spending. Some of the reforms are very welcome, but there is a real danger that a positive agenda for change is being overtaken by the desire to find savings.
A pledge to double the number of data and digital specialists is long overdue, and will help to modernise public service delivery and free up civil service time for more specialist work. The creation of a transformation fund allowing departments to bid for resources to, for example, overhaul outdated systems is a step in the right direction.
But all of this comes in the context of the desire to save £2.2bn from the civil service administration budget and to reduce the rate of spending increases in departmental budgets. This funding doesn’t just cover “back room” functions, it covers a variety of roles in the civil service including scientists, policy officers and whole departments, including the Treasury.
Reform requires investment in people and technology. Starting with a savings target, rather than a clear sense of what the civil service needs to deliver, is the wrong way to implement a programme of change and risks resulting in a disjointed approach that weakens rather than strengthens the civil service.
Labour may have backed away from blunt headcount targets and the divisive language of the last government, but some of the words used about public servants and briefings about “project chainsaw” have caused serious relationship damage. If the government wants civil servants to be partners in reform, then it needs to work hard to rebuild this trust.
General secretary of the Prospect trade union
Cutting aid will make Britain less secure
Of all the choices that lie behind today’s spring statement the one I find most heartbreaking and wrongheaded is the choice to cut aid, as expected, to fund increased defence spending. On a day like this, my mind goes to the clinic for malnourished children I saw in Somalia or the programme to provide clean water in war-stricken Yemen. These are the sorts of life-saving programmes that will shut down as international development budgets are slashed to their lowest levels since records began in 1979, according to one estimate.
A party elected on a manifesto pledge to “turn the page to rebuild Britain’s reputation on international development” has shown today that it is turning its back not just on the world’s poorest but also Britain’s strategic interests. If Rachel Reeves really wants to secure Britain’s interests she needs to see diplomacy, development and defence as complementary not competing approaches. Hard and soft power work together.
In our rush to become a “defence industrial superpower”, Reeves has even added £2bn of UK Export Finance to help foreign buyers of British-made weapons to take out loans. That may help grow our economy a bit, but it won’t necessarily make the world a safer place. Meanwhile, cutting aid undermines our ability to stabilise fragile states and manage forced migration, reduces our ability to strike alliances that enhance national security, and cedes the ground to emerging powers such as China – including to pursue business and commercial interests that will be critical for Reeves’s search for growth. Like so much in today’s statement, what may seem like savings in the short term will have huge human and strategic costs in the long term.
Chief executive of the New Economics Foundation and author of Power to the People
