UK

The Chancellor’s Spring Statement: first reactions

 

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MARCH 26, 2025

250,000 more people, including 50,000 more children, will be pushed into relative poverty by Chancellor Rachel Reeves’ latest benefit cuts – and that is the Department for Work and Pensions’ own forecast.

Alongside that, tighter eligibility rules for Personal Independence Payments will lead to 150,000 people losing their carer’s allowance. The Department further estimates that disability benefit cuts will affect 3.2m current or future claimant families, with average loses of £1,720. The Chancellor confirmed today that the health element of universal credit will be cut for new claimants by 50% and then frozen. Momentum described the cut as “shameful”.

Reacting further to the Chancellor’s Spring Statement, the group said: “Balancing the books on the most vulnerable in society was not in Labour’s manifesto, nor is it what voters voted for.

“Cuts to welfare payments and public services, slashing international aid, maintaining the two-child benefit cap and taking away Winter Fuel Payments from millions of pensioners: it’s clear from this Spring Statement that the government is continuing down the path of Tory austerity. Labour MPs now must speak out and let it be clear that this is not what the labour movement stands for.”

Backbench MPs react

Former Shadow Chancellor John McDonnell MP said the cuts would mean “immense suffering”, even loss of life. Clive Lewis MP added: “We’ve made the choice to cut and punch down on some of the poorest and most vulnerable.” “There is always an alternative,” said Ian Lavery MP. “Tax the rich.”

Brian Leishman MP said that the “’tough political choice’ of cuts would be avoided if the government decided to tax multi-millionaires instead.” He plans to vote against the cuts, as does Bell Ribeiro-Addy MP, Ian Byrne MP and many other backbenchers.

Former Shadow Justice Secretary Richard Burgon MP agreed, tweeting: “Making cuts instead of taxing wealth is a political choice. And taking away PIP from so many disabled people is an especially cruel choice. The Government should not be cutting support for the disadvantaged. It should be making the wealthiest pay through a wealth tax.”

Zarah Sultana MP said: “I asked the Chancellor —who earns over £150,000, accepted £7,500 in free clothes and took freebie tickets to see Sabrina Carpenter— if Austerity 2.0 is the “change” people voted for?”

Nadia Whittome MP also asked the Chancellor how a Labour government could justify cutting disability benefits – when a third of disabled people already live in poverty – instead of taxing the soaring wealth of the super-rich.

Other responses

Even the Chancellor’s ‘sweetener’ of a £2 bn commitment to affordable housing is not what it appears. One analyst pointed out that the Spring Statement confirms “the £2bn figure is for 2026-27, lower than the average for the previous five years. It’s a ‘downpayment’ on more housebuilding. If there isn’t much more in the Spending Review this would amount to an effective cut.”

In other reactions to the Chancellor’s Statement, Labour’s former policy chief Andrew Fisher pointed out that the  Office for Budget Responsibility was “scathing” in the way Reeves’ welfare cuts had been handled. It said: “Details of the policy package were sent to us very late in the process, and late notice of changes and incomplete analysis hampered our ability to reflect these measures in our forecasts.”

Andrew Fisher also noted that the government was halving its growth rate forecast, while presiding over a real household disposable income growth rate of just 0.5%, according to OBR estimates.

It might be even lower. Former Labour Chief OF Staff Simon Fletcher pointed out that “alternative analysis from the Joseph Rowntree Foundation based on the OBR’s forecasts showed average disposable incomes actually set to fall across the Parliament. Updated analysis from the JRF this weekend concluded that the average family will be £1,400 worse off by 2030, representing a 3% fall in their disposable incomes. The lowest income families would be £900 a year worse off, amounting to a 6% fall in the amount they have to spend.”

He concluded: “Labour is unleashing a massive cuts programme, along with inadequate investment in the economy, and tightening living standards, whilst finding extra resources for military expenditure. The Starmer-Reeves economic project is grim for living standards, economic prospects, public services and recipients of welfare, and should be opposed.”

Other responses to the Statement also expressed outrage. Former Labour leader Jeremy Corbyn MP accused Labour of going “even further than the Tories ever dared” and of “robbing disabled people of security and dignity”, adding that they are being “dehumanised by a heartless government, one broken pledge at a time.”

Pensioners “shocked and appalled”

Charities acted with “fury and dismay” to the cuts, the BBC reported. Citizen’s Advice accused the government of taking a wrecking ball to the economy. War on Want said: “Rather than committing to investment in clean energy, housing, schools, nature restoration, culture — things that would meaningfully improve our lives – the UK government squandered this opportunity.”

The National Pensioners Convention said it was “shocked and appalled at the scale of the austerity measures in today’s government spending review which will undoubtedly see an increase in poverty across the generations. Chancellor Rachel Reeves’s Spring Statement announced even more brutal cuts to welfare and other public spending than anticipated, which will badly impact the most vulnerable in our society.”

NPC General Secretary Jan Shortt said: “Unpaid family carers looking after our oldest and most vulnerable save this government and country hundreds of billions each year. Now they may lose their care allowance because they are looking after someone who no longer receives part of their PIP payments. We remind the government that these caring people save you between £162 and £193 billion a year. Without them, those with care needs would be forgotten and forsaken.”

Jan added: “The cut in the Universal Credit health element will also mean that those who lose out will face financial difficulties and growing health problems in the future.

All household bills will increase next month which makes survival for those on limited income increasingly difficult.  The 4.1% increase in the state pension is already devalued and by the time it is paid it will be in deficit. Policies that increase poverty and ill health are shameful. Yet, the rich continue to grow their wealth unabated while ordinary people are hit hard.”

Women’s Budget Group

Dr Mary-Ann Stephenson, Director of the Women’s Budget Group, also had sharp words for the Chancellor, pointing out that the government’s own impact assessments showed that the largest group affected by the changes will be single women, making up 44% of those losing out, at an average of £1,610 a year.

She suggested an alternative to Reeves; swingeing cuts: “taxation of the very wealthiest people in the country, redistributing resources in a time when wealth inequality is growing. We would also urge the Chancellor to reconsider her fiscal rules to recognise the value of investing in social infrastructure, including social security and public services. Ill and Disabled people have already borne the brunt of austerity; they should not pay the price of arbitrary spending rules and unreliable forecasts.”

Wealth inequality is widening. The wealthiest 10% of households hold around half of all wealth in Great Britain and the UK has the second-highest wealth disparity in the OECD.

The cuts announced today, argue the Women’s Budget Group, could have been avoided with a 2% wealth tax on assets over £10 million, which Tax Justice UK and the Patriotic Millionaires estimate could raise up to £24 billion a year. Moreover, polling by YouGov for Oxfam shows that 77 per cent of the public would rather the government increase taxes on the very richest to improve public finances than see cuts to public spending.

Over 40 women’s organisations from across the UK signed an open letter yesterday urging the Chancellor to reconsider her cuts because of the impact on Disabled people and the people who care for them, the majority of whom are women.

Simon Francis, coordinator of the End Fuel Poverty Coalition, called the Chancellor’s package a “Spring Stalemate,” adding, “If Rachel Reeves wants to secure Britain’s future, the first step must be to ensure our energy security and invest in solutions to the energy bills crisis. “This means that the government must commit in full to a £13.2bn Warm Homes Plan to ensure people stay warm every winter and back British renewables with reform of energy markets to bring down the cost of electricity.

“Given that energy bills continue to rise and the number of people living in cold damp homes remains high, the Chancellor also needs to provide help to those struggling in fuel poverty now, not continue with cuts in vital support to older and disabled people.”

Image: Rachel Reeves. Source: https://api20170418155059.azure-api.net/photo/GzViho86.jpeg?crop=MCU_3:4&quality=80&download=trueGallery: https://beta.parliament.uk/media/GzViho86. Author: https://en.wikipedia.org/wiki/Chris_McAndrew, licensed under the Creative Commons Attribution 3.0 Unported license.