Chancellor Rachel Reeves has vowed to improve the UK’s economy and living standards, promising a 15% reduction in government running costs and the loss of 10,000 civil service jobs.
Economic Challenges and Spending Cuts
Ahead of Wednesday’s spring statement, Reeves defended her economic strategy, acknowledging slow progress but insisting on necessary reforms. While maintaining fiscal rules and ruling out further tax hikes, she emphasized spending cuts within central government to stay within budget.
Potential U.S. Trade Deal and Digital Services Tax
Reeves hinted at the possibility of scrapping the £1bn-a-year digital services tax—which affects large U.S. tech firms—to secure a trade deal with Donald Trump. She stressed the need to balance UK interests, aiming to prevent higher tariffs on British exports while fostering global trade.
The proposal sparked criticism, with Liberal Democrat deputy leader Daisy Cooper condemning it as “robbing disabled people to appease [Elon] Musk and Trump,” given concurrent £5bn welfare cuts.
Labour Divisions Over Spending Plans
Labour faces internal opposition to welfare reductions, with backbenchers and unions expressing discontent. While funding for defence and the NHS is set to rise, other departments must prepare for cuts of up to 11%. Reeves insisted that government efficiency must improve, confirming the planned 15% administrative budget cut.
Living Standards and Future Growth
Responding to a grim forecast from the Joseph Rowntree Foundation predicting a decline in UK living standards by 2030, Reeves dismissed the claim, asserting that the Office for Budget Responsibility’s forecast—due this week—would reflect improvements.
“Living standards in the last parliament were the worst on record,” she told Sky News, expressing confidence in sustained economic growth under the Labour government.
Sabrina Carpenter Concert Ticket Controversy
Reeves also addressed criticism over accepting free tickets to a Sabrina Carpenter concert, amid Labour’s ongoing “freebies” row. Defending her decision, she cited security concerns, stating, “These weren’t tickets that you could pay for, so there wasn’t a price for them. Obviously, I’ll declare the value.”
As Reeves prepares for the spring statement, her spending cuts, tax decisions, and economic outlook continue to face intense scrutiny from both opponents and her own party.