Spring Statement 2025: Key points announced by Chancellor Rachel Reeves in Budget update

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Chancellor Rachel Reeves has cut billions of pounds of planned spending, including on benefits, after Britain’s economic growth and public finances were hit since her autumn Budget.Here are the key points in the Spring Statement 2025.

Transcript

00:00Chancellor Rachel Reeves today delivered her spring statement and she announced a

00:04series of spending cuts rather than raising taxes. This was not a full budget

00:08but there are still significant announcements. Firstly the Office for

00:11Budget Responsibility halved the UK's growth forecast from 2% in the autumn to

00:171% this year. Rachel Reeves said she was not satisfied with the OBR's forecast

00:23and she will have to take strong action to boost the UK's economy. So let's take

00:28a look at some of the measures. Firstly welfare. Now there were sweeping cuts to

00:32Britain's ballooning benefits system announced a couple of weeks ago. This

00:37included tightening the eligibility for personal independence payments which

00:40are benefits that people with disabilities get. So today we've got some

00:44more details of those cuts. The Office for Budget Responsibility said the cuts

00:48announced a couple of weeks ago would save around 4.8 billion pounds which is

00:52slightly short of the 5 billion pounds the government had wanted. Today the

00:56Chancellor said the universal credit health element which is sometimes known

00:59as incapacity benefit will be cut by 50% and frozen for new claimants. However

01:04universal credit standard allowance will increase from 92 pounds a week to 106

01:10pounds by 2029-30. This is one pound less than expected. Many of the spending cuts

01:18will come from government departments who have all been told to slash

01:21spending by 15%. This is likely to result in thousands of civil servants being

01:26made redundant and losing their jobs. The Chancellor argued that overall the cuts

01:30will save 6.1 billion pounds over the next few years. However capital spending

01:34on large infrastructure projects will not be slashed at all. This is to help

01:40boost economic growth. So for example this week we saw the Lower Thames

01:44Crossing finally gain approval after 15 years of delays. The 8.3 billion

01:49pound project will be going ahead. There will be a crackdown on tax avoiders and

01:54fraudsters the Chancellor said in a bid to save the Treasury billions of pounds.

01:59Hundreds of people will be employed by the DWP to investigate tax claims and

02:06try and dig out fraudsters across the UK economy. There will be an extra 2.2

02:11billion pounds for defence from next April. This will help pay for high-tech

02:15weaponry, upgrading the military base in Portsmouth and refurbishing military

02:20homes. The Chancellor argued that house building was key to economic growth.

02:25Planning reforms currently going through Parliament will help boost home building

02:28across the country and boost the economy at the same time, the Chancellor argued.

02:33The OBR said it believes house building will rise to its highest level in 40

02:37years as a result of the government's reforms. 1.3 million homes will be built

02:42over the next five years, Rachel Reeves said. So what does all this mean? Well the

02:46Chancellor argued that the average British household be 500 pounds better

02:50off after all of these reforms put in place. However there are many protesters

02:55outside Parliament today arguing the benefit cuts are going to hit many

03:00people extremely hard. We've seen charities, health experts and even some

03:05Labour backbench MPs arguing that the government is trying to balance its

03:10books on the back of the poorest in society. However the Chancellor says if

03:13they stick to the plan average living standards will raise twice as fast under

03:18this Parliament as they did in the last.

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