The 2025 Spring Statement is set to be delivered on Wednesday, March 26 by Chancellor Rachel Reeves. This economic event will include the latest forecasts from the Office for Budget Responsibility (OBR). While the Labour government has committed to having just one major economic event per year—the autumn budget—the spring statement is still drawing significant attention due to anticipated announcements on spending cuts and economic planning.
Sir Keir Starmer’s Perspective
Prime Minister Sir Keir Starmer has claimed the government will not “alter the basics” of public spending, despite facing questions about potential budget cuts. However, he has written to civil servants along with cabinet secretary Sir Chris Wormald calling for a “rewiring of the British state.” Starmer has emphasized that AI and technology “could do a huge amount now that is done manually,” particularly in areas like the NHS, where he believes such advances could save significant costs.
Rachel Reeves’ Role
Chancellor Rachel Reeves has confirmed plans to cut Civil Service running costs by 15% by the end of the decade. She has repeatedly stated that her fiscal rules are “non-negotiable,” including not borrowing for day-to-day spending and ensuring debt falls as a share of national income by the end of parliament. However, the OBR’s forecast is expected to confirm that her £9.9 billion financial buffer has been wiped out, creating pressure on her planned economic strategy.
The Political Climate
The economic situation remains challenging with weak growth and mounting debt interest costs. The government has already announced benefit reforms described as “the biggest shake-up to the welfare system in a generation,” aiming to save £5 billion largely through changes to Personal Independence Payment (PIP) eligibility. Civil service unions have warned that as many as 50,000 people could lose their jobs, with PCS union general secretary Fran Heathcote cautioning that previous attempts to cut civil service staff led to “chaos.”
Public and Political Reactions
Various stakeholders are closely watching the upcoming statement. Industry groups like Propertymark are calling for housing benefit reform to reflect real rental costs. The Liberal Democrats have urged ministers not to cut free school meals for younger children, as reported by The Times. Meanwhile, businesses face their own challenges, with retailers like Next set to reveal profit jumps despite economic uncertainty, while Sir Martin Sorrell’s S4 Capital has posted widened annual losses of £330.9 million.