Everything you can expect in Spring Statement 2025 – including taxes, benefits & spending cuts

RACHEL Reeves will unveil her Spring Statement tomorrow as the state of the public finances are laid bare.

The Chancellor will deliver a 20-minute assessment on the UK economy – but she has already signalled it won’t be a tax and spend event.

But she is facing trouble ahead on several fronts with government borrowing higher than predicted and growth expected to plummet.

She will be told that her headroom of around £10 billion from last year has been wiped out.

Here, we take a look at what the public can expect to hear when the Chancellor gets to her feet in the House of Commons at 12:30pm.

TAX

The Chancellor has spelled out that the Spring Statement won’t be the occasion to raise or lower taxes.

She vowed to have only one major fiscal event per year so any such decisions will have to be put back until the Autumn.

She used last autumn’s event for a £40 billion tax raid including the controversial £25 billion hit to business with a national insurance rise.

Speaking at the weekend, Ms Reeves said: We did have to put up some taxes on businesses and the wealthiest in the country in the Budget.

“We will not be doing that in the Spring Statement next week.”;

SPENDING CUTS

Rachel Reeves is expected to announce further spending cuts to Whitehall departments in a bid to balance the books.

She has put in place tough fiscal rules which is not to borrow to fund day-to-day spending and get debt falling as a share of the economy by the end of the decade.

The Chancellor has her sights set on the civil service with its size ballooning since the pandemic.

Speaking to the BBC on Sunday, she said: “We are, by the end of this Parliament, making a commitment that we will cut the costs of running government by 15%.”;

When pushed on how many people could be forced out of a job she said figure could hit 10,000 employees.

Her comments come after Cabinet enforcer Pat McFadden wrote to government departments calling for £2 billion worth of savings by the end of the decade.

She said that each department has been tasked to rank their spending from the most vital to options that can be ditched.

Ms Reeves said: “We want to put more money into the things that are the most important things for voters, for citizens, and less money on the things that are just not necessary or we should be doing in a different way.”;

GROWTH

The decisions Rachel Reeves makes will be largely dictated to by the Office for Budget Responsibility who will tell her of the UK’s growth forecast.

It is expected to downgrade the UK economy from 2 per cent for this year to around 1 per cent.

She will attempt to that the global outlook is to blame when she will tell MPs that “the world has changed”;.

Donald Trump’s decision to instill tariffs from next week will have huge knock-on effects for growth.

But it will be a major blow not only to the Chancellor but to Sir Keir Starmer who have growth as their “number one priority”;.

Business leaders have already been attacking the government saying their decision to raise NI has worsened the UK’s prospects.

WELFARE

Rachel Reeves and Welfare Secretary Liz Kendall delivered £5 billion of cuts to the benefits bill last week.

They will make up some of the £10 billion wiped out from the Chancellor’s headroom.

She has previously said that the government needs to “get a grip”; on the welfare bill to make it fairer to both the taxpayer and those receiving the cash.

The impact of the cuts will be revealed also on Wednesday when an assessment is published – likely to spark fury in Labour ranks.

Labour MPs are lobbying the government so individuals don’t lose several thousand pounds as part of the cuts.

The health and disability bill which sits at £65 billion is expected to rocket to £100 billion over the next four years.

BRITAIN’S MOST MEMORABLE BUDGETS

By Harry Goodwin

Today is the first Labour budget for 14 years – and the first ever to be delivered by a female Chancellor.

Brits are bracing for a raft of tax hikes as Rachel Reeves tries to plug the “£22billion black hole” she says she's found in government accounts.

Here are five other budgets which have caused a stir over the years.

1979 – Geoffrey Howe, Conservative

Margaret Thatcher's Chancellor Geoffrey Howe slashed both the top rate of income tax and the standard rate.

He also doubled VAT – shifting the tax burden from income to consumption in a huge change for Brits.

Howe also eased controls on foreign exchange in a bid to control inflation.

The budget signalled a massive break from the last Labour government and set the pattern for decades to come.

1988 – Nigel Lawson, Conservative

Nigel Lawson (dad to domestic goddess Nigella) massively slashed income tax again.

The deputy Commons speaker twice cleared the chamber amid noisy protests from Labour MPs slamming the tax cuts.

Lawson also set off a property bonanza by announcing an end to double mortgage tax relief for couples buying homes.

1993 – Norman Lamont, Conservative

In March 1993 the economy was still reeling from Black Wednesday, when the pound crashed out of the European exchange rate mechanism.

Lamont announced tax rises including VAT on domestic gas and electricity.

Later that year Lamont's successor Ken Clarke froze personal tax allowance and brought in stealth taxes on insurance and plane passengers.

The Lamont and Clarke budgets marked the end of the Tories's scything tax cuts – and set the stage for Labour's return to office in 1997.

2002 – Gordon Brown, Labour

Brown raised national insurance by a penny on the pound to fund higher spending on the NHS.

The future PM had fretted over a possible backlash from voters who had re-elected Labour in 2001.

But he managed to pull off the largest rise in health spending in the history of the NHS.

2009 – Alistair Darling, Labour

Labour's last budget before today came amid the credit crunch and soaring unemployment.

Darling ramped up taxes and borrowing in a bid to fill up draining Treasury coffers.

Tory leader David Cameron blasted Labour's ‘utter mess' – and was in power a year later.

2022 – Kwasi Kwarteng, Conservative

Kwarteng unveiled his economic package less than a month after becoming Liz Truss's Chancellor.

Technically, it was a fiscal statement rather than a budget – but it turned out to be just as seismic.

Rising Tory star Kwarteng announced £45billion in tax cuts including a drop in all rates of income tax.

Markets took frights and the pound went into freefall before the Bank of England waded in to stop a run on UK pension funds.

Mortgage rates soared and Kwarteng was out of the job just three weeks later.