Opposition and Think-Tank reactions to the Chancellor’s Spring Statement

The Chancellor Rachel Reeves has delivered her Spring Statement. Here are a selection of responses from the Opposition and Think Tanks

The most significant element, which will be picked up by the opposition and media, was not amongst announcements on spending cuts, welfare reform and defence spending but the OBR growth forecast which over five years reads as follows:

One percent in 2025, one point nine percent in 2026, one point eight percent in 2027, one point seven percent in 2028 and one point eight per cent in 2029.

Leader of the Conservative Party Kemi Badenoch responded:

“The emergency budget was all smoke and mirrors. I remember last October when Rachel Reeves said she was smashing glass ceilings, now the roof is falling on all our heads. Growth has been halved. Inflation is up. Unemployment is up and forecast to go higher year after year. That is people’s jobs, people’s livelihoods, ruined by this chaotic government.“

Shadow Chancellor Mel Stride responded directly to the Chancellor that economic growth had halved this year and inflation was almost double in 2025 compared with March 2024. He said borrowing was up every year in the forecast and debt interest £10bn a year more. He also pointed to unemployment rising in 2025, 2026 and 2027.

He suggested Reeves had been forced, today, to admit the UK economy is stalling. That the Fiscal headroom she had tried to build in her Budget had disappeared in just 6-months, which he described as a ‘public humiliation’.

He then ran through a litany of broken promises claiming she’d promised ‘growth, growth, growth’ but it’s been halved. Accused her of wanting a pat on the back for doing the bare minimum. He suggested Reeves’ decision to raise NICs on employers is one of many failed decisions that have led to today’s ‘emergency budget’ and all of it could have been avoided if she’d made the right choices last October. He went on to suggest that it will be working families and businesses who are paying the price for Labour’s mess through “higher prices in the shops, higher mortgage rates and fewer job opportunities.”

Given the OBR’s growth projection for the next five years Shadow Business Secretary Andrew Griffith pointed to an ‘unexploded bombshell from the OBR” suggesting the “300 pages of job destroying Employment Rights Bill has not been reflected in their forecast”

The line in the OBR forecast referred to, states:

“we have not incorporated any impact of the Government’s Plan to Make Work Pay, as there is not yet sufficient detail or clarity about the final policy parameters”

John O’Connell, chief executive of the TaxPayers’ Alliance, describes:

“The excruciating sight of a chancellor facing the consequences of her own actions will not provide any schadenfreude for businesses facing surging tax bills, jobseekers seeing opportunities evaporate, and farmers fearing for their livelihoods. Rachel Reeves has staked her credibility on fixing the public finances, delivering growth and protecting household finances, yet her devastating autumn budget means she has completely lost the confidence of taxpayers in her ability to deliver. While the chancellor is right that planning reforms could boost the economy, if she and her colleagues do not urgently change course on taxation and employment laws then the economic picture will remain bleak for many years to come.”

Tom Clougherty, Executive Director of the Institute of Economic Affairs, says:

“The Chancellor is right to cut spending rather than raise taxes again, and the cuts she has made are welcome. There is, nevertheless, a sense of unreality about all this. Policy is being determined by an arbitrary, moving target – a fiscal rule – rather than with any long term, principled strategy in mind. When you look at the sluggish growth forecasts, and the enormous liabilities the state will encounter as the population ages, Britain’s cycle of fiscal events feels a lot like rearranging the deck chairs on the Titanic. 

Turning increased defence spending into an exercise in ‘modern industrial strategy’ suggests that the government still has too state-centric a view of economic growth – one that is almost certain to disappoint in the long-run.  Ultimately, we are going to need much more fundamental reform – going further and faster on the deregulatory, supply-side measures the government has begun to talk about; lifting the self-defeating burdens that have been imposed on business; and taking a long, hard look at what the state does and how it is funded.”

Matthew Elliott, President of the Jobs Foundation, says that the Government needs to do more if it wants to achieve its goals to ‘Get Britain Working’ and boost economic growth:

“The Government has rightly identified the need to get two million people back to work, and it’s good to see the Chancellor reiterate this in her statement. However, the economic growth projections revealed today show that the Government’s policies aren’t working. From our engagement with business leaders ahead of the Spring Statement, we know that the increase to employer NICs and the upcoming Employment Rights Bill are a major barrier on businesses expanding their operations and hiring more people, and in turn, growing the economy and providing more funds for public services. It’s disappointing to see that the Government hasn’t taken this opportunity to reverse the employers NICs rise and recalibrate the Employment Rights Bill to make sure that businesses can create the employment needed that will ‘Get Britain Working’ again and grow the economy.”

Maxwell Marlow, Director of Public Affairs at the Adam Smith Institute, says:

“It is no exaggeration to say that our economy is in dire straits. Our growth forecast has been sliced in half, our standards of living have been flatlining for years, and we have a huge debt problem.  So the Chancellor could have used this Spring Statement to cancel the tax on jobs, which will devastate small businesses across the country, keep wages down, and stifle economic growth. She could have used the Statement to stem the tide of wealth-creators fleeing the country by offering them incentives to stay. And, although the Government has made some cuts to welfare, she could have used the Statement to reform the single largest item of welfare spending – the state pension. Every government which fails to abolish the triple lock will also fail to meaningfully reduce public spending.”

Growth Commission Chairman, Shanker Singham, says:

“While we applaud the Government’s pro-growth rhetoric and commitment to ‘tearing down regulatory barriers’, ministers must be judged by their actions rather than their words. On present form, after two successive quarters with contractions in GDP per capita growth – the yardstick against which to judge whether living standards are improving for British families – the rhetoric is failing to live up to reality. What Rachel Reeves announced today amounts to tinkering at the edges when a fundamental reshaping of policy in numerous areas is required. Rachel Reeves is right to identify that we live in a ‘changing world’ and the imposition of tariffs by the new US administration would certainly have a wide-ranging impact. But that provides an even more compelling reason to commit to a comprehensive trade deal with the US and undertake widespread domestic regulatory reform as part of an effort to restore the UK’s historic economic strength.“