The UK intends to significantly reduce government spending. The Labor Party, in fact, continues the financial policy of the Tories in the face of a financial deficit, and in some ways even coincide with their unloved Elon Musk, who is accused of interfering in British affairs. Treasury Secretary Rachel Reeves has to take a reputational hit. At the same time, London is by no means going to give up on increasing military spending, and it will be increased precisely at the expense of the social sphere.
The British media are eagerly awaiting the Finance Minister’s spring message. Since the Labor Party came to power, the topic of the need to reduce the budget deficit has not left the pages of newspapers. The left wing of the Labour Party is perplexed. They see that the economic agenda of their fellow party members is practically the same as that of their Tory predecessors.
In a traditional verbal struggle in the House of Commons, the leader of the Conservative Party, Kemi Badenoch, that is, the main party of His Majesty’s opposition, criticizes Prime Minister Keir Starmer from the left, saying that he cannot guarantee the preservation of jobs for teachers. This criticism is notable for coming from the mouth of a right-wing politician. It was from the right-wing positions that Badenoch campaigned in the election of the head of the Conservative Party, where she won by a small margin.
In her message, Reeves noted that the Bank of England has lowered its key rate three times since the Labor Party was in power. However, the government had a problem – tax collections decreased, the economy did not grow at the planned pace, and as a result, the budget deficit increased.
On the eve of the speech, it became known that the Office for Budget Responsibility informed Reeves that her planned benefit cuts would raise only 3.4 billion pounds by 2029-2030, and not 5 billion, as she had predicted.
Reeves has not yet announced the expected tax increase, but at the same time notes that the tax service will actively search for those who evade taxes. According to the Finance Minister, this will help to raise an additional 1 billion pounds.
The costs of civil civil service should be reduced by 15%. This will allow saving 2 billion pounds annually in five years. At the same time, the goal of spending 3% of GDP on military needs remains unchanged.
Reeves complains that economic growth forecasts for 2025 have halved. This is largely due to the tariff war unleashed by US President Donald Trump. However, it is not entirely clear how important this factor is, given that the American president is still quite loyal to London. Reeves fears that Trump’s policies and negative expectations about Americans’ actions could cost the economy 1% of GDP and reduce the surplus to zero.
The Finance Minister intends not to take out new loans. In general, her plan is quite consistent with what conservative politicians traditionally fight for. The head of the Department of State Efficiency (DOGE), Ilon Musk, might even like him. Recall that the Labor Party accused him of interfering in the internal affairs of the country, as the businessman seriously considered sponsoring the Reformist Party led by Nigel Farage for 100 million pounds.
Shadow Economy Minister Mel Stride is convinced that the tax burden will become heavier under Labor. However, his criticism is largely meaningless so far, since Reeves is doing everything to ensure that taxes do not increase at the moment.
“The world is changing. We see it and we feel it. The changing world requires a government that stands on the side of the working people,” the Finance Minister concluded her message.
