Labour’s ‘Sabrina Carpenter’ Budget

This afternoon, Rachel Reeves made good on her promise to deliver only one fiscal set piece per calendar year by announcing what is widely being considered a Budget… this precedes a spending review in the summer and an actual Budget in the autumn. The headline is that the Chancellor had to find £15 billion in spending cuts to restore her headroom and keep within her own ‘ironclad’ fiscal rules. This comes after the Office for Budget Responsibility (OBR) confirmed that the £9.9 billion margin she left herself in the autumn has disappeared. The OBR has also halved its growth projections – bleak news for the government.

Among the announcements: further welfare cuts after the OBR was not satisfied with the original package; some ‘final adjustments’ to Universal Credit, with the standard allowance rising from £92 per week in 2025–26 to £106 per week by 2029–30; around 10,000 civil service jobs are for the chop; defence spending will rise, at the expense of international aid; and a new target to reduce the cost of running government by 15 per cent. But what is most striking is the extent to which the government is now beholden to the OBR. Who is running this government? Can Labour deliver on growth?

Katy Balls speaks to Michael Gove and David Miles, member of the OBR’s Budget Responsibility Committee.

Produced by Oscar Edmondson.