Summit agrees new measures against organised immigration crime

The Prime Minister and Home Secretary gathered leaders from across the world in London yesterday to tackle organised immigration crime

The purpose of the Organised Immigration Crime Summit is to agree new action to tackle organised immigration crime (OIC) and boost border security.

Discussions at day 1 of the summit included:

  • tackling the supply chains and enablers of OIC
  • the role of criminal finances in facilitating OIC
  • the UK’s systems based approach to border security

as well as how countries can tackle organised crime groups’ operations online in relation to the advertising, promoting and facilitating of illegal immigration services.

The UK and allies including France, Iraq, Vietnam and the USA, and partners including the National Crime Agency (NCA) and representatives from social media organisations, met to agree actions to secure our collective borders, protect vulnerable people from exploitation, and tackle the global threat of organised immigration crime.

Unlike previous summits, this event engaged both European nations and key source and transit countries, as well as those that are integral to the supply of equipment, including small boats and engines, ensuring a broader, more comprehensive approach to tackling OIC.

Concrete outcomes have been agreed across Europe, Asia, Middle East, Africa, and North America to strengthen international partnerships to disrupt OIC networks.  This also includes new joint work with France to tackle irregular migration in source and transit countries, through community outreach and bolstering false document detection capabilities to Iraqi officials.

The agreement represents a key step forward in the government’s Plan for Change to deliver on working people’s priorities to restore order to the immigration system and comes after the publication of new figures showing more than 24,000 people with no right to be here have been returned since the election – the highest rate of returns in 8 years. 

A communiqué was issued that sets out how we will deepen our collaboration internationally to tackle this vile crime.  

Home Secretary Yvette Cooper said: “Organised immigration crime undermines our security and puts lives at risk. The criminal networks have spread across the globe and no single country can tackle this problem alone.

“Today, at the Organised Immigration Crime Summit, the UK has led the way forward by securing international commitments to disrupt and pursue this vile criminal trade in people – part of our Plan for Change to strengthen our borders and keep communities safe.”

Border Security Commander Martin Hewitt said: “I have said since I came into my post as Border Security Commander that organised immigration crime requires a coordinated international response to effectively dismantle criminal networks.

“In my role I have seen first-hand how the cruelty and greed of criminal gangs puts the lives of the most vulnerable at risk in dangerous small boat crossings all for financial gain.

“This summit marks a step change in the international community’s approach to tackling the problem, presenting a critical opportunity to strengthen global cooperation, disrupt criminal networks, and prevent further loss of life.”

Director General of the National Crime Agency (NCA) Graeme Biggar said: “Criminal gangs are using sophisticated online tactics, the abuse of legitimate goods and services, and illicit financial networks to facilitate dangerous and illegal journeys which put thousands of lives at risk each year and undermine border security.

“Today’s summit sets out international agreements to tackle an international problem. International intelligence sharing and cooperation is absolutely crucial to track criminal activity across borders allowing us to put a stop to these dangerous criminals.”

In addition, today the Home Secretary confirmed over £30 million in funding within the Border Security Command to tackle Organised Immigration Criminal Networks. This significant funding package will be spent on key security projects across Europe, the Western Balkans, Asia and Africa, designed to strengthen border security and combat international criminal smuggling gangs.

The Home Secretary also announced joint work with France to fund an additional grassroots engagement programme to educate local communities on the dangers of irregular migration and people smuggling gangs, raising awareness of the realities and difficulties with travelling to Northern France to cross the Channel to the UK.

This will target both potential irregular migrants and, for the first time, teachers, religious leaders, and family members within vulnerable communities, and builds on the Home Office digital deterrence comms campaign that is already running in the Kurdistan Region of Iraq.

The UK will also collaborate with France to deliver critical training to Iraqi officials and commercial transport staff,  helping them detect fraudulent documents and passports used to facilitate irregular migration and OIC activities.

UK hosts first major international summit to tackle illegal migration

The UK has ‘mobilised’ over 40 countries and organisations to launch an unprecedented global fight against ruthless people smuggling gangs

The UK is spearheading the toughest ever international crackdown on organised immigration crime as the Prime Minister and Home Secretary host a landmark summit today (31 March). 

The Organised Immigration Crime (OIC) Summit brings together over 40 countries, including the United States, Vietnam, Iraq, and France, to unite behind a new approach to dismantle people smuggling gangs and deliver on working people’s priorities for secure borders.

This is the first time the full range of factors driving illegal migration, from the supply chain in small boats to anti-trafficking measures, illicit finance and social media advertising, have been explored at a global summit of this scale.

The summit will also see representatives from Meta, X and TikTok discuss how to jointly tackle the online promotion of irregular migration. 

Through the summit, the government will use all available levers at its disposal to push forward progress in bringing gangs to justice, tackle the global threat of organised immigration crime and protect vulnerable people from exploitation.

To back this drive, the Home Secretary has today announced £30 million of funding going directly to high impact operations from the Border Security Command to tackle supply chains, illicit finances and trafficking routes across Europe, the Western Balkans, Asia, and Africa. 

An additional £3 million will enable the Crown Prosecution Service (CPS) to increase its capacity to prosecute organised international smugglers and expand its international footprint to support the Border Security Command to pursue, disrupt and arrest those responsible for dangerous people smuggling operations. 

This reflects the Prime Minister’s long-held view, informed by his work as Chief Prosecutor, that cross border cooperation is the foundation of tackling international gangs and securing Britain’s borders.

In remarks delivered later today, the Prime Minister, Sir Keir Starmer, is expected to say: “This vile trade exploits the cracks between our institutions, pits nations against one another and profits from our inability at the political level to come together. 

“When I was the Director of Public Prosecutions, we worked across borders throughout Europe and beyond to foil numerous plots, saving thousands of lives in the process. We prevented planes from being blown up over the Atlantic and brought the perpetrators to justice. 

“I believe we should treat organised immigration crime in the same way. 

“I simply do not believe organised immigration crime cannot be tackled. We’ve got to combine our resources, share intelligence and tactics, and tackle the problem upstream at every step of the people smuggling routes.”

The summit will deliver concrete outcomes across Europe, Asia, Middle East, Africa, and North America by strengthening international partnerships, enhancing intelligence sharing, and implementing targeted disruptions to Organised Immigration Crime networks.

As a direct result, we will be able to strengthen UK borders and security and create a more efficient and manageable asylum system, taking the burden away from housing, the NHS and schools, and giving hotels back to the local economy.  

Speaking ahead of the summit, Home Secretary Yvette Cooper said: “Smuggler and trafficking gangs make their money crossing borders so law enforcement needs to work together across borders to bring them down. Only a coordinated international response, across the whole irregular migration route, can effectively dismantle these networks. 

“The Organised Immigration Crime Summit is the first of its kind and will reinforce the UK’s position as a leader by securing international commitments to disrupt Organised Immigration Crime at every stage of the business model.   

“The summit demonstrates mine and the Prime Minister’s absolute dedication to disrupting the callous Organised Criminal Gangs, strengthening our borders and ultimately save countless lives.”

The UK’s global leadership on this is issue is already delivering results. France has agreed to launch a unit of specialist officers who are mobile, highly trained and equipped to respond dynamically to prevent small boat launches. 

Germany has committed to strengthen their laws against those who facilitate smuggling to the UK and a new UK-Italy taskforce is hitting people smugglers’ financial flows. After boosting the resources for the National Crime Agency to work with international law enforcement partners, they have seized 600 boats and engines since July. 

Along with this, work continues at home through giving law enforcement tougher powers than ever to smash the smuggling gangs, ‘ramping up’ removals to record levels and surging illegal working raids to end the false promise of jobs used by gangs to sell spaces on boats. 

This comprehensive approach is a vital aspect of the government’s Plan for Change, with the threat from organised immigration crime increasing in scale and complexity.  

Organised immigration crime spans multiple countries, nationalities, and criminal methodologies, with recent estimate of the total global income from migrant smuggling reaching $10 billion last year.

Criminal gangs headed by hundreds of kingpins are using sophisticated online tactics, the abuse of legitimate goods and services, and illicit financial networks to facilitate dangerous and illegal journeys which undermine border security and put thousands of lives at risk each year.  

The summit will also examine the work of the government’s Joint Maritime Security Centre (JMSC) in supporting the US, by providing innovative space-based maritime surveillance capability to monitor and dismantle any vessels along Haiti’s north coast suspected to be involved in illegal immigration, illegal fishing activities and drug smuggling.

The JMSC is harnessing cutting edge technology and capabilities to provide 24 hour monitoring of UK waters and ensure our borders are secure, by using satellite to provide a better overall understanding of incoming threats to the Turks and Caicos Islands. The UK government is working with our partners in Turks and Caicos to support and protect the Island from irregular migration. 

This collaboration demonstrates the UK government’s commitment to deploying advanced capabilities against illegal migration while protecting overseas territories. 

There has also been a series of major arrests of smuggling kingpins, including: 

  • arrests linked to a major Syrian organised crime group responsible for smuggling at least 750 migrants into the UK and Europe
  • the arrest of a Turkish national suspected of being a huge supplier of small boats
  • the conviction of 2 men in Wales who ran a smuggling ring moving thousands of migrants across Europe
  • the arrests in February of 6 men wanted in Belgium over their suspected involvement in a major people smuggling ring

These arrests come alongside the NCA working with the authorities in the Kurdistan Region of Iraq for the first time, to facilitate the arrests of 3 men linked to a Kurdish people smuggling organised crime group, as well as an increase in the takedown of social media accounts linked to people smugglers.

DWP: Spring Statement Welfare Reforms

Chancellor Rachel Reeves: “We believe if you can work, you should work. But if you can’t work, you should be properly supported”

Significant welfare reforms were announced to build the economy and get Britain working in the Spring Statement

£1 billion will be invested to provide personalised employment, health and skills support from 2026-2027 to help people start or stay in work

This will build on existing support from WorkWell, Connect to Work and the Get Britain Working trailblazers

Universal Credit Standard Allowance will be increased for new and existing claims above inflation from 2026-2027 This means the standard allowance weekly rate for a single person aged 25 and over, will increase from £92 in 2025-2026 to £106 in 2029-2030.

To ensure PIP is focused on those with higher needs, a new eligibility requirement will be introduced Please be assured there will be no immediate changes to your health and disability related benefit payment.

https://gov.uk/government/collections/spring-statement-2025…

Crackdown on illegal working and rogue employers in ‘gig economy’

In the latest move to restore order to the asylum and immigration system, the UK government will introduce tough new laws to clamp down on illegal working

Companies hiring people in the gig economy will now be legally required to carry out checks confirming that anyone working in their name is eligible to work in the UK, bringing them in line with other employers.

These checks, which take just minutes to complete, confirm someone’s immigration status and allow them to legally work in the UK.

This means that for the very first time, employment checks will be extended to cover businesses hiring gig economy and zero-hours workers in sectors like construction, food delivery, beauty salons and courier services.

Currently, thousands of companies using these flexible arrangements are not legally required to check the status of these workers. This changes now.

Where businesses fail to carry out these checks, they will face hefty penalties already in place for those hiring illegal workers in traditional roles, including fines of up to £60,000 per worker, business closures, director disqualifications and potential prison sentences of up to 5 years.

Expanding illegal working checks will help level the playing field for the majority of honest companies who do the right thing. For example, Deliveroo, Just Eat and Uber Eats already voluntarily carry out checks to ensure their delivery riders are eligible to work.

Clamping down on illegal working forms a critical part of the government’s plan to strengthen the entire immigration system, restoring tough enforcement of the rules and undermine people smugglers using the false promise of jobs for migrants.

The announcement comes a day before the UK holds the first ever Organised Immigration Crime Summit, bringing together over 40 countries to agree unprecedented new international action to take down every aspect of criminal smuggling gangs’ tactics.

Home Secretary Yvette Cooper said: “Under our Plan for Change, we are restoring order to the asylum and immigration system by introducing tougher laws and bolstering enforcement action to tackle illegal working and stopping rogue employers in their tracks.

“Turning a blind eye to illegal working plays into the hands of callous people smugglers trying to sell spaces on flimsy, overcrowded boats with the promise of work and a life in the UK.

“These exploitative practices are often an attempt to undercut competitors who are doing the right thing. But we are clear that the rules need to be respected and enforced.

“These new laws build on significant efforts to stop organised immigration crime and protect the integrity of our borders, including increasing raids and arrests  for illegal working and getting returns of people who have no right to be here to their highest rate in half a decade.”

Claire Pointon, Managing Director, Just Eat UK and Ireland said: “Just Eat is committed to supporting high streets and communities by ensuring a fair and well-regulated rapid delivery sector.

“Preventing unauthorised work is key to this, which is why we’re strengthening our measures by introducing biometric checks to swiftly remove those without the correct authorisation to work in the UK. We welcome this decision from the Home Office to expand these requirements to other sectors.”

A Deliveroo spokesperson said: “Deliveroo has led the industry in taking action to secure our platform against illegal working, developing our approach in close collaboration with the Home Office.

“We were the first to roll out direct right to work checks, a registration process, daily identity verification and now additional device checks for riders, including substitutes. We take our responsibilities extremely seriously and will continue to strengthen our controls to prevent misuse of our platform.

“We welcome the government taking action to ensure all businesses and sectors adopt the same standards.”

An Uber Eats spokesperson said: “Uber Eats is fully committed to fighting illegal work and the criminal networks who are often behind it, including by introducing state of the art identity and document video verification technology and mandatory substitute registration.

“We welcome efforts to enable and enforce further controls, and create a level playing field across the sector.”

The checks take minutes to complete, and the Home Office provide this free of charge, with businesses able to utilise digital ID verification technology to support the process. There is also support in place for employers with enquiries about the process.

The new laws further build on measures announced in November to equip Immigration Enforcement teams with new technology. From May, body worn cameras will be rolled out to officers on the front line tackling illegal working and organised immigration crime.

Backed by £5 milllion, this will help officers collect evidence to support prosecutions and make sure exploitative businesses undermining our immigration system are held to account.

The new measures go alongside a ramp-up of operational action by Immigration Enforcement teams, who since July have carried out 6,784 illegal working visits to premises and made 4,779 arrests – an increase of 40% and 42% compared to the same period 12 months ago. In that time, 1,508 civil penalty notices have been issued.

This also follows wider measures within the legislation announced earlier this month to impose tougher restrictions on foreign criminals whose removal we are pursuing but we are presently unable to deport. This includes the use of electronic tags, night time curfews and exclusion zones. Breaching these conditions would be grounds for arrest and the individual could face imprisonment.

The measures will help ensure the Home Office maintains close contact with individuals and makes it very clear that they should not become established in the UK, as the intention remains to remove them when possible.  

Tomorrow (31 March 2025), the Home Secretary will convene key government and law enforcement leads at the UK’s 2 day landmark international Organised Immigration Crime Summit.

This will include Immigration Enforcement, the Department for Business and Trade, the Gangmasters Labour Abuse Authority and the National Crime Agency, holding a roundtable to discuss the importance of shutting down illegal working and government’s ongoing surge in operational activity.

The summit will bring together leaders from across the globe, with the aim of securing international commitments to intensify efforts against organised immigration crime gangs.

UK sends life-saving aid to Myanmar following devastating earthquake

UK Government announces a package of up to £10 million support to help the people of Myanmar following recent earthquake

  • £10m of UK support pledged to help deliver humanitarian response to the natural disaster
  • UK Government working with local partners to get help to those most in need
  • British nationals receiving ongoing consular support

The UK Government has announced a package of up to £10 million support to help the people of Myanmar following the devastating 7.7 magnitude earthquake that struck the country’s central region on Friday.  

This UK funding will increase support in the hardest hit areas of the earthquake and geared towards food and water supplies, medicine, and shelter.  

Baroness Chapman, Minister of State for Development, said: “The UK is sending immediate and life-saving support to the people of Myanmar following the devastating earthquake.  

“UK-funded local partners are already mobilising a humanitarian response on the ground, and this £10m package will bolster their efforts. 

“I offer my deepest sympathies to the people of Myanmar after this tragic event.”

The Foreign, Commonwealth and Development Office is offering support to British nationals in both Myanmar and Thailand following the earthquake.

 British nationals in Myanmar who require consular assistance can call British Embassy Yangon on +95 (01) 370 863/4/5/7.

British Nationals who require consular assistance in Thailand can call British Embassy Bangkok on +66 (0) 2 305 8333.  

Anyone in the UK and concerned about a British national in Myanmar or Thailand you can contact the FCDO on +44 (0)20 7008 5000.

Government announces substantial and immediate changes to aid budget

The UK aid budget will no longer be linked to changes in the UK’s gross national income, instead being given a fixed budget potentially protecting it from spending by other departments, the Labour Government has confirmed.

The announcement could mark a major shift in the way that UK aid spending is allocated.

In a letter to the Chair of the International Development Committee, Minister Baroness Chapman (above) said the Foreign, Commonwealth and Development Office will lose its role as the Government’s aid ‘spender and saver of last resort’, meaning that it will no longer need to adjust its budgets to hit a spending commitment if gross national income (GNI) changes or other department’s costs increase.

The Minister also confirmed that bilateral aid spending has been set to meet only existing contracts, suggesting that with a few exceptions there will be no new additional bilateral aid programming in 2025/26.

Exceptions include full aid allocations for Ukraine, the Occupied Palestinian Territories, Sudan, and the Overseas Territories.

Sarah Champion MP, Chair of the International Development Committee, said: “I’m very nervous about what these changes signify. Aid programmes deliver benefits over years and decades, not months.

“What UK aid needs above all is stability. Vital programmes for the world’s most vulnerable people must be protected from the ebb and flow of domestic priorities.

“The measures announced could represent a positive step forward. Unshackling aid from percentage targets could protect aid spending from drains on its resources like reckless Home Office spending on asylum hotels at home.

“But we need more information. Will the aid budget rise as well as fall, if income forecasts improve? Which specific programmes are set to be cut? Which areas are high priorities for ministers?

“Until we know, it is impossible to assess whether the Government is serious about its international commitments and the potential risks these changes present.”

Spring Statement ‘heralds further boost to growth in Scotland’

Scottish Secretary Ian Murray welcomes Chancellor’s £2.2billion defence budget boost

Chancellor Rachel Reeves this week pledged a new era of security and national renewal as she delivered a Spring Statement to ‘kickstart economic growth, protect working people and keep Britain safe’. 

Scottish Secretary Ian Murray has welcomed her measures, including a £2.2 billion increase in the UK-wide defence budget for 2025-26, on top of £2.9 billion announced at Autumn Budget.

Mr Murray said: “We are living in an increasingly insecure world, and the extra £2.2 billion for defence – on top of the £2.9 billion announced at Autumn Budget – will make Britain stronger and safer.

“This is a huge boost for Scotland’s world-leading defence sector, which delivers Scottish economic growth and more highly-skilled jobs. The increase will also mean better homes for our military personnel and families, including the thousands based in Scotland. 

“Today’s announcements underpin the great strides being made by the UK Government in achieving stability in our public finances. There have been three interest rate cuts since the general election.

Next week the increase in the minimum wage will mean a pay rise for hundreds of thousands of workers in Scotland and our employment rights legislation will deliver the biggest upgrade in workers’ rights in a generation. 

“The Spring Statement also delivered an extra £28 million for the Scottish Government. That is on top of their £4.9 billion extra from the budget, creating a record £47.7 billion settlement for 25/26, announced at the Autumn Budget.

This is the biggest budget settlement in the history of devolution and an end to austerity. The Scottish Government must now use that wisely – to improve Scotland’s failing public services.” 

This latest defence boost builds on the Chancellor’s recent visit to Babcock in Rosyth where she also announced that UK defence exporters would benefit from a £2 billion increase to UK Export Finance lending capacity. 

Her Spring Statement underlines that growth is at the heart of the UK Government’s Plan for Change with £13 billion of additional capital spend allocated alongside the defence funding boost.

It follows the Budget in the autumn where it was announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes an additional £3.4 billion through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.  

The measures announced this week top up these Barnett consequentials by a further £28 million in 2025/26.

The Scottish Government continues to receive over 20% more per person than equivalent UK Government spending in the rest of the UK, translating into over £8.5 billion more in 2025-26. Block Grant funding from 2026-27 onwards will be confirmed at Phase 2 of the Spending Review, which concludes on 11 June 2025.

The Chief Secretary to the Treasury will meet with his counterparts from the devolved governments to discuss their priorities ahead of its conclusion.

Disability Rights UK: Fight the CUTS!

Disability Rights UK have launched a new page on the DR UK website containing information and resources regarding the recent green paper plan on benefit cuts and how people can get involved in responding.

The fallout from the recent announcements of benefit cuts and reforms has sent shockwaves through Disabled peoples organisations, disability charities and allies such as Amnesty, the Trussel Trust and many more, who all agree the cuts proposed will be catastrophic.

According to the Government, the benefits system is out of control, with far too many disabled people wrongly receiving benefits. This is not the true picture.

Social security spending overall is not increasing in any significant way.

Inclusion London have made clear that in 2023/4 the UK spent 4.88% of GDP on non-pensioner social security payments, which is lower than it was in 2009 (5.75%), the comparison year the Office for Budget Responsibility used in its 2024 Welfare Trends Report on incapacity benefits.

This is a long-term trend is steady back to the 1990s. Fraud rates for disability benefits are practically non-existent: (PIP) fraud stood at 0% in the financial year ending 2024.

It is a fact that half of all people in poverty are disabled people. Disabled people can’t afford food, energy, housing and transport, and are the biggest users of Food Banks.

The community also faces additional costs related to impairments and health conditions, amounting to up to £1k extra a month and yet the Government intends to take £5 billion pounds from Disabled peoples incomes with its benefit reforms.

With the spring statement offering even less hope, there no humanitarian or economic sense of pushing more disabled people into poverty: we need to act.

The OBR has not yet been able to forecast any employment gain from the cuts/changes to incapacity & disability benefits, so effectively MPs are being asked to support these cuts without any clear assessment of what it will achieve.

These cuts are purely about saving money, nothing else. DR UK and its allies will not stay silent as benefits are cut, public services are slashed, & our rights are eroded, join us in the fight.

The Our new web page contains what action you can take how you can get involved in campaigning against these thebenefit cuta proposals how you can respond , for example responding to the consultation write writing to your MP and protesting.

Learn more about what we campaign on, and how you can campaign with us by visiting the Take Action page

‘CATASTROPHIC’: Spring Statement welfare cuts will drive 250,000 more people into poverty

Chancellor ‘delivers security and national renewal in a new era of global change’

  • Chancellor vows to bring about “new era of security and national renewal” as she delivered a Spring Statement to kickstart economic growth, protect working people and keep Britain safe.
  • People to be on average £500 a year better off by the end of this parliament compared to under the previous government, putting more money in people’s pockets.
  • OBR forecast concludes government’s landmark planning reforms will result in a £6.8 billion boost to the economy and housebuilding at its highest level in over 40 years by 2029-30
  • Growth at the heart of Plan for Change as £13 billion of additional capital spend allocated alongside £2.2 billion defence funding boost next year.

THE Labour government said people will be on average £500 better off from 2029, relative to OBR’s autumn forecast, helping to deliver the Plan for Change as the Chancellor yesterday (Wednesday 26 March) announced a Spring Statement to grasp the opportunities in a changing world.

THEY WON’T. From November 2026, 370,000 people who already get PIP will lose it and another 430, 000 who would qualify now no longer will. These people will lose £4500 a year each. And 150,000 carers who look after them will no longer receive their £83.30 a week Carer’s Allowance.

The OBR has also concluded that the government’s landmark planning reforms will result in UK housebuilding reaching its highest level in over 40 years, bringing the UK one step closer to its Plan for Change mission to build 1.5 million homes.

The government says economy will be 0.2% larger in 2029-30 because of the reforms – worth around £6.8 billion in today’s money – growing to 0.4% over the next ten years. This represents the biggest positive growth effect it has ever forecasted for a policy that comes at zero-cost to taxpayers. The reforms will secure over 170,000 new homes for hard working families and leave borrowing £3.4 billion lower in 2029-30.

The Chancellor also set out how the government is protecting national security and maximising the growth potential of the UK defence sector by confirming a £2.2 billion increase in the defence budget in 2025-26 while ensuring UK defence is on the cutting-edge of technology and innovation.

But growth is still not where it should be, so at this Spring Statement, this government has gone ‘further and faster’ to kickstart growth by training up to 60,000 young people to get Britain building again; increasing capital investment by £13 billion over this parliament; and fixing public services by tearing out waste from its roots.

Growth

Kickstarting economic growth is the number one mission of this government, putting more money in people’s pockets. The government has already made considerable progress; supporting a third runway at Heathrow; revitalising the Oxford Cambridge Growth Corridor, launching the National Wealth Fund and making the right choices on public investment to drive growth across the UK.

The actions of this government across the Autumn Budget and Spring Statement, if sustained, lead to a 0.6% rise in the level of real GDP by 2034-35, signalling the government’s growth plan is working.

The OBR concluded that the stability rule is met by £9.9 billion and the investment rule is met by £15.1 billion. Both rules are met two years early, meaning from 2027-28 the government is only borrowing for investment and net financial debt is falling.

The government is not satisfied with short-term growth figures, and is going further and faster today to improve this:

  • To go further and faster to get Britain building, the Chancellor has today announced a further £13 billion of capital investment over the Parliament to go further on growth, on top of the £100 billion uplift announced at Autumn Budget. This will deliver the projects needed to catalyse private investment, boost growth and drive forward the UK’s modern industrial strategy – unlocking the potential of the Oxford Cambridge Growth Corridor which could add up to £78 billion to the UK economy by 2035.
  • Taken together, this greater capital investment more than offsets the modest savings on day to day spending and means the total departmental spending will increase over the next five years, when compared with plans in the Autumn.
  • Over this Parliament, the government is funding a £625 million package to boost skills in the construction sector, which is expected to provide up to 60,000 more skilled construction workers to support the government’s plans to deliver 1.5 million homes in England over the parliament and progress vital infrastructure projects.
  • As part of this, the government is providing further support to scale up existing construction skills pathway over this Parliament through £100 million for 35,000 additional training places in construction-focused Skills Bootcamps, supporting trainees, ‘returners’, and existing employees to succeed in the sector. Building on the £40 million investment in the new Growth and Skills Levy at Autumn Budget 2024, the government is also providing a further £40 million to support up to 10,000 more young people to access new construction Foundation Apprenticeships, which will provide a key entry route into a thriving industry.
  • The government is ensuring there are enough skilled construction workers in the system, with £100 million to deliver 10 Technical Excellence Colleges specialised in construction across every region in England, and £165 million to increase funding for training providers delivering construction courses for 16-19-year-olds and adults.
  • The government is committed to supporting employers to unlock further investment in training to deliver more skilled construction workers, and is providing £100 million, alongside a £32 million contribution from the Construction Industry Training Board to deliver up to 40,000 industry placements in construction each year.
  • Supported by the construction skills package, the government confirmed this week that there will be a £2 billion injection of new grant funding to deliver up to 18,000 new social and affordable homes. The new funding will only support developments on sites that will deliver in this Parliament, getting spades in the ground quickly to build homes in places such as Manchester and Liverpool.

Defence

The world is changing before our eyes, reshaped by global instability, including Russian aggression in Ukraine. Europe is facing a once-in-a-generation moment for its collective security, with conflicts overseas undermining security and prosperity at home.

A month ago, the PM announced the biggest sustained increase in defence spending since the Cold War as a result of the changing global picture, now reaching 2.5% of GDP by April 2027, and with an ambition to reach 3% in the next Parliament subject to economic and fiscal conditions.

We are going further and faster to protect our national security and maximise the economic growth potential of the UK defence sector:

  • Increasing the defence budget by £2.2 billion in 2025-26, taking additional spending on defence to over £5 billion since the Autumn Budget.
  • This raises spending on defence to 2.36% next year and will be invested in fitting Royal Navy ships with Directed Energy Weapons five years earlier than planned, providing better homes for military families and modernising His Majesty’s Naval Base Portsmouth.
  • Setting a minimum 10 percent ringfence for equipment spending on emerging technologies like drones and autonomous systems, dual-use technology, and AI-powered capabilities, so that British troops have the tools they need to fight and win in modern warfare.
  • Getting this new tech into the hands of our armed forces quicker by cutting away bureaucracy, with a new UK Defence Innovation unit within the Ministry of Defence spearheading efforts to identify promising technology and ensure these get to the frontline at speed, while also bolstering the UK tech sector and crowding in private investment.
  • Creating bespoke procurement processes for different types of military equipment, learning lessons from our rapid support for Ukraine to drive faster timescale targets for operationalising new tanks, aircraft and other essential tools for modern warfare.
  • This government is determined to transform the defence sector into an engine for growth by focusing this investment on where it boosts the productive capacity of the economy such as investment in innovation and novel technologies. As a result of the increase in defence spending to 2.5%, the government estimates this could lead to around 0.3% higher GDP in the long run, equivalent to around £11 billion of GDP in today’s money.
  • The government’s investment in defence will also support its number one mission to deliver economic growth. UK citizens will be protected from threats at home whilst creating a stable environment in which businesses can thrive, and supporting highly skilled jobs and apprenticeships across the whole of the UK.

Reform

The government is determined to make the public sector more productive and to improve services for working people. But the changing world means we need to go further and faster to ensure we can deliver the public services that working people care most about.

The government has shown its commitment to taking the difficult decisions required to drive efficiencies and reform the state – including announcing that the world’s largest quango, NHS England, will be brought back into the Department for Health and Social Care, reducing bureaucratic inefficiencies and duplication; and driving out wasteful government spend through cancelling thousands of government credit cards.

Getting more people into jobs is also central to the government’s growth mission. This broken welfare system that is letting people down by asking them to prove what they can’t do, rather than focusing on what they could do with the right support – trapping people due to fear of trying work, lack of support and poor financial incentives.

The social security system will always protect those who can never work, that is why this government is proposing an additional premium that will safeguard their incomes. And will end reassessments for people with the most severe, life-long conditions to give them dignity and security.

Helping more people into work is a central aim of these reforms and which is why the government is tackling incentives to be inactive by abolishing the WCA, rebalancing Universal Credit, and investing more into employment support.

We will always support those with long term health conditions through the Personal Independence Payment, which will remain an important non-means tested benefit for disabled people and people with long term health conditions. But these reforms will make the system more targeted and sustainable to ensure the safety net is there for those who need it most.

The OBR have now set out their final assessment of costings and confirmed this welfare package will reduce welfare spending by £4.8 billion in 2029-/30.

The government will modernise the Civil Service into a more productive and agile organisation that can effectively deliver the Plan for Change, underpinned by a digital revolution, while cancelling thousands of government procurement cards.

Today, the Chancellor has gone further:

  • The Chancellor has confirmed the creation of a £3.25 billion Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.
  • The Fund will invest in vital public services and accelerate the modernisation of the state by taking the next step to reform the children’s social care system through an additional £25 million for the fostering system. This will include funding the recruitment of a further 400 new fostering households, providing children with stability and addressing cost pressures on local government.
  • The fund will also support the managing offenders in the community, by providing £8 million for new technology so probation officers can focus on reducing reoffending, rather than filling out forms.
  • In addition, it will provide £42 million for three pioneering DSIT-led Frontier AI Exemplars. These Exemplars will test and deploy AI applications to make government operations more efficient and effective and improve outcomes for citizens by reducing unnecessary bureaucracy.
  • To create an agile and productive state we are also providing £150 million for government employee exit schemes. This will support a leaner and more efficient Civil Service, helping to reduce administration costs by 15% by the end of the decade.
    The Chancellor also announced a package of measures to close the tax gap, raising £1 billion per year by 2029-30. The UK tax gap was estimated to be around £40 billion in 2022-23.
  • The Spring Statement earmarks around £80 million in new money for third party debt collectors to bring in £1.3 billion over the next five years – a return of around £16 for every pound spent for UK public services and investment projects. HMRC will also receive £4 million in new funding to pilot a new test and learn programme with the private sector to improve the tax collection agency’s approach to recouping older unpaid tax debt. Ministers will decide whether to proceed with a larger exercise later this year based on the results of this test.
  • An additional 600 staff will also be recruited into HMRC’s debt management teams. This means that for every £1 spent on these staff, over £13 of debt is expected to be recovered. The staff will work with the private sector to make collecting tax debt more efficient including through automating admin processes.
  • The Spring Statement also announces £100 million in new funding for HMRC to recruit a further 500 compliance officers from April 2025. This will raise £241 million in unpaid tax over the next five years.
  • Late payment penalties for VAT and Making Tax Digital for income tax Self Assessment will increase to incentivise taxpayers to pay on time. This will be from 2% to 3% at 15 days, 2% to 3% at 30 days, and 4% to 10% from day 31. This will take effect from April 2025.
  • As announced in the autumn, Making Tax Digital for income tax Self Assessment will be extended to sole traders and landlords with income over £20,000. The Spring Statement confirms that this additional group will join Making Tax Digital from April 2028. This will build on the existing plan which will see sole traders and landlords with income above £50,000 joining from April 2026, and those with income above £30,000 joining from April 2027. Around 4 million businesses have an income below the £20,000 threshold.

Looking Forward

This Spring Statement builds on the Autumn Budget and the decisions taken since required to deliver stability to the British economy and kickstart economic growth.

The government will set out its plans for spending and key public sector reforms at the Spending Review which will conclude on 11 June 2025.

This will not be a business-as-usual Spending Review. The government has fundamentally reformed the process to make it zero-based, collaborative, and data-led, in order to ensure a laser-like focus on the biggest opportunities to rewire the state and deliver the Plan for Change.

At the Spending Review, the Budget in the autumn and across the Parliament, the government will continue to prioritise growing the economy to deliver change.

RESPONSES:

UK spending cuts ‘risk harm to most vulnerable’

Finance Secretary responds to Spring Statement

Spending cuts announced by the Chancellor risk harming some of the most vulnerable people in society, Finance Secretary Shona Robison has said.

Responding to the Spring Statement, Ms Robison said: “Today’s statement from the Chancellor will see austerity cuts being imposed on some of the most vulnerable people in our society. The UK Government appears to be trying to balance its books on the backs of disabled people.

“Not content with these cuts, the UK Government is still expected to short-change Scotland’s public services on additional employer National Insurance costs to the tune of hundreds of millions of pounds. This will be felt in public services that people rely on up and down the country – services such as our NHS, GPs, dentists, social care providers, and universities.

“The UK Government’s choice to increase defence investment is welcome, but its choices to shortchange public services and deliver austerity cuts to some of the most vulnerable are deplorable.”

TRUSSELL:

Trussell responds to ‘catastrophic’ Spring Statement

Cara Hilton, Senior Policy Manager at Trussell in Scotland, said: “Today’s announcement has incredibly worrying implications for disabled people in Scotland.

“The insistence by the Treasury on driving through record cuts to disabled people’s social security to balance the books is both shocking and appalling. People at food banks are telling us they are terrified how they’ll survive.

“These brutal cuts to already precarious incomes won’t help more disabled people find work, but they will risk forcing more people to skip meals and turn to food banks to get by.

“Cuts come at a cost. Driving up hunger and hardship means more spending on already struggling public services, with increased hospital and GP visits a very likely outcome of these actions.

“Disabled people are already three times more likely to face hunger, and over three quarters of people in receipt of Universal Credit and disability benefits are already struggling to afford the essentials like food. This will only get worse.

“These cruel cuts are out of touch with what voters want from this government. The government says people voted for change in Westminster, but we know that seven in ten voters across political parties agree the social security for disabled people should at least be enough to cover essential living costs. This is a change for the worse, and it is disabled people who will pay the price.”

David, 46, has a bone disease and is terrified by the prospect of cuts to his disability benefits. He has recently been forced to turn to a Trussell food bank for support.

He said: “I am terrified now that the Chancellor has confirmed that my disability benefits will be cut. The bone tumours in my hips cause me pain everyday and force me to use crutches, and in the cold weather my symptoms worsen but I already can’t afford to put the heating on.

” I don’t know how I’ll survive. It’s not my fault I’m disabled, and I shouldn’t be punished for it.

“Life costs more if you’re disabled. Things like specialist equipment and travel to healthcare appointments all add up. PIP – which the government is brutally cutting – is there to account for these extra costs. It is not a luxury, and I shouldn’t need to use a food bank or turn to charities like Trussell for support.

“Cutting my benefits won’t get me back to work – it will just push me deeper into poverty.”

JOSEPH ROWNTREE FOUNDATION

The Chancellor said today that she would not do anything to put household finances in danger Yet the government’s own assessment shows their cuts to health related benefits risk pushing 250,000 people into poverty, including 50,000 children.

“Their assessment also found:

  • 800,000 will lose PIP according to the OBR
  • 3m will lose money from changes to the main health element of UC, £500 a year for existing claimants, and £3000 for new claimants
  • £500m will come out of the carers benefits bill as 150,000 lose carers allowance or UC care element.

“The Chancellor said the world has changed, and today’s announcements places the burden of that changing world on the shoulders of those least able to bear the load. These cuts will harm people, deepening the hardship they already face.”

CHILD POVERTY ACTION GROUP:

Responding to today’s Spring Statement, chief executive of Child Poverty Action Group Alison Garnham said: “Stealth social security cuts bring neither stability nor security to struggling families and will push child poverty even higher.

“Growth and better living standards are not achieved by taking money from families with the least.

“Government must invest in social security support – not cut it – for the most vulnerable, or risk being remembered as the Labour administration under whose watch child poverty continued to rise.”

CARERS UK:

STUC:

INDEPENDENT ALLIANCE MPs:

KIM JOHNSON MP:

OCTOPUS ENERGY:

Greg Jackson, CEO of Octopus Energy, said:  “It’s good to see the focus on planning and other reforms that can unlock investment to help make Britain more productive and drive growth.

“We were also pleased to see the receipts from the Government’s sale of Bulb to Octopus funding 36,000 homes for armed forces families. It’s a sign of how business and Government can work together for the good of the country.”

FRONT PAGES:

MOMENTUM:

NEW ECONOMICS FOUNDATION:

JEREMY CORBYN:

PRIME MINISTER KEIR STARMER:

THE NATIONAL:

TRADES UNION CONGRESS (TUC):

Responding to today’s (Wednesday) Spring Statement, TUC General Secretary Paul Nowak said: “Labour inherited a toxic economic legacy from the Conservatives. But at the Budget the Chancellor took the right call to invest in repairing our public services and infrastructure. 

“To rebuild Britain this approach must continue long-term. In the face of strong global headwinds, we need to keep building stronger foundations at home. That must include protecting the most vulnerable. 

“As the last 14 years have shown us – you cannot cut your way to growth. UK taxes are low as a share of GDP. Those with the broadest shoulders must continue to contribute more through a fairer tax system.

“And the Tories’ botched Brexit deal must be improved to boost growth and trade.”

On the government’s social security reforms, Paul said: “Ministers need to rethink their plans. Decisions that affect millions of people’s lives must be made with care – not as a last-minute response to changed fiscal forecasts. 

“These changes mean many disabled people – whether they are in work or not – will be pushed into hardship. 

“And removing support could even make it harder for some people to stay in their jobs.

“Disabled people need timely access to high quality healthcare, and accessible jobs – particularly in the towns and communities where there are fewest opportunities.”

On the public sector workforce, Paul added: “Public sector workers are key deliverers of national renewal. 

“But after 14 years of Tory chaos and ruin, many feel burnt out and demoralised.

“It’s vital the government invests in these workers and recognises the key role they play in improving the services we all rely on.

“Any approach to transforming our public services must include clear workforce plans for every part of our public sector, developed in partnership with staff and unions.”

On the OBR’s growth forecasts, Paul said: “It is time to review both the role of the OBR and how it models the long-term impacts of public investment. Short-term changes in forecasts should not be driving long-term government decision-making.”

UNITE THE UNION:

UK FINANCE:

David Postings, Chief Executive Officer, UK Finance said: “The chancellor’s Spring Statement focused on stability and growth in the UK. We welcome the government’s continued commitment to growing the economy and the financial services sector is committed to playing its part in support.

“Building on recent positive regulatory reform plans, we now look forward to the upcoming Industrial Strategy, which will be key to unlocking further investment and delivering growth through various sectors, including financial services.”

MENTAL HEALTH FOUNDATION:

LLOYDS BANKING GROUP:

Charlie Nunn, Chief Executive Officer, Lloyds Banking Group said: “A safe and lasting home is the foundation for good lives and livelihoods, and we welcome this boost to building much-needed social and affordable homes.

“As the UK’s biggest commercial supporter of social housing, we’re working across the private, public and community sectors to help increase provision of good quality, genuinely affordable housing for those in need.”

UNITE HOSPITALITY:

DAILY MIRROR:

POVERTY ALLIANCE:

Responding to the Spring Statement, Poverty Alliance chief executive Peter Kelly said: “People in the UK voted for change at the last election because they were desperate for a government that delivers a just and compassionate country. Today’s announcements undermine that ambition.

“It is completely unjust to, once again, balance the books on the backs of the those on the lowest incomes. Today’s statement layered additional cuts to our social security system on top of those announced last week. That will have a devastating impact for households across the country.

“The Government’s own analysis shows that these changes will push at least 250,000 people, including 50,000 children into poverty, undermining the forthcoming child poverty strategy before it’s even published.

“These cuts will push people into debt and destitution. They will continue the need for food banks. They will stop people heating their homes, or charging essential medical and support equipment.

“People know that there is no justification for these cuts. It does not have to be like this. The Chancellor could scrap her self-imposed fiscal rules or use our taxation system to raise the revenue needed for the better future we all want to see.

“The UK Government is re-running a failed experiment – austerity will not deliver economic growth. And it certainly won’t deliver a just and compassionate society.”

SCOTTISH HUMAN RIGHTS COMMISSION:

Deep concern about impact of UK Government’s Spring Statement

The Scottish Human Rights Commission (SHRC) is deeply concerned about the impact of announcements on the future of the UK welfare system in the UK Government’s Spring Statement, especially for disabled people and their families and communities. 

Plans to cut the health element of Universal Credit will have a direct effect on the human rights of those disabled people in Scotland who are unable to work. Although payments to support people with the additional costs of disability are devolved in Scotland, the UK Government’s proposals will have negative consequences for the Scottish Budget.

Severe economic hardship

Earlier this month, the UN Committee on Economic, Social and Cultural Rights, which holds governments around the world to account for their record on human rights, warned that changes to the UK welfare system introduced since 2012 have “eroded the rights to social security and to an adequate standard of living, disproportionally affecting persons with disabilities, low-income families and workers in precarious employment” and warned that these changes have resulted in “severe economic hardship”.

Last year, the UN Committee on the Rights of Persons with Disabilities reiterated its position that the UK welfare system is leading to ‘grave and systematic’ violations of disabled people’s rights. Over the past week many disabled people, Disabled People’s Organisations and civil society organisations have expressed shock and fear about what further changes to the system could mean for people.

Professor Angela O’Hagan, Chair of the SHRC, says: “With these announcements, the UK Government is not only disregarding the expert findings and recommendations of human rights bodies, but actively pursuing regressive changes that further deteriorate the rights of disabled people in Scotland. 

“Indeed, these steps may potentially represent a breach of the UK’s obligations under international human rights law, particularly its duty to progressively realise the rights to social security, an adequate standard of living, and non-discrimination.

“Social security, an adequate standard of living, and non-discrimination are not optional benefits — they are binding human rights that the UK is required to respect, protect, and fulfil for everyone.

“These proposals fly in the face of both the letter and the spirit of the UK’s human rights obligations.”

VOLUNTEER SCOTLAND:

We share the concerns voiced by many third sector organisations regarding the Chancellor’s Spring Statement on Wednesday (writes Volunteer Sotland’s SARAH LATTO).

The significant cuts to health-related benefits have the potential to push more people into financial difficulty. This would create significant additional demand for third sector services and the volunteers that support them.

This comes at a time when the third sector is facing unprecedented pressures, and volunteer participation is in significant decline. Given the reported challenges many organisations are experiencing in recruiting new volunteers, this could add considerable pressure to existing volunteers who give their time to support people in crisis. This is not sustainable and could contribute to a further decline in volunteer participation.

Last week we published research showing that weekly participation in formal volunteering can lead to wellbeing benefits worth an estimated £1000 per person per year. 

This same research also found that the effect of volunteering on mental wellbeing for people with a disability or long-term health condition was seven times larger than for people without.

Despite these clear benefits, we are concerned that the announced reduction in welfare spend will prevent many people in receipt of benefits from pursuing volunteering.

Our ongoing research regarding the impact of the cost of living crisis on volunteering suggests that the capacity of many people to volunteer is increasingly diminished.

This is because of competing demands on their time and rising stress or anxiety regarding their finances. The planned changes to welfare spend will likely exacerbate this situation further, meaning many people in receipt of health-related benefits may feel unable to participate in an activity that is likely to improve their health and wellbeing.

As a result, we join many voices from the third sector in urging the Chancellor to rethink her plans around welfare spend.

FRASER OF ALLANDER INSTITUTE:

Spring Statement reaction: a second fiscal event of the year after all

The Chancellor may have tried to portray it otherwise, but her words in the Commons and the length of the scorecard of measures published by the OBR betray a different story: this really was a fiscal event, and a significant one at that.

It was also one where the forecasting process was nowhere as smooth as we hoped it might be given how much hay the Chancellor made out of strengthening the role of the OBR in the Autumn. Instead, we have seen a number of measures either uncertified or included only on a provisional basis, and with no time to evaluate their supply-side effects.

Given how long these measures have been speculated about, the last-minute tweaks and the scramble to announce further welfare reforms to make the sums add up to the £5bn in savings are pretty disheartening. It also makes us wonder about the reasons for announcing the headline amounts last week, before ultimate certification by the OBR.

It is not credible that the Chancellor or the Work and Pensions Secretary were not aware of the OBR’s concerns at the time of the announcement, and so we are left to wonder why figures that weren’t final were bandied about beforehand instead of being left for the appropriate fiscal event.

The underlying picture deteriorated significantly, and so spending cuts have filled the gap

As widely predicted, the Chancellor would have seen her fiscal rules broken had she not made significantly policy decisions, which collectively cut current spending by nearly £9 billion a year by 2029-30.

Chart: How the Chancellor restored her headroom

Source: OBR

Debt servicing costs are the main reason for the deterioration. Higher market interest rates raised the cost of servicing government by just over £10 billion by the end of the decade, more than wiping the starting headroom. Faced with this, and after staking her credibility on complying with the fiscal rules, the Chancellor decided to mostly lean on the spending side of the ledger to essentially get back to where she started.

This means a heavily backloaded set of policy decisions, with spending cuts coming from 2027-28 onwards. Changes to incapacity and disability benefits mostly affect spending from then on, by £1.8 billion in that year and rising to £4.6 billion by 2029-30.

Changes to the path of day-to-day departmental spending also rise to over £5 billion by 2029-30, although some of that is offset by specific investment programmes such as employment support, DWP delivery and HMRC compliance. On net, current departmental spending has been cut by £3.6 billion by 2029-30 relative to plans.

There have also been some increasing in the tax take. Much of it is from compliance activity and tax debt collection, although there are also additional council tax increases allowed in England and increases to passport and visa fees. Receipts are higher by £2.3 billion by 2029-30 because of measures.

But the Chancellor has had to run just to stand still. She is just as close to missing her fiscal rule as she was in October, and that leaves her exposed to any weaknesses or market movements between now and the Autumn. Things may well turn out for the better – but that is far from guaranteed, and it’s as close to a 50-50 bet as it gets.

Chart: Headroom against the main fiscal target since 2010

Source: OBR

What do the announcements mean for the Scottish Budget?

In the very short-term, there is a small amount of additional funding (£28 million) for the Scottish Government in 2025-26 due to a small increase in departmental spending at UK Government level.

Towards the end of the forecast, however, the picture is significantly more challenging in terms of what it means for Holyrood’s finances. The cuts in departmental budgets announced by the UK Government – even after accounting for some consequentials from employment support programmes and DWP delivery of welfare reforms – mean significant reductions in funding for the Scottish Government relative to what was previously included in the forecasts. Of particular significance are the £200 million and £435 million cuts in implied funding for the Scottish Budget in 2028-29 and 2029-30.

The current forecast points to the PIP reforms reducing the block grant adjustment for social security devolution by increasing amounts, from £177 million in 2027-28 to £455 million in 2029-30. This is in line with what we discussed in recent blogs.

Put together, and in the absence of any other changes, the Scottish Budget would be around £900 million worse off on the current side in 2029-30 than previously projected. On the other hand, some additional capital spending on areas which are devolved in Scotland – so aside from the defence spending increases – are expected to raise the Scottish Government’s capital budget by nearly £250 million by 2029-30 relative to current plans.

Chart: Effects of the Spring Statement measures on the Scottish Budget

Source: OBR

There’s still much we don’t know about the welfare reforms

One key policy change from last week’s Green Paper that the OBR have not been able to cost is the removal of the Work Capability Assessment (WCA) that currently determines whether a person is eligible for the Universal Credit (UC) health element. The UK Government have proposed that the PIP assessment will be used instead.

The OBR note the absence of key policy detail, including how entitlement will operate in Scotland where PIP is being phased out. They do state that they expect the policy to have a “material” fiscal impact, both on spending on UC but this could be offset by an increase in people claiming PIP. The labour market response of this (as with most of the other Green Paper policies) is also yet to be analysed by the OBR.

These changes will directly impact on people in Scotland as UC is a reserved policy, but as already noted, how this will happen given that PIP will soon not exist in Scotland, is unknown. The number of people impacted could be significant. The Scottish Government could mitigate this impact through its own social security top up powers but, as with the recently announced mitigation of the two-child limit in UC, would need to be able to find the money to do so from within its own budget.

But distributional analysis shows significant numbers of people will be worse off

Alongside the Spring Statement documents, the UK Government also update their distributional analysis (the differential impact of policies on poorer, middle, and higher income households). The impact of the Spring Statement, the policies from the Spring Statement are added to the policies from the Autumn Statement, making it difficult to isolate the impact of the Spring Statement, although the regressive nature of the welfare measures is clear to see: those in the lower half of the income distribution are facing most of the cuts.

Separately, the UK Government has produced a statement on the impact of the health and disability reforms.

This makes for sobering reading. The impact of changes to the eligibility for PIP will affect 800,000 people who will no longer be eligible for the Daily Living component. They note a further 150,000 people will not receive Carer’s Allowance of the UC Carer element as a result. These numbers are for England and Wales only given that disability benefits are devolved.

These results, on their own, will increase the number of working age people in poverty by 250,000 and 50,000 children. The UK Government are careful to say that these estimates do not account for any employment impact of those who lose benefits subsequently moving into work, and we will need to wait for the OBR to judge on the strength of these employment effects to understand the potential for offsetting of these numbers.

The reduction and or freezing of the UC health element will affect Scottish claimants as well as those in England and Wales. 2.25 million people who are current claimants will be affected by the freeze and 730,000 new claimants will receive the new lower rate and freeze. A further 50,000 working age people will be in poverty as a result of these changes.

There is as yet no analysis of the impact of the abolition of the Work Capability Assessment in UC, and the only impact that is shown is the reversal of a 2023 change to the descriptors in the Work Capability Assessment, which will not apply given the decision to abolish it.

We’ll have to wait until the OBR has been able to look at the whole policy package in aggregate before we understand the full scale of the impact both on the UK and Scotland. But it is clear from what we know so far that this is a package of measures that will raise poverty across the UK.

How does departmental spending look in historical context?

In October, the Chancellor announced significant increases in departmental spending. But we and others also noticed how frontloaded some of those announcements were.

This has been made even more so by the changes at this forecast to the latter years of the projections. Day-to-day departmental spending per person is now forecast to grow by a strong 3.4% in real terms in 2025-26, slowing to 1.5% in 2026-27 and remaining at 0.6% a year for the rest of the decade.

We’ll leave others to decide on words to characterise this path of spending. We’ll instead note that this leaves spending per person only 8% higher than it was in 2007-08. And as a share of national income – a better measure of affordability and of the Government’s prioritisation of the country’s resources – there is a slight increase in spending in the short-term. But day-to-day departmental spending then falls back by 0.4 percentage points by the end of the decade relative to its peak of 16.1 per cent of GDP in 2025-26 and 2026-27.

Chart: Resource departmental spending per person in real terms and as a share of GDP since 2007-08

Source: OBR, FAI analysis

RACHEL REEVES: We will deliver security for working people and renewal for Britain

BRITAIN’S POOREST COMMUNITIES FACE MORE HARDSHIP

  • Chancellor vows to bring about “security and national renewal” as she delivers a Spring Statement to kickstart economic growth, protect working people and keep our country safe.  
  • Reeves will warn that “we have to move quickly in a changing world”, unveiling a significant step towards spending 2.5% of GDP on defence with £2.2 billion funding boost next year.  
  • Growth and national security at heart of Plan for Change as funding invested in cutting-edge weapons and better homes for thousands of military families – paid for by reductions to international aid budget and from the Treasury reserve.  

The Chancellor will promise to deliver “security for working people” and a “decade of national renewal”, as she reveals how the Government will put advanced weaponry in the hands of British troops, provide better homes for military families and kickstart economic growth through the Plan for Change.   

At today’s Spring Statement, the Chancellor will announce a further £2.2 billion funding increase for defence from April, as she warns that Britain has to “move quickly in a changing world”. 

The funding will be invested in advanced technologies so that Britain’s armed forces have the tools they need to compete and win in modern warfare. This includes guaranteeing the investment to fit Royal Navy ships with Directed Energy Weapons by 2027. These weapons can hit a £1 coin from 1km away and take down drones at a distance of 5km.  

It will also be used to provide better homes for military families by refurbishing the defence estate – including over 36,000 homes recently brought back into public ownership from the rental sector. In addition to this, the funding will unlock rapid preparatory work, such as site surveys, planning and architecture, for the major redevelopment of Armed Forces housing through the Defence Housing Strategy.   

The investment will also help fund upgrades to infrastructure at His Majesty’s Naval Base Portsmouth, securing its ability to support Royal Navy operations into the future.   

Speaking in the House of Commons today, Chancellor of the Exchequer Rachel Reeves is expected to say: “This government was elected to change our country.

“To provide security for working people. And deliver a decade of national renewal. 

“That work of change began in July – and I am proud of what we have delivered in just nine months. 

“Restoring stability to our public finances; giving the Bank of England the foundation to cut interest rates three times since the General Election; rebuilding our public services with record investment in our NHS and bringing down waiting lists for 5 months in a row; and increasing the National Living Wage to give 3 million people a pay rise from next week. 

She will add: Now our task is to secure Britain’s future in a world that is changing before our eyes. The job of a responsible government is not simply to watch this change. 

“This moment demands an active government stepping up to secure Britain’s future. A government on the side of working people. 

“To grasp the opportunities that we now have and help Britain reach its full potential, we need to go further and faster to kickstart growth, protect national security and make people better off through our Plan for Change. 

She will also say: “In February, the Prime Minister set out the government’s commitment to increase spending on defence to 2.5% of GDP from April 2027 and an ambition to spend 3% of GDP on defence in the next parliament as economic and fiscal conditions allow.

“That was the right decision in a more insecure world, putting an extra £6.4bn into the defence budget by 2027. But we have to move quickly in a changing word. And that starts with investment. 

“So I can today confirm that I will provide an additional £2.2bn for the Ministry of Defence next year – a further downpayment on our plans to deliver 2.5% of GDP. 

“This increase in investment is not just about increasing our national security but increasing our economic security, too. As defence spending rises, I want the whole country to feel the benefits.” 

The plan will include action to harness the ingenuity of Britain’s leading manufacturing and technology sectors, creating jobs across the country and putting more money into people’s pockets.   

The increase set to be announced today follows the extra £2.9 billion announced for defence in the Autumn Budget and takes spending as a proportion of GDP to 2.36 per cent in 2025/26 – up from 2.3 per cent in 2024/25.   

The announcement is fully funded. The new money comes from in-year funding from the Treasury reserve and from changes to the Overseas Development Assistance budget, so will not require additional borrowing and will maintain the Chancellor’s ironclad fiscal rule. 

Further detail on the Ministry of Defence’s investment plan will be set out via the Strategic Defence Review in the Spring and the Spending Review in June.   

Commenting on the increase in defence spending, Defence Secretary John Healey said: “National security is the bedrock of a successful economy and our Plan for Change. This significant increase in defence spending, on top of the £2.9bn announced by the Chancellor at the Budget, means an extra £5 billion for our Armed Forces next financial year. 

“This investment will make Britain stronger and safer in a more insecure world. And it will ensure defence is an engine for growth, creating good jobs across the nation. 
 
“These are the bold first steps of the largest sustained increase in defence spending since the Cold War announced by the Prime Minister last month. Our government is delivering for defence and investing in the outstanding men and women who keep Britain secure at home and strong abroad.”