Rachel Reeves's Spring Statement breakdown: What you need to know - from DWP reform to spending cuts

The Chancellor's statement came alongside the Office for Budget Responsibility's (OBR) forecast into gross domestic product (GDP) for the UK economy in 2025.

Here is a full summary of the fiscal policy changes announced by Rachel Reeves during her Spring Statement earlier today:

DWP benefit reform

Multiple changes to the benefit system were reiterated by the Chancellor, notably to Universal Credit and Personal Independence Payment (PIP):

• Health-related Universal Credit payments for existing and new claimants will be frozen in cash terms until 2030
• Health-related Universal Credit payments for new claimants will be halved from April 2026
• Universal Credit standard allowance will now increase to £107 per week in 2030, instead of £106 per week
• PIP eligibility tests will be stricter from November 2026
• Incapacity benefits to be frozen in cash terms for existing claimants at £97 per week from April 2026
• Top-up payments for incapacity benefits for those with the most severe conditions
• Britons under 22 years old will no longer be able to claim the incapacity benefit top-up of Universal Credit.

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OBR forecasts

As well as cuts to the welfare state, the Chancellor outlined the latest projections for the economy from the Office for Budget Responsibility, including:

• Gross domestic product (GDP) growth forecast for the UK in 2025 has been halved from two per cent to one per cent.
• GDP growth for the next four years has been upgraded to 1.9 per cent in 2026, 1.8 per cent in 2027, 1.7 per cent in 2028 and 1.8 per cent in 2029
• Inflation forecast to average 3.2 per cent in 2025, up from 2.6 per cent previously forecast, before slipping back to 2.1 in 2026
• Inflation expected to hit two per cent, the Government target from 2027
• England's planning system will boost housebuilding by 170,000 over five years, growing the size of the economy by 0.2 per cent

Public services

Reeves cited emerging new technologies as being part of the Government's plan to reduce the size of the civil service, which include:

• A plan to cut the administrative costs of departments by 15 per cent by 2030
• A plan to cut 10,000 civil service jobs, including staff working in HR, policy advice, communications and office management.

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• Richard Tice says OBR forecasts are WRONG and Britain is ‘heading for long, difficult recession’

Spending rules

In its forecast projections, the OBR gave an update as to how the Government is handling keeping to Rachel Reeves's strict spending rules, including:

• Labour were set miss its self-imposed rule to balance spending against taxes by 2030 without today's action and £9.9billionn financial buffer against this target set in the Autumn Budget would have been wiped out
• There is a 54 per cent spending rules will be met and 51 per cent that public debt will fall as a share of the economy, taking savings into account.

Defence spending

The Government also gave an update on the state of defence spending, as the UK commits to its support for Ukraine:

• Defence spending, which had been due to rise £2.9billion next year, to rise by an extra £2.2billion
• Treasury confirms it will take military expenditure to 2.36 per cent of national income next year, a "down payment" on plans to raise it to 2.5 per cent by 2027