For weeks, the prophets of doom on the populist right have been willing Rachel Reeves to fail with the spring statement and undermine our economy.
Well, reality check. Average wages are rising ahead of inflation for the first time in a decade, making people better off. And the Government deliberately raised the National Living Wage by three times the rate of inflation. Labour tackling poverty as it always does in Government.
And in the Spring statement in contradiction of the predictions of the prophets of doom on the right, the Chancellor did not raise taxes, increase borrowing, or breach the Governments fiscal rules, which are so vital for economic stability.
But the global economic context for the Spring statement was the most challenging any chancellor has faced in almost 20 years. The world has changed.
The Chancellor confirmed a clampdown on tax avoiders GB NEWS Putin is pursuing his war in Ukraine, and Trump is moving into isolationism necessitating higher defence spending which the Government is rightly delivering.
The economic madness of King Donald with his crazy economic tariffs will harm the US and the rest of the world, pushing up borrowing costs.
In these circumstances, we need a firm and measured hand at the tiller. And we got it in the Spring Statement.
The Government confirmed it is reforming the broken welfare system it inherited from the Tories, in a way the Tories never dared or dreamed in 14 years in office. The Government is clear we cannot allow disability payments to rise to 2% of GDP.
So, it is cutting the welfare bill-the biggest overhaul in a generation. A far tighter test for Personal Independence payments. Massively increasing face to face assessments. Raising the benefit rate for those seeking work, reducing it relatively for those unable to work. Incentivising work.
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Norman Baker joined many when he hit out at Rachel Reeves's 'disgusting' welfare cuts in her Spring Statement, but others have said the Chancellor is tackling a spiralling welfare bill in a way the Tories never dared
GB News / PAPloughing £1 billion of savings into a major investment support for those looking for a job.
In short recreating a welfare system which is affordable and fair.
The Government also confirmed 15% cuts in the numbers of civil servants. And given these have risen by 100,000 since 2019, that is achievable without affecting front line services.
But I do worry that the projected increase in public spending of 1.2% in the latter years of this parliament is too little. Non protected areas like Justice, transport and local government would face cuts of about 7%.
That’s why the Government must redouble its efforts to drive economic growth, so that we can afford more than 1.2%.
So, it is welcome the Spring Statement confirmed reform of the planning rules, fast-tracking of150 major infrastructure projects, and £600 million to train 60,000 construction workers to build the homes we need.
Likewise, the announcement of £2 billion new investment to deliver 18,000 new social and affordable homes is a good one.
