Rachel Reeves delivered her highly anticipated Spring Statement, revealing significant cuts to public spending. While the Spring Statement is not a formal budget — as Labour has committed to delivering only one budget per year — it provides an update on the economy.
The Chancellor confirmed there would be no major tax changes, but the statement still included key updates that will impact millions across the country. Reeves told the Commons, "the world has changed" since her first budget less than five months ago, and this shift was behind the series of spending cuts announced. Here, we highlight some of the winners and losers of the Spring Statement
Losers from the statement
People with health conditions and disabilities
"We believe that if you can work, you should work but if you can’t work, you should be properly supported. This government inherited a broken system. More than 1,000 people are qualifying for Personal Independence Payments. And 1 in 8 young people are not in employment, education or training. If we do nothing, we are writing off an entire generation. That cannot be right, and we will not stand it."
"Today, the OBR have said that they estimate the package will save £4.8bn in the welfare budget reflecting their judgements on behavioural effects and wider factors."
"This also reflects final adjustments to the overall package consistent with the Secretary of State’s statement last week and the government’s Pathways to Work Green Paper."
Universal Credit claimants
"The Universal Credit Standard Allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30 while the Universal Credit Health element will be cut for new claimants by 50% and then frozen. On top of this, we are investing £1bn to provide guaranteed, personalised employment support to help people back into work and £400m to support the Department for Work and Pensions and our Job Centres to deliver these changes effectively and fairly taking total savings after that for the package to £3.4bn."
Carers
Tighter PIP rules introduced by the DWP could result in over 150,000 people losing their Carer’s Allowance, a benefit of £81.90 per week for those providing substantial unpaid care. Eligibility for Carer’s Allowance is linked to PIP, which assesses the needs of the person receiving care.
The DWP stated: "By 2029/30, an estimated 800,000 people who would have qualified under current rules will no longer receive the daily living component of PIP. A significant proportion will still receive the mobility component and remain on the benefit. Additionally, 150,000 people will lose entitlement to Carer’s Allowance or the Universal Credit carer element."
Civil servants
On departmental budgets, which set government spending limits until 2030, Reeves said she aims to make the state "leaner and more agile." This includes improving productivity within the civil service and government bodies, building on the plan to abolish NHS England as an arm's-length body.
The Chancellor said Cabinet Office minister Pat McFadden would "significantly reduce the costs" of government by 15%, saving £2 billion by the end of the decade. Cuts to departmental budgets are likely to impact civil service jobs, though no formal target has been set. However, Reeves has previously suggested that 10,000 jobs could be at risk.
Current homeowners
The Treasury has been warned by the OBR that in July 2025, inflation is now expected to peak at 3.8%, which is higher than previously forecast
This warning comes despite inflation easing to 2.8% in the 12 months to February, with the Bank of England unlikely to reach its 2% target until next year.
These forecasts could lead the Bank of England's Monetary Policy Committee (MPC) to delay interest rate cuts, meaning mortgage rates may remain high for longer.
More taxpayers will face stricter late payment penalties under new rules announced alongside Chancellor Rachel Reeves' Spring Statement. From April 2025, VAT and income tax self-assessment taxpayers joining the "Making Tax Digital" (MTD) scheme will see increased charges for overdue payments.
The MTD scheme requires individuals and businesses to maintain digital records and submit updates every four months. Late filings will result in penalties from HMRC, including an initial charge followed by an annualised penalty rate.
Currently, taxpayers avoid penalties if they pay within 15 days of the due date. After that, they are charged 2% of the outstanding tax, rising to 4% if still unpaid after 30 days. From April 2025, those under MTD will face a higher 3% charge at 15 days, increasing to 6% by day 30. The annualised penalty rate will also more than double, from 4% to 10%. The government says the changes are intended to "encourage taxpayers to pay on time."
Self-assessment tax payers
More taxpayers will face tougher late payment penalties under new rules announced alongside Chancellor Rachel Reeves' Spring Statement. From April 2025, VAT and income tax self-assessment taxpayers joining the "Making Tax Digital" (MTD) scheme will see increased charges for overdue payments.
The MTD scheme requires individuals and businesses to maintain digital records and submit updates every four months. Late filings will result in penalties from HMRC, including an initial charge followed by an annualised penalty rate.
Currently, taxpayers avoid penalties if they pay within 15 days of the due date. After that, they are charged 2% of the outstanding tax, rising to 4% if still unpaid after 30 days. Under the new rules, those in the MTD scheme will face a higher 3% charge at 15 days, increasing to 6% by day 30. Additionally, the annualised penalty rate will more than double from 4% to 10%. The government says the changes aim to "encourage taxpayers to pay on time."
Tax fraudsters
The Chancellor announced that the government will intensify efforts to combat tax evasion. The Treasury outlined plans to increase the number of tax fraudsters charged annually by 20%, raising the number of charging decisions from 500 to 600. Reeves stated that the government would continue investing in "cutting-edge technology" for HMRC to support this initiative. The move is expected to generate a total of £7.5 billion in additional revenue by reducing tax evasion
Benefiting from the statement
Low-income parents
Rachel Reeves confirmed that the government will not be scrapping free school meals for young children. Currently, all children in reception, Year 1, and Year 2 are entitled to free meals. She also highlighted that Labour's new breakfast clubs are already being rolled out across England.
Homebuyers
The chancellor promised thousands of new social and affordable homes will be built with a £2billion grant. The Chancellor confirmed that 18,000 new homes would be built, describing it as the "biggest boost to social and affordable housebuilding in a generation".
However, she accepted that Labour is likely to miss its manifesto pledge to build 1.5 million homes by the next general election. Reeves said the government will oversee 1.3 million new homes being built in the next five years, “within touching distance” of the election pledge. The OBR said the boost means there will be 305,000 homes a year by the end of the decade.
Construction workers
In an effort to boost economic growth, the chancellor announced a £600 million investment to train up to 60,000 bricklayers, electricians, engineers, and carpenters over the next four years. The initiative aims to help fill 35,000 job vacancies in the construction sector.
Smokers and drinkers
In the documents published alongside the announcement, it was confirmed the price of alcohol and cigarettes will not be going up as there are no changes to the duties charged to them. Alcohol duty is a type of tax that manufacturers pay when making products. The tax varies in cost depending on the alcohol content of the drinks.
Tobacco duty is a tax charged to companies making or importing cigarettes in the UK. When these duties are raised, the cost is filtered down onto consumers.
