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Rachel Reeves will unveil further welfare cuts in her spring statement after being told the reforms announced last week will save less than planned, Sky News understands.

The Office for Budget Responsibility (OBR) has rejected the government’s assessment that the package of measures, including narrowing the eligibility criteria for personal independence payments (PIP), will save £5bn.

Politics latest: Ex-Labour leader says Starmer ‘an enormous disappointment’

The fiscal watchdog put the value of the cuts at £3.4bn, leaving ministers scrambling to find further savings.

Ms Reeves is now expected to announce that universal credit (UC) incapacity benefits for new claimants, which were halved under the original plan, will also be frozen until 2030 rather than rising in line with inflation

As originally reported by The Times, there will also be a small reduction in the basic rate of UC in 2029, with the new measures expected to raise £500m.

A Whitehall source told Sky’s political editor Beth Rigby that it is “hard to tell how MPs will react”, as while the OBR’s assessment means fewer people will be affected by the PIP changes than thought, they “might be unhappy about the chaotic nature of it all”.

More on Spring Statement

The government did not publish an impact assessment of the crackdown on benefits it announced last week, saying that would come alongside the spring statement on Wednesday.

Several Labour MPs criticised the measures as pushing more sick and disabled people into poverty, while former Labour leader Jeremy Corbyn called the package a “disgrace” on Tuesday and accused the government of imposing austerity on the country.

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‘Labour MPs are upset’

Spending cuts expected

Ms Reeves is expected to announce a large package of departmental spending cuts when she gives an update on the economy on Wednesday, potentially putting her on a further collision course with her own MPs.

Having only committed to doing one proper budget each year in the autumn, the spring statement was meant to be a low-key affair.

However, a turbulent economic climate since October means the OBR is widely expected to downgrade its growth forecasts for the UK while the government has borrowed more than previously expected.

This has wiped out the £9.9bn gap in her fiscal headroom Ms Reeves left herself at her budget last year – money she needs to make up if she wants to stick to her self-imposed fiscal rule that day-to-day spending must be funded through tax receipts, not debt, by 2029-30.

Chancellor of the Exchequer Rachel Reeves during a visit to Bury College in Greater Manchester. Picture date: Thursday March 20, 2025. Anthony Devlin/PA Wire
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Chancellor Rachel Reeves. Pic: PA

The chancellor has sought to blame global factors but the Conservatives blame measures like the national insurance tax hike on employers, saying this is choking business.

Shadow chancellor Mel Stride urged Ms Reeves to “use the emergency budget” to “fix her own mistakes and end Labour’s war on enterprise”.

Ms Reeves will defend her record in the spring statement, saying she is “proud” of what Labour has achieved in its first nine months in office.

However, on the eve of the statement, polling showed the public is pessimistic about what is to come.

According to More in Common, half think the cost of living crisis will never end, while YouGov found three-quarters of people want to see a tax on the richest over spending cuts.

Ms Reeves is not expected to announce any tax hikes, having said her tax-raising budget in October was a once-in-a-parliament event.

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Expect different focus from Reeves at spring statement

Defence increase to ‘deliver security’

In a bid to fend off criticism, she will also announce an extra £2.2bn will be spent on defence over the next year to “deliver security for working people”.

The money is part of the government’s aim to hike defence spending to 2.5% of the UK’s economic output by 2027 – up from the 2.3% where it stands now.

Ms Reeves will insist this plan, set out by the prime minister in February, was the “right decision” against the backdrop of global instability, saying it will put “an extra 6.4bn into the defence budget by 2027”.

“This increase in investment is not just about increasing our national security but increasing our economic security, too,” she will say.

The money is coming from reductions to the international aid budget and Treasury reserves, and will be used to invest in new technology, refurbish homes for military families and upgrade HM Naval Base Portsmouth.

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Wrongly-released migrant sex offender Hadush Kebatu claims he was ‘ignored’ by police while trying to hand himself in

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Wrongly-released migrant sex offender Hadush Kebatu claims he was 'ignored' by police while trying to hand himself in

Migrant sex offender Hadush Kebatu, who was wrongly freed from prison, has claimed in an interview with Sky News that he tried to hand himself in to police a day before he was arrested, but was ignored by officers.

The Home Office said Kebatu, 38, was deported from the UK on Tuesday night.

Speaking to Sky News after he arrived back in Ethiopia on Wednesday morning, Kebatu shared details of his accidental release from HMP Chelmsford on 24 October and the two-day manhunt that followed.

The convicted sex offender was repeatedly questioned on his crimes, but Sky News has chosen not to broadcast this part of the interview.

‘Ignored’ by police

The morning after he was released from prison, Kebatu claimed he tried to hand himself into police, but was ignored.

He said: “I [told] police, look here, police I am wanted man, I am arrested, I will give you my hand, please help where is police station? He ignored me, he drove [off].”

He added that he told the officer his name and that he was mistakenly released from prison.

“I am not unknown. The police station, where is the place? But also I go to police, I will give you my hand please help me where is the police station, take me, I am wanted.

“You know me, or my image, my name is Hadush Kabatu, nationality Ethiopia. Please, I was the mistake release from Chelmsford prison. Please help me.”

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Moment Hadush Kebatu put on deportation flight

Responding to Kebatu’s claims, the Metropolitan Police told Sky News: “The Met is not aware of any evidence to support the claims that Kebatu approached officers on Saturday morning.

“The actions of officers who responded to the sighting of him on Sunday morning show how seriously they were taking the manhunt. Kebatu’s actions on the morning of his arrest were more like those of someone trying to avoid officers, not trying to hand himself in.”

Release from prison

Kebatu was released by HMP Chelmsford a month into his 12-month sentence on the expectation he would be picked up by immigration enforcement.

He said after he was released he waited more than three hours outside the prison, for what he described as someone who was “responsible” for him.

He said: “At that time I am waiting more than three hours… who [is] responsible for me? Where is Home Office, where is [immigration]?

“I was told there was a bus. Also, all the experts, they all ignored me.”

In another Sky News story, a delivery driver who spoke to Kebatu outside Chelmsford prison said he looked “confused”.

The driver said he was approached by the prisoner, who had no idea where he was supposed to go. He said Kebatu waited outside the prison for roughly “an hour and a half” before leaving.

Kebatu said after he left the prison, he asked a passerby where the train station was. He claimed someone helped him, and bought him a train ticket for £18.

Kebatu then travelled to London. He was spotted later that evening in Stratford, east London, and then the Dalston area of Hackney.

Kebatu's movements the day he was released from prison
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Kebatu’s movements the day he was released from prison

The Ethiopian national arrived in the UK on a small boat on 29 June. Days after his arrival, he sexually assaulted a 14-year-old girl and a woman in Epping, Essex, where he was staying.

He was found guilty of two counts of sexual assault, one count of attempted sexual assault, one count of inciting a girl to engage in sexual activity and one count of harassment without violence.

He was jailed on 23 September.

When approached by Sky News, the Ministry of Justice (MoJ) pointed to a statement made by Justice Secretary David Lammy upon Kebatu’s deportation: “Kebatu has been returned to Ethiopia where he belongs.

“I am grateful to Home Office colleagues for acting swiftly to secure his deportation. I have been clear from the outset that a mistake of this nature is unacceptable, and we must get to the bottom of what happened.

“I have established an independent investigation chaired by Dame Lynne Owens into last Friday’s events to get the public the answers they rightly deserve, and we have introduced the strictest checks ever seen in our prison system to stop similar unacceptable errors in future.”

Essex Police, who arrested Kebatu after the assaults in July, told Sky News: “Our officers responded quickly to the reports of the sexual assaults committed in Epping and arrested Hadush Kebatu on the same day the offences were reported to us.

“Kebatu was then immediately remanded in custody, while officers acted diligently and professionally securing charges and building a case which saw Kebatu convicted following a trial. Protecting women and girls is a priority for Essex Police and our swift and thorough actions highlight our commitment to this.”

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Deported migrant sex offender given £500 to leave country

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Deported migrant sex offender given £500 to leave country

Migrant sex offender Hadush Kebatu was given £500 to be deported to Ethiopia following his mistaken release from prison, Sky News understands.

The government, who confirmed he was escorted on to a plane at Heathrow Airport on Tuesday night, said he has no right to return to the UK.

But Sky News understands Kebatu was handed a discretionary payment of £500 as part of efforts to avoid a lengthy legal challenge after he made threats to disrupt his removal.

Home Secretary Shabana Mahmood said she “pulled every lever” to deport Kebatu, although it is thought the decision about the payment was made by removal teams, not ministers.

“I am pleased to confirm this vile child sex offender has been deported. Our streets are safer because of it,” she said.

Hadush Kebatu seen on the plane during his deportation flight
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Hadush Kebatu seen on the plane during his deportation flight

Kebatu was found and arrested by the Metropolitan Police in the Finsbury Park area of north London at around 8.30am on Sunday following a manhunt.

Last month, he was found guilty of sexually assaulting a schoolgirl and a woman in Epping, Essex, just over a week after arriving in the UK on a small boat.

Hadush Kebatu was arrested on Sunday after his mistaken release
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Hadush Kebatu was arrested on Sunday after his mistaken release

He was expected to be deported, but instead of being handed over to immigration officials, he was released in error from HMP Chelmsford on Friday.

He spent just under 48 hours at large before he was apprehended.

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Prisoner releases: ‘A problem on the rise’

The accidental release sparked widespread alarm and questions over how a man whose crimes sparked protests in Epping over the use of asylum hotels was able to be freed.

Ms Mahmood said: “Last week’s blunder should never have happened – and I share the public’s anger that it did.”

Anti-asylum demonstrators in Epping, Essex. Pic: PA
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Anti-asylum demonstrators in Epping, Essex. Pic: PA

Read more from Sky News:
Military barracks to be used to house asylum seekers
Lammy blames ‘human error’ for release of migrant sex offender

On Sunday, Justice Secretary David Lammy said an exclusive Sky News interview will be used as part of an independent inquiry into the mistaken release.

Speaking to Sky’s national correspondent Tom Parmenter, a delivery driver who spoke to Kebatu at HMP Chelmsford described him as being “confused” as he was being guided to the railway station by prison staff.

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Local council reads family statement: ‘My family feels massively let down’

The migrant is said to have returned to the prison reception four or five times before leaving the area on a train heading to London.

Mr Lammy, who put Kebatu’s release down to human error, said he has ordered an “urgent review” into the checks that take place when an offender is released from prison, and new safeguards have been added that amount to the “strongest release checks that have ever been in place”.

From Monday, new checks include five pages of instructions and demands that more senior prison staff sign off on a release, according to documents obtained by Sky News.

“I have been clear from the outset that a mistake of this nature is unacceptable, and we must get to the bottom of what happened,” said Mr Lammy.

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Academic who sued Steve Coogan over Richard III film says he hasn’t received an apology

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Academic who sued Steve Coogan over Richard III film says he hasn't received an apology

A university academic who is receiving “substantial damages” for how he was portrayed in a film has told Sky News he hasn’t received an apology from star Steve Coogan – nor the two companies involved in its production.

Richard Taylor said he was “shell-shocked” after seeing The Lost King for the first time, a film about how Richard III’s skeleton was discovered below a car park in Leicester.

He told The UK Tonight with Sarah-Jane Mee: “I wasn’t consulted or even knew I was in the film. The first I hear is I get a phone call while I’m on holiday – and eventually, after press previews, I persuade the producers to let me see a preview.”

Richard III
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Richard III

Last year, a judge ruled that Mr Taylor was depicted as “smug, unduly dismissive and patronising” – with the plot suggesting he “knowingly” misled the public.

“I’m portrayed by someone on screen who looks like me, who sounds like me, who dresses like me – but behaves in a way that falls so far short of the standards I set for myself and what others might reasonably expect of me,” the academic explained.

Mr Taylor revealed he received emails at work telling him to “rot in hell”, while others described him as a “disgrace”.

He added: “Something that was a collaborative effort that showcased the best of British universities in my view was turned into this farce – where I was the villain and portrayed in a way that was completely inconsistent with the reality and the truth.”

Now chief operating officer at Loughborough University, Mr Taylor said “none of the facts” in the 2022 film were ever checked – and the Alan Partridge star, his company Baby Cow and Pathe Productions did not reach out to him before its release.

“The producers just went ahead, filmed it, produced it, stuck it out there and left me to deal with all the flack and all the fallout from it. Grossly unfair and I feel vindicated from the result we’ve achieved,” he told Sky News.

Steve Coogan and two production companies have agreed to pay 'substantial damages'. Pic: PA
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Steve Coogan and two production companies have agreed to pay ‘substantial damages’. Pic: PA

‘The film’s going to look pretty silly’

As part of the settlement, an on-screen clarification will now be added to the start of the film, but no scenes will be removed.

When asked whether he was satisfied with this outcome, Mr Taylor replied: “I’d have liked them to re-edit the film, but one’s got to be realistic about what one can achieve.

“The insertion of the card will say that the person on screen is a fictitious portrayal – and the real Richard Taylor didn’t behave like that … so the film’s going to look pretty silly.”

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The statue of Richard III outside Leicester Cathedral. Pic: Shropshire Matt/PA
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The statue of Richard III outside Leicester Cathedral. Pic: Shropshire Matt/PA

The case was due to proceed to trial, but a High Court hearing on Monday heard that the parties had settled the claim.

In a statement afterwards, Coogan had said: “If it wasn’t for Philippa Langley, Richard III would still be lying under a car park in Leicester. It is her name that will be remembered in relation to the discovery of the lost king, long after Richard Taylor has faded into obscurity.”

He went on to add: “That is the story I wanted to tell, and I am happy I did.”

Reacting to the statement, Mr Taylor argued “it’s a pretty strange definition of happy when you’ve had to settle a defamation claim for seven figures in costs”.

He said: “Steve is never anything other than certain in himself and of his own position, but I think he’s got it wrong – basic facts were not checked.”

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