Chancellor’s difficult decisions in spring statement could just be the start
It might not have been a budget, but the spring statement felt like one.
There was red pen all over the chancellor’s economic plans as Rachel Reeves sought to repair deteriorating public finances by cuts that will hit the poorest in society.
Faced with a deteriorating economic outlook and rising debt repayment costs, the chancellor was in a tight spot having made her big call back in October when she executed a – her words – “once in a generation” £70bn tax and spend budget to improve public services and drive economic growth.
Five months in, the budget is not living up to what was billed.
She confirmed on Wednesday that the £9.9bn surplus forecast in 2029/30 had been wiped out, leaving the public finances in the red.
Cue a £14bn repair job to restore her fiscal cushion as Reeves told the House of Commons her fiscal rule to fund day-to-day government spending from tax receipts not borrowing by the end of the decade was “non-negotiable”.
No more borrowing and no more tax hikes (for now).
The chancellor instead announced billions of spending cuts to make her sums add up and the cuts were hard to stomach for the Labour movement as they watched a Labour chancellor cut the welfare bill by £4.8bn.
The government’s own assessments estimate that 3.2m families on universal credit will be on average £1,720 worse off a year by 2029/30 while 250,000 adults and 50,000 more children are set to be pushed into relative poverty, according to the government’s own impact assessment.
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I don’t need to tell you how uncomfortable this is for many Labour MPs and the clamour against cuts was plain to see, not only in the Commons as MPs stood up to rail against “cruel cuts” and urge the chancellor to think again, but outside Downing Street too as protesters gathered.
For now, MPs, and government insiders, tell me they don’t scent a full-blown rebellion. One seasoned MP told me that while MPs are very concerned about how these cuts will be implemented and reaction from constituents, they also “generally still recognise the tough circumstances” with “no one in doubt Rachel Reeves is serious about turning around public finances”.
Government figures argue they do not think the fall-out from the cuts will be as bad as their own assessment, pointing out that the calculations don’t take into account the rise in national living wage, the government’s poverty plan for around 700,000 vulnerable families and changes to employment support as part of the welfare reform that should help people back into work.
But that does not mean the difficulties are not piling up for this chancellor even if on Wednesday she managed to buy a bit of political space as she repaired her black hole, avoided an emergency budget and could at least point to upgrades to the growth forecasts after 2026.
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There was also a rabbit of sorts – the chancellor looks very happy about this – as she announced that the government’s planning reforms would add nearly £7bn to the economy over the next five years.
This is something to grasp on to for a politician groping around for a bit of good news and something to sell to her MPs: Stick with me the growth plan is going to work.
But what is plain to see is that this is a repair job rather than a fix.
Rachel Reeves. Pic: PA
As the Office of Budget Responsibility itself noted, the £9.9bn headroom Reeves has re-built to stick to her fiscal rules is flimsy and fragile and could easily be wiped out by trade wars, an interest rate shock or market volatility in these deeply uncertain times.
So, the question on everyone’s lips is will she have to come back for more in a few months? When I asked her at this afternoon’s press conference, she said only that the government was, as demonstrated on Wednesday, “determined to live within its means”.
But it’s obvious that further tax rises or spending cuts could soon be on the cards if she remains determined to stick to her fiscal rules and not borrow more.
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What is clear too is that the appetite for further spending cuts from her own party is pretty much exhausted.
Labour MPs were vocal about that in the chamber, demanding taxes on the rich rather than benefits cuts on the poor, while those who are sticking with the chancellor now also know all too well that pressure will build to raise revenue elsewhere.
The chancellor may have managed to navigate a difficult day, but the months ahead look set to become harder still. The difficult decisions now could be just the start.
The grieving mother of a Scottish teenager who vanished for almost five weeks has told Sky News she believes a “third party” was involved in her son’s death – but police say there’s “no evidence” of that.
Cole Cooper, 19, was discovered dead in woods near Falkirk earlier this month following a missing persons inquiry his relatives don’t believe was taken seriously enough by police.
He was last seen on CCTV in May after leaving a house party, but police later revealed a former school friend had spoken to Cole a few days later nearby.
Speaking exclusively to Sky News, his mother Wendy Stewart, 42, revealed her son had “various arguments” in the days and hours before he disappeared.
Cole’s mum Wendy (L) and his aunt Aimee
In an emotional interview, she said: “He was only 19, he should never have been taken. I am never going to see him again. I never got a chance to give him a last cuddle and hold his hand.
“Someone has taken that away from me far too soon. Whether it be intentionally or unintentionally, I do believe there has been some involvement by a third party and the result is the death of Cole.”
The family, who organised a local vigil in Cole’s memory last weekend, have vowed to get “justice”.
Asked what that means, Ms Stewart told Sky News: “Finding the culprit and getting justice that way. Finding the person that is responsible for the death of my child.”
Police previously said 400 residents were spoken to during door-to-door enquiries and more than 2,000 hours of CCTV footage was collected.
The 19-year-old’s death is being treated as “unexplained”, with a top police officer saying “at this time there is no evidence of any third party involvement”.
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A vigil was held in Banknock for Cole Cooper. Pic: PA
Cole’s aunt Aimee Tennie, 32, revealed the family’s anger over the police handling of the case as they attempt to find out what happened.
She said: “We are aware of small details surrounding the weekend leading up to it with arguments. He had a few arguments over that weekend. We want the details re-examined thoroughly.”
Sky News put all of the family’s concerns and allegations to Police Scotland.
The force initially swerved our questions and responded saying: “Enquiries remain ongoing.”
In an update later on Wednesday morning, Detective Chief Inspector Bob Williamson said: “We are carrying out significant enquiries into Cole’s death, however, at this time there is no evidence of any third party involvement.
“It is vital that we establish the full circumstances leading up to Cole’s death so that we can provide some answers to his family.
“The thoughts of everyone involved in this investigation are very much with his family and friends and officers will continue to offer them support and keep them informed as our enquiries progress.”
Ms Stewart claimed the probe has been handled “shockingly” with a failure to take her son’s disappearance seriously.
The 42-year-old said: “I have had to scream and shout from rooftops to be heard by the police. I don’t think they have handled it well.
“The police really need to take accountability and listen to families, they are reporting a missing child and understand the family knows their child best.”
Cole’s loved ones still have not been told when his body will be released to allow them to lay him to rest.
A member of Irish-language rap group Kneecap has appeared in court in London after being charged with a terror offence – as hundreds of protesters gathered outside.
Liam O’Hanna, or Liam Og O hAnnaidh, is accused of displaying a flag in support of Hezbollah, a proscribed organisation in the UK, at a gig last year.
The charge against the 27-year-old, from Belfast, was brought last month after counter-terror officers assessed a video reported to be from a Kneecap concert at the O2 Forum in Kentish Town, London, on 21 November 2024.
O hAnnaidh arrived at Westminster Magistrates’ Court on Wednesday with bandmates Naoise O Caireallain and JJ O Dochartaigh, as a crowd of fans and supporters gathered with placards and flags outside.
O’Hanna (centre) arrived at court with his bandmates, including Naoise O Caireallain (below). Pics: PA
During a short appearance, O hAnnaidh confirmed his name and address, and was released on unconditional bail until his next hearing on 20 August.
Chief Magistrate Paul Goldspring told him he must attend court on that day.
Kneecap released their first single in 2017 and rose to wider prominence in 2024 following the release of their debut album and award-winning eponymous film – a fictionalised retelling of how the band came together and their fight to save the Irish language.
The group are known for their provocative lyrics and merchandise – and have been vocally opposed to Israel’s military action in Gaza.
O hAnnaidh performs under the stage name Mo Chara, while O Caireallain is known as Moglai Bap, and O Dochartaigh as DJ Provai.
Pic: PA
They have built a following for their hedonistic anti-establishment tracks, but their outspoken stance has proved polarising – prompting a surge in streaming for their songs and, at the same time, resulting in several of their gigs being cancelled this year.
Last year, they won a discrimination case against the UK government after Conservative leader Kemi Badenoch tried to refuse them a £14,250 funding award when she was business secretary.
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