Rachel Reeves will keep her remarks short when she delivers the spring statement on Wednesday.
But the enormity of what she is saying will be lost on no one as the chancellor sets out the grim reality of the country’s finances.
Her economic update to the House of Commons will reveal a deteriorating economic outlook and rising borrowing costs, which has forced her to find spending cuts, which she’s left others to carry the can for (more on that in a bit).
The independent Office of Budget Responsibility (OBR) is expected to forecast that growth for 2025 has halved from 2% to 1%.
That, combined with rising debt repayment costs on government borrowing, has left the chancellor with a black hole in the public finances against the forecasts published at the budget in October.
Back then, Reeves had a £9.9bn cushion against her “iron-clad” fiscal rule that day-to-day spending must be funded through tax receipts not debt by 2029-30.
More on Rachel Reeves
Related Topics:
But that surplus has been wiped out in the ensuing six months – now she finds herself about £4bn in the red, according to those familiar with the forecasts.
That’s really uncomfortable for a chancellor who just months ago executed the biggest tax and spend budget in a generation with the promise that she would get the economy growing again.
At the first progress check, she looks to be failing and has been forced into finding spending cuts to make up the shortfall after ruling out her other two options – further tax rises or more borrowing via a loosening of her self-imposed fiscal rules.
Please use Chrome browser for a more accessible video player
7:26
What to expect in the spring statement
‘World has changed’
When Reeves gets up on Wednesday, she will put it differently, saying the “world has changed” and all that means is the government must move “further and faster” to deliver the reforms that will drive growth.
But her opponents will be quick to lay economic woes at her door, arguing that the unexpected £25bn tax hike on employers’ national insurance contributions last October have choked off growth.
But it’s not just opposition from the Conservative benches that the chancellor is facing – it is opposition from within as she sets about cutting government spending to the tune of £15bn to fill that black hole.
Politically, her allies know how awkward it would have been for the chancellor to announce £5bn in welfare cuts to avoid breaking her own fiscal rules, with one acknowledging that those cuts had to be kept separate from the spring statement.
There’s also expected to be more than £5bn of extra cuts from public spending in the forecast period, which could see departments that don’t have protected budgets – education, justice, home – face real-term spending cuts by the end of the decade.
Image: Pic: PA
Not an emergency budget
We won’t see the detail of that until the Spending Review in June.
This is not an emergency budget because the chancellor isn’t embarking on a round of tax raising to fix the public finances.
But these are, however they are framed, emergency spending cuts designed to plug her black hole and that is politically difficult for a government that has promised no return to austerity if some parts of the public sector face deep cuts to stick with fiscal rules.
If that’s the macro picture, what about the “everyday economics” of peoples’ lives?
I’d point out two things here. On Wednesday, we will get to see where those £5bn of welfare cuts will fall as the government publishes the impact assessment that it held back last week.
Up to a million people could be affected by cuts, and the reality of who will be hit will pile on the pressure for Labour MPs already uncomfortable with cuts to health and disability benefits.
Please use Chrome browser for a more accessible video player
3:06
Benefits cuts explained
The second point is whether the government remains on course to deliver its key pledge to “put more money in the pockets of working people” during this parliament after the Joseph Rowntree Foundation think-tank produced analysis over the weekend saying living standards for all UK families are set to fall by 2030.
But that doesn’t mean that the forecasts published on Wednesday calculating real household disposable income per head won’t make for grim reading as the economic outlook deteriorates.
Nervousness in Labour
Ask around the party, and there is obvious nervousness about how this might land, with a degree of anxiety about the economic outlook and what that has in store for departmental budgets.
But there is recognition too from many MPs that the government has political space afforded by that whopping majority, to make these decisions on spending cuts without too much fallout – for now.
Because while Wednesday will be bad, worse could be yet to come.
Staring down the barrel
The chancellor is staring down the barrel of a possible global trade war that will only serve to create more economic uncertainty, even if the UK is spared from the worst tariffs by President Donald Trump.
The national insurance hike is also set to kick in next month, with employers across the piece sounding the warnings around investment, jobs and growth.
Six months ago, Reeves said she wouldn’t be coming back for more after she announced £40bn in tax rises in that massive first budget.
Six months on she is coming back for more, this time in the form of spending cuts. And in six months’ time, she may well have to come back for more in the form of tax rises or deeper cuts.
The spring statement was meant to be a run-of-the-mill economic update, but it has morphed into much more.
The chancellor now has to make the hard sell from a very hard place, that could soon become even tougher still.
On Friday, the social fabric of England and Wales might be changed forever.
MPs are set to vote on the assisted dying bill and supporters are confident that they have the numbers to win.
But the hugely controversial legislation polarises opinion. Communities remain divided, and medical colleagues can’t agree.
Three royal colleges have withdrawn support for the bill in its current form. They want more time to be given for further scrutiny of the legislation.
Please use Chrome browser for a more accessible video player
1:12
How will the assisted dying bill work?
Frank Sutton does not have time. When we went to Frank’s home in East Dulwich, London, last November to watch the vote unfold she already had terminal liver disease and cancer.
As the vote was passed with a majority of 55, Frank broke down in tears and said: “Finally, I can die in peace.”
Frank is unlikely to live long enough to see assisted dying introduced in England and Wales. If the legislation passes, it will be introduced in four years.
More on Assisted Dying
Related Topics:
Frank now suffers from diabetes and fibromyalgia.
She said: “On top of everything I’ve got, to start developing more comorbidities, I have a massive thought in my head, which I live with every day, which is, is my body, am I on the road to the end, you know, is my body just giving up?
“I mean, I was taking morphine anyway for pain, but now I’m living on morphine, and that’s not a life that you want.”
But even as MPs prepare to vote, many important questions remain over who will take responsibility for determining a patient’s mental capacity and their prognosis. The Royal College of Psychiatrists said it was approaching Friday “with trepidation”.
Image: Dr Annabel Price, the Royal College of Psychiatrists’ lead on assisted dying
Dr Annabel Price, the RCPsych’s lead on assisted dying, told Sky News: “If this bill as it stands proceeds through the rest of the parliamentary process, we as psychiatrists are left in a situation where there are so many unknowns about what is expected of us, about what patients can expect and about the safety of the process.
“We will continue to engage and there may be opportunities for reconsideration at further points in the bill. But yes, I approach this professionally with trepidation.”
The Royal College of GPs says the assisted dying process should happen outside of general practice.
Dr Susi Caesar is in favour of the bill being passed and feels it is okay for the medical community to be so divided on the issue.
She said: “I think people have the right to make their own choices and absolutely I would not want to see anybody forced into being part of this process who didn’t. Our current system is broken and this law would go a long way towards fixing it, at least for a certain group of people.”
Please use Chrome browser for a more accessible video player
1:43
Psychiatrists raise assisted dying concerns
But the Royal Colleges of Physicians (RCP) also has reservations about the bill in its current form.
It says it would be hard for a panel of experts who have no connection to a patient requesting an assisted death to determine if the person is being coerced or has mental capacity.
Dr John Dean, clinical vice president at the RCP has concerns, saying: “Currently decisions clearly are made by patients but agreed by single doctors and then the social worker and psychiatrists are not meeting the patient and those that have been caring for them.
“This has to be done in keeping with modern clinical practice which is complex decisions made with patients and families by teams.”
But for patients like Frank, these concerns have not changed her mind.
She said: “I’m praying for Friday that it still goes through because, like I said, it’s not going to happen in my lifetime, but the thought that people like me who still try to look nice, who still tried to have a life and everything, that they can just have some peace of mind and they can have a weight lifted off their shoulders knowing that they’re going to be able to do it peacefully with their family.”
A damning report into the faulty Post Office IT system that proceeded Horizon has been unearthed after nearly 30 years – and it could help overturn criminal convictions.
The document, known about by the Post Office in 1998, is described as “hugely significant” and a “fundamental piece of evidence” and was found in a garage by a retired computer expert.
Capture was a piece of accounting software, likely to have caused errors, used in more than 2,000 branches between 1992 and 1999.
It came before the infamous faulty Horizon software scandal, which saw hundreds of sub postmasters wrongfully convicted between 1999 and 2015.
Please use Chrome browser for a more accessible video player
1:49
What is the Capture scandal?
The ‘lost long’ Capture documents were discovered in a garage by a retired computer expert who came forward after a Sky News report into the case of Patricia Owen, a convicted sub postmistress who used the software.
Adrian Montagu was supposed to be a key witness for Pat’s defence at her trial in 1998 but her family always believed he had never turned up, despite his computer “just sitting there” in court.
Mr Montagu, however, insists he did attend.
He describes being in the courtroom and adds that “at some point into the trial” he was stood down by the barrister for Mrs Owen with “no reason” given.
Image: Adrian Montagu was supposed to be a key witness for Pat’s defence
Sky News has seen contemporaneous notes proving Mr Montagu did go to Canterbury Crown Court for the first one or two days of the trial in June 1998.
“I went to the court and I set up a computer with a big old screen,” he says.
“I remember being there, I remember the judge introducing everybody very properly…but the barrister in question for the defence, he went along and said ‘I am not going to need you so you don’t need to be here any more’.
“I wasn’t asked back.”
Image: The ‘lost long’ Capture documents were discovered in a garage
Sky News has reached out to the barrister in Pat Owen’s case who said he had no recollection of it.
‘An accident waiting to happen’
The report, commissioned by the defence and written by Adrian Montagu and his colleague, describes Capture as “an accident waiting to happen”, and “totally discredited”.
It concludes that “reasonable doubt exists as to whether any criminal offence has taken place”.
It also states that the software “is quite capable of producing absurd gibberish”, and describes “several insidious faults…which would not be necessarily apparent to the user”.
All of which produced “arithmetical or accounting errors”.
Sky News has also seen documents suggesting the jury in Pat Owen’s case may never have seen the report.
What is clear is that they did not hear evidence from its author including his planned “demonstration” of how Capture could produce accounting errors.
Image: But flaws were found within it
Pat Owen was convicted of stealing from her Post Office branch in 1998 and given a suspended prison sentence.
Her family describe how it “wrecked” her life, contributing towards her ill health, and she died in 2003 before the wider Post Office scandal came to light.
Her daughter Juliet said her mother fought with “everything she could”.
“To know that in the background there was Adrian with this (report) that would have changed everything, not just for mum but for every Capture victim after that, I think is shocking and really upsetting – really, really upsetting.”
Image: Pat died before the contents of the report came to light
The report itself was served on the Post Office lawyers – who continued to prosecute sub postmasters in the months and years after Pat Owen’s trial.
‘My blood is boiling’
Please use Chrome browser for a more accessible video player
3:09
‘They knew software was faulty’
Steve Marston, who used the Capture software in his branch, was one of them – he was convicted of stealing nearly £80,000 in September 1998.
His prosecution took place four months after the Capture report had been served on the Post Office.
Steve says he was persuaded to plead guilty with the “threat of jail” hanging over him and received a suspended sentence.
He describes the discovery of the report as “incredible” and says his “blood is boiling” and he feels “betrayed”.
“So they knew that the software was faulty?,” he says. “It’s in black and white isn’t it? And yet they still pressed on doing what they did.
“They used Capture evidence … as the evidence to get me to plead guilty to avoid jail.
“They kept telling us it was safe…They knew the software should never have been used in 1998, didn’t they?”
Steve says his family’s lives were destroyed and the knowledge of this report could have “changed everything”.
He says he would have fought the case “instead of giving in”.
“How dare they. And no doubt I certainly wasn’t the last one…And yet they knew they were convicting people with faulty software, faulty computers.”
Image: Steve’s prosecution took place four months after the Capture report had been served on the Post Office
The report is now with the Criminal Cases Review Commission, the body investigating potential miscarriages of justice, which is currently looking into 28 Capture cases.
A fundamental piece of evidence
Neil Hudgell, the lawyer representing more than 100 victims, describes the report as “hugely significant”, “seismic” and a “fundamental piece of evidence”.
“I’m as confident as I can be that this is a good day for families like Steve Marston and Mrs Owen’s family,” he says.
“I think (the documents) could be very pivotal in delivering the exoneration that they very badly deserve.”
He also added that “there’s absolutely no doubt” that the “entire contents” of the “damning” report “was under the noses of the Post Office at a very early stage”.
Image: Pat Owen
He describes it as a “massive missed opportunity” and “early red flag” for the Post Office which went on to prosecute hundreds who used Horizon in the years that followed.
“It is a continuation of a theme that obviously has rolled out over the subsequent 20 plus years in relation to Horizon,” he says.
“…if this had seen the light of day in its proper sense, and poor Mrs Owen had not been convicted, the domino effect of what followed may not have happened.”
What the Post Office said
Sky News approached the former Chief Executive of the Post Office during the Capture years, John Roberts, who said: “I can’t recall any discussion at my level, or that of the board, about Capture at any time while I was CEO.”
A statement from the Post Office said: “We have been very concerned about the reported problems relating to the use of the Capture software and are sincerely sorry for past failings that have caused suffering to postmasters.
“We are determined that past wrongs are put right and are continuing to support the government’s work and fully co-operating with the Criminal Cases Review Commission as it investigates several cases which may be Capture related.”
A Department for Business and Trade spokesperson said: “Postmasters including Patricia Owen endured immeasurable suffering, and we continue to listen to those who have been sharing their stories on the Capture system.
“Government officials met with postmasters recently as part of our commitment to develop an effective and fair redress process for those affected by Capture, and we will continue to keep them updated.”
Around 30,000 deaths will be linked to toxic air in the UK in 2025, according to a report from leading doctors, as they urged the government to “recognise air pollution as a key public health issue”.
The Royal College of Physicians (RCP) warned that around 99% of the population in the UK are breathing “toxic air”.
The report says there is “no safe level” of air pollutants while noting how exposure to air pollution can shorten life by 1.8 years on average.
That is “just behind some of the leading causes of death and disease worldwide”, including cancer and smoking, the authors wrote.
The college has called on the government to take action to tackle the issue, as it urged ministers to “recognise air pollution as a key public health issue”.
In the forward of the report, England’s chief medical officer, Professor Sir Chris Whitty, said: “Air pollution remains the most important environmental threat to health, with impacts throughout the life course.
“It is an area of health where the UK has made substantial progress in the last three decades with concentrations of many of the main pollutants falling rapidly, but it remains a major cause of chronic ill health as well as premature mortality.
More on Air Pollution
Related Topics:
“Further progress in outdoor air pollution will occur if we decide to make it, but will not happen without practical and achievable changes to heating, transport and industry in particular.
“Air pollution affects everybody, and is everybody’s business.”
The report also highlights the economic impact of air pollution as it has an estimated cost of £27bn a year in healthcare costs and productivity losses.
Dr Mumtaz Patel, president of the RCP, said: “Air pollution can no longer be seen as just an environmental issue – it’s a public health crisis.
“We are losing tens of thousands of lives every year to something that is mostly preventable and the financial cost is a price we simply cannot afford to keep paying.
“We wouldn’t accept 30,000 preventable deaths from any other cause. We need to treat clean air with the same seriousness we treat clean water or safe food. It is a basic human right – and a vital investment in our economic future.”