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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).

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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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Beth Rigby asks: ‘Is it time for you to level with people?’

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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Spring statement 2025 key takeaways
After the spring statement we end more or less where we began

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 holds a press conference at the Downing Street Briefing Room.
Pic: PA
Image:
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.

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BBC ‘determined to fight’ any Trump legal action, chairman tells staff

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BBC 'determined to fight' any Trump legal action, chairman tells staff

BBC chair Samir Shah has said there is “no basis for a defamation case and we are determined to fight this” – after Donald Trump said he would sue the corporation for between $1bn and $5bn.

It comes after the US president confirmed on Saturday he would be taking legal action against the broadcaster over the editing of his speech on Panorama – despite an apology from the BBC.

Samir Shah said the BBC's position 'has not changed'. Pic: Reuters
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Samir Shah said the BBC’s position ‘has not changed’. Pic: Reuters

In an email to staff, Mr Shah said: “There is a lot being written, said and speculated upon about the possibility of legal action, including potential costs or settlements.

“In all this we are, of course, acutely aware of the privilege of our funding and the need to protect our licence fee payers, the British public.

“I want to be very clear with you – our position has not changed. There is no basis for a defamation case and we are determined to fight this.”

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On Saturday, President Trump told reporters legal action would come in the following days.

“We’ll sue them. We’ll sue them for anywhere between a billion (£792m) and five billion dollars (£3.79bn), probably sometime next week,” he said.

“We have to do it, they’ve even admitted that they cheated. Not that they couldn’t have not done that. They cheated. They changed the words coming out of my mouth.”

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The BBC on Thursday said the edit of Mr Trump’s speech on 6 January 2021 had given the “mistaken impression that President Trump had made a direct call for violent action”.

The broadcaster apologised and said the splicing of the speech was an “error of judgment” but refused to pay financial compensation after the US leader’s lawyers threatened to sue for one billion dollars in damages unless a retraction and apology were published.

Deborah Turness. Pic: Reuters
Image:
Deborah Turness. Pic: Reuters

Tim Davie. Pic: PA
Image:
Tim Davie. Pic: PA

The Panorama scandal prompted the resignations of two of the BBC’s most senior executives – director-general Tim Davie and news chief Deborah Turness.

The broadcaster has said it will not air the Panorama episode Trump: A Second Chance? again, and published a retraction on the show’s webpage on Thursday.

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Joseph James O’Connor ordered to pay back over £4m in Bitcoin after hacking celebrity X accounts

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Joseph James O'Connor ordered to pay back over £4m in Bitcoin after hacking celebrity X accounts

A British man who hacked the X accounts of celebrities in a bid to con people out of Bitcoin, has been ordered to repay £4.1m-worth of the cryptocurrency, prosecutors say.

Joseph James O’Connor, 26, was jailed in the United States for five years in 2023 after he pleaded guilty to charges including computer intrusion, wire fraud and extortion.

He was arrested in Spain in 2021 and extradited after the country’s high court ruled the US was best placed to prosecute because the evidence and victims were there.

The Crown Prosecution Service (CPS) said on Monday it had obtained a civil recovery order to seize 42 Bitcoin and other crypto assets linked to the scam, in which O’Connor used hijacked accounts to solicit digital currency and threaten celebrities.

The July 2020 hack compromised accounts of high-profile figures including former US presidents Barack Obama and Joe Biden, and Amazon founder Jeff Bezos.

O’Connor and his co-conspirators stole more than $794,000 (£629,000) of cryptocurrency after using the hacked accounts to ask people to send $1,000 in Bitcoin to receive double back.

Prosecutor Adrian Foster said the civil recovery order showed that “even when someone is not convicted in the UK, we are still able to ensure they do not benefit from their criminality”.

The order, which valued O’Connor’s assets at around £4.1m, was made last week, following a freeze placed on the hacker’s property, which prosecutors secured during extradition proceedings.

Barack Obama was one of the famous people to have their Twitter account hacked
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Barack Obama was one of the famous people to have their Twitter account hacked

Elon Musk was among those targeted by scammers in a Twitter hack
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Elon Musk was among those targeted by scammers in a Twitter hack

Read more on Sky News:
‘Wealth goddess’ jailed over Bitcoin billions
Arrests over alleged crypto scam

A court-appointed trustee will liquidate his assets, the CPS said.

The attack also compromised the X (then Twitter) accounts of other high-profile figures including Tesla chief executive Elon Musk, investor Warren Buffett, and media personality and businesswoman Kim Kardashian.

The hack prompted the social media platform to temporarily freeze some accounts.

X said 130 accounts were targeted, with 45 used to send tweets.

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Inside the town where 6 out of 7 children grow up in poverty – and live in fear of homelessness

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Inside the town where 6 out of 7 children grow up in poverty - and live in fear of homelessness

The cobbled streets of Newport in Middlesbrough survive from the Victorian era.

The staggering levels of child poverty here also feel like they belong in a different time.

Six out of every seven children in Newport are classified as living in poverty.

Six out of every seven children in Newport are classified as living in poverty
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Six out of every seven children in Newport are classified as living in poverty

The measure is defined by the Child Poverty Action Group as a household with an income less than 60% of the national average.

More than half of children across the whole of the constituency of Middlesbrough and Thornaby East are growing up in poverty.

As a long-awaited new strategy on child poverty is expected from the government, much of the focus on tackling the problem has been placed on lifting the two-child cap on benefits for families.

Researchers say there is direct link between areas with the highest rates of child poverty and those with the highest proportion of children affected by that two-child cap.

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The two-child benefit cap means Gemma Grafton and Lee Stevenson receive no additional universal credit for three-month-old Ivie
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The two-child benefit cap means Gemma Grafton and Lee Stevenson receive no additional universal credit for three-month-old Ivie

Mother-of-three Gemma Grafton said: “Maybe if families do have more than two children, give them that little bit of extra help because it would make a difference.”

Three months ago, she and partner Lee welcomed baby Ivie into the world. With two daughters already, the cap means they receive no additional universal credit.

“You don’t seem to have enough money some months to cover the basics,” said Lee.

“Having to tell the kids to take it easy, that’s not nice, when they’re just wanting to help themselves to get what they want and we’ve got to say ‘Try and calm down on what you’re eating’ because we haven’t got the money to go and get shopping in,” added Gemma.

Katrina Morley, of Dormanstown Primary Academy, says lack of sleep affects concentration
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Katrina Morley, of Dormanstown Primary Academy, says lack of sleep affects concentration

Tracey Godfrey-Harrison says parents 'are crying that they're failing'
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Tracey Godfrey-Harrison says parents ‘are crying that they’re failing’

The couple had to resort to paying half of the rent one month, something they say is stressful and puts their home at risk.

Those who work in the area of child poverty say they are engaged in a battle with child exploitation gangs who will happily step in and offer children a lucrative life of crime.

“Parents are crying that they’re failing because they can’t provide for their children,” said Tracey Godfrey-Harrison, project manager at the Middlesbrough Food Bank.

“In today’s society, it’s disgraceful that anyone should have to cry because they don’t have enough.”

In the shadow of a former steelworks, Dormanstown Primary Academy serves pupils in a community hit hard by the economic collapse that followed.

The school works with charities and businesses to increase opportunities for pupils now and in the future.

Katrina Morley, the academy’s chief executive, said: “A child who hasn’t been able to sleep properly can’t concentrate. They’re tired. We know that the brain doesn’t work in the same way. A child who is hungry can’t access the whole of life.

“When you face hardship, it affects not just your physiology but your emotional sense, your brain development, your sense of worth. They don’t get today back and their tomorrow is our tomorrow.”

Dormanstown Primary Academy serves pupils in a community hit hard by the closure of a steel plant
Image:
Dormanstown Primary Academy serves pupils in a community hit hard by the closure of a steel plant

Barney's Baby Bank founder Debbie Smith says local people 'are struggling with food'
Image:
Barney’s Baby Bank founder Debbie Smith says local people ‘are struggling with food’


The school’s year six pupils see the value of things like the on-site farm shop for families in need.

They are open about their own worries, too.

Bonnie, 10, said: “I think that’s very important because it ensures all the people in our community have options if they’re struggling.

“It can be life-changing for families in poverty or who have a disadvantage in life because they don’t have enough money and they’re really struggling to get their necessities.”

Mark, also 10, said: “I worry about if we have nowhere to live and if we haven’t got enough money to pay for our home. But at least we have our family.”

They also see the homelessness in the area as the impact of poverty. “I think it actually happens more often than most people think,” said Leo, “because near the town, there’s people on the streets and they have nowhere to go.”

The school is one of many calling for the lifting of the two-child cap.

The need for life’s essentials has prompted more than 50 families to register for help at Barney’s Baby Bank in the last 11 months. Nappies, wipes, clothing, shoes, toys, are a lifeline for those who call in.

Founder Debbie Smith said local people “are struggling with food. They’re obviously struggling to clothe their babies as well. It’s low wages, high unemployment, job insecurity and that two-child benefit cap”.

“Middlesbrough does feel ignored,” she added.

A government spokesperson said: “Every child, no matter their background, deserves the best start in life. That’s why our Child Poverty Taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty.

“We are investing £500m in children’s development through the rollout of Best Start Family Hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1bn crisis support package.”

Read more on Sky News:
Progress ‘being made’ on poverty
Warning over ‘great poverty distraction’

But what is the message to those making the decisions from the North East?

“Come and do my job for a week and see the need and the desperation the people are in,” said Ms Godfrey-Harrison. “There needs to be more done for people in Middlesbrough.”

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