UK households are set to be £500 a year better off, Chancellor Rachel Reeves claimed in her spring statement today. The Chancellor announced cuts to some benefits and increases to others in her statement today, including an increase of the Universal Credit Standard Allowance and the reduction of the Universal Credit Health Element by 50%. She also announced an increase to the National Living Wage, as expected, but did not make any changes to pensions or Cash ISAs.
Reeves says the OBR now expects people to be £500 per year better off at the end of the decade than under previous forecasts. She claimed that, compared to what was being forecast at the time of the last Budget delivered under the Tories, people will be £500 a year better off on average, taking into account inflation.
She said that the OBR has upgraded its growth forecast “next year and every single year thereafter”, adding: “With GDP growth of 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.
“By the end of the forecast our economy is larger compared to the OBR’s forecast at the time of the Budget.”
She continued: “Compared to the forecast in the final Budget delivered by the party opposite, and after taking account of inflation, the OBR say today that people will be on average over £500 a year better off under this Labour Government.”
Conservative shadow chancellor Mel Stride has accused Labour leaders of having “reneged on their promises to the British people” during last year’s general election.
He told the Commons: “Given her track record, given the fact that she has failed to control spending and borrowing to date, what does she think the markets are going to make of her latest promises?
“But (Chancellor Rachel Reeves) says of course that none of this – none of this – is her fault, that it’s the war in Ukraine, it is (US) President (Donald) Trump, it is tariffs, it is (Russian) president (Vladimir) Putin, it is the Conservatives, it is (the) legacy, it is anybody but her.
“But what the British people know is that this is a consequence of her choices. She is the architect of her own misfortune: it was (Ms Reeves) who talked down the economy, who talked down the economy so that business surveys and confidence crashed through the floor.
“It was (Reeves) who confected the £22 billion black hole, a smokescreen that was only ever there in order to cover up for the fact that she and the Prime Minister (Sir Keir Starmer) reneged on their promises to the British people during the last general election.”
