Spring Statement: All you could know as Rachel Reeves delivers key replace

Rachel Reeves expected to deliver a no-frills Spring Statement to Parliament on the state of the economy, designed to project stability after the chaos of the Budget in November

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Rachel Reeves will argue her economic plan is paying off for working people as she unveils her Spring Statement today.

The Chancellor is expected to deliver a no-frills update to Parliament on the state of the economy, designed to project stability after the chaos of the Budget in November. Amid spiralling conflict in the Middle East, Ms Reeves will say the Government is building a strong and secure economy in the face of global turbulence.

The Chancellor will also seek to convince her own MPs to hold their nerve after a devastating by-election defeat in Gorton and Denton on Friday, where the Greens seized victory and Labour was relegated to third place.

Speaking in Parliament, Ms Reeves will say: “This Government has the right economic plan for our country…in a world that has become yet more uncertain. Stability in the public finances, investment in infrastructure and reform to our economy.

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“Building growth not on the contribution of a few people or a few parts of the country, but in every part of Britain with a state that doesn’t stand back, but steps up.”

She will add: “Because of the decisions we have already taken, we have a stronger and more secure economy. Inflation and interest rates falling. And in every part of Britain, working people are better off.”

The low-key approach comes after the run-up to the Budget was marred by speculation and confusion. Ms Reeves hinted strongly that she was planning a manifesto-busting hike to income tax in early November but ditched the idea less than two weeks before the Budget. And in extraordinary scenes, the watchdog accidentally published the key measures before the Chancellor stood up to deliver her speech.

Here’s what you need to know.

When is the Spring Statement?

Rachel Reeves will deliver the statement to Parliament at around 12.30pm on Tuesday, March 3. It could be as short as 20 minutes, as she offers her update on the state of the economy. She will appear outside No11 Downing Street but sadly there will be no red box moment, as that only happens at the Budget.

What will be in it?

Ms Reeves will update on the Office for Budget Responsibility’s (OBR) economic and fiscal forecasts – essentially a temperature check on the economy. Estimates on growth, inflation, unemployment, government spending and tax income over the next few years will be published alongside the statement.

However the forecasts won’t take into account any potential impact from the US-Israeli conflict with Iran on oil prices.

Spring statements are usually light on actual policy, however there are exceptions. Last year Ms Reeves tacked on highly controversial benefit cuts to the statement in a bid to balance the books. The plans to slash £4.8billion from health-related benefits by 2029 triggered a political storm and was later abandoned by Keir Starmer, leaving Ms Reeves with a black hole to fill.

The Treasury appears to have learned its lesson and this year Ms Reeves is not expected to make any big announcements.

Will taxes go up?

There is no need to panic. Tax and spending decisions are only taken at what is known as a fiscal event – the Budget.

The Chancellor has deliberately decided to only hold one fiscal event a year, to offer greater stability to businesses so they don’t have to worry about plans constantly chopping and changing.

So why does it matter?

The latest estimates will give us a sense of how the Government is getting on. Ms Reeves gave herself £21.7billion in headroom at the Budget so she wouldn’t have to come back for more tax rises.

If this cushion has been reduced, speculation will ramp up again on whether she needs to hike taxes in the autumn. If it gets much bigger, MPs may start pressing her to spend some of this cash.

Particular areas of vulnerability include defence spending, where military chiefs have been pressing the Treasury to speed up budget hikes. Student loans are also shooting up the political agenda amid concerns young people are being ripped off with interest rates and changes to repayment terms.