Spring statement 2025 latest: Reeves refuses to rule out more cuts amid growing Labour backlash – UK Times

Labour faces two major battles after the chancellor’s spring statement, writes Andrew Grice – keeping the UK economy on track while facing rebellion from MPs and the public.

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The chancellor wants to save £5 billion from the UK’s ballooning welfare bill by making it harder to claim Personal Independence Payments and cutting Universal Credit.

First off, there’s Universal Credit, which provides a top-up payment for those with “limited capability for work and work-related activity” (LCWRA). The government is set to halve this health-based payment, after which it will be frozen for new claimants. People already have to have their ability to work assessed before they can claim.

Those assessments are neither pleasant nor easy: you have to be really quite disabled to get past first base. The hated Work Capability Assessment (WCA) is slated to be scrapped. Instead, only those who qualify for the daily living component of the Personal Independence Payment (PIP) will be eligible for the top-up.

Taxpayers face higher fines for not paying VAT and income tax self assessment (Itsa) on time under new rules announced as part of Chancellor Rachel Reeves’ spring statement.

Late payment penalties for the two levies are to rise in April as part of a Government push to raise more than £1 billion in extra tax revenue.

People who file their Vat and Itsa tax returns late will have to pay 3 per cent of the outstanding bill when it is overdue by 15 days, up one percentage point on the current level.

After 30 days, the penalty rises by another 3 per cent, up from 2 per cent currently, while there will also be a 10 per cent charge per annum when tax is overdue by 31 days or more, up from 4 per cent.

Labour also said it is also expanding its rollout of its scheme to digitise the tax system, called Making Tax Digital.

The system will be expanded to sole traders and landlords with incomes over £20,000 from April 2028.

And the Treasury “will continue to explore how it can best bring the benefits of digitalisation” to the roughly four million taxpayers whose income is below the £20,000 threshold, it said.

Rachel Reeves’ spring statement is fast approaching, and on Wednesday, people across the UK will learn how her announcements will impact their finances, sparking renewed debate about the future of living standards in the country.

A new forecast from the Joseph Rowntree Foundation suggests that average disposable incomes could fall by 3 per cent by 2030, with the lowest earners affected the most.

The chancellor has hinted at spending cuts to address a £20bn gap in public finances while ruling out tax rises as a solution.

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Extending an outdoor smoking ban to hospitality settings is not being considered “at this time”, a health minister told the Commons.

The government distanced itself from plans to ban smoking in the gardens of pubs, bars and restaurants last year, following concerns raised by the hospitality sector.

Smoking outside schools, children’s playgrounds and hospitals will be prohibited under the Tobacco and Vapes Bill.

The Bill also aims to create a smoke-free generation with anyone born after January 1 2009 to be prevented from legally smoking, by gradually raising the age at which tobacco can be bought.

A total ban on vape advertising and sponsorship, including displays seen by children and young people such as on buses, in cinemas and in shop windows, is also included in the Bill, bringing them in line with tobacco restrictions.

Speaking at the Bill’s report stage, health minister Ashley Dalton urged MPs not to listen to the “tobacco industry’s arguments and myths about how people should be free to make their own choices”.

She added: “Smoking kills two-thirds of its users, three-quarters of people wish they’d never started smoking, and the majority want to quit. That’s not freedom of choice, the tobacco industry took away their choice with addiction, usually at a young age.

“In relation to smoke-free places, we’ve been clear, in England we intend to consult on extending smoke-free outdoor places to outside schools, children’s playgrounds and hospitals – but not outdoor hospitality settings, at this time.”

Donald Trump has announced 25 per cent tariffs on all motor vehicle imports to the United States, in a move that will inflict another blow on the UK economy.

During a press conference in the Oval Office, the US president announced that cars and light trucks imported into the US would be subject to the levy in the latest escalation of the Trump administration’s far-reaching trade war.

“What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” Trump said.

The announcement raises fears of greater economic pain in the UK, whose largest vehicle export market is the US, having exported £6.4bn in motor vehicles to the United States in 2023, according to the Office of National Statistics.

She had come to the Commons to announce policy changes because “the world has changed”. But the whole point of fixing the foundations was to strengthen the public finances so that they could withstand unexpected pressures.

The chancellor was coy, in any case, about the way in which the world had changed. She mentioned Vladimir Putin’s invasion of Ukraine, but that really got going three years ago. So she said vaguely that it had “since escalated further”, which is a strange way of saying that, in the past five months, Donald Trump has threatened to pull the plug on the Ukrainians.

The Independent’s chief political commentator John Rentoul writes: