Chancellor Rachel Reeves has pledged to improve the UK economy and raise living standards while cutting government spending by reducing civil service jobs and trimming departmental costs.
Speaking ahead of the spring statement, Reeves acknowledged current economic challenges but maintained confidence in her fiscal strategy. “It’s not possible within just a few months to reverse more than a decade of economic stagnation, but we are making the changes necessary to get Britain building again,” she told Sky News.
Government Spending Cuts and Job Reductions
Reeves announced plans to cut central government running costs by 15% by the end of the current parliament, a move expected to eliminate 10,000 civil service jobs. While departments such as the NHS and defence will see increased spending, others have been asked to prepare for cuts of up to 11%.
She emphasized that these measures will help meet fiscal rules without raising taxes. “I’m sticking to the rules we’ve set. That means cutting waste, not increasing taxes,” she said.
Digital Services Tax Could Be Scrapped to Avoid US Tariffs
Reeves hinted the UK government may consider scrapping the £1 billion-a-year digital services tax to strike a broader trade deal with former US President Donald Trump and prevent the imposition of tariffs on British exports.
“We want to see trade barriers fall right across the world,” she said, confirming ongoing talks with US officials. However, the possible rollback of the tax, which affects major US tech companies, has sparked political backlash.
Deputy Leader of the Liberal Democrats Daisy Cooper criticized the move, saying it would amount to “robbing disabled people to appease Musk and Trump,” especially amid planned £5 billion cuts to welfare spending.
Labour Faces Backbench Pressure Over Welfare Reforms
Both Reeves and Labour leader Keir Starmer are facing mounting pressure from within their own party and unions over the proposed welfare cuts. Despite overall spending increases, the proposed savings on disability benefits have triggered warnings of a potential internal rebellion.
Reeves Rejects Forecast of Falling Living Standards
Responding to a report by the Joseph Rowntree Foundation predicting that UK families will be worse off by 2030, Reeves rejected the findings, asserting that living standards will rise under Labour’s leadership.
“Living standards in the last parliament were the worst ever on record,” she told Sky News’ Trevor Phillips. “I’m confident we will see improvements during the course of this parliament.”
Trade Confidence and Concert Ticket Controversy
Reeves expressed optimism about the UK’s trade negotiations with the US, saying she believes a tariff-free agreement is possible.
When questioned about accepting free concert tickets to see Sabrina Carpenter, Reeves defended the decision, citing security concerns and confirming she would declare the hospitality. “These weren’t tickets you could buy,” she explained. “I thought that was the right thing to do from a security perspective.”
