Spring Statement 2025: Rachel Reeves won’t rule out tax hikes at next Budget
Rachel Reeves has declined to rule out hiking taxes at her next Budget, amid growing pushback from Labour MPs over welfare cuts in the wake of her Spring Statement.
The Chancellor told reporters at a press conference that she was focused on growing the economy, despite speculation she will have to find more revenue to make her sums add up – including if the UK economy is hit by the impact of US President Donald Trump’s tariffs.
Reeves insisted: “I’m not going to write four years of budgets, I’ve just delivered a spring statement today.”
She emphasised “how determined this government is” to “live within the means that we set ourselves in the Budget” and to grow the UK’s economy in a bid to boost living standards.
Speaking in Downing Street, Reeves vowed she would not need to repeat her “once in a generation” tax-raising first budget in October, which she said had “wiped the slate clean”.
And she added: “There was lots of speculation that I was going to change taxes today, the Tories were desperate to call this an emergency budget – it was far from it.”
Her Spring Statement came as fiscal watchdog the Office for Budget Responsibility (OBR) halve its growth forecast for 2025 to just one per cent, which saw Reeves slice welfare spending, which is set to affect some three million households, and cut Whitehall budgets.
But despite restoring her £9.9bn headroom, the Chancellor could face further “uncertainty” with the prospect of fresh global tariffs imposed by President Trump triggering a potential trade war, which could “entirely eliminate” her breathing space, the OBR warned.
Reeves faces outcry
Reeves also faces outcry and the risk of a backbench rebellion by Labour MPs on the left of the party over her cuts to welfare spending.
Her cuts will leave some 250,000 more people, including 50,000 children, in relative poverty after housing costs across Britain by 2030, the government’s own impact assessment found.
Former Labour leader Jeremy Corbyn urged her to reverse the cuts and “end the two-child benefit cap, which has driven so many children and families into really desperate poverty”, claiming the government has now “gone further than even the Tories ever dared”.
While Liverpool MP Kim Johnson branded the move an “assault on disabled people” and “nothing short of sadistically cruel”, and Clapham and Brixton Hill MP Bell Ribeiro-Addy posted on X that she would vote to oppose the measures, adding: “No Labour MP should be voting to push children into poverty.”
Shadow Chancellor – and former Conservative work and pensions secretary – Mel Stride also criticised Reeves’ announcement on welfare, dubbing it “the worst of all worlds, a wholly inadequate level of savings on welfare with welfare costs still spiralling ever higher.
“And changes that will likely harm many vulnerable people.”
Speaking to journalists after the statement, Stride said: “There were much more significant savings to be found… but you cannot do it, and you can’t do it fairly, if you rush it.
“They have rushed it and they’ve botched it.”
But asked about rising poverty, the Chancellor said: “We’re confident the changes we are making and the support we’re providing to get people into work will result in more people having fulfilling careers, paying decent wages and, of course, that’s the best way to lift families out of poverty.”