Spring Statement won’t ‘alter basics’, Starmer insists, amid tax cuts reports
The Spring Statement this week will not “alter the basics” of public spending plans, Sir Keir Starmer has insisted, amid reports the government is considering tax cuts for tech firms.
Speaking this morning, the Prime Minister said he wanted to “take some money out of government” and that his ministers were “looking across the board” at spending.
Chancellor Rachel Reeves will deliver the Spring Statement to the Commons on Wednesday, when she is expected to announce spending cuts for some government departments, amid already announced reductions to the welfare bill and civil service running costs.
It comes as a new YouGov survey found 80 per cent of Brits believe the public finances are in a poor state, including 34 per cent who say they are in a “very bad” state – with just three per cent believing the government is in a good place financially.
Asked by BBC Radio 5 Live about cuts to unprotected departments, such as the Ministry of Justice (MoJ), the Prime Minister said his government was “looking across the board” at spending.
He insisted: “At the budget last year we made some record investments, and we’re not going to undo that.
“We’re not going to alter the basics, but we are going to look across and one of the areas that we will be looking at is, can we run the government more efficiently?
“Can we take some money out of government? And I think we can. I think we’re essentially asking businesses across the country to be more efficient, to look at AI and tech in the way that they do their business.
“I want the same challenge in government, which is, why shouldn’t we be more efficient?”
Starmer’s civil service reforms
The Prime Minister initially set out plans to prune the size of the civil service when he set out his public sector reform proposals in early March ahead of the Spring Statement.
Artificial intelligence (AI) and technology “could do a huge amount now that is done manually”, the Prime Minister also told the BBC.
He added: “Some of the examples I’ve been given are in the NHS – a stethoscope and AI, working together can predict pretty accurately if you’re 60 years or over, whether you’re going to have a heart problem and therefore get in early, saves a fortune for the NHS.”
He said AI could be used for organising waiting lists and identifying people likely to miss appointments, calling it “transformative” and saying it would “make a huge difference”.
But civil service unions have warned 50,000 people could lose their jobs and vital services could deteriorate after Reeves confirmed plans to cut costs by 15 per cent by 2030.
While the Times newspaper reported cuts to the education budget could come from ending free school meals for younger children, and the Chancellor pledged to The Sun newspaper that she would not be raising taxes in the Spring Statement.
Digital services tax
Reeves also told broadcasters on Monday: “Digital services tax is hugely important, it brings in around £800m a year and ensures companies pay tax in the country they are operating in.
“So we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector.”
An impact assessment for the government’s welfare cuts will also be published on Wednesday.
Shadow Chancellor Mel Stride has warned ahead of the fiscal event that Reeves “needs to take responsibility for her own choices”, adding: “Economic stagnation and higher government borrowing cannot be blamed on external factors – it was clear we were on this path ever since her first disastrous Budget.”
He added: “Labour promised stability and said there would only be one fiscal event a year. Yet another promise they are about to break. The Chancellor is rapidly losing credibility.”