Rachel Reeves stood at the dispatch box this week to deliver the Spring Statement, and if you weren’t paying close attention, you might have thought everything was fine. Growth forecasts “adjusted,” spending “reprioritised,” fiscal rules “maintained.” The language was immaculate. The reality is brutal.
Behind the Treasury’s careful euphemisms lies a set of spending decisions that would make George Osborne blush. Public sector pay rises capped below inflation. Capital investment in hospitals and schools pushed back “beyond the current parliament.” Local government funding frozen for the third year running while councils teeter on the edge of Section 114 notices.
The Iran War Excuse
The Government has found its get-out-of-jail-free card: the Iran conflict. Every difficult spending decision is now justified by “the unprecedented energy shock caused by events in the Middle East.” It’s a convenient narrative, and it’s not entirely wrong — oil at $112 a barrel does change the fiscal arithmetic. But it doesn’t explain why the choices always fall hardest on those least able to bear them.
The Finance (No.2) Bill, currently grinding through Committee stage, contains provisions that received barely any media attention. Inheritance tax thresholds frozen until 2030. Council tax revaluation delayed indefinitely. The so-called “non-dom” reforms that Labour promised would raise billions have been watered down to the point of meaninglessness after aggressive lobbying from the City.
The Lords Are Watching
The House of Lords has been unusually vocal. Cross-bench peers have tabled amendments to the Finance Bill that would force the Treasury to publish distributional impact assessments — essentially showing who wins and who loses from every fiscal decision. The Government is fighting this tooth and nail, which tells you everything you need to know about what those assessments would reveal.
Labour came to power promising to end austerity. What they’ve delivered is austerity with better PR. The Spring Statement was a masterclass in saying nothing while doing a great deal — none of it good for ordinary people struggling with energy bills that have doubled since January.
What Comes Next
The real test comes in May, when local elections will serve as the first major electoral verdict on Starmer’s economic management. If Labour loses control of councils in the Midlands and the North — as current polling suggests — the pressure for a genuine change of direction will become impossible to ignore. Until then, expect more spreadsheets, more euphemisms, and more pain.