Rachel Reeves is set to deliver her spring statement today, warning that spending cuts are inevitable because “the world has changed” and borrowing costs are rising. Though the Office for Budget Responsibility (OBR) has just made her job even harder, by coming up with different sums to the government, again…
The OBR is now expected to slash its 2025 growth forecast by up to half, down from the 2% it naively predicted in October. On top of that, last week’s welfare reforms, which the government claimed would save £5 billion, are now projected by the OBR to save just £3.4 billion which includes an extra £500 million Reeves is cutting from benefits. That leaves a £1.6 billion shortfall. Defence secretary John Healey confirmed to Times Radio this morning that Reeves is now scrambling to plug the hole:
“That’s a calculation we may see confirmed from the OBR… Doing nothing is not an option, it’s failing and writing off a young generation.”
Meanwhile, government borrowing for the year to February hit £10.7 billion, way above the £6.5 billion forecast – piling yet more pressure on Reeves. OBR chairman Richard Hughes admitted last year that their forecasts are basically “a work of fiction.” Reeves will be regretting tying the Treasury to a forecaster that’s misjudged UK borrowing by £53 billion a year since its creation…
UPDATE: Reeves confirms the OBR slashed its growth forecast for 2025-26 in half from 2% at the Budget to 1% now. Predicted productivity levels are now more than 1% lower…
Speaking on Times Radio, former Home Secretary David Blunkett spoke about overdiagnosis of mental problems:
“Let’s distinguish those who are really severely mentally ill, diagnosed with things that require prolonged medical and diagnostic treatment. My wife and I talk about this a lot, because she’s a retired GP, about the fact that you can be sad without being ill. You can be momentarily depressed because your boyfriend or girlfriend’s just thrown you and you’re not mentally ill. You can even have mild issues, which can be dealt with with the right kind of support, but it doesn’t make you mentally ill. So we’ve got a real task, I think, to get the psychology, if you like, of this over. But there are things where you definitely need medical intervention, and there are other things where you need good friends, you need good connectivity, and you need a job.”