WBG’s response to the Spring Statement 2025

The current geopolitical and economic circumstances are challenging, but many issues the UK faces are long-standing and homegrown. Austerity policies in the last couple of decades have significantly weakened our economic and fiscal ability to respond to challenging global circumstances. Our public services have been neglected for too long, we face rising levels of poverty, especially amongst children, housing is unaffordable for increasing numbers of people, and wealth inequality has increased. Women continue to bear the brunt of care work without sufficient economic support or recognition. Instead of cuts to social security, which will throw hundreds of thousands into poverty in the name of balancing the books, we need a rebalancing of the scales so the wealthiest contribute their fair share to the things that make us collectively prosperous. This should make us stronger as a country to withstand global shocks.

Global uncertainty calls for a different approach to fiscal policy – spending on defence should not come at the expense of investment in the true foundations of our economy, like care, education and social security. Cutting foreign aid to pay for military spending will further disadvantage some of the poorest women and girls around the world. It will not make the UK safer. Whilst supporting Disabled people and encouraging them into paid work is a good thing, the Government’s plans to cut health and disability benefits will further impoverish Disabled women and carers who have been at the sharp end of austerity cuts since 2010. Any savings on disability and health spending should result from effective policies that support those who can enter the labour market, along with inclusive and flexible work opportunities. The cuts proposed by the Government are likely to push people away from the labour market. For many Disabled people, the goods and services they buy with PIP enable them to stay in work. Dealing with extreme poverty can make it harder for people to focus on finding work.

Instead of cutting support to some of the most disadvantaged women in the UK and abroad and further cutting public services, the Chancellor could look at improving our tax system and reviewing her fiscal rules. A wealth tax to match the obscene increases in wealth the richest in the UK have amassed in the last few years ¹ would be the right thing to do and a popular policy ² . Other reforms would also make the way revenue is raised fairer, for example ensuring that everyone pays National Insurance and, by abolishing the upper earnings threshold, making contributions progressive.

The Spending Review in June and the Budget in the Autumn are pressing opportunities for the Chancellor to show that the Government is seriously committed to fixing these interlinked crises through sustained investment in a Green and Caring Economy. The wellbeing of people and environmental sustainability should be at the forefront of economic policy. This is what underpins a strong economy. Prosperity should not be narrowly equated with economic growth.

In the meantime, the Chancellor should review her fiscal rules to ensure the Government has enough flexibility to allow borrowing for some proportion of ‘day-to-day’ spending that has important socio-economic benefits. She should also introduce reforms to taxation to increase revenue and tackle rising wealth inequality.

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