Further welfare cuts expected as Rachel Reeves to deliver spring statement

Spring statement Q&A: Ask your questions to our experts

Today's main event will see Chancellor Rachel Reeves update the country on her plans for the economy during the spring statement this afternoon.

It was meant to be a low-key affair having committed to holding one budget a year, but a turbulent economic climate since October means the £9.9bn gap in her fiscal headroom has been wiped out.

Some big cuts have already been announced - and there may be more to come...

What could be announced later today?

• Income tax freeze
• Increasing business relief rate from 40%
• Further welfare cuts
• Reducing the tax-free annual limit on cash ISAs
• Relief ahead of rise in employers' national insurance contributions
• Details on how international aid funding will be reallocated to defence
• £400m in spending on government's new UK Defence Investment body

What has already been announced?

• Cutting £2bn a year from civil service budget
• Narrowing eligibility criteria for disability benefits
• NHS England to be abolished
• £600m funding to train up to 60,000 more skilled construction workers

We spoke to shadow Treasury minister James Wild a short time ago, and we asked him what the Tories make of the government's cut to welfare.

He told Sky's Wilfred Frost that Labour spent eight months in office ignoring the issue "because they're split and divided" on it, and then "rushed forward this package".

"A week ago, the work and pensions secretary told MPs in the House of Commons it was worth £5bn a year. But we now learned the OBR is only scoring it at £3.4bn," he said.

"That is frankly a bit of a shambolic approach to welfare, to people's lives."

He went on to say that the Tories were set to implement a package with savings worth £12bn a year, and said the government should have done something similar.

Wilfred put to the Tory MP that he seems to be saying that they would have gone further on cuts to welfare, and yet are also framing Labour's cuts as heartless.

He avoided the point, and argued that Labour's proposals are "rushed" in order to "avoid the chancellor breaking her fiscal rules".

Wilfred pushed Wild on the apparent hypocrisy, and he replied: "No, I'm saying that we haven't seen the detail of what the government's cuts are.

"We support getting the welfare budget under control. It's unsustainable. It's unfair for taxpayers and people are being written off. We have a considered package of £12bn."

He accepted that £12bn in cuts to welfare would have had an impact on people's lives, but framed that as "helping more people who want to work" and offering "extra support" to people on benefits.

Ahead of the spring statement, Sir Keir Starmer is gathering his top team for a cabinet meeting in Downing Street.

The ministers will hear the full details of the spring statement before the chancellor delivers it in the House of Commons from 12.30pm, and discuss any other key topics for each department.

It's a big day for the government today, with the chancellor due to set out the state of the public finances, and how the economy is performing.

She will reveal the independent Office for Budget Responsibility's judgement on how she is handling the economy, and is expected to enough a raft of cuts across the public sector.

Our economics and data editor Ed Conway explains everything you need to know here:

It's a huge set piece day for the government today, with the chancellor set to deliver the spring statement in the House of Commons.

But around it, there is plenty happening as we digest the chancellor's announcements, and what they mean for the country's finances, and for the finances of households across the country.

Here are the key timings today:

• 11am - Sky News special coverage on TV and online starts;
• Around 11.15am - The prime minister and the chancellor will leave Downing Street to head to parliament;
• 12pm - It's Wednesday, so Sir Keir Starmer will face Prime Minister's Questions as usual;
• 12.30pm - The spring statement will be delivered by the chancellor in the House of Commons, and shadow chancellor Mel Stride will deliver the opposition's response;
• 2.30pm - The Office for Budget Responsibility (OBR) will hold a news conference on their fiscal forecasts and deliver their verdict on the chancellor's plans.
• 3.30pm - We will hold a Q&A here in the Politics Hub, answering all your questions about the spring statement and what it means.
• 4.15pm - The chancellor will deliver a news conference from Downing Street.

Join us live on Sky News from 11am for full coverage of the day's events.

Remember "securonomics"? It was the buzzword Rachel Reeves gave to her economic philosophy back before the election.

The idea was that in the late 2020s, the old ideas about the way we run the economy would or should give way to a new model.

For a long time, we ignored where something was made and by whom and just ordered it in from the cheapest source. For a long time, we ignored the security consequences of where we got our energy from. The upshot of these assumptions was that over time, we allowed our manufacturing base to become hollowed out, unable to compete with cheap imports from China. We allowed our energy system to become ever more dependent on cheap Russian gas.

The whole point of securonomics was that it matters where something is made and who owns it. And not just that - that revitalising manufacturing and energy could help revitalise "left-behind" corners of the economy, places like the Midlands and the North East.

Back when she came up with the coinage, Joe Biden was in power and was pumping billions of dollars into the US economy via the Inflation Reduction Act - a scheme designed to encourage green tech investment. So securonomics looked a little like the British version of Bidenomics.

That's the key point: the "security" part of "securonomics" was mostly about energy security and supply chain security rather than about defence.

But when Rachel Reeves became chancellor, it looked for a period as if securonomics was dead on arrival. Most glaringly, Labour dramatically trimmed back the ambition and scale of its green investment plans.

But roll on a year or so, and we all know what happened next.

There has been outrage in the US since it emerged that a journalist was added to and went unnoticed in a Signal chat with top national security officials discussing impending strikes on the Houthis in Yemen.

Sky's Wilfred Frost asked the UK defence secretary, John Healey, how he communicates with his US counterpart, Pete Hegseth, who was a key member of this chat.

Healey replied: "I talk to him regularly. And here in the UK defence department, we have a range of different communication channels for the business that we conduct."

He added that he spends "most of the day" without his mobile phone because he is not allowed to bring devices with him for security reasons.

Asked if he would ever use a mobile phone or public messaging apps to conduct government business, as US officials have, Healey said: "One of the things that they drum rightly hard in to you when you get a job like this extraordinary job that I have now as defence secretary is security, security, security. And I'm very conscious of that.

"The MoD here in the UK has got good security procedures in place."

Given the major breach in the US, Wilfred asked if the UK's intelligence, that we share very openly with the US, is at risk.

He said: "No, we have the closest intelligence relationship that the US has with any other nation."

The exchange of intelligence "helps keep both our nations safe, makes our forces more effective and strengthens the deterrence that both nations can offer against any of those that would want to do us ill".

It is being reported that a potential EU-UK defence and security pact could depend on Sir Keir Starmer making concessions on fishing rights.

But the defence secretary denied the reporting, telling Sky's Wilfred Frost: "Everything that we've heard from the European Union and every European nation recognises that this is a time of increasing threats and greater insecurity.

"They recognise the leadership that Britain is providing on defence spending, on European security, on Ukraine, and they're ready to do similar.

"The European Union is recognising the case that we have to do more also to boost our defence industries across Europe, and that Britain has a big role to play."

John Healey went on to say that the UK is "ready" to form a defence partnership with the EU, and added: "We're ready to contribute to the efforts the European Union is making."

He also rejected the notion that this renewed focus on domestic defence spending is as a result of not being able to trust the new Trump administration, saying: "I've argued for three or four years that British defence investment should be directed first towards British based businesses and British jobs. And that's what we will now be doing in government.

"We can't design, make, and build everything for ourselves. We have to do some of that, in collaboration with allies. And sometimes it's important that we are able to buy from the Americans."

Asked if the UK could enter a war without the support of the US, he said he "can't see circumstances where Britain would go into conflict without the support of our allies", which is "the purpose of being a member of NATO".

It's spring statement day – a bigger day than the Treasury probably ever wanted it to be, but definitely not a budget.

With Chancellor Rachel Reeves on course to break her own fiscal rules, she'll lay out how she intends to find billions of pounds of extra savings.

At the eleventh hour, it looks like welfare cuts will be tougher than first thought – with a hit on Universal Credit.

Sam and Anne outline what the calculations are likely to be and how the chancellor will handle the day.

And beyond today – if there's no glimmer of growth by the end of the year, how would she approach the autumn budget? Could that be where raising taxes is the only option?

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