Scottish Secretary, Douglas Alexander says that the Chancellor’s Spring Statement, delivered in the House of Commons on Tuesday, will mean an additional £921m for Scotland, according to
Mr Alexander said: “The Chancellor has set out how the UK Government has the right economic plan for Britain, cutting the cost of living, cutting borrowing and growing the economy.
“The Chancellor also confirmed an additional £921m for the Scottish Government.
“That means that, since the general election in July 2024, we have provided the Scottish Government with nearly £12bn extra for them to invest into public services like the NHS, transport or education.
“In an increasingly uncertain world, stability in our economy is vital. Because of the decisions the Chancellor has already taken, we have a stronger and more secure economy.
“Inflation and interest rates are falling, and families are better off as we tackle the cost of living.”
Office for Budget Responsibility (OBR)
The OBR’s forecast shows inflation, borrowing and debt interest are all falling while investment is rising. It now forecasts that inflation will return to target in the second half of this year – earlier than forecast in November – and delivering on the government’s plan to ease pressure on households.
The OBR produces two economic forecasts each year. One of those is for the budget in autumn, and there is another in spring. This 2026 spring forecast is the second one of 2025/26.
Immediately after the autumn budget, the OBR publishes a forecast for the economy and public finances which take into account the policies just announced in parliament. This takes the shape of the Economic and fiscal outlook publication. It is at the end of a long process – usually about ten weeks – of preparing for the forecast and scrutiny of policies.
The OBR used to assess whether the government was meeting the rules alongside both of its forecasts, but now it will only assess the rules at Budget time. Changes were announced last autumn.
Chancellor’s speech
The Chancellor, Rachel Reeves, said that her economic plan has been proven to be the right one as inflation is falling and there have been several cuts in the interest rate by the Bank of England since the 2024 election.
Ms Reeves said: “Today, the new forecasts from the Office for Budget Responsibility show that our plan is the right one: Inflation is down, Borrowing is down, Living standards are up…and the economy is growing. Mr Speaker, this government has restored economic stability.”
While the OBR report and the Spring Statement had been drafted before Israel and the US bombed Iran last weekend, she said that her plan is even more important in a world that has become yet more uncertain.
In her speech, Ms Reeves said that the Spending Review provided developed government with the larges spending review settlements “in real terms” since devolution in 1998. She claims that all devolved governments continue to receive over 20% more per person than?equivalent?UK Government spending in the rest of the UK. This means that for every £1 spent by the UK Government in devolved policy areas, the devolved governments?are able to?spend at least £1.20.
She also said that easing energy bills by £150 in the last budget, and freezing rail fares will bring inflation down.
Gregor Poynton, Labour MP for Livingston, said the Government was determined not to repeat the economic mistakes of recent years.
He said: “We will not return to the austerity that damaged public services under the Conservatives.
“And we will not risk the kind of unfunded borrowing spree that crashed the economy and pushed up mortgages under the Tories’ disastrous mini-Budget.
“Since taking office, Labour has been focused on stabilising the economy after years of chaos.”
Students have their say
Outside Parliament ahead of the Spring Statement, National Union of Students President Amira Campbell, dressed as a shark, has addressed sharks with Rachel Reeves facemasks calling attention to the Chancellor acting “like a loan shark” when freezing the repayment threshold of Plan 2 student loans.
As the Spring Statement begins, Amira Campbell, NUS President said “This is a message to the Chancellor from graduates. Today, you have the opportunity to right the wrongs of a broken Tory student loan system.
“The system isn’t working for students who are queuing in food banks waiting for their next student finance England payment to drop. It’s not working for grads who are paying back hundreds of pounds a month on smaller salaries. It’s not working for parents, sinking money they don’t have into supporting us.
“You have the opportunity to win back the trust of graduates across the country. A generational opportunity to invest in young people.
“Education opens doors for us all. I say to Rachel Reeves: do the right thing and don’t freeze our futures.”
The Sharks will be available for media this afternoon, and are currently at Old Palace Yard. Please call +44 7971 271364 if you can’t find us
UNITE the union
Unite general secretary Sharon Graham said: “Today’s statement was a real opportunity to do something for Britain – to back workers, to commit to our public services and British industry. Britain needs the government to have a real Labour vision. One that understands the deep cost-of-living crisis that is crippling families.
“This cost-of-living crisis is an everyday reality, and workers need immediate change that they can touch and feel, not numbers on a spreadsheet.
“If this government is going to reconnect with everyday people in Britain, it needs to stop the performative statements, roll up its sleeves and back Britain. Britain is hurting and we need action now.”
Wealth Club
Susannah Streeter, Chief Investment Strategist, of Wealth Club said: “The Chancellor was trying to project a ‘keep calm and carry on’ message, but market turmoil continued during her speech, with UK borrowing costs having shot up and London’s FTSE 100 deep in the red, staying around 2.6% lower.
“Although there was a nod to the current turbulence, the forecasts don’t take into account the rapidly developing situation in the Middle East. So even though Rachel Reeves championed forecasts of a further fall in inflation, there’s a clear and present danger of the price spiral taking off again due to escalating conflict with Iran.
“The Office for Budget Responsibility downgraded growth for this year to 1.1% but upgraded it slightly for the following years. This appeared to help sterling recover slightly against the dollar, but the moves were limited given that big risks have crept back into the outlook.
“The potential wiggle room identified in the OBR’s latest projections also risks being swallowed up by the economic repercussions of war in the Middle East.
“Hopes for an interest rate cut later this month are being dramatically scaled back due to the spike in energy prices. It means servicing the UK’s debt pile could prove more costly than current forecasts suggest.
“Already high energy costs have been blamed for holding back growth, and the big worry is that if planned support for industries is not brought forward, more firms could go to the wall, potentially pushing the UK’s fragile recovery back into reverse.”
SCALE
SCALE is an organisation which brings together the UK’s most ambitious founders, investors and business leaders. CEO Sam North warns that the Chancellor risks “stabilising at mediocrity” with no new policies for SMEs in the Spring Statement.
He said: “Rising geopolitical tensions make decisive economic leadership even more important.
“With heightened global uncertainty and renewed pressure on fuel and energy markets, this was a moment for the Chancellor to show businesses how she will ‘step up’, and not ‘stand back’. Stability is welcome, but now we need acceleration. We can’t just sit tight for another six months.
“The Autumn Budget gave founders hope, particularly with the ‘Call for Evidence on Tax Support for Entrepreneurs’. That consultation closed on 28 February, and what scaleups needed today was an immediate package of measures to help them power ahead.
” There is clear pent-up capacity for growth in the UK economy. Founders are ready to hire, invest and expand, but that potential will only be unlocked if both consumer and business confidence improve.
“The Chancellor has missed a trick by not bringing forward new policies. Without decisive action, she risks stabilising at mediocrity.
“Britain’s fastest-growing small businesses are capable of delivering far greater economic impact, but momentum will stall if ambition isn’t matched with policy.”
