Growing pains: lowdown on a brutal spring statement

From benefit cuts to tax crackdowns, Archie Mitchell looks at the chancellor's prescription for a flatlining economy

- Archie Mitchell

Rachel Reeves has outlined a fresh set of cuts to government spending without raising taxes, blaming a dramatic slowdown in growth.

The chancellor faced a major setback in the hours before delivering her spring statement when the government's official spending watchdog rejected its forecasts for how much its welfare cuts would save. That prompted the Office for Budget Responsibility (OBR) to slash its economic growth forecast for this year from 2 per cent to 1 per cent.

Having been forced to go further than expected to fall back within her self-imposed borrowing rules, Reeves set out fresh measures to cut the government welfare bill. She promised changes were consistent with plans to cut the benefit bill announced last week, despite admitting the government was forced to make "final adjustments to the overall package".

The Independent looks at the key takeaways from what was meant to be a minor financial update, but turned into a major spring statement.

Benefit cuts

Reeves and work and pensions secretary Liz Kendall had just about seen off a Labour rebellion despite unveiling billions of pounds worth of benefit cuts.

But the pair's plans were thrown into last-minute jeopardy when the OBR refused to accept that the measures would save the £5bn the Department for Work and Pensions (DWP) said they would.

Instead, the OBR said they would likely save just £3.4bn, taking extra spending elsewhere into account, with the chancellor and Kendall being forced to find a slew of extra welfare cuts at the last minute and forcing extra spending cuts elsewhere. Anger among Labour MPs at the unforced error is palpable.