Chancellor's spending cuts plan sparks austerity fears

There are growing fears that Britain will be plunged back into austerity, as Rachel Reeves prepares to unveil a swathe of spending cuts at next week’s mini-Budget.

- MILLIE COOKE ARCHIE MITCHELL

The chancellor is set to deliver her spring statement next Wednesday, against the backdrop of a faltering economy and reduced headroom when it comes to the strict borrowing rules she set herself in October.

According to The Guardian, the chancellor will announce plans to cut Whitehall budgets by billions of pounds more than previously expected, with some departments facing cuts of up to 7 per cent over the next four years.

It is understood that she won’t change taxes, meaning a swathe of spending cuts are needed to balance the books after the Bank of England reduced its forecasts for growth this year.

Ben Zaranko, associate director at the Institute for Fiscal Studies (IFS), warned that the cuts – which he said would be the steepest since 2019 – would lead to “adverse impacts on public services and those who rely on them”.

“The government will be hoping that the short-term cash injection provided last year, and efficiency improvements as public services continue to recover from the pandemic, will be enough to deliver service improvements even if money is tight,” he said.