David Reed MP has responded to the Chancellor’s Spring Forecast Statement, warning that the latest figures point to a rising tax burden, continued pressure on families, and unresolved questions about how increased defence spending would be funded at a time of growing global instability.
The latest figures from the Office for Budget Responsibility (OBR) lay bare the scale of the challenge facing the country under this Government. The tax burden is now forecast to rise to 38 per cent of GDP by 2030, the highest sustained level in decades. At the same time, frozen income tax thresholds will drag one million more pensioners into paying income tax by the end of the decade, a stealth tax that hits those who have worked and saved all their lives.
Growth has been marked down yet again. GDP is forecast at just 1.1 per cent in 2026, down from the 1.4 per cent previously expected, while unemployment is projected to climb to 5.3 per cent, the highest level since the pandemic. Lower growth and higher unemployment are not abstract statistics; they mean fewer opportunities and greater pressure on families across the country.
Meanwhile, welfare spending is set to rise by £18 billion this year to £333 billion and is forecast to reach £406.9 billion by 2030 to 2031. Over the same period, the overall tax burden is expected to increase from 34.5 per cent of GDP in 2024/25 to 38.5 per cent by the end of the forecast period, a historic high. The combination of rising spending, weak growth and ever higher taxes points to a government that has yet to set out a credible plan to restore economic discipline and deliver sustainable growth.
Defence spending also demands serious attention. In light of the recent events in the Middle East, the Government must set out a clear and credible plan to strengthen our national security. The OBR now forecasts that increasing defence spending to 3.5 per cent of GDP by 2035 will cost £40 billion, £5 billion more than previously estimated. This underlines the need for transparency about how any uplift will be funded and delivered.
Commenting, David Reed MP said:
“These figures confirm that the Government is presiding over the highest tax burden since the Second World War, while growth remains sluggish and families continue to feel the strain.
Freezing tax thresholds and drawing more pensioners into income tax is a political choice. There is a better way to manage the public finances, built on stronger growth and disciplined spending.
We also face a more dangerous and unpredictable world. From Russia’s aggression in Ukraine to instability in the Middle East, strengthening our defence is essential. If the Government is serious about reaching 3.5 per cent of GDP, it must explain clearly how that will be funded and on what timetable.
The country needs an economic plan that restores growth, controls spending and supports national security without permanently increasing the tax burden.”
During the Spring Statement, David also challenged the Chancellor on the long-term sustainability of student finance and the mounting pressure on the graduate job market.
Greater transparency about how higher education will be funded in the years ahead and young people are being given realistic information about employment prospects and future earnings. As well as the financial burden of taking out student finance.
The Chancellor’s response did not set out a clear plan for reform or explain how the labour market will support increasing numbers of graduates.
Commenting further, David added:
“There is clear cross-party concern that the current system is not sustainable. We need straightforward answers about who pays, how the model will be made fair, and how we ensure graduates can move into meaningful, well-paid work.”
