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Gardening is typically something career politicians only enjoy once they have retired. But Rachel Reeves appears to be paying homage to the green-fingered guru Alan Titchmarsh in the lead-up to her Spring Statement to be delivered this Wednesday.
In one video viewed 111,000 times on Youtube, Titchmarsh offers a tutorial on how to get “free extra rose plants” from making some cuttings.
“I’m cutting just above a leaf joint,” he says. “Shoots will come straight out from there.”
This would be the paradise scenario for Reeves and most finance ministers these days: make targeted cuts – and the boom will follow.
Some of the cuts that have been announced so far include a 15 per cent trim off the civil service’s running costs, £5bn snippings off the welfare budget and the elimination of thorny state bodies such as NHS England and the Payment Systems Regulator.
The Treasury has not quite got its hands on the giant chainsaw flung around by Argentinian libertarian President Javier Milei, now passed onto DOGE chief Elon Musk.
In Argentina, Milei has slashed pension payouts by more than a third while Elon Musk’s DOGE says it wants to eradicate up to $1 trillion of federal spending a year.
While the approach seems natural for free-market thinkers who believe the private sector should always outpace the public sector, a slash-and-burn approach might be too environmentally disturbing for a Labour government.
The policies are unlikely to please its electorate, or the unions and civil servants delivering on policy.
And yet, Reeves is already coming unstuck.
Proposed spending cuts have already been picked off by her opponents and labeled as “austerity” – the much-feared term – with the Shadow Business Secretary Andrew Griffith saying on GB News that Reeves had brought it back “just with a different name, a different face”.
Even officials within the government think austerity is back, according to The Spectator, while the Treasury has faced accusations of micromanagement as ministers go through departmental spending line by line.
Dry cuts will be smoothed over by funding announcements, including £100m for new technical colleges and a further £165m for construction training.
Reeves has insisted that the Spring Statement is not a budget and has downplayed its importance. Perhaps she knows that making small cuttings does not quite make for great television.
So, this is where Reeves and Titchmarsh part ways. While Titchmarsh can sit back and watch his rosebushes blossom, Reeves’ cuttings may not be enough to change the weather.
The Office for Budget Responsibility (OBR) is set to halve its growth forecast this Wednesday.
The Bank of England was even more pessimistic. They slashed their growth forecast from 1.5 per cent to 0.75 per cent in February.
The most troubling number to come from the last week may have been on government borrowing.
Figures released by the Office for National Statistics showed the government’s borrowing had gone as high as £10.7bn in February – an overshoot compared to an OBR forecast of £6.5bn.
The Chancellor had left herself with £9.9bn in headroom, but with it having likely been entirely wiped out, analysts at Barclays and Investec believe the Chancellor will have to make reductions totalling £10bn in order to keep to her fiscal rules.
But for all the talk of cuts in the short term, the OBR still sees government spending only rising over time. Projected increases to spending could even outpace growth if varying forecasts are cross-checked.
It means that, as Reeves spends time adjusting public finances, the weeds are only getting longer.
After much time spent on announcing relatively modest savings, Reeves may stop to ponder why the UK economy doesn’t begin to look any rosier this summer, denying the government its desired windfall.
Businesses – particularly manufacturers in recent days – are pointing the finger directly at the Chancellor.
Reeves’ £40bn tax hikes – which included the lowering to the threshold at which employers begin making national insurance contributions (NICs) – have stunted businesses’ growth and put a brake on hiring plans, according to various business surveys.
In a particularly incisive comment released before the Spring Statement, British Chamber of Commerce director general Shevaun Haviland reminded the Chancellor just how damaging her tax rises will be.
“From next week, firms face an unpalatable menu of higher national insurance (NI) and minimum wage bills,” Haviland said.
“There will be little escape for businesses, with our research showing 82% of firms will be impacted by just the NI rise,” she added.
The incoming storm of Trump’s tariffs on steel and aluminium from April 2 could also rattle the UK economy and tear Reeves’ plans apart.
With growth forecasts only being slashed and small spending cuts unlikely to rectify public finances, Reeves appears destined to revert to her old trick: increase taxes, according to a growing number of economists.
James Smith at ING is among those who believes that tax hike announcements later this year is “inevitable”.
“Yes, we are getting this big cash injection in the upcoming fiscal year,” James Smith, UK economist at ING told City AM. “But thereafter, there is not a lot baked in.” The bank predicts tax hikes come the autumn.
Analysts at Investec appear to agree with Smith’s assessment: “If this materially worsens the predicted course of the UK economy, or indeed if the public finances continue to deteriorate between now and the autumn, the government will have to make more difficult decisions at the Budget in the autumn.”
Autumn is no time for a sudden blossoming and tax rises only threaten to scare businesses more.
Reeves would be defying her critics and the forecasters if she delivered high growth after a spring pruning.
Surprising announcements at set-piece events such as these can never be ruled out. Reeves might yet stun forecasters and pull a spring rabbit out of the hat – or a chainsaw out of the shed.
