This is partly because the OBR has measured Labour’s flagship piece of deregulation — planning reform. The watchdog believes this will add 170,000 homes on its own and lift GDP 0.2 percent (£6.8 billion) in 2029/30. Reeves called it the “biggest positive growth impact” of its kind ever scored by the OBR.
But there’s a sting in the tail. The OBR forecasts 1.3 million net extra homes will be built between April 2025 and March 2030. This is short of Labour’s election promise to build 1.5 million, albeit over a different period (July 2024 to summer 2029).
Treasury officials insist the 1.5 million target still stands and can be met, partly because some growth measures — such as a war on regulators, and forthcoming industrial, trade and small business strategies — haven’t yet been counted by the OBR.
3) Whitehall is getting squeezed again
Detailed cuts to Whitehall departments will only emerge in Reeves’ June spending review, but Wednesday’s statement hints at what is coming.
After a 3.1 percent boost this year, public spending had been due to rise just 1.3 percent in each of the following three years. This is now an even tighter 1.2 percent, due to a frontloaded £3.25 billion “transformation fund” taking up cash earlier. Reeves said it would cut government running costs by £2 billion a year in 2030.
Reeves told MPs that apart from cuts to foreign aid (more below) the overall “envelope” for spending in these three years has not changed.