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People across the UK will be on average 拢500 better off from 2029, relative to OBR鈥檚 autumn forecast, helping to deliver the Plan for Change as the Chancellor today (Wednesday 26 March) announced a Spring Statement to grasp the opportunities in a changing world.

The OBR also confirmed that the UK economy is expected to grow faster than expected from 2026 and will be larger by 2029 compared to its autumn forecast 鈥� up to 9.5% compared to 9.2%.

The Chancellor set out how the government is protecting national security and maximising the growth potential of the UK defence sector by confirming a 拢2.2 billion increase in the UK-wide defence budget in 2025-26.

The Spring Statement delivers UK Government spending plans focused on its core objectives, bringing security and stability for working people across the UK.

It follows the Budget in the autumn where the Chancellor announced that the Welsh Government will be provided with a 拢21 billion settlement in 2025/26 鈥� the largest in real terms in the history of devolution. This includes an additional 拢1.7 billion through the Barnett formula, with 拢1.5 billion for day-to-day spending and 拢250 million for capital investment.

The measures taken today top these Barnett consequentials up by a further 拢16 million in 2025/26. The Welsh Government continues to receive over 20% more per person than equivalent UK Government spending in the rest of the UK, translating into over 拢4 billion more in 2025-26.

The Welsh Government鈥檚 block grant funding from 2026-27 onwards will be confirmed at Phase 2 of the Spending Review, which concludes on 11 June 2025. The Chief Secretary to the Treasury will meet with his counterparts from the devolved governments to discuss their priorities ahead of its conclusion.

Secretary of State for Wales Jo Stevens said:

Today鈥檚 Spring Statement is going further and faster to deliver economic growth, national security and renewal across Wales and the rest of the UK.

By fixing the foundations of our economy, we have already started to deliver the change the people of Wales voted for nine months ago.

The 拢16 million made available today through the Barnett formula adds to the 拢21 billion record settlement announced for the Welsh Government at last Autumn鈥檚 Budget, boosting spending on public services like the NHS which is already seeing waiting lists fall in Wales.

We have made sure that no Welsh families will pay even a penny more tax in their pay packets and boosted the minimum wage and living wage for up to 140,000 workers in Wales.

We are creating tens of thousands of new jobs through our Welsh Investment Zones, Freeports and through local growth projects and inward investment. Today鈥檚 investment in defence will also boost the industry in Wales. And we have delivered a better deal for Welsh steelworkers and, for the first time, 拢25m to keep Welsh coal tips safe.

This is a Spring Statement to kickstart economic growth, protect working people and keep our country safe.鈥澛犅�

Defence

We are going further and faster to protect our national security and maximise the economic growth potential of the UK defence sector.

• Increasing the defence budget by 拢2.2 billion in 2025-26, taking additional spending on defence to over 拢5 billion since the Autumn Budget.
• This raises spending on defence to 2.36% next year and will be invested in fitting Royal Navy ships with Directed Energy Weapons five years earlier than planned, providing better homes for military families and modernising His Majesty鈥檚 Naval Base Portsmouth.
• Setting a minimum 10 percent ringfence for equipment spending on emerging technologies like drones and autonomous systems, dual-use technology, and AI-powered capabilities, so that British troops have the tools they need to fight and win in modern warfare.聽
• Getting this new tech into the hands of our armed forces quicker by cutting away bureaucracy, with a new UK Defence Innovation unit within the Ministry of Defence spearheading efforts to identify promising technology and ensure these get to the frontline at speed, while also bolstering the UK tech sector and crowding in private investment.
• Creating bespoke procurement processes for different types of military equipment, learning lessons from our rapid support for Ukraine to drive faster timescale targets for operationalising new tanks, aircraft and other essential tools for modern warfare.
• This government is determined to transform the defence sector into an engine for growth by focusing this investment on where it boosts the productive capacity of the economy such as investment in innovation and novel technologies. As a result of the increase in defence spending to 2.5%, the government estimates this could lead to around 0.3% higher GDP in the long run, equivalent to around 拢11 billion of GDP in today鈥檚 money.
• The government鈥檚 investment in defence will also support its number one mission to deliver economic growth. UK citizens will be protected from threats at home whilst creating a stable environment in which businesses can thrive, and supporting highly skilled jobs and apprenticeships across the whole of the UK.

Growth

Kickstarting economic growth is the number one mission of the UK Government, so we can put more money in working people鈥檚 pockets across all parts of the UK.

The UK Government has already made considerable progress in this plan for growth in Wales, including confirming the Wrexham and Flintshire Investment Zone鈥檚 focus on advanced manufacturing to crowd in 拢1 billion of investment and create up to 6,000 jobs; and 拢1.5 billion of direct UK Government investment in projects that support growth across Wales.

The UK Government is steadfastly supporting steel communities and, through the Port Talbot Tata Steel Transition Board, delivering 拢80 million to help workers, the supply chain, local businesses and regeneration.聽

The actions of this government across the Autumn Budget and Spring Statement, if sustained, lead to a 0.6% rise in the level of real GDP by 2034-25.

The OBR concluded that the stability rule is met by 拢9.9 billion and the investment rule is met by 拢15.1 billion. Both rules are met two years early, meaning from 2027-28 the government is only borrowing for investment and net financial debt is falling.

The government is not satisfied with short-term growth figures, and is going further and faster today to improve this.

The Chancellor has announced a further 拢13 billion of capital investment over the Parliament to go further on growth, on top of the 拢100 billion uplift announced at Autumn Budget. This will deliver the projects needed to catalyse private investment, boost growth and drive forward the UK鈥檚 modern industrial strategy.

Taken together, this greater capital investment more than offsets the modest savings on day-to-day spending and means the total departmental spending will increase over the next five years, when compared with plans in the Autumn.

Reform

The UK Government is determined to make the public sector more productive and to improve services for working people. But the changing world means we need to go further and faster to ensure we can deliver the public services that working people care most about.

The government has shown its commitment to taking the difficult decisions required to drive efficiencies and reform the state 鈥� reducing bureaucratic inefficiencies and duplication; and driving out wasteful government spend through cancelling thousands of government credit cards.

Getting more people into jobs is also central to the government鈥檚 growth mission. This broken welfare system is letting people down by asking them to prove what they can鈥檛 do, rather than focusing on what they could do with the right support - trapping people due to fear of trying work, lack of support and poor financial incentives.

The social security system will always protect those who can never work, that is why this government is proposing an additional premium that will safeguard their incomes. And will end reassessments for people with the most severe, life-long conditions to give them dignity and security.

Helping more people into work is a central aim of these reforms, which is why the government is tackling incentives to be inactive by abolishing the WCA, rebalancing Universal Credit, and investing more into employment support.

We will always support those with long term health conditions through the Personal Independence Payment, which will remain an important non-means tested benefit for disabled people and people with long term health conditions.聽 But these reforms will make the system more targeted and sustainable to ensure the safety net is there for those who need it most.

The Chancellor has confirmed the creation of a 拢3.25 billion Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.

The Chancellor also announced a package of measures to close the tax gap, raising 拢1 billion per year by 2029-30. The UK tax gap was estimated to be around 拢40 billion in 2022-23.

Looking Forward

This Spring Statement builds on the Autumn Budget and the decisions taken since required to deliver stability to the British economy and kickstart economic growth.

The government will set out its plans for spending and key public sector reforms at the Spending Review which will conclude on 11 June 2025.