Rachel Reeves to unveil Labour's spending plans on Wednesday

Chancellor Rachel Reeves is set to announce Labour 's spending plans on Wednesday, outlining funding until the next election in 2029, but experts warn nearly £5bn in cuts may be needed by 2028/29 to balance the books.
The spending review will allocate billions to projects creating jobs and prosperity, with Reeves emphasising the plans are possible due to the stability she introduced.
Analysis suggests unprotected departments like housing, policing, and culture could face real-terms cuts of nearly £5 billion by 2028/29, excluding recent commitments to restore winter fuel payments to pensioners.
The Home Office is expected to bear the brunt of spending cuts, potentially impacting police numbers, despite being tasked with delivering key pledges.
The Liberal Democrats criticised the potential spending squeeze, while the Tory shadow chancellor warned the spending review would lead to future taxes.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

South Wales Argus

17 minutes ago

• South Wales Argus

MPs share their own stories as assisted dying debate continues

Debating the proposal to roll out assisted dying in the UK, Sir James Cleverly described losing his 'closest friend earlier this year' and said his opposition did not come from 'a position of ignorance'. The Conservative former minister said he and 'the vast majority' of lawmakers were 'sympathetic with the underlying motivation of' the Terminally Ill Adults (End of Life) Bill, 'which is to ease suffering in others and to try and avoid suffering where possible'. But he warned MPs not to 'sub-contract' scrutiny of the draft new law to peers, if the Bill clears the Commons after Friday's third reading debate. Backing the proposal, Conservative MP Mark Garnier said 'the time has come where we need to end suffering where suffering can be put aside, and not try to do something which is going to be super perfect and allow too many more people to suffer in the future'. He told MPs that his mother died after a 'huge amount of pain', following a diagnosis in 2012 of pancreatic cancer. Sir James, who described himself as an atheist, said: 'I've had this said to me on a number of occasions, 'if you had seen someone suffering, you would agree with this Bill'. 'Well, Mr Speaker, I have seen someone suffering – my closest friend earlier this year died painfully of oesophageal cancer and I was with him in the final weeks of his life. 'So I come at this not from a position of faith nor from a position of ignorance.' Labour MP Siobhain McDonagh spoke int he assisted dying debate (House of Commons/PA) Labour MP for Mitcham and Morden Dame Siobhain McDonagh intervened in Sir James's speech and said: 'On Tuesday, it is the second anniversary of my sister's death. 'Three weeks prior to her death, we took her to hospital because she had a blood infection, and in spite of agreeing to allow her into intensive care to sort out that blood infection, the consultant decided that she shouldn't go because she had a brain tumour and she was going to die. 'She was going to die, but not at that moment. 'I'm sure Mr Speaker can understand that a very big row ensued. I won that row. 'She was made well, she came home and she died peacefully. What does (Sir James) think would happen in identical circumstances, if this Bill existed?' Sir James replied: 'She asks me to speculate into a set of circumstances which are personal and painful, and I suspect she and I both know that the outcome could have been very, very different, and the the moments that she had with her sister, just like the moments I had with my dear friend, those moments might have been lost.' He had earlier said MPs 'were promised the gold-standard, a judicially underpinned set of protections and safeguards', which were removed when a committee of MPs scrutinised the Bill. He added: 'I've also heard where people are saying, 'well, there are problems, there are still issues, there are still concerns I have', well, 'the Lords will have their work to do'. 'But I don't think it is right and none of us should think that it is right to sub-contract our job to the other place (the House of Lords).' Mr Garnier, who is also a former minister, told the Commons he had watched 'the start of the decline for something as painful and as difficult as pancreatic cancer' after his mother's diagnosis. 'My mother wasn't frightened of dying at all,' he continued. 'My mother would talk about it and she knew that she was going to die, but she was terrified of the pain, and on many occasions she said to me and Caroline my wife, 'can we make it end?' 'And of course we couldn't, but she had very, very good care from the NHS.' Conservative MP Mark Garnier said he would back the Bill (PA) Mr Garnier later added: 'Contrary to this, I found myself two or three years ago going to the memorial service of one of my constituents who was a truly wonderful person, and she too had died of pancreatic cancer. 'But because she had been in Spain at the time – she spent quite a lot of time in Spain with her husband – she had the opportunity to go through the state-provided assisted dying programme that they do there. 'And I spoke to her widower – very briefly, but I spoke to him – and he was fascinating about it. He said it was an extraordinary, incredibly sad thing to have gone through, but it was something that made her suffering much less.' He said he was 'yet to be persuaded' that paving the way for assisted dying was 'a bad thing to do', and added: 'The only way I can possibly end today is by going through the 'aye' lobby.' If MPs back the Bill at third reading, it will face further scrutiny in the House of Lords at a later date.

Rhyl Journal

18 minutes ago

• Rhyl Journal

Tax hike fears mount after government borrowing jumps in May

The Office for National Statistics (ONS) said borrowing surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid. May borrowing was £700 million higher than a year earlier, though it was slightly less than the £18 billion most economists had been expecting. The higher borrowing came in spite of a surge in the tax take from national insurance after Chancellor Rachel Reeves increased employer contributions in April. The decision, which was announced in last autumn's budget, has seen wage costs soar for firms across the UK as they also faced a minimum wage rise in the same month. Experts warned the higher borrowing figures raised the chances of tax hikes to come in the budget later this year, with Ms Reeves under pressure to balance the books amid rising borrowing and her spending commitments. Thomas Pugh, economist at audit and consulting firm RSM UK, said he is pencilling in tax increases of between £10 billion and £20 billion. He said: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9 billion of fiscal headroom that she clawed back in March. 'Throw in the tough outlook for many Government departments announced in the spending review and U-turns on welfare spending and the Chancellor will probably have to announce some top-up tax increases after the summer.' Danni Hewson, AJ Bell head of financial analysis, said the borrowing figures 'will only add to speculation that the Chancellor will have to announce more spending cuts or further tax increases at the next budget if she wants to meet her fiscal rules and pay for her spending plans'. 'One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP (gross domestic product) should be spent on defence and where the money is going to come from,' she added. Borrowing for the first two months of the financial year to date was £37.7 billion, £1.6 billion more than the same two-month period in 2024, according to the ONS. The data showed so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined. Rob Doody, deputy director for public sector finances, said: 'While receipts were up, thanks partly to higher income tax revenue and national insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.' While May's borrowing out-turn was lower than economists were expecting, it was more than the £17.1 billion pencilled in by the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), in March. The figures showed that central government tax receipts in May increased by £3.5 billion to £61.7 billion, while higher NICs saw social contributions rise by £1.8 billion to £15.1 billion last month alone. Public sector net debt, excluding public sector banks, stood at £2.87 trillion at the end of May and was estimated at 96.4% of GDP, which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The ONS said the sale of the final tranche of taxpayer shares in NatWest, formerly Royal Bank of Scotland, cut net debt by £800 million last month, but did not have an impact on borrowing in the month. Interest payments on debt, which are linked to inflation, fell £700 million to £7.6 million due to previous falls in the Retail Prices Index (RPI). But recent rises in RPI are expected to see debt interest payments race higher in June. Chief Secretary to the Treasury Darren Jones insisted the Government had 'stabilised the economy and the public finances'. 'Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain,' he said.

The Independent

20 minutes ago

• The Independent

What's the point of the UK talking to Tehran? More than you might think…

Europe's frantic diplomatic mission in Geneva may go down as one of its most arduous ventures on the world stage – and also one of its most consequential. The foreign ministers of Britain, France and Germany must persuade a battered Iranian regime to kow-tow to the US and Israel over its nuclear ambitions, or face likely annihilation. All three European powers would, of course, love to see the back of supreme leader Ayatollah Khamenei's corrupt and brutal theocracy. But they rightly fear the regime's capacity to unleash death and destruction before it goes. If Trump joins Israel in the war on Iran with US bunker-busting bombs on nuclear sites, and it succeeds in killing Khamenei, there will still be plenty of Iranian hardliners left who will be willing to fight to the death. Previous inhibitions will not apply. That could mean use of a dirty bomb in the West, or chaos unleashed in the Strait of Hormuz, through which 90 per cent of the Gulf's oil passes. For the world at large, the stakes are that high. British foreign secretary David Lammy – after meeting his US counterpart, Marco Rubio, and presidential envoy Steve Witkoff in Washington on Thursday – said that the UK was 'determined that Iran must never have a nuclear weapon". He thinks a window now exists within the next two weeks to achieve a diplomatic solution, as Trump dithers over whether to attack the regime, as US neo-cons and Israeli prime minister Benjamin Netanyahu are demanding – or whether to heed the no-more-wars mantra of his Maga base. And so, in search of a diplomatic solution, Iran's foreign minister Abbas Araghchi is meeting with his European counterparts in Switzerland. But what can be achieved? For all their good intentions – French president Emmanuel Macron said the diplomats would make a "comprehensive, diplomatic and technical offer of negotiation" to Iran – the Europeans are unlikely to persuade the Iranians to pull back from the brink. At least not on their own. While one Iranian diplomat said Tehran was willing to pursue 'a balanced and pragmatic policy in its dealings with Europe, and engage rationally with both East and West', Araghchi said there will be 'no talks' with the US over Iran's nuclear programme while the Israeli bombardment continues: 'The Americans want negotiations and have sent messages several times, but we have clearly said that there is no room for dialogue.' But there is a useful point to holding talks on neutral ground with Tehran – and it's not simply to ask them nicely and face-to-face if they wouldn't mind stopping with their nuclear enrichment programme. Rather than relaying Trump and Netanyahu's demands to Iran, Geneva is about feeding back to the White House – translating Tehran's position for the US president. The Europeans aren't there to stop the war, they're Trump-whispering for the Ayatollah. It's not clear that European diplomats have the connections they need to have a greater role to play than this, useful though it will prove. But when it comes to a practical breakthrough, some of the Gulf states might, however. Behind the scenes, figures in what some dub 'Iran's deep state' – many of them members of the powerful Islamic Revolutionary Guard Corps – are talking to representatives of Oman and Qatar; it might be these Middle Eastern countries that can make the difference, in a second stage of dialogue. Qatar, for its part, will likely hold more sway over Washington than London or Paris. All the peacemakers, though, will be battling the plans of Israeli prime minister Benjamin Netanyahu. Nothing less that the obliteration of the regime in Tehran will satisfy him. Worryingly, Israel's premier appears to have been joined by an increasingly pro-war Fox News, with Sean Hannity this week declaring that Iran 'is the biggest existential threat to the entire western world'. The West should have learnt by now – after the disasters in Iraq, Afghanistan and Libya – that enforced regime change in the Middle East is best avoided. Andreas Krieg, a leading Iran expert at King's College London thinks regime change in Iran would 'not be clean or peaceful'. If the current theocracy falls, there is no significant alternative political-social structure to lead this country of 92 million into the light. The IRGC, a ruthless military-industrial complex, would not easily cede control of the Iranian economy. Instead, with 190,000 personnel and a similar number of Basij paramilitaries to call on, it might well create a military dictatorship. The West and Israel would be back to square one. And the Iranian people would be no better off. Ironically, the last time the West brought about regime change in Iran – by booting out, in 1953, the democratically elected premier Mohammad Mosaddegh (for which we have British Petroleum and the CIA to thank) – it laid the groundwork for the emergence of the current Islamic Republic in the 1970s. In between rounds of golf, as he ponders his next steps in the Middle East, you can't help wishing Potus would be shown – by Lammy or anyone else – the relevant pages of a history book. It is within the president's power to unleash hell – or stop history repeating itself. After the Geneva talks, let's hope he listens to what the Trump-whisperers tell him.