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Yahoo
12-06-2025
- Business
- Yahoo
Spending review: Reeves vows to ‘renew Britain' with big rises for NHS, housing and defence
Rachel Reeves has pledged to 'renew Britain' with a spending review prioritising health, defence and more than £100bn for long-term capital projects, despite leaving some key areas facing a tough squeeze on funding. In a speech to the Commons setting out Labour's priorities up to the next general election, the chancellor said her investment programme would be felt in all corners of the country, while decrying austerity as a 'destructive choice'. Announcing the government's spending review, the chancellor made a high-stakes promise to cut spending on controversial issues such as asylum hotels by the end of the parliament, which she said would save £1bn. But the Home Office will receive a budget cut which will extend beyond the asylum savings, causing alarm from police officers and the London mayor Sadiq Khan. Others that will see spending cuts include Defra and local government, as well as the Foreign Office which will see an almost 7% cut because of the loss of much of the foreign aid budget. 'We are renewing Britain,' Reeves said. 'I know that too many people in too many parts of our country are yet to feel it. This government's task, my task as chancellor, and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, in their jobs and on their high streets. 'The priorities of this spending review are the priorities of working people, to invest in Britain's security, in Britain's health, and to grow Britain's economy so that working people are better off.' Reeves said total departmental budgets would grow by 2.3% a year in real terms, drawing a comparison with the 2.9% cut under the Conservative-Liberal Democrat coalition – a retort to her critics who have accused her of a return to austerity. 'Austerity was a destructive choice for the fabric of our society, and it was a destructive choice for our economy too, choking off investment and demand,' Reeves said. 'Creating a lost decade for growth, wages and living standards that is their legacy. My choices are different. My choices are Labour choices.' She said there would be 'tough decisions for stability', a nod to the unpopularity of the now partly reversed winter fuel allowance and welfare cuts, as well as tax rises including the increase in the national insurance rate paid by employers. However, experts warned the chancellor could face a summer of speculation over possible further tax increases at the autumn budget, after Reeves reiterated a promise to stick to her 'ironclad' fiscal rules – despite concerns over rising government borrowing costs and a sluggish growth outlook. 'It looks increasingly likely that substantial tax increases will be needed in the autumn budget,' said Andrew Goodwin, chief UK economist at the consultancy Oxford Economics. 'Considering the plans require large efficiency savings, departments may find it hard to stick to the targets… today's spending review leaves the impression of being a stopgap, rather than a durable plan.' In a highly political speech, Reeves attacked the Tories and Reform for opposing her changes to the fiscal rules and tax rises announced at last year's October budget, saying the investment would never have been possible under them. 'Every one of those changes was opposed by the parties opposite. So today, they can make an honest choice, and they can oppose these spending plans as they oppose every penny I raise to fund them, or they can make the same choice as Liz Truss, spend more, borrow more, with no regard for the consequences.' The Conservative shadow chancellor said the spending rise was 'not worth the paper that it is written on' and would mean months of speculation over how it would be paid for. 'This is the spend now, tax later review, because [she] knows she will need to come back here in the autumn with yet more taxes, and a cruel summer of speculation awaits.' The health service was the biggest winner in terms of day-to-day spending, increasing in real terms by 3% a year – though lower than some years under the Conservatives. It will mean the health service gets £29bn extra a year. Defence is among those with the biggest spending boost – as expected – with spending rising to 2.6% of GDP by April 2027, though that includes the intelligence agencies. It will mean £11bn for defence and £600m extra for security services. Another key winner was Angela Rayner's housing department, where Reeves said 'social housing [had been] neglected for too many decades, but not by this Labour government'. Overnight, she had announced £39bn over the next decade. Blackpool, Preston, Sheffield and Swindon are among the towns that have already put forward bids for the cash. The department most unhappy with its settlement is the Home Office, especially the policing budget, which chiefs have warned will mean the government will miss its manifesto commitments on recruitment and tackling crime. Reeves said the department would get an average 2.3% increase a year in real terms over the spending review period, an increase of £2bn, but the funding is far below what police services believe will be adequate. The chancellor also vowed there would be significant savings on asylum, with an ambitious pledge to end spending on hotels for asylum seekers by the end of the parliament, without saying how. Reeves said there would be new funding for the department to hear cases and appeals more quickly and deport those whose claims were rejected, saying the end of the use of hotels would save taxpayers £1bn. Education will get a cash uplift of £4.5bn in the core schools budget, as well as £2.3bn in investment to fix school classrooms, especially those with crumbling concrete. From the capital budget, there will be £2.4bn a year to continue the rebuilding of 500 schools. Several departments have secured better-than-expected investments, including those of the environment secretary, Steve Reed, and the energy secretary, Ed Miliband. Defra will get a major funding boost for flood defences, investing £4.2bn over three years, though overall spending will be cut by 2.7%, The Department for Energy Security and Net Zero has the biggest increase in capital spending at five times the average departmental growth rate. The spending review will fund manifesto commitments for £13.2bn on home insulation and the full £8.3bn for Great British Energy, which many reports had speculated would be cut. Other major funding programmes include an already announced £14.2bn for a new nuclear power station, Sizewell C, and £2.5bn investment to develop small modular reactors. There is an additional £9.4bn for carbon capture, including Acorn in Scotland. Major transport projects were also given additional funding, including the east-west rail link between Oxford and Cambridge, which will receive an extra £2.5bn and a further £3.5bn investment in the Transpennine route upgrade as well as the Midlands Rail Hub, the region's biggest rail improvement scheme. There will be £445m for railways in Wales over 10 years. Reeves said she understood that the decline of high streets was a key driver of dissatisfaction in Britain, saying there too many regeneration projects had been 'held back, gathering dust in bureaucratic limbo'. There would be a new growth mission fund to expedite local projects, she announced. The additional funding will support up to 350 communities to improve parks, youth facilities, swimming pools and libraries and to tackle graffiti and fly tipping. Reeves also used the spending review to announce government investment in R&D and entrepreneurs, confirming R&D spending would reach £22bn a year by the end of the spending review. She will increase the investment power of the British Business Bank to £25.6bn, which she said would be directed towards helping British business scale up.
The Herald Scotland
11-06-2025
- Business
- The Herald Scotland
Reeves ‘failed' to back English councils in spending review, MPs warn
The Treasury will pump an additional £3.4 billion per year into councils by 2028/29, compared with 2024/25, which combined with yearly council tax rises is set to boost their spending power by 3.1% in real terms. But Mr Forster warned that 'in the detail of the statement', the Government 'is only investing an extra 1.1% in local government next year and the year after'. The Liberal Democrat MP told the Commons he was 'very disappointed' with the Chancellor's statement and asked: 'What does the Chancellor say to councils across the country and to my constituents of Woking to justify that lack of investment?' Ms Reeves replied: 'Well, that's real-terms increases in spending every year, that this Labour Government are giving to local authorities. 'And that compares to the Conservative-Liberal Democrat administration from 2010 to 2015 that cut real spending by 2.9% every year, so I'm much happier to stand on my record as Chancellor than what the Liberal Democrats did when they had a chance of being in government.' Woking issued a section 114 notice two years ago, in June 2023, when it faced having to plug a £1.2 billion deficit. Billpayers in the Surrey borough faced a 9.99% council tax rise the following year. Mr Forster, who is a member of the Commons Housing, Communities and Local Government Committee, told the PA news agency: 'In today's spending review, the Chancellor has failed to invest in local government – and she is refusing to acknowledge the harm this will cause. 'In my constituency of Woking, our local authority has already gone bankrupt, I fear more will soon follow. Following the former Conservative administration bankrupting Woking, we have seen public toilets close.' He called on the Government to 'support councils more'. The spending review which Ms Reeves fronted on Wednesday pledged 'wider reforms' which 'will ensure funding is effectively targeted, based on an updated assessment of need, and will consolidate funding to give local authorities greater flexibility to innovate'. Local government reorganisation will 'improve the join-up between local services, enabling councils to deliver services more efficiently', according to The Treasury. Conservative MP for Broxbourne Mr Cocking, who is also a member of the Commons committee, described the spending review as 'devastating'. He said: 'Councils that are going through local government reorganisation, where councils that have been run really well, are going to be potentially lumbered into new super-unitary councils, with councils that haven't managed their finances well'. Mr Cocking said that where authorities merge, 'you'll find that residents that have got sound council finances, have had good services, are now going to be subsidising areas that have made bad decisions', and added that the spending review failed to compensate for this. Surrey's district and county councils are set to merge, with new single-tier authorities taking on town hall functions, as part of the Government's push towards 'unitary' councils throughout England set out in last year's English Devolution White Paper.
Evening Standard
11-06-2025
- Business
- Evening Standard
Reeves ‘failed' to back English councils in spending review, MPs warn
'And that compares to the Conservative-Liberal Democrat administration from 2010 to 2015 that cut real spending by 2.9% every year, so I'm much happier to stand on my record as Chancellor than what the Liberal Democrats did when they had a chance of being in government.'
Yahoo
11-06-2025
- Business
- Yahoo
Reeves ‘failed' to back English councils in spending review, MPs warn
Rachel Reeves has faced warnings that she 'failed' to back English councils in the spending review, including authorities which are effectively bankrupt. Woking MP Will Forster called on the Chancellor to 'justify' a 'lack of investment' into local government, and Tory Lewis Cocking said Labour's spending plans were 'devastating' for the sector. The Treasury will pump an additional £3.4 billion per year into councils by 2028/29, compared with 2024/25, which combined with yearly council tax rises is set to boost their spending power by 3.1% in real terms. But Mr Forster warned that 'in the detail of the statement', the Government 'is only investing an extra 1.1% in local government next year and the year after'. The Liberal Democrat MP told the Commons he was 'very disappointed' with the Chancellor's statement and asked: 'What does the Chancellor say to councils across the country and to my constituents of Woking to justify that lack of investment?' Ms Reeves replied: 'Well, that's real-terms increases in spending every year, that this Labour Government are giving to local authorities. 'And that compares to the Conservative-Liberal Democrat administration from 2010 to 2015 that cut real spending by 2.9% every year, so I'm much happier to stand on my record as Chancellor than what the Liberal Democrats did when they had a chance of being in government.' Woking issued a section 114 notice two years ago, in June 2023, when it faced having to plug a £1.2 billion deficit. Billpayers in the Surrey borough faced a 9.99% council tax rise the following year. Mr Forster, who is a member of the Commons Housing, Communities and Local Government Committee, told the PA news agency: 'In today's spending review, the Chancellor has failed to invest in local government – and she is refusing to acknowledge the harm this will cause. 'In my constituency of Woking, our local authority has already gone bankrupt, I fear more will soon follow. Following the former Conservative administration bankrupting Woking, we have seen public toilets close.' He called on the Government to 'support councils more'. The spending review which Ms Reeves fronted on Wednesday pledged 'wider reforms' which 'will ensure funding is effectively targeted, based on an updated assessment of need, and will consolidate funding to give local authorities greater flexibility to innovate'. Local government reorganisation will 'improve the join-up between local services, enabling councils to deliver services more efficiently', according to The Treasury. Conservative MP for Broxbourne Mr Cocking, who is also a member of the Commons committee, described the spending review as 'devastating'. He said: 'Councils that are going through local government reorganisation, where councils that have been run really well, are going to be potentially lumbered into new super-unitary councils, with councils that haven't managed their finances well'. Mr Cocking said that where authorities merge, 'you'll find that residents that have got sound council finances, have had good services, are now going to be subsidising areas that have made bad decisions', and added that the spending review failed to compensate for this. Surrey's district and county councils are set to merge, with new single-tier authorities taking on town hall functions, as part of the Government's push towards 'unitary' councils throughout England set out in last year's English Devolution White Paper. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-06-2025
- Politics
- Yahoo
Dozens of MPs back campaign to revive playgrounds
More than 70 MPs are backing a campaign to revive England's playgrounds as pressure grows on the government to do more to tackle community decline to fight Reform UK. Labour MP Tom Hayes has tabled an amendment to the Planning and Infrastructure Bill that would ensure playgrounds lost to development are replaced. Politics Live: Mr Hayes told Sky News it is a personal subject as he grew up in poverty, caring for two disabled parents, and without his local playground "they wouldn't have been able to afford any sort of leisure activity for me". "Talking to parents these days, with the cost of living crisis going on, they just don't have play areas on their doorstep like they used to. What they have instead is rusting swings or boarded-up playgrounds." The Bournemouth East MP said this speaks to a "wider hopelessness" that people are feeling about "littering in their streets, graffiti on their walls, potholes in their roads". "It just makes people feel like nobody really cares about their area. That's at a time when people are feeling hopeless about the possibility of change and Reform, obviously, are trying to capitalise on that." Under the last Labour government, Ed Balls and Andy Burnham launched England's first and only play strategy, which aimed to create 3,500 new play spaces across every local authority - backed by £235m of funding. It was abandoned by the Conservative-Liberal Democrat coalition two years later and facilities have been in sharp decline since then, according to Play England which has developed the amendment Mr Hayes is tabling. The amendment would require councils in England to assess play provision and integrate "play sufficiency" into local plans and planning decisions - similar to a law that already exists in Scotland and Wales. It would also require developers to deliver and fund adequate play infrastructure, with a focus on inclusive play equipment for children with special educational needs and disabilities. Mr Hayes said this would not cost the Treasury anything and "is such a simple thing" the government can do quickly for children and young people "who have been shafted for so long". It is backed by 71 MPs from across Labour, the Conservatives, the Lib Dems and the Greens, with many supporters hopeful it could also reduce screen time Pressure on government over left-behind areas Amendments by backbench MPs are not usually agreed to but can be used to put pressure on the government, with the issue to be debated in the House of Commons this week as the planning bills enter the report stage. Mr Hayes said his playground campaign was just the start as he backed the resurrection of Sure Start centres, following calls from Rother Valley MP Jake Richards last week. Read More: There is growing momentum among Labour backbenchers who want to see the government give more of a priority to social infrastructure to deliver tangible change to communities and fend off the threat of Reform UK. MPs and policy insiders have told Sky News they are concerned Downing Street's ambition to grow GDP with long-term transport and infrastructure projects will not make a difference in places that look and feel forgotten, even if achieved. As Sky News has previously reported, several Red Wall MPs have , which has identified 613 "mission-critical" neighbourhoods in need of a cash boost to ensure people in left-behind areas can benefit from growth. The commission, chaired by Labour peer Hilary Armstrong, highlights the need to regenerate neighbourhoods with facilities like libraries, parks and community centres for voters to feel a difference. Any money for such a project will be set out in Chancellor Rachel Reeves's , when she will allocate funds for each department over the coming years. One of ICON's supporters is Blackpool South MP Chris Webb, who has also signed Mr Hayes's amendment. He told Sky News playgrounds "will make a real difference to families in Blackpool, which has the most mission-critical neighbourhoods in the country". "I'm committed to fighting for policies that benefit our community, and I'm thrilled to be working with Tom Hayes MP, the play sector and Play England to make this vision a reality." Sky News has contacted the government for comment.
