Rachel Reeves was accused of ‘spend now, tax later’ as she splashed the cash on the NHS and Net Zero today but with no clear sense of where the money was coming from. The Mail has more.
Unveiling the Spending Review in the Commons, the Chancellor claimed she is “renewing Britain”.
She is allocating huge sums to departments up to the end of the decade, after loosening the Government’s borrowing rules at the last Budget.
Ms Reeves boasted that her new approach means Labour can spend a staggering £300 billion more over the next five years than the Tories planned. That includes a 3% real-terms increase in day-to-day budgets for the NHS to 2029, worth £29 billion a year.
But Shadow Chancellor Mel Stride branded it the “spend now, tax later” review, warning the proposals are “fantasy” because Labour does not know where the money is coming from.
The generous fiscal envelope set last Autumn has been put under massive pressure by the economy slowing down and Donald Trump’s trade war.
There are demands to pump far more cash into defence, while Ms Reeves has already made an humiliating U-turn on winter fuel allowance cuts and is facing a Labour revolts on other benefits curbs.
That has led analysts and political rivals to argue that more tax increases are “inevitable” – although the funding gap will not crystalise until the next fiscal package.
Ms Reeves fuelled the speculation by telling MPs that there would be no change to her fiscal rules, and day-to-day spending must be covered by “tax receipts”. Doubts have also been raised about whether nearly £14 billion of ‘efficiencies’ pencilled into the plans will come to pass.
At PMQs before the Chancellor took to her feet, Keir Starmer dodged ruling out more tax rises – even though the Budget last year imposed the biggest increase for a single fiscal event in record.
The splurge was also not enough for some Labour figures, as the health service has sucked up so much of the available funding. London Mayor Sadiq Khan warned that Ms Reeves risked “levelling down” the capital by failing to sign off infrastructure projects, and said the funding settlement for police could mean fewer Met officers.
The backdrop to the decisions has been looking increasingly grim, with Labour trailing in the polls behind Reform – whom Ms Reeves repeatedly attacked from the despatch box.
Figures yesterday showed unemployment rising, and a survey found just 12% of Brits believe Ms Reeves is doing a good job.
Ministers have described the spending plans – equal to an extra £8,100 for every taxpayer in Britain – as “the end of austerity”.
Spending Review at a glance (courtesy of the Mail):
- Departmental budgets will grow by 2.3% in real terms.
- £190 billion more invested in day-to-day running of public services over the course of the spending review.
- £280 million per year for border security command to tackle Channel migrants
- NHS expected to be the big winner with budgets rising by up to 3% in real terms
- Defence spending will be increased to 2.5% of GDP by 2027, as the foreign aid budget is slashed
- £15.6 billion for public transport projects in England’s city regions
- £16.7 billion for nuclear power projects, including £14.2 billion for the new Sizewell C power plant in Suffolk
- £39 billion over the next 10 years to build affordable and social housing
- An extension of the £3 bus fare cap until March 2027
- £445 million for upgrades to Welsh railways
- Changes to the Treasury’s ‘green book’ rules that govern whether major projects are approved
Worth reading in full.
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w.r.t the Sizewell C project, dropping out of something that has already had a lot of investment can be like dumping cash down the drain. It’s well over 10 years since it began, notwithstanding the flawed reportage from the usual sources.
My initial take:
build affordable and social housingdestroy the countryside and clog up roads and servicesWhat confused me the most was the claim that increased defence spending would secure jobs at BS Scunthorpe. I don’t doubt that some production might find it’s way there but most defense demand for steel is plate, which Scunthorpe does not produce, it makes long steel, you know railway tracks etc and cable steel. We still have some plate capacity at Liberty in Scotland but apparently they are about to go bust and haven’t produced anything for ages and, as we know, South Wales cannot produce high quality virgin plate anymore. So where are they going to get the steel needed for defence? You would think a Sheffield girl would know all about steel, wouldn’t you.
One might hope so, but this particular Sheffield girl probably doesn’t know much about anything.
Certainly not economics.
The announced policy is not about facts but about feelings.
What does it mean to say “£190 billion more invested in day-to-day running of public services”
The word “invest” conventionally means to spend money or money’s worth in order to get a financial return. In simple terms that means the investor gets income directly as a result of the expenditure. Exceptionally it could mean that direct savings were achieved.
Clearly the spending in this case was not invested. When will numptie politicians, journos and the public understand this.
I noticed the buckshee invest word as well and was going to comment, but you beat me to it.
I think any real financial adviser pissing away clients’ money in such spectacularly egregious fashion would be defrocked p.d.q.
Politicians etc use the word “invest” for the specific purpose of implying there will be a return but as I have posted previously for the Labour Party investment or to invest typically requires some prior destruction. When Liebour invest there is never a return; same here, the intention is simply to squander taxpayers cash. The con is the word ‘invest.’
£280 million to tackle channel migrants? How much does a giant ‘Welcome’ sign cost?
No, no. That’s how much the French want to patrol their border.
How much _extra_ they want.
Talks about a new ‘Border Command’ – that sounds to me like a lovely new department, head office building, new logo and headed paper etc… nowt that will make any difference to actually stopping people, especially when your actual *real* strategy is to welcome them
Truly dismal. I don’t know jack about allocation of spending and its relationship to economic growth but this is a collection of nasty cancerous turds. There is no point giving a few sops to the poor because you got spooked by recent election results. Doesn’t matter what money you give them their lives remain debased because of the toxic culture that you have promoted for decades. I remember in the early 1980s you might meet a punk or a skinhead and they would kick your head in but even that is beautiful compared to what we have now. As a ten year old I got a really big kick in the arse from a punk rocker and I am glad if it now. They were squatting in a house and we thought it was haunted. I bet half of the kids these days don’t even go apple scrumping. Why not? That was the most quintessentially English thing imaginable. You sold your birthright for a mess of pottage.
No more fences in your gardens. No more covetousness about your possessions. You let the dirty scallywags in and you should rejoice when they rob you blind. The burden of all of that crap has been relieved from you. You should congratulate them on a top class bloody public service! Now you can sit at peace as a normal human rather than a human that is concerned about their possessions. Do you own your possessions or do they own you? You would be surprised by how many people are owned by their possessions.
29bn per year is 3% of NHS budget?Really?
Clumsily worded, but I think it’s 3% per year between now and 2029, totalling £29 billion.
“the end of austerity”
“Austerity” about as austere as the “Tories” were Tory, I suppose.
Incredible that the Socialists haven’t recognised how the Tories splashed other people’s cash like crazy, and now believe that the solution is splashing more of other people’s cash. How clueless are they, really?
Yep. Public spending remained roughly constant as a percentage of GDP under Osborne’s “austerity” (sic). Then it soared once the Fake Tories got to run the government on their own.
Oh look, it’s that hoary old chestnut…
“£190 billion more invested in day-to-day running of public services over the course of the spending review.”
This is consumption, not investment.
I’m just off to “invest” in a slap-up meal, paid for with my credit card.
Exactly.
They are deliberately destroying our economy, our society, our culture and our historic freedoms.
The Great Reset in action.
I honestly don’t understand
I thought we ran out of money?
Well if we haven’t run out of money we soon will have. Unfortunately for we plebs that has always been the intention.
They are simply printing more… which devalues what exists already, which in practical terms makes people poorer, through inflation