Spend Now, Tax Later! Reeves Splurges on NHS and Net Zero – But Where is the Money Coming From?

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