Chancellor Rachel Reeves has announced a sweeping £15.6 billion investment in transport infrastructure across England, targeting regions outside London ahead of next week’s Government spending review.

The announcement comes as Nigel Farage’s Reform UK continues to gain ground in the polls.

The investment, unveiled in a speech in Manchester, will fund tram, train and bus schemes in Greater Manchester, West Yorkshire, the West Midlands and Tyne and Wear. It includes £2.4 billion to extend the West Midlands Metro, £2.1 billion to kickstart West Yorkshire’s long-delayed mass transit system, and £2.5 billion for new tram lines in Greater Manchester. Senior figures in Downing Street believe Labour must show it can deliver visible improvements to voters’ lives to reverse the trend. Reeves said the country “cannot rely on a handful of places forging ahead of the rest of the UK,” warning that underinvestment in regional transport was holding Britain back.

Andy Burnham, the Labour Mayor of Greater Manchester welcomed the Government giving £2.5 billion to his area which will be used to help deliver the “first fully-integrated, all-electric, zero emission public transport system”. He said that “good transport powers good growth” and Greater Manchester was now closing the “north/south divide” in terms of economic growth. “The levelling up that was once promised is now happening here,” he said.

West Yorkshire has been promised £2.1 billion to begin work on its long-delayed mass transit system by 2028 PA

West Yorkshire has been promised £2.1 billion to begin work on its long-delayed mass transit system by 2028, alongside new bus stations in Bradford and Wakefield. Six more metro mayoral regions will benefit: South Yorkshire : £1.5 billion to renew the tram network and upgrade bus services across Sheffield, Doncaster and Rotherham by 2027

: £1.5 billion to renew the tram network and upgrade bus services across Sheffield, Doncaster and Rotherham by 2027 Liverpool City Region : £1.6 billion for faster links to Liverpool John Lennon Airport, Everton’s stadium and Anfield, plus a new bus fleet in St Helens and Wirral

: £1.6 billion for faster links to Liverpool John Lennon Airport, Everton’s stadium and Anfield, plus a new bus fleet in St Helens and Wirral North East : £1.8 billion to extend the Metro from Newcastle to Sunderland via Washington

: £1.8 billion to extend the Metro from Newcastle to Sunderland via Washington West of England : £800 million for rail upgrades, more frequent trains between Brabazon and central Bristol, and work on a wider mass transit link connecting Bristol, Bath, South Gloucestershire and North Somerset

: £800 million for rail upgrades, more frequent trains between Brabazon and central Bristol, and work on a wider mass transit link connecting Bristol, Bath, South Gloucestershire and North Somerset Tees Valley : £1 billion, including £60 million to expand platform capacity at Middlesbrough station

: £1 billion, including £60 million to expand platform capacity at Middlesbrough station East Midlands: £2 billion to improve road, rail and bus connectivity between Derby and Nottingham

The move comes with Reeves under pressure from Labour MPs to unlock spending amid anger over potential cuts to disability benefits. GETTY

The move comes with Reeves under pressure from Labour MPs to unlock spending amid anger over potential cuts to disability benefits. The Chancellor is seeking to reassure both voters and markets that public investment can still proceed within her fiscal rules. In her speech, Reeves is expected to say Britain cannot “rely on a few places forging ahead while others fall behind,” and that infrastructure investment is key to closing the regional divide.

After making a speech in Rochdale, the Chancellor told reporters: “The previous Government made a lot of commitments. What they didn’t do is put the money in to be able to deliver them. “That is the big difference about what we are doing. “On Wednesday next week I will be setting out in a spending review where you can see every pound allocated, investment for three years for day-to-day spending, investment for five years for capital spending.

What did Labour do to the winter fuel allowance?

The winter fuel allowance – not something we expected to be speaking about quite so much when Labour won power last year, but an issue that’s become synonymous with the party’s unpopularity.

You’ll likely recall it was one of the first policy announcements by the chancellor last July – she said it would help fill a £22bn “black hole” in Britain’s public finances.

It had previously been a universal benefit for all pensioners to help them pay for their winter fuel bills, but Reeves made it means tested so only the very poorest still got it.

Who is eligible for the winter fuel payment?

Labour limited it to people over state pension age who are receiving pension credit or a limited number of other benefits.

These benefits are income support; income-based jobseeker’s allowance; income-related employment and support allowance; universal credit.

The number of people eligible dropped from 11.4 million to 1.5 million.

Reeves has said that number will go up for the coming winter, but we don’t know yet who’ll be made eligible.

How much is the payment?

The payment is £200 for households receiving pension credit where the recipients are all under 80.

If someone in the household is over the age of 80, it’s £300.

What were the rules before?

The payments were available to everyone above state pension age.

Most people got the winter fuel payment automatically.

We are not expecting Labour to revert to that. Mick Jagger, your winter fuel allowance has gone for good.

Ministers will want to save some face on their U-turn, and still make the case that only poorer pensioners need the payment.

Who is eligible for pension credit?

Pension credit is available to pensioners whose income falls below a certain threshold – the payment tops up their income to this amount.

For people with a partner, income is calculated together.

Income includes state and private pensions, earnings, and social security benefits including a carer’s allowance.

But not everything counts as income – disability payments, housing benefit, and council tax reduction aren’t counted.

Pension credit tops up your weekly income to £218.15 if you’re single and £332.95 if you have a partner.

Pension credit is often described as a “gateway benefit” as it can lead to further support, including help with housing costs and council tax.

The benefit can be claimed by phone and online, and an online calculator can help pensioners check if they are likely to be eligible and get an estimate of what they may receive.

Reeves admits some will lose out in spending review

The chancellor also confirmed winter fuel payments will be restored to some pensioners this year , after the government U-turned on cuts to the allowance.

Reeves said her rules on borrowing to pay for public services were “non-negotiable” and insisted they were necessary because of “Conservative maltreatment” of the economy.

In a speech in Manchester, Reeves suggested she had turned down requests for funding from ministers and argued a squeeze on funding was a “product of economic reality”.

Chancellor Rachel Reeves has said not every government department will “get everything they want” in the upcoming spending review, as she defended her economic decisions.

The government said the spending review, which will be announced on 11 June, would “scrutinise every single pound the government spends”.

The review will outline day-to-day departmental budgets over the next three years and investment budgets over the next four.

Whitehall insiders have told the BBC they expect it will be “ugly”, and that ministers have been fighting over winning small amounts of cash for their respective departments.

During Prime Minister’s Questions, Conservative leader Kemi Badenoch said the government was in chaos and accused Cabinet ministers of “squabbling” over funding.

Sir Keir Starmer said the government was taking “the right decisions” on the economy adding that growth figures were up while interest rates had been cut.

Reeves’s position on ruling out borrowing for day-to-day spending and not raising taxes again has fuelled speculation that spending cuts will be made.

The chancellor said £40bn of tax hikes already announced in last year’s Budget and the changes to the way borrowing for investment is accounted for meant £300bn extra was available to pay for infrastructure projects in the coming years.

But the chancellor hinted there had been some friction within government over decisions on day-to-day spending on public services, ranging from prisons to policing.

The chancellor said despite a £190bn increase in funding over the spending review period “not every department will get everything that they want next week and I have had to say no to things that I want to do too”.

“That’s not because of my fiscal rules,” Reeves said.

“It is a result of 14 years of Conservative maltreatment of our public services, our public realm and of our economy.”

She said there were “good things I’ve had to say no to” but “the reason for that is because it is important to have control of the public finances”.

Conservative shadow chancellor Mel Stride said: “The government’s mismanagement of the economy has already led to huge tax increases.”

He added: “I think next week we’re going to see some very tough things across the spending allocations.”

The Institute for Fiscal Studies (IFS) think tank has warned tough choices are “unavoidable”, with some departments facing spending cuts.

In her speech, Reeves mounted a forceful defence of her fiscal rules, as she announced £15.6bn of investment in transport infrastructure in England.

“Over the next week you will hear a lot of debate about my so-called self-imposed fiscal rules,” Reeves said.

“Contrary to some conventional wisdom, I didn’t want to come into politics because I care passionately about fiscal rules.”

The chancellor said she came into politics “because I want to make a difference to the lives of working people”, adding that she believed “economic responsibility and social justice go hand-in-hand”.

Reeves accused former Conservative Prime Minister Liz Truss of trashing market confidence with her mini-budget, which included £45bn of tax cuts funded by borrowing, spooking global investors and leading to her resignation.

The chancellor suggested Reform UK leader Nigel Farage was “itching to repeat that exact same experiment”, calling it “fantasy politics”.

“That’s why my fiscal rules are non-negotiable,” Reeves said.

“Let’s be clear: It is not me imposing borrowing limits on government, those limits are the product of economic reality.”

Winter fuel payment U-turn in place this year, says chancellor

3 hours ago Share Save Kevin Peachey Cost of living correspondent, BBC News Share Save

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Changes to the winter fuel payment to allow more people to receive it will be in place this year, the chancellor has said. Rachel Reeves said more people would qualify for the allowance “this winter”, however details of the changes and who will be eligible remain unclear. Prime Minister Sir Keir Starmer has said he wanted to widen the threshold for winter fuel in a U-turn on one of his government’s first major policies, but failed to confirm on Wednesday how many would now get it. The payment, worth up to £300 to help with energy bills during the coldest months, was paid only to those on pension credit last year, but the policy was widely blamed for Labour’s poor local election results.

It meant 10 million fewer pensioners received the money in 2024. There was particular concern among charities and some MPs about those whose income was slightly too high to qualify, but were hit by the loss of the payment as energy costs remained expensive. Sir Keir did not confirm during Prime Minister’s Questions who would be eligible for the revised policy, having previously admitted in a recent BBC interview that clarity was needed as soon as possible. “We will look, again, as I said two weeks ago, at the eligibility for winter fuel, and of course, we’ll set out how we pay for it,” when quizzed by Conservative Party leader Kemi Badenoch on how many of the 10 million pensioners who lost the allowance would get it back. The questions came after Reeves said earlier that people “should be in no doubt that the means test will increase and more people will get winter fuel payment this winter”. Badenoch said the Chancellor was “rushing her plans because she just realised when winter is”. If the government waits until the Budget to announce the changes, it would be just before payments are typically made. Eligible pensioners receive payments automatically in November or December. Under the short-lived current system, people are required to claim pension credit – which is a top-up to the state pension for those on low incomes. Households with a person under 80 receive £200 a year, while homes with a person over 80 receive £300.

In response to growing questions over the changes, Downing Street said it would provide “clarity” on how it would expand payments “as soon as we can”. Caroline Abrahams, charity director at Age UK, said: “We are encouraged by the chancellor’s words, but will wait to see the detail, which needs to be published very soon if changes are to be made in time for this winter, something that is absolutely crucial if we’re to protect the pensioners at greatest risk.” Earlier on Wednesday, pensions minister Torsten Bell said there would be no return to the previous system in which the payment was made to all 11.4 million pensioners. “It’s not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we’re not going to be continuing with that,” he said. The government has not provided details of who would qualify as a millionaire. Sir Keir told Parliament that the reason the government could expand the number of people receiving the payment was because Labour had “stabilised the economy”. Reeves said the economy was now in a “better shape,” and that the government “had listened to the concerns people had about the level of the means test” in a speech in Greater Manchester announcing billions of pounds of investment in transport infrastructure in England. But Daisy Cooper, treasury spokesperson for the Liberal Democrats, said pensioners deserved an apology from the government. “This whole debacle has caused needless misery for millions of pensioners,” she said.

Changes still unclear

The decision to means-test the previously universal payment was one of the first announcements by the chancellor after Labour’s landslide election victory last year. The practicalities of changing the system again are complicated. One option would be a system in which people on certain incomes can make a claim. Clawing back a payment via the tax system for those on higher incomes is another possibility. The government has yet to outline which mechanics it intends to use to enact its change of policy. In Scotland, ministers have already outlined a different policy. Those in receipt of qualifying benefits like pension credit would get the payment as before, while others would get £100. The funds – which are limited to one payment per household – will be paid through a new Scottish Parliament benefit, which will not be ready until late 2025.

‘Ugly’ spending review expected

Chancellor announces £15bn for transport projects

1 hour ago Share Save Jennifer McKiernan • @_JennyMcKiernan BBC political reporter Share Save

BBC

Billions of pounds of investment in transport infrastructure in England have been announced by Chancellor Rachel Reeves. The money will be spent on tram, train and bus projects in mayoral authorities across the Midlands, the North and the West Country. The move comes before the government’s spending review next week, which will determine how much money each Whitehall department gets over the next three to four years. Reeves has been under pressure from Labour MPs to spend money following criticism of relentless economic gloom, particularly concerning disability and benefit cuts.

Trams form the backbone of the investment plans, with Greater Manchester getting £2.5bn to extend its network to Stockport and add stops in Bury, Manchester and Oldham, and the West Midlands getting £2.4bn to extend services from Birmingham city centre to the new sports quarter. There will also be £2.1bn to start building the West Yorkshire Mass Transit programme by 2028, and build new bus stations in Bradford and Wakefield. Six more metro mayors will receive transport investments: £1.5bn for South Yorkshire to renew the tram network as well as bus services across Sheffield, Doncaster and Rotherham by 2027

to renew the tram network as well as bus services across Sheffield, Doncaster and Rotherham by 2027 £1.6bn for Liverpool city region with faster connections to Liverpool John Lennon Airport, Everton stadium and Anfield, and a new bus fleet in St Helens and the Wirral next year

with faster connections to Liverpool John Lennon Airport, Everton stadium and Anfield, and a new bus fleet in St Helens and the Wirral next year £1.8bn for the North East to extend the Newcastle to Sunderland Metro via Washington

to extend the Newcastle to Sunderland Metro via Washington £800m for West of England to improve rail infrastructure, provide more frequent trains between the Brabazon industrial estate in Bristol and the city centre, and develop mass transit between Bristol, Bath, South Gloucestershire and North Somerset

to improve rail infrastructure, provide more frequent trains between the Brabazon industrial estate in Bristol and the city centre, and develop mass transit between Bristol, Bath, South Gloucestershire and North Somerset £1bn for Tees Valley including a £60m platform extension programme for Middlesbrough station

including a £60m platform extension programme for Middlesbrough station £2bn for the East Midlands to improve road, rail and bus connections between Derby and Nottingham. The transport investment marks Reeves’ first open move away from the stringent rules in the Treasury’s Green Book, which is used by officials to calculate the value for money of major projects. The book has been criticised for favouring London and the south-east. In a speech in Greater Manchester, the chancellor said that sticking to book’s rules has meant “growth created in too few places, felt by too few people and wide gaps between regions, and between our cities and towns”. Changing the rules will also mean more money for areas of the North and Midlands, including the so-called “Red Wall”, where Labour MPs face an electoral challenge from Reform UK.

Reeves is not the first chancellor to review the Treasury’s investment rules; former Prime Minister Rishi Sunak also reviewed the book as part of the Conservatives’ Levelling up agenda. Sunak had also announced some of these same projects, including the development of a mass transit network in West Yorkshire, in his Network North plan, intended to compensate for the decision to scrap the HS2 line north of Birmingham. Labour reviewed these projects when they came to power in July, arguing they had not been fully funded. Conservative shadow Treasury minister Gareth Davies accused Labour of copying and pasting announcements made by the Conservative government”. Conservative mayor of Tees Valley Ben Houchen said Labour’s decision meant projects in his area had been delayed by a year which was “frustrating” but added that he was “absolutely delighted” the funding had now been given the go ahead. North East Mayor Kim McGuinness said the £1.8bn funding for her area was a “game changer”, while Liverpool City Region Mayor Steve Rotheram said the investment was a “massive vote of confidence in our region”. Liberal Democrat Treasury spokeswoman Daisy Cooper warned the chancellor must now deliver, because “these communities have heard these same promises before, only to be left with phantom transport networks”. She added: “Extra investment in public transport must also focus on cutting fares for hard-pressed families being clobbered by a cost of living crisis.” Zoe Billingham, head of the IPPR North think tank, welcomed the investment but said that while money had been provided to lay the tracks there was “still a question about the ongoing running costs” and the extent to which the new transport networks would pay for themselves. Following the speech Reeves was asked if there would be funding for a new rail link between Manchester and Liverpool. She replied that there would be “more to come next week” when she delivers her Spending Review. Reeves’ £15.6bn regional transport announcements are part of a five-year funding allocation from 2027/28 to 2031/32, which a Treasury spokesman confirmed would double the current £1.14bn spending allocation for 2024-25 to £2.9bn by 2029-30.