Reeves boosts NHS and housing as some budgets squeezed

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Spending Review: Where key money is being spent… in 99 seconds

Rachel Reeves has announced an extra £29bn per year for the NHS in England, along with funding boosts for defence and housing, as she set out the government’s spending plans until the end of the decade. The chancellor also promised more money for artificial intelligence and transport projects, saying “renewing Britain” was at the heart of her plans. But the Spending Review also saw some departments squeezed in day-to-day spending, including the Foreign Office and the environment department. Reeves said the review would deliver security, economic growth and “an NHS fit for the future”, but Conservative shadow chancellor Sir Mel Stride said it was a “spend now, tax later review”.

He predicted “a cruel summer of speculation” ahead of the autumn Budget, when he said the chancellor would announce tax rises. Ahead of the chancellor’s announcement in the Commons, Prime Minister Sir Keir Starmer told his cabinet the day marked “the end of the first phase of this government, as we move to a new phase that delivers on the promise of change for working people”. The government will hope that, following a bumpy first year, increased spending in health and investment in longer-term projects will reassure voters but many departments will still have to grapple with frugal day-to-day spending allocations.

The Spending Review marked the culmination of months of discussions between Reeves and her cabinet colleagues. Negotiations have been particularly drawn out with Housing Secretary Angela Rayner and Home Secretary Yvette Cooper, with agreements not being reached until Sunday and Monday respectively. Rayner’s department secured £39bn across 10 years for social and affordable housing in England. The Home Office’s day-to-day budget will go down by 1.7% over the next three years but funding of police forces rises by 2.3% – provided local council taxes also increase. The National Police Chiefs’ Council said the increase would “cover little more than annual inflationary pay increases”. The chancellor also pledged to end the use of hotels to accommodate asylum seekers by the end of the Parliament, expected in 2029. The BBC has been told that will be achieved by reducing the number arriving by small boats and building new accommodation for asylum seekers. The housing department has been given a pot of money to provide alternatives. Health was the big winner in the review, with the NHS budget increased by 3% per year across three years for day-to-day running costs. The government had already said it would be increasing defence spending from 2.3% of national income to 2.6% by 2027, which includes intelligence spending. This was confirmed in the Spending Review but it did not include progress towards reaching 3%, which the government has said it hopes to hit by 2034. The chancellor is restricted in how much can she spend as a result of her two self-imposed rules – that day-to-day spending should not be funded through borrowing and that government debt as a share of national income should fall by 2029-30. Her decision to increase spending on health, means other departments will see their budgets tighten. The Foreign Office loses 6.9% a year, mainly in aid spending; Transport loses 5% a year over the next three years, and the environment department loses 2.7%. Paul Johnson, director of the Institute for Fiscal Studies think tank said spending limits would put pressure on public sector pay and budgets for schools would be particularly tight, especially as demand for special education continues to rise. Other announcements included: An additional £280m for the Border Security Command, the body tackling small boat crossings

£7bn to help build 14,000 new prison places in England and Wales

An extension of the £3 cap on bus fares in England to March 2027

£2bn for artificial intelligence projects and £750m to fund a supercomputer at Edinburgh University In the days leading up to the Spending Review, the government announced £86bn for science and technology projects, £15bn for transport links, £11.5bn towards building the Sizewell C nuclear power plant and an expansion of the number of children receiving free school meals at a cost of £1bn. Additional spending in England will be be matched by an extra £5.7bn per year on average for Scotland, Wales and Northern Ireland.

Despite the tightening of some budgets, Reeves was keen to insist she was not returning to the austerity policies of the coalition and Conservative governments of 2010 to 2016. She said austerity had been a “destructive choice for the fabric of our society and a destructive choice for our economy”, adding: “My choices are different.” With announcements for investment in the longer term, the government hopes to see the economy growing, while the focus on NHS and defence budgets match government pledges on health and security. But there is political risk for the government as they hope that voters, who may be drawn to Reform UK, do not get impatient as they wait for services to improve. The chancellor aimed political jibes not only at the Conservatives, but also Reform, who she said were “itching” to replicate the “disastrous” spending policies of Liz Truss. Reform UK’s deputy leader Richard Tice said “spending was out of control” and that the government could learn from his party’s efforts to cut waste in local councils. Liberal Democrat Treasury Spokesperson Daisy Cooper called for more money for social care, telling MPs: “Putting more money into the NHS without fixing social care is like pouring water into a leaky bucket.” She said the chancellor could boost growth by pursuing a closer trade deal with the EU. The SNP’s Dave Doogan said the chancellor had mentioned Reform UK and its leader Nigel Farage more than Scotland. Green Co-Leader Adrian Ramsay accused the chancellor of “balancing her spreadsheet on the backs of some of the worst off in our society” and urged the government should introduce a tax on the “super-rich”.

Rachel Reeves was branded the “spend now, tax later” Chancellor after she announced billions of pounds of new spending on public services and infrastructure projects.

The Chancellor unveiled her eagerly awaited spending review in the House of Commons and committed to big funding increases for the NHS and defence.

But she did not set out how she would pay for the commitments, raising the prospect of more tax rises at the autumn Budget.

Sir Mel Stride, the shadow chancellor, said the spending review was “not worth the paper that it is written on because the Chancellor has completely lost control”.

The senior Tory said: “This is the spend now, tax later review because the Chancellor knows that she will need to come back here in the autumn with yet more taxes and a cruel summer of speculation awaits.”

Ms Reeves said her spending plans would “deliver the priorities of the British people”.

She announced the NHS will receive an extra £29 billion a year to ensure the health service is “there whenever we need it”.

She told the Commons: “An extra £29bn per year for the day-to-day running of the health service. That is what the British people voted for and that is what we will deliver. More appointments. More doctors. More scanners. The National Health Service: Created by a Labour government. Protected by a Labour government. And renewed, by this Labour Government.”

Meanwhile, the Chancellor promised to increase the core schools budget by more than £4.5 billion a year and confirmed defence spending will rise to 2.6 per cent of GDP by 2027, which included an uplift for the intelligence services.

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UK chancellor Rachel Reeves has delivered the government’s spending review, setting out its plans and priorities for the next three years. The aim of the review is of course to allocate spending over that time period – but this government is keen for economic growth and so has directed the funds to try to boost GDP. This approach could work but is particularly challenging in an uncertain global environment.

The parameters of the UK’s fiscal policy were set in the budget last October and the spring statement in March when the chancellor confirmed her fiscal rules, which allowed borrowing only for investment. Day-to-day spending on public services like the NHS and schools has to be met by tax revenues.

As a result of an earlier tweak to the fiscal rules, public investment – spending on things like roads and hospitals – will total about £113 billion from now until nearly the end of this parliament.

Many investors and creditors will have been looking out for this boost, as the UK has lagged behind comparable economies partly due to its lower levels of investment. The announcements have the potential to bring in private funding if more investors see an opportunity to benefit from increased economic growth, particularly if the UK’s relatively high energy costs are also addressed.

Also in line for government investment is social and affordable housing. The announcement of £39 billion for this sector in England was a centrepiece of Reeves’ announcement. Coupled with planning reforms, the independent Office for Budget Responsibility (OBR) judged in March that this could indeed boost growth.

In terms of day-to-day spending, health and defence received the biggest increases among government departments because of, respectively, pressures on the NHS arising from COVID-19 and the ageing population, and from geopolitical challenges like the war in Ukraine.

Both departments, though, also have the potential to raise economic growth. Rates of economic inactivity (people who aren’t in paid work, for example) in the UK have not fallen back to their pre-COVID levels as they have in other major economies such as the US, France and Germany. Improving health services, cutting waiting lists and widening access to mental health support could help get more people back to work, which would boost employment and support growth.

And on defence, spending in this area has the potential (depending greatly on the type of spend) to create technology that could eventually boost the nation’s productivity. GPS, for example, was developed by the US Department of Defense, as were many innovations now used in smartphones. Boosting UK defence spending to 2.6% of GDP by 2027 and investing in technology has the potential to unlock advances in equipment for the UK.

Who loses out?

This is not to say that increasing the settlements to other government departments would not support growth too. But some of those departments, including the Home Office, Foreign Office and transport, are now facing cuts in real terms to their spending. And they may find themselves under even more pressure should GDP growth slow.

This is because of the chancellor’s fiscal rule about funding current spending from taxes. This would mean cuts if these receipts fall as a result of slowing growth, since Reeves has very little “fiscal headroom” (spare cash) to ensure she can meet her rules – only £9.9 billion.

But the reverse may also prove to be true. Should investment in research and development (£22.6 billion per year by 2029‑30), renewable energy and infrastructure, alongside planning reforms, increase GDP growth, then the chancellor may find that she has more funding to allocate to day-to-day departmental spending to support public services.

However, it takes time for investment to generate growth. OBR forecasts only expect increased growth of around 1.7% to 1.8% in the second half of this parliament. But those growth forecasts pre-date the US president Donald Trump’s tariffs announced in April, which are causing turmoil in global trade.

This is why it is even more important for the UK to raise domestic economic growth through investing in people, technology and productivity. To govern is to choose, as the saying goes, and the government will hope that these are the right trade-offs to have made in order to grow during such shaky times. Despite the uncertain global picture, the chancellor has laid some promising foundations. Now the challenge will be delivering the growth.

Linda Yueh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

This article was originally published on The Conversation. Read the original article.

Nigel Farage has suggested the chancellor should come to the pub to “meet some real people”

Rachel Reeves implied that council tax could rise to pay for police funding , according to Paul Johnson, the director of the IFS. But Reeves told GB News that no tax rises will be needed

Fiscal rules have allowed the allocation of £190 billion for public services, chancellor says

• The winners and losers of the spending review

Listening to Rachel Reeves, you’d think Britain was firing on all cylinders.

How else could the chancellor justify all that spending? Billions after billions for all of Labour’s favourite pet projects.

No reform of the public sector, or plans to bring down the welfare bill. Just more and more borrowing.

Read in full: Labour’s spending review shows how unserious they are

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Farage challenges Reeves to meet voters in the pub

Nigel Farage has suggested Rachel Reeves should come to the pub to “actually meet some real people”.

The Reform UK leader gave his response to the spending review from outside the Westminster Arms in London, the pub the chancellor accused him of spending too much time at, with a pint in hand.

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In a video shared on social media he said: “I suggest Reeves comes here as she might actually meet some real people and realise what damage she is doing to the economy. Anyway, I haven’t got time for all this. Cheers.”

Unions praise spending review

Some unions are optimistic about the spending review, including Unison and the Trades Union Congress (TUC).

Christina McAnea, the general secretary of Unison, said: “The chancellor is trying to turn the page on the austerity disaster inflicted on communities across the UK by successive Conservative governments.

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“Ministers know investing in key public services is the best way to undo the damage of the past and grow the economy of the future.”

Paul Nowak, the general secretary of the TUC, said: “After over a decade of Conservative chaos, rebuilding and repairing Britain was never going to be easy — but this government is on the right track.”

He said the boost for the NHS and schools will be “vital to help fix our public services after years of Conservative austerity and an important boost for the workforce”, while funding for key infrastructure is “how you secure good jobs and deliver industrial revival up and down the country”.

Reeves balanced budget ‘on backs of worst off’

Adrian Ramsay, the MP for Waveney Valley HOUSE OF COMMONS/PA

The Green Party’s co-leader said he was “horrified” by real-term cuts to the Department for Environment Food and Rural Affairs’s funding “just as the impact of climate change is starting to affect our communities”.

Adrian Ramsay said: “Now is the time to invest in climate resilience and preparedness.”

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He added: “Today’s spending review shows we have a chancellor who seems to know the price of everything and the value of nothing.

“While today Reeves may have balanced her spreadsheet, it is done on the backs of some of the worst off in our society. The proof is in how many will still be feeling worse off as the cost-of-living crisis bites hard.

“People want to feel pride in Britain again, and for this, they need real hope. Hope only comes from seeing how things will improve through real investment in the everyday services we all rely on.”

Councils ‘face more cuts’

Councils will have to increase tax bills and make cuts, the Local Government Association has warned.

Louise Gittins, chair of the LGA, said: “A re-commitment to multi-year local government funding settlements is essential for financial planning, while efficiency and innovation continues across local government.

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“However, all councils will remain under severe financial pressure. Many will continue to have to increase council tax bills to try and protect services but still need to make further cutbacks.”

Analysis: Will Reeves’s plan solve the housing crisis?

Rachel Reeves made “the biggest boost to social and affordable housing investment in 50 years” in her spending plans.

While Angela Rayner, the housing secretary, was one of the last government ministers to finalise her settlement with the Treasury before the spending review, she came away with a £39 billion cash injection spread over ten years to fund homes for low-income households.

The last five-year affordable homes programme was worth £11.5 billion, averaging at about £2.3 billion a year, but this new pledge will see the government spend £4 billion a year by 2030.

However, will this sum be enough to make a difference or is it a drop in the ocean of Britain’s housing needs — and what will it mean for our property landscape?

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Read in full: Will the spending review 2025 mean more new affordable housing?

Reeves confident about NHS targets

Rachel Reeves meets staff at St Thomas’ Hospital in London CARL COURT/GETTY IMAGES

The chancellor has said she is confident the government can meet its commitment on NHS waiting time targets despite scepticism from health leaders.

Sir Keir Starmer said in December that the NHS will carry out 92 per cent of routine operations within 18 weeks by March 2029.

Asked about the pledge, Reeves told reporters: “We’ve already delivered around three-and-a-half million additional appointments since we came to office last July.

“Waiting lists are already down by 200,000 so we are confident that we can meet our plan for change commitments because of the 3 per cent annual increase in funding for the National Health Service.”

Reeves: Labour ‘making the difference’

Wes Streeting, the health secretary, with the chancellor in London’s St Thomas’ Hospital. Reeves has urged MPs to “sell the benefits” of her review CARL COURT/GETTY IMAGES

Rachel Reeves has urged Labour MPs to “get out and sell” the benefits of her spending review.

Addressing a meeting of the Parliamentary Labour Party this evening, the chancellor said: “People are only going to know the good news that we set out today if we campaign on it, if we deliver the leaflets, if we speak to people on the doorstep, if we write those pieces for our local papers — that is how people are going to know that it is Labour making these differences.”

She told them it is “because of this Labour government” that “more kids are going to get free school meals” and that “we’ve got already 200,000 off of the waiting list”. She said that “there is going to be local community policing in their neighbourhood”, and “we are going to have spades in the ground, building the tram links, the bus stations, the train stations”.

Tax rises ‘only place to go’, IFS warns

Growth forecasts are more likely to go down and the “only place to go” for Rachel Reeves will be tax rises, the deputy director of the IFS said.

Asked by Times Radio whether tax rises are likely, Carl Emmerson said “it’s possible” that they might not happen and “let’s hope that we get three or four months of really good news through the summer”.

He said: “Unfortunately, it seems to be more likely that those growth forecasts will get downgraded rather than upgraded.

“There’s no wiggle room in there. The chancellor has only just complied with pretty loose fiscal targets. So any downgrade is likely to force her to take action if she wants to continue to comply with those targets.”

Either she “reopens the spending review”, which Emmerson said is “pretty difficult”, or cuts benefits further, which he said was “pretty unlikely”. So, he added: “The only place to go is further tax rises.”

‘Watershed moment’ for social housing

Housing charities praised Rachel Reeves’s boost for social and affordable homes in England and said it was a “watershed moment”.

A spokesman for Shelter said it was a “huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country”.

Kate Henderson, chief executive of the National Housing Federation, described the funding as a “transformational package” for social housing. She said: “This is the most ambitious affordable homes programme in decades and alongside long-term certainty on rents, will kick start a generational boost in the delivery of new social homes.”

Paul Dolan, the chief executive of Riverside, one of the largest housing association groups, said: “The Affordable Homes Programme marks a major step in boosting the amount of social housing which is crucial if we are to cut the record number of homeless families living in temporary accommodation.”

Funding boost for the North of England

Oliver Coppard, mayor of South Yorkshire GARY ROBERTS PHOTOGRAPHY/REX FEATURES/SHUTTERSTOCK

We are “finally beginning to see” the investment the North has been “denied for too long”, the mayor of South Yorkshire said.

Oliver Coppard said: “Overall, this is good news for South Yorkshire and for the North. We’re finally beginning to see the type of investment we’ve been denied for too long; a rebalancing of our economy and long-term commitments to addressing the challenges that hold our economy back.”

He welcomed the investment in transport, defence, housing, health and education, but said no news on new money for South Yorkshire Police was “disappointing”.

‘Tough years ahead for social care’

Social care, universities and local authorities face “tough years ahead”, the Institute For Public Policy Research said.

Harry Quilter-Pinner, executive director of the think tank, said: “There are muchneeded big increases in investment in infrastructure, especially transport and housing, which will make a huge difference to the economy — helping to drive growth and living standards. There are also welcome increases in funding for public services, including the NHS and schools.

“But in other areas we have yet to hear how the government will solve the big challenges facing the country: social care, universities and local authorities all face tough years ahead after years of under-investment and cuts, for example.

“If the government wants to tackle these challenges, as voters expect it to, it will have to look again at taxes over the coming years.”

Farmers’ Union welcomes spending review pledge

Tom Bradshaw, the union’s president GEOFF PUGH/SHUTTERSTOCK

The National Farmers’ Union has welcomed the spending review for protecting the agriculture budget.

After angering many farmers with the decision to reduce inheritance tax relief, the Treasury will be relieved that the NFU is pleased.

Tom Bradshaw, the union’s president, said: “Relentless NFU lobbying and leadership, convening agriculture and environmental groups, has seen the agriculture budget protected against rumours of significant cuts.

“I am pleased the government has listened, and credit should go to Defra secretary of state, Steve Reed, for his work in maintaining a budget against such a tough financial backdrop.”

But he did call on the government to recognise food security as a “critical part of national security” and asked how Labour would “realise all of its ambitions for the natural environment”.

Spending review is ‘fully funded’, Reeves says

Rachel Reeves insisted that no tax rises will be needed to pay for the commitments in her spending review.

Asked by GB News if she could rule out tax rises in the autumn budget, the chancellor said: “Every penny of this is funded through the tax increases and the changes to the fiscal rules that we set out at last autumn. We’re not spending a penny more or a penny less than the envelope that we set last autumn.

“So all of this is fully funded. I said at the budget last year, and I repeated again in the spring statement in March, that public services now needed to live within the envelope that we have set.”

Labour won’t ‘go above’ 5% council tax increases

Rachel Reeves has said that the government will not be “going above” council tax increases of 5 per cent per year.

Asked whether the spending review depended on council tax increases and whether people should expect them throughout the parliament, she told ITV: “The previous government increased council tax by 5 per cent a year, and we have stuck to that. We won’t be going above that.

“That is the council tax policy that we inherited from the previous government, and that we will be continuing. Of course, that money goes into those local public services, including social care, and in case of the police precept, it goes into our local policing.”

The spending review appeared to suggest that a gap in police funding will be filled with an increase in the police precept, which is part of council tax bills.

Chancellor: ‘Not everyone will get what they want’

Rachel Reeves addresses concerns from departments HENRY NICHOLLS/AFP/GETTY IMAGES

Rachel Reeves has said she recognises “that not everyone has been able to get exactly what they want” from her spending review.

Asked about concerns raised by policing figures, she told the BBC: “I recognise that not everyone has been able to get exactly what they want in this spending review.”

She added: “We’re not able to do everything that everyone would want, but real-terms spending power increases for the police of 2.3 per cent a year, above inflation, enabling us to deliver on the commitments we made in our manifesto.”

Tacit council tax warning

Buried in the small print of the spending review is a tacit warning that council tax will have to rise.

The Home Office’s budget is being cut by 1.7 per cent over the rest of this parliament, but police funding is rising.

The government appears intent on filling the gap with an increase in the police precept that is part of council tax bills. Full details won’t be set out until the Autumn, but it means council tax will rise.

The same assumption underlies funding for local authorities. There will be a 5 per cent increase in bills over the next three years.

Council taxes may rise, IFS says

Reeves implied that council tax could rise to pay for police funding, a think tank’s director has said.

Paul Johnson from the the Institute for Fiscal Studies wrote:

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In his initial analysis, he went on to warn that the boost for the NHS might not be enough to meet the government’s waiting times target. Also, should Nato’s spending target rise, the rise in defence spending might “no longer cut the mustard”.

He also said that without the free school meals expansion, the budget for schools is a “real-terms freeze”.

The IFS verdict on spending cuts

Paul Johnson, the director of the Institute for Fiscal Studies

“This is not an austerity spending review,” the Institute for Fiscal Studies (IFS) said.

In the think tank’s initial response to Reeves’s announcement, its director Paul Johnson said: “Most departments will have larger real-terms budgets at the end of the parliament than the beginning, but in many cases much of that extra cash will have arrived by April.

“Eight departments will actually see cuts to their budget between this year and the end of the parliament. This is not an austerity spending review, though much of the government’s largesse, such as it is, was focused on the first two years of the parliament.”

Foreign Office cuts are ‘very concerning’

It is “very concerning” that the Foreign Office appears to be suffering the “harshest real-term cuts”, Dame Emily Thornberry said.

The Labour chair of the foreign affairs committee said this comes “at a time when Britain is back on the world stage, and has never been more needed as a force for good”.

She said: “Real-term cuts to the Foreign Office budget are alarming and inconsistent with the government’s objective to position the UK as a leader on the world stage.

“Britain punches well above its weight when it comes to soft power and diplomacy. If we aren’t proactive in maintaining our global influence, we can expect our standing to diminish, and for autocratic states to fill the vacuum we leave.”

Thornberry added that maintaining global security isn’t “just about funding our military”, but that diplomacy plays “an essential role in peace-building and conflict resolution”.

Businesses can’t take any more taxes, CBI warns

Rain Newton-Smith LEON NEAL/GETTY IMAGES

“We will hold the chancellor to account that she won’t come back for tax rises on business,” the director-general of the CBI said.

Rain Newton-Smith told Times Radio that businesses cannot “shoulder any more” taxes as they need to invest. She said: “The prime minister himself has said you cannot tax your way to growth. So I think it’s critical that we don’t see rises like that on business because they are the ones that need to invest to deliver the growth mission.”

Newton-Smith said the £100 billion over this parliament in capital investment was “huge”, as long as it can be delivered. This depends on working with the private sector and putting in place planning reforms, she said.

“What the business leaders I speak to want to see is that pace of delivery,” she added.

School funding ‘won’t be enough’, union leaders say

Rachel Reeves’s funding increase for schools will not be enough to stop cuts, headteachers unions have warned.

Julia Harnden, deputy director of policy at the Association of School and College Leaders, said: “Schools are already having to make significant cuts and the spending review announcements will not change that situation in the short term and won’t be enough to reverse this situation in the longer term either.”

Paul Whiteman, general secretary at the National Association of Head Teachers, said there is “no escaping” the fact that schools will be operating in a “challenging financial climate for some years to come”.

He said: “We also know that some of the increase in funding will be absorbed by the increased free school meal costs schools will be facing after last week’s announcement.”

Whiteman added that the demands placed on schools will increase as Labour wants to see more pupils with special educational needs educated in mainstream classrooms.

‘No guarantee NHS waiting list targets will be met’

There is no guarantee that targets to reduce NHS waiting times will be met despite the boost in funding, health leaders have warned.

Cutting waiting lists was a key part of Labour’s manifesto. The government wants the NHS to meet the 18-week standard for planned treatment.

Matthew Taylor, chief executive of the NHS Confederation, which represents all health organisations, said the £29 billion funding for the NHS “on its own won’t guarantee that waiting time targets are met”.

He warned that the funding won’t be enough to cover the increasing cost of new treatments, adding that staff pay is likely “to account for a large proportion”.

Analysis: Was Reeves being prudent or profligate?

By Daniel Finkelstein

What will voters make of the performance of Rachel Reeves in the spending review? Will they think she is spending too much, or investing too little? Is she prioritising the right things, or missing the really important areas? Will they believe her figures, or think she is lying to them?

I’m pretty confident I know exactly what the majority of them will think. Nothing. They won’t have noticed anything at all. They may well not be aware there even was a fiscal event happening.

But that’s not to say that Reeves’s review has not been immensely politically consequential. It was a chance to frame the government’s basic case and tell a story about what it is doing.

Is the government being prudent or expansive? I wasn’t clear.

Read in full: Can anyone tell me what story the government is telling?

Police chiefs say funding ‘falls short’ of government’s ambitions

The chairman of the National Police Chiefs’ Council said the increase in funding “falls far short of what is required to fund the government’s ambitions”.

Gavin Stephens said that in real terms it will cover “little more than annual inflationary pay increases for officers and staff”.

He said: “A decade of underinvestment has left police forces selling buildings, borrowing money and raising local taxes to maintain what we already have, with forces facing a projected shortfall of £1.2 billion over the next two years, which is now expected to rise.

“This is against a backdrop of increasing crime rates, with new and escalating threats from organised crime and hostile states, and more offenders being managed in the community as a result of an overstretched criminal justice system.

“Cutting crime isn’t just about officer numbers — we need specialist skills and people, supported with the right systems and technology, to better protect communities.”

In pictures: Starmer and Reeves

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HOUSE OF COMMONS/UK PARLIAMENT/PA

Foreign Office is one of the big losers

Defra, the Foreign and Development Office, the Cabinet Office and the Home Office are some of the departments to lose out in the spending review, according to the official document.

Page 48 of the red book, which accompanies the review, breaks down the projected spending of each department from 2023-24 to 2028-29.

It shows that the average annual real growth of the Department for Environment, Food and Rural Affairs (Defra) will be down 0.7 per cent.

For the Cabinet Office the same figure is 2.2 per cent, the Home Office is 2.2 per cent and the Foreign and Development Office is 5 per cent — mostly because of the cuts to the foreign aid budget to fund defence spending.

The biggest winners are health, justice and housing — all of which will see a rise of more than 2.8 per cent.

Will Reeves’s long-term plan pan out?

Rachel Reeves leaves No 11 before presenting her spending review KIN CHEUNG/AP

By Steven Swinford, Political Editor

For both Sir Keir Starmer and Rachel Reeves, the spending review was a defining moment after a hugely challenging first year in office.

On one level it represented an opportunity to put flesh on the bones of what his government is really about, something that critics say has been sorely lacking to date.

But for Reeves it was also personal. Her autumn budget, which included a huge package of tax rises, and her decision to strip winter fuel payments from ten million pensioners only to reinstate them has led to questions from colleagues — including fellow cabinet ministers — about both her judgment and credibility.

• Read in full: Rachel Reeves is testing voters’ patience … she needs results

Spending review ‘levels down’ London

The mayor of London has criticised the spending review as “levelling down” the capital city.

Sir Sadiq Khan said he was “concerned” the spending review could mean a lack of funding for the Metropolitan Police, meaning fewer officers to tackle crime.

He also criticised a lack of commitment towards infrastructure investment, such as extending the Docklands Light Railway.

“The way to level up other regions will never be to level down London. I’ll continue to fight for the investment we need so that we can continue building a fairer, safer and greener London for everyone,” he said.

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Greater defence spending is the ‘ambition’

Britain has an “ambition” to spend 3 per cent of its GDP on defence by 2034, the spending review confirmed.

Rachel Reeves announced the government would increase its defence budget from about 2.3 per cent to 2.5 per cent by 2027 but did not mention the 3 per cent target.

The accompanying spending review document stated: “The first duty of the government is to keep the country safe. This is why in February, the government announced that defence spending will rise to 2.6 per cent of GDP from 2027, with an ambition to reach 3 per cent in the next parliament when economic and fiscal conditions allow.”

Nato had demanded that the government raise this figure to 3.5 per cent.

The key takeaways of Reeves’s statement

• NHS day-to-day spending will increase 3 per cent, £29 billion, a year

• Funding for 13,000 additional police staff

• The core schools budget will increase by £4.5 billion a year

• Defence spending will rise to 2.5 per cent of GDP by 2027

• £39 billion for affordable and social housing

• £280 million for a Border Security Command agency

• The use of asylum hotels will end by 2029

Analysis: Mixed measures or mixed messages?

By Aubrey Allegretti

To trumpet what she sought to present as good news in her statement, Rachel Reeves used a mixture of measures: percentage and cash increases, a mixture of baseline and real-terms figures.

This means it will take some time to unpick and verify the numbers, which are set to be published by the Treasury imminently.

Reeves also has the luxury of no immediate checking of her figures by the Office for Budget Responsibility, which delivers its verdict the moment she sits down after delivering a budget.

The chance for real scrutiny will come shortly.

The government has ‘trashed the economy’, say Tories

Rachel Reeves has “trashed the economy” and will have to raise taxes at the next budget, Sir Mel Stride has said.

The shadow chancellor said that Rachel Reeves has left “no contingency in the face of a highly volatile global outlook”.

“She continues to claim that she has brought stability to the public finances. Can I ask their what on earth her definition of stability is?” he said.

He criticised the way in which the government handled the change in the winter fuel payment levels which he said was unfunded.

“What has changed? Because it certainly hasn’t been made possible by an improvement in the economy and the public finances,” Stride said.

“Her deluge of taxes and regulation left business confidence at record lows, costing people their livelihoods.”

Reeves is the ‘tin foil’ chancellor

The spending review is “not worth the paper it is written on”, the Conservatives have said.

After Rachel Reeves’s speech, Sir Mel Stride, the shadow chancellor, dubbed her counterpart the “tin foil chancellor” who is ready to fold.

“She has completely lost control. This is the spend now, tax later review,” he said.

He added that Reeves would need to come back in the autumn for more tax rises.

“The chancellor now expects us to believe that she will let spending rise by only 1.2 per cent a year. There is no chance whatsoever of that happening.

“When the going gets tough, the right honourable lady blinks. She presented herself as the iron challenger but what we have seen is the tin foil chancellor — flimsy and ready to fold at the slightest bit of pressure.”

Chancellor funds NHS with £29bn

A “strong” NHS is needed to help build a strong economy, the chancellor said, as she announced a “record” cash investment in the NHS with a 3 per cent increase every year.

Rachel Reeves said it would amount to £29 billion extra spending.

Reeves recalled the government’s record on the NHS since coming into office, including 1,700 more GPs, 3.5 million more appointments and cutting waiting lists by 200,000.

She finished her statement and commended it to the House before the shadow chancellor, Sir Mel Stride, responded.

Reeves knocks back Farage

Reeves indulges in some pub-based humour as she attacks Farage over spending too much time in the Westminster Arms.

“Or maybe that should be the Two Chairman”, she says, referring to Zia Yusuf’s resignation.

Analysis: Efficiency savings may be slimmer than hoped

By Chris Smyth

Rachel Reeves has promised to be “relentless in cutting out waste” as she seeks to show that Labour can be as tough on government bureaucracy as Reform UK and its “Doge” (Department of Government Efficiency) unit.

She boasted closing government buildings, making services more efficient and easier to use.

Strikingly, though, she offered no savings figure, suggesting that her efficiencies have been far smaller than the tens of billions claimed by Nigel Farage’s proposals.

Spending rules reviewed to boost investment

The chancellor has confirmed the government is reviewing its “green book” spending rules which will allow the Treasury to spend more on projects to rejuvenate towns across England.

She said it would overturn generations of underinvestment in areas outside London and the southeast.

“This government takes seriously its commitment to investment, jobs and growth in every part of the UK. And I have heard the concerns of [the MP Andrew Cooper]and [the MP Andy MacNae] and the mayor of Liverpool City Region, Steve Rotheram, that past governments have underinvested in towns and cities outside London and the southeast. They are right.

“So I am today publishing the conclusion of the review of the Treasury’s green book, the government’s manual for assessing value for money. Our new green book will support place-based business cases and make sure no region has Treasury guidance wielded against them.

“I said we would do things differently. I said that we wanted growth in all parts of Britain. And I meant it.”

Communities have a sense of loss, says Reeves

The chancellor has said the “renewal of Britain must be felt everywhere” as she lays out funding for communities.

“I know the pride that people feel in their communities. I see it everywhere I go. But I also know that for too many people, there is a sense that something has been lost, as high streets have declined, as community spaces have closed, as jobs and opportunity have gone elsewhere”, she said. “The renewal of Britain must be felt everywhere.

“I’m pleased to announce additional funding to support up to 350 communities, especially those in the most deprived areas. Funding to improve parks, youth facilities, swimming pools and libraries, supporting councils’ fightback against graffiti and fly-tipping, including in Blackpool South, in Stockport, in Stoke Central, in Swindon North, and in Newcastle upon Tyne East and in Wallsend.”

Police budgets to increase

Police budgets in England and Wales would increase by 2.3 per cent a year to help meet the aim of employing 13,000 more officers, Rachel Reeves said. It represents an increase of more than £2 billion, she claimed.

A £7 billion funding package will also allow for the creation of 14,000 more prison places, she said, while a further £700 million would go to reforming the probation service.

Analysis: Reversal of council home decline wins favour

By Chris Smyth

One of the biggest cheers from Labour MPs so far came for Rachel Reeves’s promises of “the biggest cash injection into social and affordable housing in 50 years”.

Spending on building council houses will almost double in a big spending splurge, reversing years of decline under the Conservatives.

With backbench MPs increasingly questioning the chancellor’s position, hard cash behind what has long been a Labour priority will offer her a significant political boost.

As a concrete illustration of how Labour “choices” differ from Conservative ones, expect social housing to be repeatedly deployed as activists chafe at Treasury discipline.

AI will solve ‘diverse and daunting’ challenges

Rachel Reeves has announced £2 billion for an artificial intelligence action plan.

The chancellor said: “Because home-grown AI has the potential to solve diverse and daunting challenges as well as the opportunity for good jobs and investment in Britain, I am announcing £2 billion to back this government’s AI action plan, overseen by the secretary of state for science and technology.”

“To champion those small businesses seeking access to finance as they look to grow, I am increasing the financial firepower of the British Business Bank, a two-thirds increase in its investments, increasing its overall financial capacity to £25.6 billion to help pioneering businesses start up, and scale up, backing Britain’s entrepreneurs and wealth creators.”

Reeves hails £39bn for social housing

The chancellor has said Labour will invest £39 billion in affordable and social housing.

“I am proud to announce the biggest cash injection into social and affordable housing in 50 years,” she said. “A new affordable homes programme in which I am investing £39 billion over the next decade.

“Direct government funding that will support housebuilding, especially for social rent, and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses.”

British steel is safe, says Reeves

Rachel Reeves has said her infrastructure plans will boost the country’s steel industry.

She said: “Heathrow Airport, where we are backing London by backing a third runway, has signed the UK Steel Charter — a multi-billion pound expansion, backed by Labour, built with British steel.

“And as we build our train and tram lines, our military hardware and our new power stations, that will mean orders for steel made in Britain.

“In Sheffield Forgemasters, where we are investing in nuclear-grade steel, and in Port Talbot, where this spending review confirms the £500 million grant to Tata Steel … a future for British-made steel. And a proud future for Britain’s steel communities.

“Things built to last, built here in Britain.”

Analysis: Labour positions itself ‘safer’ than Reform

By Chris Smyth

One word is recurring in Reeves’s speech: “choices”.

The chancellor is attempting to make a virtue of her decisions to raise taxes and constrain spending in some areas to present Labour as the only serious party of government.

In an unusually direct attack on Nigel Farage, the Reform UK leader, she reminded voters of his support for the Liz Truss budget and said he was “itching to do the same thing all over again” with £80 billion of unfunded promises. “They are simply not serious,” she said.

It is a clear attempt to make Reform appear too risky compared with the safe Labour option. The problem currently is that voters may feel things are bad enough to roll the dice.

£11bn defence boost to make UK ‘industrial superpower’

By the end of April 2027, Rachel Reeves has said defence spending will rise to 2.6 per cent of GDP.

There will also be a £600 million boost for security and intelligence agencies.

“A new era in the threats we face demands a new era for defence and security,” she said, echoing the prime minister’s announcement on defence spending this month.

“We will make Britain a defence industrial superpower. With the jobs, the skills and the pride that comes with that.”

Analysis: Chancellor acknowledges slow progress

By Aubrey Allegretti

Rachel Reeves opened by nodding to some Labour MPs’ concerns that progress to make voters feel better off had been slow.

The chancellor admitted that too many people were “yet to feel” the benefits of her plans.

While she sought to assiduously defend her record, it was a tacit acknowledgement that Labour had not led in any major opinion poll for nearly two months.

Her opening comments were an attempt to frame the spending review as way to build on the tough decisions ministers said they had to take.

Labour to end ‘costly’ immigration hotels

The new Border Security Command will be funded by up to £280 million a year to tackle illegal immigration, Rachel Reeves has said.

The chancellor added that the government aimed to end the use of costly immigration hotels by the end of the parliament.

“I can confirm today that led by the work of the home secretary we will be ending the costly use of hotels to house asylum seekers, in this parliament.

“Funding that I have provided today including from the Transformation Fund will cut the asylum backlog, hear more appeal cases, and return people who have no right to be here — saving the taxpayer £1 billion per year.

“That is my choice, Mr Speaker. That is Labour’s choice. And that is the choice of the British people.”

Department budgets to rise

Total departmental budgets will grow 2.3 per cent per year in real terms, the chancellor has said.

Reeves attacks Farage over Truss comments

Rachel Reeves has claimed Nigel Farage, the Reform UK leader, once called the Liz Truss budget the “best Conservative budget since the 1980s”.

There were jeers and Farage laughed along.

‘Austerity was a destructive choice’

Tory cuts created a “lost decade” of growth, Reeves said. “My choices are Labour choices.”

“It is not right for future generations to pay” for today, she said.

Reeves reminded MPs of her fiscal rules, which she said allowed her to invest.

She added that today was about “delivering investment”, which was possible because she decided to raise taxes in the autumn.

Chancellor begins statement

Rachel Reeves has said her “driving purpose” is to see the country succeed by “fixing the foundations” of the economy.

She mentioned reform of the planning system and the National Wealth Fund, adding that her measures had led to cuts to interest rates and increases in real wage.

PM condemns ‘mindless attacks’ in Ballymena

The prime minister has paid tribute to Police Service of Northern Ireland officers who were attacked by individuals during public disorder and condemned racism.

“I utterly condemn the violence that we have seen overnight in Ballymena and in other parts of Northern Ireland”, he said.

Social carers must get priority, says Ed Davey

The leader of the Liberal Democrats questioned Sir Keir Starmer over whether carers would get increased funding in the review.

He also asked about the £25 billion of frozen Russian assets in Britain, which could be seized to support Ukraine.

The prime minister said the issue regarding Ukraine was “complicated” and that the government was “talking to allies”.

Badenoch: ‘I get better every week’

The Conservative leader, Kemi Badenoch HOUSE OF COMMONS/AFP/GETTY IMAGES

The Conservative leader has defended her performance and accused the prime minister of being “puffed up”.

Asked by Badenoch about the Chagos Islands deal, Sir Keir Starmer said the islands had been secured for the future and that Britain’s allies have welcomed the deal.

‘Liz Truss is back in vogue’

Sir Keir Starmer says the Tories have “learnt absolutely nothing” from the former prime minister’s policies.

Kemi Badenoch, the conservative leader, said Starmer “loves” talking about Truss because he is a “coward” and did not want to talk about his record.

“They left a £22 billion black hole that we had to fix”, Starmer said.

Starmer at the dispatch box

The prime minister faced criticism from Kemi Badenoch HOUSE OF COMMONS/UK PARLIAMENT/PA

Sir Keir Starmer is being scrutinised at PMQs, which will last half an hour before, Rachel Reeves addresses MPs.

‘The end of the first phase of government’

Sir Keir Starmer told cabinet ministers that the spending review “marks the end of the first phase of this government, as we move to a new phase that delivers on the promise of change for working people all around the country and invests in Britain’s renewal”.

Rachel Reeves said the spending review “would invest in economic growth, creating jobs and backing British industry in all parts of the country”.

She promised “investments in defence, protection of our borders, and energy security; and public services including health and education”.

NHS England happy with settlement, says head

The NHS England chief executive said the NHS has done “really well” after negotiations with the Treasury during the spending review.

At the NHS Confederation conference in Manchester, Sir Jim Mackey said: “The NHS has done really well relative to other parts of the public service.

“But we all know it’s never enough because of the scale of advancement, all the ambition, all things we want to do, the day-to-day cost pressures we’re trying to get on top of, etc.”

He said NHS needed “better value for money”, comparing its budget to the GDP of Portugal of about £228 billion.

On social care, he said: “Social care in local authorities won’t do brilliantly in the spending review, and then we have the review of social care, so we will be left with what we can do as much as we can within our gift.”

Rachel Reeves leaves No 11

The chancellor has left 11 Downing Street and is making her way to the Houses of Parliament.

Starmer: Labour will make homeownership a reality

The prime minister has said spending measures will help make the “dream” of owning a home a “reality” for a generation.

In a post on X, Sir Keir Starmer wrote: “We are fixing the housing crisis with the biggest boost to affordable housing in a generation, to build the 1.5 million new homes this country needs.”

Rachel Reeves is expected to announce £39 billion over the next ten years to build affordable and social housing.

Fact check: will the NHS get ‘back on its feet’?

The health secretary has said measures in the spending review will get the NHS “back on its feet” despite a briefing of an “over-optimistic” target.

Wes Streeting wrote on X: “It’s because of the choices made by this Labour government that waiting lists are lower now than when we came in.”

It comes after internal Department of Health modelling showed the NHS would not come close to hitting Sir Keir Starmer’s waiting list target even with a budget boost of about £30 billion.

Officials say the figures can only come close to hit a routine operations target of treating 92 per cent of patients within 18 weeks by using “implausible” and “over-optimistic” assumptions.

The Times understands the modelling shows that the NHS is on course to hit about 80 per cent by the end of the parliament.

‘You’re gonna need a bigger wallet’

The Conservatives have likened the chancellor to the shark from Jaws, saying that “no job is safe”.

The party posted on X a mocked-up image of Rachel Reeves under the ocean, describing her as “hungry” for taxpayers’ money before she makes her speech at 12:30pm.

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What to expect from the announcement

Spending reviews often accompany budgets as the government of the day will announce how it plans to set ministerial budgets for up to four or five years based on official projections and its own fiscal rules.

This time round, Rachel Reeves chose to give herself more time to make these decisions after her autumn budget and a spring statement in March.

The spending review will not contain new measures on how the government plans to raise revenue through taxation. It is also unlikely to deviate from the spending pots — on day-to-day spending and future investment spending — that Reeves confirmed in March.

Instead, Labour will publish allocations for its protected and unprotected departmental spending for the next three years, and longer-term capital spending allocations for the next four years.

First spending review in almost four years

Britain is having its first spending review since October 2021, when Rishi Sunak was chancellor and the economy was still under lockdown restrictions. In the intervening period, the country has had seven budgets.

Unlike budgets, which are annual and often twice-annual events in the fiscal calendar, government spending reviews are periodic and usually come about every three years.

The current spending review has been delayed by last year’s election.

How is a spending review different to a budget?

Rachel Reeves has more power over the process of a spending review than other big announcements such as a budget.

First, she has time on her side. In the run-up to a budget, the Treasury must submit figures and plans to the Office for Budget Responsibility (OBR) weeks in advance to let the watchdog run its own analysis, to be published simultaneously.

Spending reviews give the chancellor latitude to let things run down to the wire: Gordon Brown often only agreed final settlements in the early hours of the morning of the announcement. Treasury insiders have said final tweaks were being made to Reeves’s speech into yesterday evening.

The lack of an independent assessment by the OBR also means there will be less immediate official information for opposition MPs to rely on, giving Reeves a helpful advantage at the dispatch box.

Angela Rayner partied after Treasury deal

The deputy prime minister hosted drinks with MPs on Tuesday evening JAIMI JOY/REUTERS

After being one of the last cabinet ministers to finalise negotiations with the Treasury, Angela Rayner held a drinks do last night in her Westminster office.

The housing secretary played DJ as she blasted songs through a sound system.

It was the latest in a series of invites for an informal meeting with the most recent intake of Labour MPs, with colleagues from the across the north of England asked along.

Cuts ‘needed’ to avoid tax rises

The director of the Institute for Fiscal Studies has said cuts will still be needed to avoid tax increases in the next budget.

Despite expecting “big increases” in capital investment, Paul Johnson told the Radio 4 Today programme his concern was that if the economic forecast “moves at all in the wrong direction, we will need more tax rises”.

“The risk in terms of further tax rises is if anything at all goes wrong with any of the current forecasts then they will come again in the autumn,” he said.

Yvette Cooper arrives at No 10 after funding snub

Yvette Cooper meets other ministers in Downing Street STEFAN ROUSSEAU/PA

Ministers are arriving at Downing Street to rubber stamp the spending review, after weeks of wrangling between the Treasury and departments over budgets.

Yvette Cooper, the home secretary, was seen entering through the black door, as well as the business secretary, Jonathan Reynolds, and the work and pensions secretary, Liz Kendall.

Negotiations went down to the wire on Monday when the chancellor refused Cooper’s demands for extra police funding despite warnings that it means the government could miss its key pledges on upholding law and order.

A Whitehall source said: “Rachel imposed the settlement on Yvette in the end. Yvette pushed very hard but was told that there simply isn’t the money for it.”

We have stabilised economy, says PM

The government has successfully completed the task of seeking to “stabilise the economy and public finances”, Sir Keir Starmer has said.

In a post on X, the prime minister said Rachel Reeves would “move into a new chapter to deliver on our promise of change”.

“We’re investing in Britain’s renewal, so you and your family are better off,” he added.

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Nadhim Zahawi: If I were still chancellor

Nadhim Zahawi, who was chancellor for 62 days in 2022, said if he were still in the role he would “say when the facts change, I change my mind and we need real growth”.

He supported Rachel Reeves’s spending on infrastructure, such as the announcement on funding for the Sizewell C nuclear plant which he approved while in office.

He could not support Reeves continuing with the employment rights bill, which he called the “employment reduction bill”. “It will make us as bad as Europe, the worst of Europe in terms of hiring people, which I think will reduce the incentive for businesses to expand to grow to hire people in the UK,” he told Times Radio.

“I think we’ve lost more millionaires I think second only to China. I think we need talent to come back to the UK. Talent that will build businesses that will invest in the United Kingdom.”

He added he would abolish inheritance tax, particularly on family businesses and farms.

Reeves keen to persuade unruly backbenchers

Analysis by Aubrey Allegretti

A key audience for Rachel Reeves today will be Labour MPs packing the Commons benches behind her.

They have become increasingly unruly and critical of key decisions such as the winter fuel allowance cut before the chancellor’s partial reversal.

One senior ally of Reeves said that “when colleagues look at the sky they tend to see clouds, not the sun”.

The announcement will be designed to prove Reeves is delivering a clean break from the Conservatives and boosting spending with investment in public services and infrastructure — that will be even more vital for building goodwill with MPs before a vote expected in the first week of July on welfare cuts.

Ministers hope a strong performance from Reeves which cajoles backbenchers will win over some wavering potential rebels by proving the link between savings in some areas to allow spending in others.

Conservatives’ three criteria for chancellor

The shadow chief secretary to the Treasury has said the Conservatives will judge the chancellor’s measures on three metrics.

Richard Fuller told Sky News: “First of all, is the chancellor taking the steps necessary in the spending to avoid another round of tax increases in the autumn? Public borrowing is already ahead of target.

“It’s very important that she sends a signal that she’s not coming back for additional taxes.”

Fuller’s second criterion was whether “quite significant changes” would be made in the functions of departments after the chancellor announced it would be a zero-based review, accounting for every pound spent.

“And then number three. Is she being serious about waste, is she being serious about pushing for increased productivity improvements?” he added. “We didn’t think that the 5 per cent target was sufficient. We think there’s more opportunity in that.”

Extra £14bn for Sizewell C despite past challenges

Sizewell C will be built near the existing Sizewell B nuclear power station ALAMY

By Tom Whipple, Science Editor

“It is not too much to expect,” Lewis Strauss, the chairman of the US Atomic Energy Commission, famously predicted of nuclear power, “that our children will enjoy in their homes electrical energy too cheap to meter.”

He came to regret that 1954 prediction. Today the children of Strauss’s generation have children of their own, who find themselves still, alas, paying electricity bills.

On Tuesday Sir Keir Starmer made his own prediction about the promise of the atom, and meters would definitely be involved. The prime minister said the taxpayer will invest a further £14.2 billion in Sizewell C nuclear power station. But he warned: “It’s not a blank cheque.”

• Read in full: Why will Sizewell C cost so much?

What announcements have been made?

• £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 Sizewell C power plant in Suffolk

• £39 billion over the next ten 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

The chancellor is expected to announce changes to the Treasury’s “green book” rules that govern whether major projects are approved, making investment easier outside of London and the southeast.

Spending measures to give boost ‘for years to come’

A Labour MP has said the spending review is a “crucial moment” for his party and the measures are all “about making us better off”.

Jeevun Sandher, who sits on the Treasury committee, said the country was experiencing some of the “most serious and difficult times in almost a century”.

“These are the most serious times for any government in this century, we have to rise to the challenge, and part of rising to the challenge in a democracy is being honest with people about where we stand”, he told Sky News.

“We’re making decisions today, yes making people better off in the short run, but also years to come, decades and even generations.”

No government ministers are speaking to broadcast media this morning.

UK economy ‘in a better place’, claims Labour

Rachel Reeves announced this week that nine million pensioners would receive winter fuel payments this year MILO CHANDLER/ALAMY

Labour has justified its reversal on winter fuel payments by claiming the economy “is in a better place” and the public finances are on a “stronger footing”, according to James Murray, a Treasury minister. Is he correct?

• Read in full: Is the economy ‘is in a better place’?

Who will be the winners and losers?

Rachel Reeves, the chancellor, wants to show voters that the government is investing to renew Britain

The chancellor’s first year in office has been challenging, imposing unpopular tax rises and cutting winter fuel payments for millions of pensioners, which she has subsequently been forced to reverse.

Reeves sees the spending review as a chance to stamp her authority and present voters with a clearer narrative about the purpose of this government. She will say that the government will invest to renew Britain, focusing on three central pillars: security, health and the economy. Growth will be the order of the day.

But there will also be clear losers. Yvette Cooper, the home secretary, is said to be unhappy with her settlement.

• Read in full: What will be in the spending review?

Chancellor will promise to ‘invest in Britain’s renewal’

Rachel Reeves will vow to “invest in Britain’s renewal” as she reveals her spending plans for the coming years.

Arguing that investment is possible “only because of the stability I have introduced” after the budget in October, the chancellor is expected to say her spending review will ensure renewal is felt “in people’s everyday lives, their jobs, their communities”.

She will say the priorities of her spending review are “the priorities of working people”, to invest in security, health and the economy so that people “all over the country are better off”.

Spending review follows winter fuel reversal

The chancellor has been setting the scene in the run-up to her spending review with a reversal on winter fuel payments and Tuesday’s announcement of £14 billion investment in a new nuclear power station, Sizewell C.

The government will be hoping the decision to give nine million pensioners winter fuel payments this year will give it a boost after the initial policy proved deeply unpopular with voters.

The funding for nuclear energy also shows Labour stands by its clean power pledge.

Changes to the Treasury’s “green book” rules that govern which projects receive investment were also hinted at in last week’s £15 billion transport announcement. The changes to boost spending outside London and the south east are expected to be revealed today.

Spending review gives £20m to neighbourhood

47 minutes ago Share Save Alex McIntyre BBC News, West Midlands Jen Aitken Political Reporter, BBC Stoke and Staffordshire Share Save

Reuters Chancellor Rachel Reeves announced the trailblazer neighbourhoods in her spending review

A “deserving” area of Stoke-on-Trent will receive £20m of government funding for regeneration projects. Bentilee and Ubberley was announced as one of 25 “trailblazer neighbourhoods” as part of Chancellor Rachel Reeves’s spending review. The government said the funding would would “support improvements people can see on their doorstep, champion local leadership, foster community engagement and strengthen social cohesion”. “That is a part of the world that deserves more from the local authority and from government so I’m really pleased that money has been allocated,” Labour MP Gareth Snell said.

Councillor Jane Ashworth, Labour leader of Stoke-on-Trent City Council, said it was a “truly transformational” sum of money which would make a real difference to people’s lives. “It is also recognition of the work we have already been doing to empower communities to have more control over the places where they live,” she added. Spending review: Your questions answered The Ministry of Housing, Communities and Local Government (MHCLG) said it would work with community leaders in the neighbourhood to develop potential schemes.

Council leader Jane Ashworth said the funding was “truly transformational”

Snell said further details would come out in the next few days and the projects would be led by the neighbourhood itself. “This has to be about what the neighbourhoods need and what they want rather than being from the top down,” he added. “I think it’s a great opportunity for that whole community to take a grip of their future.”

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