Spending Review: What is it and what might Rachel Reeves announce?
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
Body found in Portugal in search for missing stag party Scot Greg Monks
Greg Monks, 38, was reported missing last week after leaving the main strip in Albufeira in the Algarve. The body of a man was found in the Cerro de Aguia area on Wednesday morning.
Greg Monks, 38, was reported missing last week after leaving the main strip in Albufeira in the Algarve in the early hours of Wednesday morning.
Mr Monks, from Cambuslang, near Glasgow, had travelled to the resort on 27 May on a stag party with friends.
The Portuguese national Policia Judiciaria said the body of a man was found in the Cerro de Aguia area on Wednesday morning.
Winter fuel payment U-turn in place this year, says chancellor
Winter fuel payment U-turn in place this year, says chancellor Rachel Reeves. Prime Minister Sir Keir Starmer has said he wanted to widen the threshold for winter fuel. But he 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. 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 in which those in receipt of pension credit would get the payment as before, while others would get £100. Those funds are limited to one payment per household, which will be paid through a new Scottish Parliament benefit, which is not expected to be ready until late 2025. It meant 10 million fewer pensioners received the money in 2024.
47 minutes ago Share Save Kevin Peachey Cost of living correspondent, BBC News Share Save
Getty Images
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, they are required to claim pension credit – which is a top-up to the state pension for those on low incomes.
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. 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
Rachel Reeves admits some will lose out in spending review
Reeves admits some will lose out in spending review on 11 June. Winter fuel payments will be restored to some pensioners this year. Chancellor 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. 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. Tory leader Kemi Badenoch said the government was in chaos and accused Cabinet ministers of “squabbling” over funding. The spending review will outline day-to-day departmental budgets over the next three years and investment budgets over next four. The Institute for Fiscal Studies (IFS) think tank has warned tough choices are “unavoidable”, with some departments facing spending cuts.
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.”
Billions to be spent on regional transport but government ‘can’t do everything it wants to’, says Rachel Reeves
£15.6bn will go towards regional transport projects in next week’s spending review. Mayors will receive the funding directly to be spent on train stations, trams, and bus routes. Cash marks the “biggest ever investment” by a British government in transport links outside of London and the southeast. But she warned: “Does that mean that we’ll be able to do everything that we want to do? No…there are good things that I’ve had to say no to” Shadow Treasury minister Gareth Davies accused the chancellor of “copying and pasting” announcements made by the Tories. He added: “The country is not falling for their lies anymore. Britain deserves better”Winter fuel changes to come this year after a backlash to the cuts made within a month of entering office last year. Labour put a pause on the plans when they entered government to review the funds, so it was not clear until now if the money would be made available. Some of the projects formed part of Rishi Sunak’s “Network North” plan, intended to compensate for the decision to scrap the HS2 line.
The chancellor said the cash marks the “biggest ever investment” by a British government in transport links outside of London and the southeast, with mayors to receive the funding directly to be spent on train stations, trams, and bus routes.
Politics Live: PM under fire for ‘disgraceful’ PMQs performance
Ms Reeves was speaking in Manchester ahead of laying out her departmental spending plans for future years on 11 June, a process known as a spending review.
She said that tax hikes and changes to the way borrowing for investment is accounted for meant £300bn extra is available over the coming years.
But she warned: “Does that mean that we’ll be able to do everything that we want to do? No…there are good things that I’ve had to say no to.”
She insisted this was not because of her self-imposed “fiscal rules” but because “of 14 years of Conservative maltreatment of our public services, our public realm, and of our economy”.
The fiscal rules, which include a promise to match day-to-day spending with revenues rather than borrowing, meant Ms Reeves had to make cuts in her spring statement to balance the books, and there is speculation more are to come.
The chancellor did not say what departments could face a squeeze next week, but insisted spending on police will increase following concerns from police chiefs about their budgets.
She said transport was being prioritised because a lack of infrastructure outside of London puts England’s other cities “at a disadvantage compared to their European counterparts”, contributing to the UK’s stagnant growth.
The settlements include:
• £2.5bn for Greater Manchester for projects including new tram stops in Bury, Manchester and Oldham;
• £2.4bn for the West Midlands for an extension of the metro from Birmingham city centre to the new sports quarter;
• £2.1bn to start building West Yorkshire Mass Transit by 2028;
• £2bn for the East Midlands to design a new mass transit system between Derby and Nottingham;
• £1.8bn for the North East for a metro extension linking Newcastle and Sunderland via Washington;
• 1.6bn for the Liverpool City Region for new bus routes, including to the airport and football stadiums;
• £1.5bn for South Yorkshire including £530m to renew the region’s trams;
• £1bn for Tees Valley, including £60m for the Platform 3 extension at Middlesbrough station;
• £800m for the West of England, including £200m for mass transit links between Bristol, Bath, South Gloucestershire and north Somerset;
Some of the projects formed part of Rishi Sunak’s “Network North” plan, intended to compensate for the decision to scrap the HS2 line north of Birmingham.
Labour put a pause on the plans when they entered government to review the funds, so it was not clear until now if the money would be made available.
Shadow Treasury minister Gareth Davies accused the chancellor of “copying and pasting” announcements made by the Tories “to salvage her failing economic plan” following “U-turn after U-turn”.
He added: “The country is not falling for their lies anymore. Britain deserves better.”
Winter fuel changes to come this year
In a surprise announcement during questions from the media, Ms Reeves also said that changes to the winter fuel payment will be made this year after a backlash to the cuts made within a month of entering office last year.
Read More:
Partial winter fuel U-turn could have consequences for PM
Can Labour’s new local cash idea win over Reform voters?
She denied she would be forced into another large tax raid to fund her plans, as the government is also seeking to increase defence spending.
“We made decisions in the budget last year to increase taxes by £40bn. We have absolutely no intention of repeating a budget on that scale again,” she said.
Asked if deputy prime minister Angela Rayner is fully behind her plans, following reports she has been pushing for wealth taxes, Ms Reeves said that it is “perfectly normal for government ministers” to come up with their ideas.
“Angela Rayner had ideas around, I think around £3bn of tax changes, some of them in housing, which is an area that she covers. But we did raise taxes by £40bn in the budget last year, much more than £3bn.”
Spreaker Spreaker , which may be using cookies and other technologies. To show you this content, we need your permission to use cookies. You can use the buttons below to amend your preferences to enable Spreaker cookies or to allow those cookies just once. You can change your settings at any time via the This content is provided by, which may be using cookies and other technologies. To show you this content, we need your permission to use cookies. You can use the buttons below to amend your preferences to enablecookies or to allow those cookies just once. You can change your settings at any time via the Privacy Options Unfortunately we have been unable to verify if you have consented to Spreaker cookies. To view this content you can use the button below to allow Spreaker cookies for this session only. Enable Cookies Allow Cookies Once
The Daily Telegraph reported last month that Ms Rayner, who is also the housing secretary, proposed a higher corporation tax level for the banks and reinstating the pensioners’ lifetime allowance.
She is said to be exasperated at having to defend the government’s spending cuts amid a slump in the polls and a drumming at last month’s local elections, fuelled by a rise in Reform UK’s popularity.
Ms Reeves took aim at her critics on Wednesday, accusing Reform leader Nigel Farage of being “itching to repeat” the “fantasy economics” of Liz Truss, whose 2022 mini-budget sent markets into turmoil and upended her time as prime minister.
“I will never take those risks. Labour will never take those risks,” she said.
Keir Starmer taunts Kemi Badenoch after Tories praised by Russian Embassy
Keir Starmer accused Kemi Badenoch of parroting Kremlin propaganda. He said: “There’s only one leader who’s been praised this week by the Russian Embassy. And if she carries on echoing Kremlin talking points like this Reform are going to send her an application form for membership”
Referring to her claim on Sky News last week that Ukraine was fighting a proxy war against Russia on behalf of Western interests, he said: “There’s only one leader who’s been praised this week by the Russian Embassy. And if she carries on echoing Kremlin talking points like this Reform are going to send her an application form for membership.”
It came hours after Rachel Reeves confirmed winter fuel payments WILL be available to more pensioners by the end of the year. The Prime Minister dodged a question on how many pensioners would get the lifeline payment after he committed to partially reverse the controversial policy.
It comes after the Chancellor gave hope to millions of OAPs by saying more pensioners would get the winter fuel allowance from the end of the year. She said the public finances are on a better footing after years of Tory chaos after delivering a major boost to the North and the Midlands by ploughing billions of pounds into much-needed transport projects.