Rachel Reeves says she ‘chooses investment' ahead of unveiling Labour's spending review

The Guardian

a day ago

Update:
Date: 2025-06-11T08:19:01.000Z
Title: Rachel Reeves
Content: Good morning. The government plans to be spending almost £1.4tr in 2026-27, rising to almost £1.5tr in 2028-29. Those annual limits are already agreed. Today, when , the chancellor, stands up at 12.30pm to present the spending review, she will explain how she has decided to divvy up that money between government departments over the next three years.
This is not a budget, and she will not be announcing changes to tax policy. But it will feel like a budget because, like a budget, it will involve decisions that affect the public services people rely upon. And it is bound to intensify speculation about whether taxes will have to go up in the next budget, in the autumn.
Public spending is hideously complicated, and Reeves needs a clear, simple narrative that will land with the public at large. We know what it is because the Treasury sent out a press release last night with words from her speech today where Reeves will sum up what she is trying to achieve. She will say:
This government is renewing Britain. But I know too many people in too many parts of the country are yet to feel it.
This government's task – my task – and the purpose of this Spending Review – is to change that. To ensure that renewal is felt in people's everyday lives, their jobs, their communities.
So that people can see a doctor when when they need one. Know that they are secure at work. And feel safe on their local high street …
I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal.
These are my choices. These are this government's choices. These are the British people's choices.
The government differentiates between current, day-to-day spending ('resource' spending, in Treasury jargon) and capital spending. In so far as Reeves has 'good news' to announce, much of it is in the capital spending area, because she changed her fiscal rules last year to allow more borrowing for infrastructure projects. That is why she is saying 'In place of decline, I choose investment', not 'I choose spending'. Some government departments will face real-terms spending cuts.
But there is an obvious political problem with this, well summarised by John McDonnell, shadow chancellor when Jeremy Corbyn was Labour leader, in this comment to the Financial Times.
Capital spend takes years to produce political results, while cuts in revenue spending on services like council services are felt adversely quickly.
It is easy to promise national renewal, but it is a lot harder to make people believe it is happening. Today's decisions will have a big effect on what voters do end up concluding about this, but it will take a while to know for sure what that effect will be.
Here is Aamna Modhin's assessment of what to expect in the spending review in her First Edition briefing.
And here is our overnight preview story, by Kiran Stacey, focusing on the proposal to spend £39bn on affordable housing.
Here is the agenda for the day.
9am: Keir Starmer chairs cabinet, where , the chancellor, will be briefing colleagues on what is in the spending review.
Noon: Starmer faces Kemi Badenoch at PMQs.
12.30pm: Reeves makes a statement to MPs about the spring statement.
4pm: The Institute for Government thinktank holds a briefing on the spring statement.
4.15pm: The National Police Chiefs' Council gives its response to the spending review.
If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can't read all the messages BTL, but if you put 'Andrew' in a message aimed at me, I am more likely to see it because I search for posts containing that word.
If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary.
I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can't promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.