The Daily T: ‘Tax rises are inevitable' – Rachel Reeves's spending review decoded
The Chancellor's much-anticipated spending review is a day away, with extra cash expected for defence, health and education.
Are tax rises on the horizon to pay for all this? Camilla is joined by guest presenter Jacob Rees-Mogg, who says Labour doesn't understand business and argues that Keir Starmer could survive sacking Rachel Reeves…
The former Tory MP also reacts to the Government's U-turn on the winter fuel payment, supposedly a response to a healthier economy under Labour. But the unemployment and jobs figures seem to say otherwise.
Plus, how two very different rows about immigration triggered riots in North Ireland and in LA. Protests turned violent after an alleged sexual assault in Ballymena, while unrest is ongoing in California's biggest city over ICE raids and Donald Trump's immigration crackdown.
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The Independent
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Gavin Newsom lashes out at Trump ally Ric Grenell over claims Governor's wife was shopping during LA protests
California Governor Gavin Newsom has lashed out at President Donald Trump's special envoy Richard Grenell for pushing claims that his wife was out shopping during the protests in Los Angeles. Grenell, a White House special envoy for special missions, claimed that the governor and Jennifer Siebel Newsom ' don't care about the chaos' after a report claimed the first lady of California was shopping in Beverly Hills Monday. 'She came to Los Angeles to shop using her $4k purse,' Grenell posted on X early Wednesday. ' @GavinNewsom and his wife don't care about the chaos.' Newsom's representatives furiously denied the claims. 'This story is an outright lie and needs to be retracted entirely,' the Governor's press office responded on X Wednesday, quoting Grenell's post. 'The photo is from months ago — when the first partner was picking up skin care products. She is recovering from a past skin cancer diagnosis, you SICK people.' But Grenell, a regular critic of Newsom, doubled down on his claims and accused the couple of 'pathetic spin.' In 2023, Jennifer Newsom revealed she had undergone surgery for the second time to treat a type of skin cancer. 'This is pathetic spin from @GavinNewsom 's wife,' Grenell said in a follow up post. 'Using a previous skin cancer diagnosis to explain why you are tone deaf to the LA riots is shameful.' 'I had 5 rounds of R-CHOP chemotherapy for 18 weeks,' Grenell added. 'It's offensive for the First Partner of California (this is the title she demands we use) to use cancer as a reason you need to be in Beverly Hills picking up skincare products while the riots are unfolding around you.' The Independent has contacted the State Department for comment. Representatives for the governor could not be immediately reached. It follows the governor's televised address Tuesday where he lambasted Trump's 'brazen abuse of power.' Newsom said the presence of troops was exacerbating tensions and asked for an emergency injunction to halt the deployment, arguing it is 'unlawful' and 'unnecessary.' A hearing is set Thursday. In the latest developments in the city, the downtown curfew enacted by Los Angeles Mayor Karen Bass in response to the president's escalation of the response to immigration protests has been lifted. Meanwhile, approximately 700 Marines mobilized by Defense Secretary Pete Hegseth will arrive in the city 'soon' after training in Seal Beach, 30 miles south.
Times
13 minutes ago
- Times
Fact check: how accurate are Rachel Reeves's spending figures?
'The chancellor's speech was full of numbers, few of them useful,' said Paul Johnson, the head of the Institute for Fiscal Studies. Reeves's speech was political to the core — and that extended to her use of statistics. The chancellor appears to have used whichever numbers best suited her position, predominantly to inflate the scale of the government's spending plans. She used bigger, cumulative figures to highlight the scale of investments, rather than annual numbers, and cash increases stripped of their context. She also used Tory spending plans from before the election, which never came to pass, as the baseline for the biggest numbers in her speech. When it did not suit her she ignored the Tory spending plans. While none of the figures are technically inaccurate, economists argue that they are a statistical sleight of hand and that Reeves would be better off being consistent in her use of numbers. Spending going up The claim: The first number in Reeves's speech — bar her obligatory reference to the £22 billion 'black hole' she claims to have been left by the Tories — was the boast that 'in this spending review, total departmental budgets will grow by 2.3 per cent per year in real terms'. The reality: This figure includes spending announced at the budget last year, where there were some of the biggest increases. Over the next three years, total spending — combining day-to-day and investment — will increase by 1.5 per cent. Day-to-day spending will rise by 1.2 per cent a year for the rest of the parliament, about half the rate it rose this year. • More for public services The claim: Reeves promised to add '£190 billion more to the day-to-day running of our public services' as well as an extra £113 billion to public investment. The reality: This is a comparison with previous Conservative plans — dismissed as 'essentially fictitious' by Johnson — drawn up before the election to set a trap for Labour and allow Rishi Sunak to promise tax cuts. The Tory plans envisioned day-to-day spending rising by only about 1 per cent a year, and big cuts in capital spending. Reeves reversed these by changing her fiscal rules to allow more borrowing and is increasing infrastructure spending. But on an annual basis, capital spending will be £151.9 billion in 2029-30, £20.6 billion more in cash terms than it is now. Day-to-day spending will rise by £50.7 billion by 2028-29. More for schools The claim: Reeves said she was providing a 'cash uplift' of more than £4.5 billion for schools by the end of the spending review period. The reality: Context is everything. The Treasury concedes in the small print that the core budget for schools will rise by 0.4 per cent over the next three years. It says that when the cost of expanding free school meals is stripped out of the figures 'you get a real-terms freeze in the budget'. • Rachel Reeves is testing voters' patience … she needs results Backing innovation The claim: Reeves declared that the government was 'backing [Britain's] innovators, researchers and entrepreneurs' with research and development funding rising to a 'record high of £22 billion per year by the end of the spending review'. In a press release the government said that spending on research and development was £86 billion. The reality: Despite the rhetoric, this spending pledge represents a significant scaling back of the government's investment ambitions in research and development. The previous government pledged to hit the £22 billion target by this year and then delayed it until 2027. This target has now been put back even further to 2029. Indeed, the Department for Science, Innovation and Technology's budget will barely rise at all next year — far from the rhetoric of Reeves's statement. The £86 billion referred to in government press releases is a cumulative figure. More for social housing The claim: Reeves boasted of 'the biggest cash injection into social and affordable housing in 50 years', saying this would total £39 billion over ten years. The reality: The figure would represent almost a doubling of the £2.3 billion affordable homes programme. However, this spending ramps up slowly, reaching just £4 billion a year by the end of the parliament, leaving it to future chancellors to find ways of maintaining the spending. The overall capital budget for the housing ministry is actually flat over the spending review, with ministers relying on savings elsewhere — especially a reduction in the capital costs to councils of homes for asylum seekers. If these savings fail to materialise, painful decisions will be needed. NHS spending The claim: With health the big winner, Reeves boasted of 'an extra £29 billion per year for the day-to-day running of the health service' along with a 50 per cent boost in the NHS technology budget. The reality: The £29 billion figure is for NHS England specifically, and its budget will rise by 3 per cent a year in real terms, within a 2.8 per cent per year overall Department of Health rise. Capital budgets were increased last year but will be held flat for the rest of this parliament. Increasing technology spending further will therefore come at the cost of crumbling buildings or modern scanners and other kit. NHS leaders are already saying they will find it harder to shift to more modern, efficient treatments without extra equipment and buildings. Efficiency savings The claim: Reeves said the government had carried out a zero-based review of all government spending that would make public services 'more efficient and more productive' and, according to the Treasury, save £13 billion a year by 2029. The reality: These savings are, to put it charitably, extremely hypothetical and in some cases seem wildly optimistic. The NHS, the government thinks, will save nearly £9 billion from higher productivity — despite the fact that the health service has got less rather than more productive since Covid. And the culture department thinks it will save £9 million from 'digital reform' — despite the fact that the MoD, which is a much larger organisation, only thinks it can save £11 million. Overall the savings appear, at best, to be highly aspirational. But if they are not met, it will have a real-world impact on the amount of money the government has for public services.
Telegraph
13 minutes ago
- Telegraph
Planet Normal: ‘The numbers don't add up' in Rachel Reeves' spending review
Mr Lyons wasn't convinced by the numbers, ' Early in her speech the Chancellor said, is the plan credible, and the answer unfortunately is, no.' 'T he starting position is debt is very high, and I think we're in the early stages of Britain going into a debt crisis. If you're looking for good news, it might be that we're not the only country facing this problem; but today the Chancellor gave a speech that I think lacked a lot of the detail.' Allison is not convinced by the claims the economy is stabilising, ' We know it is not true, and we are already starting to see the impact on employment and on businesses. We know payrolls have fallen, that employment's fallen by over 250,000 since Rachel Reeves' budget. This is not an economy where you should be taking the gambles that she's taking. Where is the growth going to come from?'
