Rachel Reeves begs Cabinet to cool war over spending cuts and talks up transport investment - as police warn crimes 'will be ignored'
Rachel Reeves blamed the Tories for looming spending curbs today as she tried to cool Cabinet infighting.
The Chancellor acknowledged ministers will not get 'everything they want' in the spending review due next Wednesday.
But in a speech in Manchester she urged them to recognise 'this is a result of 14 years of Conservative maltreatment of our public services' - signalling she will stick to her fiscal rules.
Ms Reeves also talked up £15.6billion of capital investment for mayoral authorities in the North and Midlands, saying she wanted 'renewal for our country'.
The package includes funding to extend the metros in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit systems in West Yorkshire.
The borrowing-funding splurge on major investment is being overshadowed by intense haggling over day-to-day budgets.
Ms Reeves is due to announce spending plans for the next three years in a week's time, but several Cabinet ministers have yet to reach settlements with the Treasury.
Tensions with Home Secretary Yvette Cooper surfaced today with warnings that cuts for police will mean some crimes effectively being ignored.
Ed Miliband is also embroiled in horse-trading over Net Zero funding, while Angela Rayner is said to be holding out over cash for housing and local government.
In a letter to Keir Starmer, Metropolitan Police chief Mark Rowley said there would be 'far-reaching consequences' from inadequate funding.
The letter, also signed by other senior police officers, voiced alarm that negotiations between the Treasury and the Home Office were going 'poorly'.
'A settlement that fails to address our inflation and pay pressures would entail stark choices about which crimes we no longer prioritise,' it read according to The Times.
Meanwhile, in a separate letter, Domestic Abuse Commissioner for England and Wales Dame Nicole Jacobs and Victims' Commissioner for England and Wales Baroness Newlove wrote to Sir Keir saying victim support services are being 'pushed to the brink', hit by funding cuts and rising costs.
The Institute for Fiscal Studies has said Ms Reeves faces 'unavoidably tough decisions' next week as the demands of NHS and defence spending raise the prospect of cuts in other departments.
Last week, senior police officers – including Sir Mark – wrote a letter in the Times calling on the Government for 'serious investment' in the spending review, which will set out the Government's day-to-day departmental budgets for the next three years.
'A lack of investment will bake in the structural inefficiencies for another three years and will lose a once-in-a-generation opportunity to reform the service,' the letter warned.
Sir Mark also voiced his concern that fewer criminals serving jail time under proposals to end prison overcrowding will 'generate a lot of work for police'.
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Wales Online
3 hours ago
- Wales Online
The £6bn rail line argument that masks what you should be really angry about
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info Over the last few days, there has been one hot topic in the world of Welsh politics - a train line which will run between Oxford and Cambridge. Given these two cities are roughly 200 miles from Wales, you can be forgiven for asking why. East West Rail is a railway project which will link Oxford and Cambridge at an estimated cost of £6.6bn. Any money spent on it will trigger extra payments to Scotland and Northern Ireland so they can spend it on their transport systems. But, just as has been the case throughout the HS2 debacle, there won't be any extra money for the Welsh Government. The reason for this is both incredibly simple and reasonable on the surface but devillishly complicated and truly unfair beneath it. It may not necessarily be a scandal in itself. But it symbolises everything that is wrong with how rail funding is allocated in England and Wales. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here On the face of it, this issue isn't linked to the spending review that has been happening in Westminster for the last six months or more and of which chancellor Rachel Reeves will stand up in the Commons on Wednesday and deliver the conclusion. Yet it helps shed a light on why that will be enormously complex to understand and why the real story may not be the one you read in headlines that evening. So bear with us while we go through it. The fury from politicians Opposition politicians in Wales have been fulminating about East West rail. They say that the rail line should have been classified as an England-only project like Crossrail so that the Welsh Government would get a guaranteed share. Lib Dem MP David Chadwick said Wales will lose out to the tune of between £306m and £363m as a result. Describing it as another HS2, he said: "Labour expects people across Wales to believe the ridiculous idea that this project will benefit them, and they are justified in not giving Wales the money it needs to improve our own public transport systems. 'It's a disgrace, and it shows there has been no meaningful change since in the way Wales is treated since Labour took power compared to the Conservatives." Plaid Cymru's leader Mr ap Iorwerth took a similar tack, telling plenary: "For all the talk of the UK Government acknowledging somehow that Welsh rail has been historically underfunded, this is some partnership in power." Yet, while there's a lot of truth to what they're saying, it's also much more complicated. Which is where the spending review comes in. Comparability factors There will be so many numbers in the paperwork that accompanies Wednesday's spending review that finding the most important ones isn't straightforward. Yet if you want to know just how much of the England and Wales transport pot is going to be sucked into paying for massive rail projects in England like HS2 (£66bn) or East West rail (£6bn) or all the tram/train projects being promised in England outside London (£15bn), then look out for the overall transport comparability factor for Wales. Very simply, this is the number that the Treasury uses to work out how much the Welsh Government should get for every £1 it spends on transport in England. The reason everyone has been so, so angry about HS2 and the massive billions being poured is that back in 2015, Wales used to get a comparability factor of 80.9%. Yet when the number crunchers in Horse Guards Road sat down to work out how much the Welsh Government should get at the last spending review in 2021, that comparability factor fell to just 33.5%. Ouch. For every £1 spent on transport by Westminster, since the last spending review the Welsh Government has received a population adjusted share (5%) of 33.5%. Or about 1.6p. For context, it used to be around 4p. If Mr Chadwick and Mr Iorwerth are right and the UK government plans to plough even more money into rail in England in the coming years on projects like HS2, East Coast and what the Tories used to call Northern Powerhouse rail, then the new comparability factor that the Treasury mathematicians will conjure up this time could be even lower. But even that is massively misleading. Because if the UK government also promises to plough vast sums into rail in Wales then the comparability factor for the Welsh Government would not rise - it would fall further still. Is your mind boggling yet? We said it was complex. What the Welsh Government wants Because the Welsh Government isn't responsible for rail infrastructure spending, the transport comparability factor really just reflects how much money is going on rail. The less that's spent on rail, the higher a share of the overall transport pot the Welsh Government gets. The more that goes on rail, the lower a share of the overall transport spot the Welsh Government gets. The real problem for Cardiff Bay then is not the comparability factor. Neither is it the fact that East West rail isn't classified as England-only. The problem, as far as the Welsh Government is concerned, is the fact that the England and Wales rail pot itself isn't shared fairly. HS2 and East Coast rail are the symbols of a system that is broken that pours vast sums into English rail projects while Wales misses out. Even if they were classified as England-only, the money would go to the Welsh Government which isn't responsible for rail infrastructure spending. "The way that the system operates at the moment—for years I've been saying—is redundant," Wales' transport minister Ken Skates has said. "The east-west line, which has been in development, I believe, for around about 20 years now, is part of the rail network enhancements pipeline, where everything in a large footprint, a substantial footprint, including Wales, is packaged together. "Where you have all schemes in England and Wales packaged together in what's called the regional network enhancement pipeline it means that projects in Wales are always going to be competing on the business case with projects in affluent areas of the south-east, of London. That means that we are at a disadvantage. "I want to see it change. I've been saying it for years. There's nothing new in this story. I've been saying that we need reform for years and suddenly people have woken up to it." Wales' First Minister Eluned Morgan has said the same. "What we have is a situation where there is a pipeline of projects for England and Wales. Are we getting our fair share? Absolutely not. Are we making the case? Absolutely." "I've made the case very, very clearly that, when it comes to rail, we have been short-changed, and I do hope that we will get some movement on that in the next week from the spending review," she said. What does this mean for the spending review When Rachel Reeves stands up in the Commons on Wednesday, we fully expect she will announce some funding for rail in Wales, as you can see in our piece here, and our expectation is that will be about the rail stations earmarked in the work by Lord Burns after the M4 relief road was axed. They would be in Cardiff East, Parkway, Newport West, Maindy, Llanwern and Magor. But what matters is how much and when - and how that compares to the money being spent in England. Imagine the chancellor announces a few hundred million pounds for those rail stations in Wales in the spending review, what we do not - and will likely not know for many years - is whether that amount is a fair reflection of the mass spending she has announced in England because we know she has also touted £15bn of improvements in England. It will likely take years for academics to assess what kind of share of the rail pot has been spent in Wales. In the past, it certainly has not been fair. In 2018, a Welsh Government commissioned report by Professor Mark Barry estimated that the Network Rail Wales route, which covers 11% of the UK network, received just over 1% of the enhancement budget for the 2011-2016 period. In 2021, the Wales Governance Centre told MPs on the Welsh affairs select committee that had rail been fully devolved to the Welsh Government, Wales would have received an additional £514m for enhancements via Network Rail had rail infrastructure been devolved as it is in Scotland. So when Leeds West and Pudsey MP Ms Reeves gets to her feet in the Commons on Wednesday, you can pretty much guarantee there will at least one or two headlines relevant Wales. But we may not understand what they really mean for a while yet and East West rail won't help us understand either.
Daily Mail
4 hours ago
- Daily Mail
Starmer goes all in on NHS with PM set to hand health service £30bn spending boost at expense of other public services
Sir Keir Starmer will pump money into the NHS at the expense of other public services. The government is putting all its eggs in one basket as it lines up the Department for Health for a £30billion cash boost at next week's spending review. However, health chiefs have warned the prime minister's promise to 'turbocharge delivery' could lead to difficult compromises elsewhere in services from the police to councils. It comes after the party's unexpected victory in the Hamilton, Larkhall & Stonehouse by-election - though as the threat of Nigel Farage 's Reform UK still looms large. The Department for Health will be handed an increase of around £200billion to its budget by 2028 - a £17billion rise in real terms. Its day-to-day budget is set to increase by 2.8 per cent in real terms annually over the three-year spending review period. Sir Keir has also pledged to have 92 per cent of NHS patients treated within 18 weeks by the next election, a target that has remained unmet for a decade. Currently, under 60 per cent are seen within this time with waiting lists rising to 7.4million last month. There are even fears NHS bosses may not hit an interim goal of 65 per cent next year. Chancellor Rachel Reeves' prioritisation of health has forced cuts in other departments and prompted protestations from other cabinet members like Yvette Cooper, the home secretary and Angela Rayner, the deputy prime minister and housing secretary. Both have warned Ms Reeves the cuts will put some of the government's crime and housing targets at risk amid 'robust negotiations'. But the chancellor has maintained 'not every department will get everything they want'. Overall, the health budget, which stood at £178billion as Labour took office, will exceed £230billion by the next election. The increase means health is set to account for 41 per cent of all day-to-day departmental spending - up from 39 per cent. Ben Zaranko, of the Institute for Fiscal Studies, said Ms Reeves's cash boost was 'a serious, meaningful increase in health funding'. But Matthew Taylor, chief executive of the NHS Confederation, warned the funding increase 'is not going to enable us to achieve recovery and reform' without big changes to the way the health service treats patients. He said the government's plan to withhold the budget for infrastructure simultaneously would also make 'combining recovery and reform' impossible.
The Independent
6 hours ago
- The Independent
UK could face up to £30bn of tax rises to fund defence spending boost, economist says
Rachel Reeves could be forced to raise up to £30bn through tax rises or funding cuts as the chancellor seeks to meet Labour's pledge to boost defence spending, an economist has claimed. The government has promised to increase defence spending to 2.5 per cent of GDP by 2027, and has an 'ambition' – but no firm commitment – to raise it to 3 per cent in the next parliament, after 2029. But the UK's Nato allies are expected also to push for a fresh target of 3.5 per cent, with the alliance's chief Mark Rutte pushing for a 'dramatic increase', with discussions over a possible 5 per cent target – as called for by Donald Trump – also taking place. And Sir Keir Starmer this week vowed to make Britain 'a battle-ready, armour-clad nation' as a long-awaited defence review called for major upgrades to the UK's military. While the major proposals were based around Labour's current spending pledges for 2027 and the next parliament, the report warned that 'as we live in such turbulent times it may be necessary to go faster' on increasing the UK's defence capabilities. Michael Saunders, a senior economic adviser at the Oxford Economics consultancy, suggested that the government could take steps towards this in the chancellor's next Budget. 'To establish a more credible path to defence spending 'considerably north of 3 per cent' next decade, the government may decide in the autumn Budget that it needs to add some extra spending within the five-year OBR forecast horizon,' said Mr Saunders. 'It's not hard to see pressures for extra fiscal tightening of £15bn to £30bn,' he told The Telegraph. Fiscal tightening involves either raising taxes or cutting government spending. Earlier this week, Paul Johnson, the director of the Institute for Fiscal Studies (IFS), also warned the only way to pay for the increased defence budget would be through 'chunky tax rises' as the government grapples with other key areas of public spending. He told Times Radio: 'You really do have to ask that question, what are the choices that you're going to make? Bluntly, it really does seem to me that the only choice that is available, is some really quite chunky tax increases to pay for it.' According to the IFS, hitting the 3 per target by 2030 would require an extra £17bn pounds between now and then which is yet to be accounted for. Sir Keir has previously said that increasing defence spending to 2.5 per cent would mean 'spending £13.4bn more on defence every year from 2027'. The Office for Budget Responsibility has also estimated that reaching 3 per cent by the next parliament would cost an additional £17.3bn in 2029/30. Speaking in parliament as the defence review was unveiled this week, Lib Dem defence spokesperson Helen Maguire said: 'It is staggering that we still don't have an answer to the vital question: 'Where is the money coming from?' The government has flip-flopped a number of times on 3 per cent.' On Tuesday, defence secretary John Healey failed to rule out tax rises to make Britain 'war ready' and insisted he was '100 per cent confident' the 3 per cent target would be met — but struggled to say how it would be paid for. It came as defence sources were reported to expect that Britain will be forced to sign up to a target to hike defence spending to 3.5 per cent by 2035 at a Nato summit later this month in a bid to appease the US president.
