What the spending review means for you: RACHEL RICKARD breaks down Reeves' spending spree
Chancellor Rachel Reeves has unveiled a Government spending spree on Britain's schools, hospitals and armed forces as critics immediately questioned how she would pay for it.
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Telegraph
2 hours ago
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France blocking Britain from EU's massive defence fund
France is trying to shut out British arms firms from the EU's defence industrial programme despite the post-Brexit reset. A diplomatic source told The Telegraph that Paris was seeking to restrict member states looking to make a purchase under the scheme to weapons made mostly within the bloc. The European Defence Industry Programme (EDIP) is being touted by the European Commission as the largest overhaul of the Continent's industrial base. It will see EU cash pumped into joint procurement projects and the production of weapons, ammunition and other military hardware. EDIP, which has been six months in the making, is part of a wider scramble to spend €800 billion on defence by the end of the decade. French diplomats have insisted the tool should be solely used to boost firms based inside the EU, as well as Norway and Ukraine. This means any member states looking to make a purchase under the scheme will be restricted to technologies with at least 85 per cent of its parts made in the bloc. The demand means that Britain, which recently signed a flagship defence and security agreement with Brussels, will be shut out from the majority of projects being funded by the EU's budget. The UK will also be blocked from joint procurement projects under the EDIP scheme. 'Not even a month ago, we solemnly declared the turning of pages and opening of new chapters in our relationship with the UK,' an EU diplomat told The Telegraph. 'Yet, at the first occasion to turn those words into action, we have slammed the book shut.' There are also fears the hard-line French position will see potential EU funding cut from factories producing Patriot surface-to-air interceptors, because they are a US technology. It comes at a time when Nato's European allies and Canada were warned they would have to increase air defence systems by 400 per cent to protect against the prospect of a Russian attack. 'It seems self-defeating to exclude investments in the one readily available air defence system, simply because it's American,' the diplomat added. Emmanuel Macron, France's president, has consistently pushed for EU defence schemes to be used to boost the Continent's own industry, rather than allowing funds to be invested in foreign firms. Bogged down in red tape Many militaries across the EU, such as the Netherlands, Romania and Greece, have built their defensive strategies around the procurement of American systems, like Patriot air defence batteries. To mitigate concerns, there are discussions over allowing the transfer of technologies from non-EU defence firms to businesses based in the bloc. But insiders have said this mechanism will likely become bogged down in red tape, making it practically impossible to secure funds for.
Telegraph
2 hours ago
- Telegraph
Captain Kemi needs ‘an army' but business not yet keen to follow her over the top
There was not much headroom, fiscal or otherwise, as the Tory leader spoke on the economy in the cramped basement of a City hotel. The ceiling was low but Kemi Badenoch's hopes were high as she addressed a conference of bankers who seemed under-enthused by the Chancellor's spending review. Tax Freedom Day, the point of the year when we stop working for the Exchequer, had just dawned, six days later than last year, and there was little sign of relief. The Institute for Fiscal Studies warned that Rachel Reeves was a 'gnat's whisker' away from having to hike taxes and most gnats are asking for the No 1 clippers these days. Add the grim news of GDP falling by 0.3 per cent in April, and the Chancellor's breakfast media round had been like someone trying to sing Good Vibrations to the tune of Beethoven's Funeral March. Speaking from a hospital surrounded by diagnostic equipment (all wisely unplugged to avoid images of flatlining) Reeves insisted she is 'determined' to deliver growth and that GDP is 'volatile'. This is the same Reeves who demanded an emergency Budget in 2022, when GDP fell by 0.1 per cent on the Tory watch. It was not a bad time, therefore, for a Conservative to remind those in the City who their friends are. Badenoch had come to play FTSE with financiers, but she began with a nostra culpa. She admitted the Tories had left a ropey economy – blame Covid, blame Putin, blame the Treasury, don't blame me – 'but it was not this bad'. Productivity, she added, was 'stuck in first gear' and London was experiencing the greatest exodus of wealth of any city save Moscow. She pronounced it the American way to rhyme with cow. Labour don't 'get' business because hardly any of them have a background in it, she added, which may be true but only one of the Beach Boys knew how to surf. Reform, she contended, was running a scam. 'No one is making the argument for business any more except me and my party,' she said. 'Business is a good, in and of itself, and it pays for everything.' Especially, she hoped, at that night's Tory donors' summer party. Their tummies suitably tickled, Badenoch then returned to bashing the Government, saying that borrowing is so high there is a 'significant risk of a death spiral' and that Labour is pessimistically pursuing a path of managed decline, exacerbated by a compliance culture that strangles innovation. So far so punchy, but what would she do better? Badenoch's shirt cuffs were unbuttoned but she had little up her sleeves. Her opposition to VAT on school fees was reprised and she promised to 'reverse changes to APR and BPR' (agricultural and business property relief), thus giving CPR to the economy. Beyond that, she had nothing. It is, to be fair, early in the parliament for policy. What she most wants now are allies ('Quite frankly, we need an army.') 'I'm on your side,' she told them, 'but I need you to be on mine too. You can't sit back and hope that someone else is coming along to fix this. You need to speak up. Don't just wait for other politicians to do it. You need to get on the pitch too.' Building to her conclusion with a plea for ideas, Captain Kemi hit a poetic, if metrically flawed, note. 'Back us, put your name to the cause,' she said, 'for we're not going to turn the country around with quiet applause.' She then left the stage to quiet applause. The pin-striped army liked her tone, but they are not quite ready to follow her over the top.
Wales Online
2 hours ago
- Wales Online
Millions for Wales' rail funding is 'underwhelming'
Millions for Wales' rail funding is 'underwhelming' A row over Rachel Reeves' words in her spending review is overshadowing the UK Government's big announcement Chancellor of the Exchequer Rachel Reeves delivers her Government's spending review to MPs in the House of Commons (Image: PA ) The UK Government's announcement that £445m of funding will come to Wales is "underwhelming" and not enough to make up for years of underfunding, experts have said. Chancellor Rachel Reeves made her long-awaited spending review statement in the House of Commons on Wednesday, June 11. As part of it, she declared: "Following representations from my Right Honourable Friend the Welsh secretary, the First Minister for Wales, and Welsh Labour MPs I am pleased to announce £445m for railways in Wales over 10 years including new funding for Padeswood sidings and Cardiff West junction." The paperwork associated with the statement said that would mean "£300 million for rail investment in Wales, including for the Burns Review stations, North Wales Level Crossing, Padeswood Sidings and Cardiff West junction." For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here However, the chancellor's words led to confusion, because UK Government then sought to row back on the chancellor's words, saying the funding wasn't over 10 years at all. If the money were for over a decade-long period, it would be considerably less good news for Wales than Labour had been briefing especially given the historic underfunding for rail Wales has had. The Treasury and Wales Office explained to journalists in a subsequent briefing the money was split into different parts, £300m will be spent by the UK Government on heavy rail - so things like the new stations and sidings mentioned above and rail improvements. The Welsh Government will get £48m for the Core Valley Lines and the remaining £97m would be for developing future schemes. Article continues below They explained that while the "bulk" of the total sum would be spent in this next three year period, only the £97m development funding would be for a longer period of 10 years because it covers the upcoming spending review, and the next from 2030. Despite that, confusion continued to reign, which led to a spat in the Senedd between Mark Drakeford and Rhun ap Iorwerth - which you can read here. The experts at Wales Governance Centre gave their response to the chancellor's comments saying: "In today's statement, the Chancellor announced that this £445m would be spread over ten years: six years longer than the period of the spending review period itself. It includes £48m for enhancements to the Core Valley lines over four years, responsibility for which is devolved to the Welsh Government. "In the spending review documentation, there are specific mentions of the Borderlands Line and the Cardiff to Bristol line. Beyond this, there is no substantial detail on the profile of this funding in each year of the spending review period. "Given the rail enhancement spending currently committed to projects across England, this level of funding would fall well below a population share for Wales over the next decade. Any suggestion that this funding in any way compensates Wales for the loss incurred from HS2 is obviously unsustainable. It does not substantially change the overall picture of underfunding of Welsh rail infrastructure." In February 2025, the Welsh Government estimated that the loss in consequentials from HS2 being classified as an England and Wales project (rather than an England-only project) was £431m, from 2016-17 up to and including 2025-26. "However, Wales Governance Centre say it now estimates that the total loss from HS2 between 2016-17 and 2029-30 now stands at approximately £845m. "Over the course of the next four years, Wales will lose more than £100 million in capital funding every year because of HS2's designation as an England and Wales project, and the cumulative loss will continue to grow significantly at future spending reviews. We show our workings in the attached table," their analysis reads. "The Welsh Government has apparently expended significant political capital in pushing the case for rail infrastructure investment in Wales. In that context, the announcements today feel underwhelming. "Furthermore, by leaving the existing system of funding rail infrastructure in place, it will leave Wales again at the behest of future governments (of whatever political colour) and risk further entrenching rail underfunding at future spending reviews." Their analysis further consequentials deriving from NHS and schools spending in England equate to around 91% of the additional funding announced for the Welsh Government in 2028-29. Passing on these consequentials to equivalent services in Wales would still leave NHS funding growing at below its long run historical average (3.6%) but this would still see other services facing tight budgets over coming years, leaving them – at best – flat in real terms "Following the pattern of recent years, the funding is also frontloaded, with faster growth in spending in 2026-27 followed by leaner budgets in 2027-28 and 2028-29. "This is good news for the current Cabinet Secretary for Finance, who may be able to avoid having to cut services in next year's budget, which will need to pass through the Senedd a matter of months before the election," Guto Ifan's analysis says. Wales' finance minister Mark Drakeford told BBC Radio Wales that the spending review was good for Wales. He said the Welsh Government had got everything it wanted from the UK Government and it had only asked for funding for things it could deliver in terms of resources and staff. He said claims by opposition parties that funding would be evenly split over a decade was an "elementary error". He said he had repeatedly corrected assertions that it would be divided, but they kept quoting it. "Despite having that error corrected a number of times, they continued to cling to it. The error was to assume the money would be evenly divided over that 10 year period, whereas in fact, £350m of it, the vast bulk of it, will happen in the next three years. "What the chancellor was explaining was that on top of the £350m there is £95m associated with a ten-year investment strategy. It's not £45m a year, as the leader of Plaid Cymru kept asserting, despite having had it explained to him, it's actually £350m over the next three years and there will be opportunities in subsequent spending reviews to add to that," he said. Article continues below
