Spending review latest: Fears ‘staggering' cuts may be required by Rachel Reeves
Concerns have been raised that Rachel Reeves may have to make 'staggering' cuts as a result of her spending review plans.
The chancellor is set to unveil plans for all department funding until the next election in 2029 during her review on Wednesday.
Experts have warned the chancellor will have to make £5 billion worth of cuts to ensure the spending plans are fulfilled - with areas such as housing, policing and border control expected to be affected.
The analysis, carried out by researchers at the House of Commons library commissioned by the Lib Dems, found that unprotected departments — which excludes NHS England, the core schools budget and defence — could see the real-terms cuts by 2028/29.
The Lib Dems said the scale of the expected cuts was 'staggering'. Spokesperson Daisy Cooper said: 'After years of shameful Conservative neglect, it is household budgets and people relying on these services for vital support who are bearing the brunt.
'From social care to neighborhood policing, this Labour government is at risk of failing to deliver the change that people were promised.'
'We are really going to suffer': Residents' dismay over nuclear plant investment
Residents, campaigners and organisations have expressed outrage after the Government allocated more than £14 billion towards building a nuclear plant on the Suffolk coast.
The plant is expected to provide 10,000 jobs but residents and campaign groups say it will damage wildlife and impact the community.
Jenny Kirtley, a resident from nearby Sibton who chairs the campaign group Together Against Sizewell C, arranged a demonstration against the development at the site last Saturday, which was attended by around 300 people.
'I have lived in this area on and off most of my life and have never seen anything like it,' she said.
'The devastation going on in this area is unbelievable.
'Net zero is supposed to happen by 2030 – there is no way this is going to be completed by then.
'Leiston has a population of fewer than 6,000: where are all these people going to stay?
'Rent is going sky-high at the moment – it's absolutely ridiculous.
'We are really going to suffer.'
Athena Stavrou10 June 2025 15:00
Fears 'staggering' cuts may be required by Rachel Reeves
Concerns have been raised that Rachel Reeves may have to make 'staggering' cuts as a result of her spending review plans.
Experts have warned the chancellor will have to make £5 billion worth of cuts to ensure the spending plans are fulfilled - with areas such as housing, policing and border control expected to be affected.
The analysis, carried out by researchers at the House of Commons library commissioned by the Lib Dems, found that unprotected departments — which excludes NHS England, the core schools budget and defence — could see the real-terms cuts by 2028/29.
The Lib Dems said the scale of the expected cuts was 'staggering'.
Spokesperson Daisy Cooper said: 'After years of shameful Conservative neglect, it is household budgets and people relying on these services for vital support who are bearing the brunt.
'From social care to neighborhood policing, this Labour government is at risk of failing to deliver the change that people were promised.'
Athena Stavrou10 June 2025 14:51
What is the spending review?
The chancellor will unveil the results of her line by line spending review, setting out the budgets of government departments until the end of the decade on Wednesday.
Rachel Reeves' spending review has taken place in two parts, with phase one set out in her October Budget - which included £40 billion of tax hikes and set out departmental spending until 2026.
The second phase has seen departments ordered to set out how adopting technologies such as AI and reforming public services can free up government cash and support the delivery of Labour's missions.
Wednesday's review will set out day-to-day departmental spending for the next three years and investment spending for the next four.
Reeves has ruled out borrowing for day-to-day spending and has insisted she will not raise taxes again, prompting questions about how the policies will be funded and whether cuts will be made.
Athena Stavrou10 June 2025 14:38
Pictured: Starmer talks to college students in Ipswich
Athena Stavrou10 June 2025 14:23
Watch: Sizewell C nuclear plant to be built with £14.2bn government funding
Nuclear plans labelled 'downgrade' by Conservatives
The Conservatives have branded the Government's nuclear development plans as a 'downgrade' on the previous government's commitments.
Speaking from the frontbench, Conservative MP Nick Timothy (West Suffolk) said: 'This statement is a downgrade on what the last government put in motion. Today, the Energy Secretary has announced only one small modular reactor (SMR). There is no clear target to increase nuclear power generation, and no news on Wylfa.
'The nuclear industry is expecting news of a third gigawatt-scale reactor. The last government purchased the land and committed to build but on this today, the Energy Secretary said nothing.
'So can he commit to the planning inherited for a third gigawatt-scale plant at Wylfa? And will he recommit to the Conservative policy of 24 gigawatts of nuclear power by 2050?'
Energy Secretary Ed Miliband replied: 'I do sort of slightly scratch my head, because he sort of says it's a downgrade, I mean, we've announced the largest nuclear building programme in 50 years.'
Athena Stavrou10 June 2025 13:41
Exclusive: Rachel Reeves forced 'to make £5bn cuts' to balance books after spending review
Rachel Reeves will need to wield the axe and make nearly £5bn worth of cuts to balance the books in the wake of Labour's spending review, new analysis has revealed.
The chancellor will on Wednesday announce funding for all departments until the next election in 2029 after a bitter cabinet civil war over what is being dubbed 'austerity 2.0'.
But experts have warned Labour will have to make billions of pounds of cuts to ensure Reeves can fulfil her spending plans — with areas such as housing, policing and border control expected to be in the line of fire.
Rachel Reeves 'needs to make £5bn cuts' to balance books after spending review
Exclusive: The chancellor is set to unveil her spending review on Wednesday but researchers warn she will need to make £5bn of cuts by 2028/29 — even before finding the cash to restore winter fuel payments to pensioners
Athena Stavrou10 June 2025 13:24
When is the spending review?
Rachel Reeves will this week make one of her biggest statements to MPs since Labour's general election victory.
The chancellor will unveil the results of her line by line spending review, setting out the budgets of government departments until the end of the decade.
The spending review will take place after Prime Minister's Questions, so at around 12.30pm, on Wednesday, 11 June.
Athena Stavrou10 June 2025 13:08
People will be more safe, not less, after spending review, PM insists
The Independent's political correspondent Millie Cooke reports:
People will be 'more safe' not less after the spending review, the prime minister has insisted, promising there is money going into policing and security.
His comments came ahead of Wednesday's review of government departments, amid growing speculation that there could be cuts to police force numbers and a squeezed Home Office budget.
Asked whether people will be less safe after the spending review, Sir Keir told GB News: 'They will be more safe. There's money going into policing, into security, and that is really important, particularly coming from my background.
'I was chief prosecutor for five years, prosecuting cases across England and Wales. So this is a core belief.
'Those extra police officers will be neighbourhood police officers, and I think that will give people the reassurance in their communities that they are safe'.
Athena Stavrou10 June 2025 13:04
Comment: Could 'going nuclear' finally end Ed Miliband's career?
Not far from me, in the lovely Leicestershire village of Nevil Holt, for some reason a replica of the notorious 'Ed Stone' has been erected in a churchyard. It's all part of the small but growing Nevil Holt art and literature festival, and I imagine it's to remind passersby of the ephemeral nature of so much of politics – if not life.
The energy secretary is one of politics' great survivors – but his plan to build a £14bn power station on the Suffolk coast could leave a toxic legacy, says Sean O'Grady:
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Times
26 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
27 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?'
Telegraph
27 minutes ago
- Telegraph
Reeves has folded like the Tin Foil Chancellor she is
Rachel Reeves confirmed on Wednesday that she is a ' spend today, tax tomorrow ' Chancellor. Her spending spree on the country's credit card has set us on a collision course with the autumn when more tax rises will hit working families' pockets hard. After a year of chaos, how can anyone take this Government seriously? Rather than using the spending review as an opportunity to deliver secure public finances, the Chancellor is instead lurching from one disaster to the next. The cruel cuts to winter fuel payments, the £30 billion Chagos Islands surrender and the billions in no-strings-attached union handouts are all chickens that have come home to roost. When the pressure is on, the self-styled 'Iron Chancellor' folds like the 'Tin Foil Chancellor' she really is. She promised to get borrowing down, but the deficit is up by 70 per cent on her watch. She pledged no new taxes rises, yet more are on their way. She pledged not to change pensioner benefits, then U-turned. Then U-turned again. The only consistent thing about her is her inconsistency. Her own MPs, Cabinet ministers and Labour's trade union paymasters smell weakness. They know she's vulnerable and they will demand more money – and get it if they shout loud enough. The Chancellor has boxed herself into a corner. We face an extra £200 billion of borrowing this Parliament compared with the last Conservative Budget, with £80 billion more in interest payments alone. We are almost a year in but no economic plan is forthcoming. Our country is exposed. We have no room left to respond to shocks in global markets. Interest rates and mortgages are staying higher for longer because of her choices, as the OBR has said. She trumpets the hundreds of billions in extra spending she has announced while on the other hand claiming to have fixed the public finances. It simply doesn't make sense. She claims there is 'still work to do to ensure the sums add up'. That's not stability, it's uncertainty – the very last thing markets want to hear. It is not just markets. Her abject failure means British families have seen inflation almost double, unemployment rise, growth stalling, debt interest soar and pensioners sacrificed. The country is worse off because of her choices. What of the winter fuel U-turn? Last summer, pensioners were left out in the cold to avoid 'a run on the pound', as Labour's Lucy Powell put it. Now they claim they can afford to reverse it because they have fixed the economy and the finances – but economists are saying both are in a worse state since Labour came to office. Nothing's changed except the Government's credibility, which is vanishing. Rock bottom confidence There was nothing in her review restore rock bottom business confidence. Payrolls fell by over 100,000 last month alone. Unemployment is up 10 per cent since Labour took office. Only businesses create growth and jobs. But our Chancellor has not yet learnt that basic lesson of economics, her fingers planted firmly in her ears whilst the alarm bells are ringing. Similarly, the first and most important duty of any Prime Minister is keeping the country safe. But even as the world is becoming more dangerous and a new axis of evils draws their battle lines, there was no further progress towards spending 3 per cent of GDP on defence, which Labour claim to be committed to. They stood firm on the Chagos surrender, which is paying for tax cuts for Mauritians while we suffer, costing our country £30 billion to lease back our own land. There is no urgency on the issues of the day. The Home Office budget too has been significantly hit by asylum costs, while illegal crossings soar. Rather than point the finger at everyone else, the Chancellor should take responsibility and fix the problems she has created. Instead, the socialist's lazy embrace of high spending, more borrowing and higher taxes beckons – leaving our public finances dangerously vulnerable. If we were in charge, we would take a different approach. We wouldn't kill growth with tax rises and red tape. We'd restore confidence, focus on efficiency and productivity, and reform welfare to get people off benefits and into work. At the end of the day, it's working people and businesses who will pay – with higher taxes, higher costs, and fewer opportunities. This Spending Review is unaffordable, and so is this Chancellor.
