Cooper still in last-minute talks with Treasury over spending review
Rachel Reeves is expected to announce above-inflation increases in the policing budget when she sets out her spending plans for the next three years on Wednesday.
But Home Secretary Yvette Cooper is yet to agree a final settlement with the Chancellor, with reports suggesting greater police spending will mean a squeeze on other areas of her department's budget.
Downing Street is now understood to be involved in the talks, with Ms Cooper the last minister still to reach a deal with the Treasury.
Rachel Reeves is expected to announce funding increases for health, defence and education, but tougher budgets for other departments (Peter Byrne/PA)
The spending review is expected to see funding increases for the NHS, schools and defence along with a number of infrastructure projects as the Chancellor shares out some £113 billion freed up by looser borrowing rules.
But other areas could face cuts as she seeks to balance manifesto commitments with more recent pledges, such as a hike in defence spending, while meeting her fiscal rules that promise to match day-to-day spending with revenues.
On Monday morning, technology minister Sir Chris Bryant insisted that the spending review would not see a return to austerity, telling Times Radio that period was 'over'.
But he acknowledged that some parts of the budget would be 'much more stretched' and 'difficult'.
Sir Sadiq Khan's office is concerned that the spending review could contain no new projects or funding for London (Lucy North/PA)
One of those areas could be London, where Sir Sadiq Khan's office is concerned the spending review will include no new projects or funding for the capital.
The mayor had been seeking extensions to the Docklands Light Railway and Bakerloo Underground line, along with powers to introduce a tourist levy and a substantial increase in funding for the Metropolitan Police, but his office now expects none of these will be approved.
A source close to the Mayor said ministers 'must not return to the damaging, anti-London approach of the last government', adding this would harm both London's public services and 'jobs and growth across the country'.
They said: 'Sadiq will always stand up for London and has been clear it would be unacceptable if there are no major infrastructure projects for London announced in the spending review and the Met doesn't get the funding it needs.
'We need backing for London as a global city that's pro-business, safe and well-connected.'
For too long, communities across the country have been locked out of the investment they deserve.
That's why on Wednesday, we announced funding worth £15.6bn, helping to drive cities, towns, and communities forward. pic.twitter.com/SJ41aeSZJz
— HM Treasury (@hmtreasury) June 6, 2025
Last week, Ms Reeves acknowledged she had been forced to turn down requests for funding for projects she would have wanted to back, in a sign of the behind-the-scenes wrangling over her spending review.
The Department of Health is set to be the biggest winner, with the NHS expected to receive a boost of up to £30 billion at the expense of other public services.
Meanwhile, day-to-day funding for schools is expected to increase by £4.5 billion by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement.
Elsewhere, the Government has committed to spend 2.5% of gross domestic product on defence from April 2027, with a goal of increasing that to 3% over the next parliament – a timetable which could stretch to 2034.
Ms Reeves' plans will also include an £86 billion package for science and technology research and development.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Rhyl Journal
13 minutes ago
- Rhyl Journal
Martin Lewis: Winter fuel payment changes 'big improvement'
The payment, worth up to £300, will be restored to the vast majority of pensioners who previously received it because anyone with an income of under £35,000 a year will now get the payment automatically. Martin Lewis tweeted: Winter Fuel Payment to be reinstated for all State Pensioners this winter, but then clawed back via tax system for all who earn over £35,000 (roughly average earnings). This is a big improvement. Full instant analysis video coming with all the details in a minute. #WinterFuelPayment NEWS. Winter Fuel Payment to be reinstated for all State Pensioners this winter, but then clawed back via tax system for all who earn over £35,000 (roughly average earnings). This is a big improvement. Full instant analysis video coming with all the details in a minute.… The full details were announced here. Devolved authorities in Scotland and Northern Ireland will each receive a funding uplift so they too can meet the new threshold. Pensioners who do not want to receive the payment will be able to opt out, according to the Treasury. The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour's first acts in Government, aimed at balancing what was described as a £22 billion 'black hole' in the public finances. This meant the number of pensioners receiving the payment was reduced by around 10 million, from 11.4 million to 1.5 million. The Treasury claims the new arrangement will cost £1.25 billion in England and Wales, while means-testing winter fuel will save the taxpayer £450 million. Chancellor Rachel Reeves said: 'Targeting winter fuel payments was a tough decision but the right decision because of the inheritance we had been left by the previous government. 'It is also right that we continue to means test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest. 'But we have now acted to expand the eligibility of the winter fuel payment so no pensioner on a lower income will miss out. 'This will mean over three-quarters of pensioners receiving the payment in England and Wales later this winter.' Video done, just working on adding subtitles, then it'll be up, it answers most of the questions i'm seeing Those with an income above this threshold will also receive the payment, but it will then be reclaimed from them in tax. To be eligible for the winter fuel allowance, a person will need to have reached state pension age by the week starting September 15 this year. Some two million pensioners who earn more than £35,000 will see their winter fuel payments clawed back via the taxman, the Treasury estimates. But, Kemi Badenoch, Leader of the Opposition, claimed the Prime Minister had 'scrambled to clear up a mess of his own making'. Recommended reading: Liberal Democrat Leader Sir Ed Davey said: 'Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated. 'Countless pensioners were forced to choose between heating and eating all whilst the Government buried its head in the sand for months on end, ignoring those who were really suffering. 'We will now study the detail of this proposal closely to make sure those who need support actually get that support. The pain they went through this winter cannot be for nothing.'
Sky News
17 minutes ago
- Sky News
Tobacco giant BAT launches quest to smoke out next chairman
The FTSE-100 cigarette-maker British American Tobacco (BAT) is preparing to kick off the search for a new chairman. Sky News has learnt that the owner of Dunhill and Lucky Strike is in the process of picking headhunters to help identify a successor to Luc Jobin. Mr Jobin, a Canadian business veteran, has only chaired BAT since 2021. He has, however, been on its board since 2017, meaning he faces being 'timed out' by the middle of next year under UK corporate governance guidelines which state that directors are no longer deemed independent if they have served for more than nine years. The search for his successor is not expected to conclude until later this year or early 2026, according to insiders. With a market capitalisation of over £77bn, BAT remains one of the largest companies listed on the London Stock Exchange. It reported half-year results last week showing that full-year revenues were on track to exceed previous guidance to the City. The company's growth is being fuelled by so-called next-generation products such as Velo, a global brand of nicotine pouches. "In the US, I am very pleased that we expect to return to both revenue and profit growth in H1 and FY," Tadeu Marroco, BAT chief executive, said last week. "While Combustibles industry volume remains under pressure, we have stabilised our total industry volume and value share. "Excluding the deep discount segment where we are not present, we are gaining share, driven by Natural American Spirit and Lucky Strike."
Telegraph
17 minutes ago
- Telegraph
What the winter fuel payment changes mean for you
Will you miss out on winter fuel payment because your income is just above £35,000? Get in touch: money@ Rachel Reeves has U-turned on her controversial winter fuel payment plan, which saw the money removed from all but the poorest pensioners. The Chancellor had restricted the previously universal payments to just those receiving pension credit, removing the money from an estimated 10 million pensioners. From this winter, those over state pension age with an annual income of less than £35,000 will be able to benefit from the payment – the Treasury says this will include more than three quarters of pensioners in England and Wales. Those under the age of 80 can expect £200 per household, while those over the age of 80 can get an extra £100. However, those earning more than £35,000 will pay back the money to HM Revenue and Customs through their tax bills. Mrs Reeves said: 'Targeting winter fuel payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest. 'But we have now acted to expand the eligibility of the winter fuel payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.' The Government estimates that the new iteration will still save £450m a year, compared to restoring the payment to every pensioner, since there are an estimated two million pensioners with incomes above £35,000. The clawback mechanism is similar to the high income child benefit charge, which sees families on more than £60,000 hand back some, or all, of their child benefit payments. Here, Telegraph Money explains what the new winter fuel payment rules mean for you. What has changed? Rachel Reeves announced last summer that she was removing the £200 winter fuel payment from pensioners who were not in receipt of pension credit, as she looked to fill holes in the public purse. But this proved deeply controversial, as millions of pensioners missed out, with many struggling to cover high energy prices. The change also drove a huge surge in applications for the pension credit, with 285,600 pensioners applying between July last year and the end of May, an increase of 51pc. This saw delays of as long as 87 days for those waiting to be approved for the benefit. Campaign groups said that restricting eligibility to those receiving pension credit made some of the very poorest pensioners worse off, as many were just above the threshold for the benefit. The Government has now changed its mind. According to the latest announcement, this winter will see all pensioners over state pension age paid the £200 or £300 – but those who are not eligible to keep it will pay it back to HMRC. The annual income threshold has been set at £35,000. This means that nine million pensioners will receive the payment this year, compared to approximately 1.5 million last year. It is not clear whether the threshold will be increased annually with inflation, or linked to increases in the so-called 'triple lock', which sees the state pension increased by one of three measures each year. How to claim? Pensioners will not need to actively claim the payment, as it will be made automatically – but it will be possible to opt out. There will be no need to register with HMRC to receive the payment. Pensioners will be eligible if they have reached state pension age – currently 66 – by the qualifying week, which this year will be September 15 to September 21. How will it be paid back if I earn more than £35,000? If you earn more than £35,000, the payment will be clawed back through your tax bills. The Government says this will be done through the PAYE system, or via self-assessment. Sir Steve Webb said that for those with large company pensions, which are taxed through PAYE, this should be relatively easy for the Government to administer. If you earn over the threshold, the entire payment will be claimed back through your tax bills, with no taper. Is winter fuel allowance per person or household? Confusingly, the winter fuel payment is paid per household, but the earnings clawback is calculated individually. This means that a household will receive no more than £300 (for those over the age of 80), but each person's income is used to determine whether their half of the payment is removed via tax. I live alone. What happens if I earn just over £35,000? While someone who lives alone will be paid the full £200, or £300 if they're over 80, having an income of over £35,000 would mean the full winter fuel payment is taken back via tax. For those earning just over the threshold of £35,000, it might be worth considering reducing what you're taking from a pension pot. Alice Haine, of Bestinvest, said: 'Ultimately, for pensioners earning just above the £35,000 threshold, the latest news will be disappointing. Some may even choose to reduce their income from private pensions if it means they can just skim under the threshold to receive the payment.' What happens if I earn more than £35,000 but my spouse doesn't? If one pensioner in a household earns more than the threshold and the other doesn't, then £100 will be clawed back by HMRC from the higher earner. This is because the allowance is paid on a household level, so if there are two pensioners living in the same home, then it is split equally between them. This means that households where one pensioner earns £100,000 and the other earns £34,000, would receive £100 in winter fuel payment. The other £100 would be paid back through the tax system. Can I get the winter fuel payment if I am a millionaire? You could technically be a millionaire and keep the winter fuel payment if your income is less than £35,000. Even if a pensioner is asset rich, with a large home or pension pot, if their annual income for tax purposes is below the threshold, they will still be permitted to keep the payment. Sarah Coles, of Hargreaves Lansdown, said: 'The balance of property assets and pension income for older people can leave them wealthy on paper, and yet seriously strapped for cash on a daily basis. In the short term, things like the winter fuel payment can help.' Some millionaires don't believe they should receive the payments at all. Digby Harper, 79, a retired manufacturing company owner, said that he would not have the winter fuel payment restored, having sold his business for several million pounds when he retired. He said: 'As far as I am concerned, it's perfectly ok. I can't see why they gave me that money in the first place. I just don't need it. 'My wife used to describe it as her 'wine allowance'. I think it's a trivial issue. It's a big political issue but it's a nonsense.' How much do I get if I am over 80? Those over the age of 80 receive an additional £100 in winter fuel payment. For single pensioners, or households where both people are over 80, this would mean a payment of £300. In households with one pensioner under the age of 80 and one over, payments will be made of £100 and £150 respectively, sources at the DWP confirmed. This means that a total of £250 will be paid to mixed-age households. If either pensioner is over the income threshold, then their share would be clawed back. If both pensioners earn over the threshold, all £250 would be clawed back. Can I opt out? Pensioners will be able to opt out of receiving the payment at all, if they so choose. For those earning more than £35,000, this means that no additional money will be claimed by HMRC. More details about how pensioners can opt out will be announced by the Government at a later date. This is similar to how parents can opt out of receiving child benefit payments, if they earn over the threshold and would have to repay it. Opting out of child benefit can be done using an online form on the Government website, or by phone or post. As of August last year, more than 712,000 families had opted out of receiving child benefit payments.
