Latest news with #ResolutionFoundation
Yahoo
4 days ago
- Business
- Yahoo
Projects awaiting potential fate ahead of government spending review in June
A NUMBER of key planned projects in Cumbria could have their fate decided by next month's government spending review. Rachel Reeves has been warned that 'tough trade-offs' await her at this summer's spending review, as she has been urged to prioritise investment that 'boosts' public services and standards for families. Projects across the country and in Cumbria have been put on hold whilst the government reviews their spending plans. A report from the Resolution Foundation has suggested that the Government should focus spending from its 'limited pot' in areas such as health and housing if it wants to increase living standards. The analysis by the think tank also urges ministers to examine investment at June's spending review in the prisons system and public transport, but describes them as 'secondary priorities'. The Treasury is currently undertaking the review, which will set the budgets for Government departments for the next three years in terms of day-to-day spending. The process will set the budgets for so-called unprotected departments, including local government, justice, transport and culture. Protected departments include defence, the NHS in health, and schools as part of the education envelope. 'The Chancellor must now decide how to allocate a limited pot of capital spending in a way that both addresses the UK's legacy of frayed infrastructure and supports future ambitions for growth and higher living standards,' the report stated. 'Focusing direct government investment in health and housing would allow the Government to deal with the legacy they have inherited, while furthering their missions of boosting growth and raising living standards.' Capital spending is money used to spend projects such as new hospitals or road schemes, rather than day-to-day running costs such as salaries. At the budget in October 2024, Ms Reeves announced more money for capital spending, but also said that there would be 'four key guardrails' introduced to ensure good value for money. 'Ultimately, if the Government wants to avoid dramatic cuts to departmental budgets, then it will likely have around £20-50 billion of capital spending to allocate over the next five years,' the Resolution Foundation report said. It added: 'The Government should prioritise investment based on areas of particularly acute historical under-investment, and the future impacts on living standards and economic growth. 'Investment that is likely to be well targeted across both of these criteria includes social investment in housing and health, with investment in the prison system and well-targeted transport infrastructure projects in the UK's second cities being secondary priorities.' Rachel Reeves told the BBC in March that 'we can't just carry on like we have been, spending on the same things that the previous government spent on'. In Cumbria there are several projects waiting on government funding approval before they can go ahead. Westmorland and Lonsdale MP Tim Farron is campaigning for the Government to approve plans to dual the A66 from Penrith to Scotch Corner which he says would 'reduce congestion, boost the economy, and save lives.' Mr Farron recently met with the roads minister who said that a final decision on the project would be made in the Spending Review in June. The previous government approved the A66 Northern Trans-Pennine project which would see the 80-kilometre stretch between Penrith and Scotch Corner in North Yorkshire made into a full dual carriageway. The A66 Northern Trans-Pennine project is aimed at dualling the road between Cumbria and North Yorkshire (Image: National Highways) The project would also include improvements to multiple junctions and minor enhancements to the already existing sections of the dual carriageway on the A66. Following the election, the new Labour Government put the whole project – which would cost hundreds of millions – under review, blaming the 'dire' state of the public finances left by the Tories. The new government cancelled and put other major road and public transport infrastructure projects across the country in review following the election. Tim said: 'Dualling the A66 would bring huge benefits to our area – reducing congestion, providing a big boost to the North's economy, and helping to limit the number of serious and fatal accidents which tragically are a regular occurrence on this road.' The spending review could possibly give the green light to the University of Cumbria's request for additional funding for their ambitious Citadels project in the city centre. The university had originally pledged to give £23.5million to the £77million Borderlands Partnership project but has since requested to pay £15.5million. The request for the additional £8million funding is now with the Ministry for Housing, Communities and Local Government. The project is set to 'transform' the city centre, with a brand-new campus being built in and amongst the historic citadels. Properties on English Street and Victoria Viaduct have been purchased and vacated ahead of the build which was given planning permission in August 2022. What the Citadels could look like when the project is complete... but it needs funding In a report sent to the Borderlands Partnership at the time of their request, the university said it is suffering with 'intense inflationary pressures, increasing employer pension contributions and increased utility costs' which have all contributed to the request. The chancellor is under pressure to approve projects in the north of England with Bassetlaw Labour MP, Jo White calling for more investment in the north. Ms White said: 'Every time we [red wall constituencies] get missed out, and I'll give a very good example is when Rachel Reeves did her speech, and she talked about the third runway for Heathrow, and then she talked about the connectivity between Oxford and Cambridge via Milton Keynes, and then she's recently talked about the extension to Luton airport. "Everything in the south is very, very easy investment because the industry and the business are there to support it.' Jo White, MP for Bassetlaw (Image: UK Parliament) She went on: 'We are the more hard-to-do areas, and what we want Treasury and government to be thinking about is: how can we work with business to ensure that they come to areas like ours? 'Because that then brings the infrastructure in partnership with it. So our challenge is: don't go for the easy options, because electorally, it won't make any difference to you whatsoever.' Projects awaiting approval in Cumbria have both been called key for economic growth in the area and have been publicly backed by local MPs. The chancellor will announce the spending review on June 11.
The Independent
5 days ago
- Business
- The Independent
UK housing crisis sees renters hit hardest by rising bills
New data has revealed that renters in the UK are facing a disproportionate increase in living costs compared to homeowners, highlighting the deepening inequalities exacerbated by the ongoing housing crisis. According to the Office for National Statistics (ONS), inflation for renters surged to 3.6 per cent in the year leading up to March, surpassing all other groups. This figure significantly exceeds the overall inflation rate of 2.6 per cent during the same period, demonstrating the escalating burden of rent on the UK's 5.5 million private tenants. In stark contrast, homeowners experienced a more moderate increase in costs, with inflation affecting them at a rate of 1.8 per cent. These figures underscore the challenge facing the government, as it grapples with an acute housing shortage that has driven up rents and property prices in recent year s. While Labour has pledged to construct 1.5 million homes by 2030, the Office for Budget Responsibility has forecast a shortfall of approximately 200,000 homes. Think tank the Resolution Foundation said housing continues to be a 'major headwind' in the cost-of-living crisis. Senior economist Simon Pittaway told the PA news agency: 'Inflation is at the forefront of everyone's minds but some groups have been hit harder by recent price rises than others. 'As policy makers grapple with ongoing cost-of-living concerns, boosting support for low-income families who rent and increasing the availability to homes to buy should be priorities.' By comparison, people who have mortgages saw inflation ease to 2.8 per cent, well below 5.6 per cent from the year before, after the Bank of England cut interest rates several times in 2024 and early 2025. The base interest rate helps dictate how expensive it is to take out a mortgage or a loan, as well as influencing the interest rates offered by banks on savings accounts. Hikes in recent years, designed to combat skyrocketing inflation, have left mortgage rates much higher than was normal for most of the last decade. Social renters, such as people who live in rented council homes, were the next worst affected after private renters, with average inflation of 3 per cent. The ONS also found that families who are working age faced a higher rate of inflation, at 2.8 per cent, than retired people, at 2.1 per cent. And households with children saw price rises of 2.8 per cent compared to those without, who saw a 2.6 per cent increase.
The Independent
5 days ago
- Business
- The Independent
UK renters hit hardest by inflation as household costs surge
Renters have seen costs rise twice as fast as people who own their homes outright in the last year, underscoring the growing social divide caused by the housing crisis. Inflation for Britons who rent their homes climbed 3.6% in the year to March, according to the Office for National Statistics (ONS), the highest of any group. It was also far above headline inflation of 2.6% over the same period, reflecting how spiralling rents for the UK's 5.5 million private tenants continue to outstrip broader price rises in the economy. By contrast, costs for people who own their homes increased by 1.8%, making them the group most sheltered from inflation. The figures underline the challenge facing Sir Keir Starmer's government, as it tries to ease an acute housing shortage that has pushed up rents and prices in recent years. Labour has promised to build 1.5 million homes by 2030 but the Office for Budget Responsibility recently forecast it will fall short by about 200,000. Think tank the Resolution Foundation said housing continues to be a 'major headwind' in the cost-of-living crisis. Senior economist Simon Pittaway told the PA news agency: 'Inflation is at the forefront of everyone's minds but some groups have been hit harder by recent price rises than others. 'As policy makers grapple with ongoing cost-of-living concerns, boosting support for low-income families who rent and increasing the availability to homes to buy should be priorities.' By comparison, people who have mortgages saw inflation ease to 2.8%, well below 5.6% from the year before, after the Bank of England cut interest rates several times in 2024 and early 2025. The base interest rate helps dictate how expensive it is to take out a mortgage or a loan, as well as influencing the interest rates offered by banks on savings accounts. Hikes in recent years, designed to combat skyrocketing inflation, have left mortgage rates much higher than was normal for most of the last decade. Social renters, such as people who live in rented council homes, were the next worst affected after private renters, with average inflation of 3%. The ONS also found that families who are working age faced a higher rate of inflation, at 2.8%, than retired people, at 2.1%. And households with children saw price rises of 2.8% compared to those without, who saw a 2.6% increase.
New Statesman
6 days ago
- Politics
- New Statesman
Child poverty is rallying the Labour left
Photo byIn the aftermath of this government's first King's Speech in July 2024, Labour suspended the whip from seven of its MPs: Apsana Begum, John McDonnell, Richard Burgon, Rebecca Long-Bailey, Zarah Sultana, Ian Byrne and Imran Hussain. This group was charged with voting – against the Labour whip – for an SNP amendment which called for the removal of the two-child benefit cap. This policy, designed by George Osborne and introduced by the government in 2017, limits the number of children for whom a family can claim financial support. According to data from the Resolution Foundation, 470,000 children would be lifted out of poverty if the cap was removed. Nine months later, the government has all but confirmed it is about to stage a U-turn. Reporting over the weekend suggested that Keir Starmer is convinced that the cap should be removed with the government hoping to unveil this decision in its upcoming Child Poverty Strategy, which has been delayed until the autumn (it was originally intended for publication in the spring). Doing the broadcast round on Tuesday morning, Bridget Phillipson confirmed that lifting the cap is 'something we're considering'. This follows Starmer's recent announcement that the government would retract its decision to cut the winter fuel payment for more than nine million pensioners, a policy that did a lot of damage in this year's local elections. For the seven MPs who voted to remove the cap, this is a vindication. 'I think it's pretty poor form,' said Byrne when we spoke over the phone. 'You've got people who actually voted on a point of principle for constituents [who were suspended], then there's been a realisation that they were actually doing the right thing, and the government follows on almost 12 months later,' he said. Byrne, along with three of the seven (Long-Bailey, Burgon and Hussain), had the whip restored in February this year. Sultana, McDonnell and Begum remain independent. Byrne, who has not spoken to the government about its impending decision, thinks that if a U-turn is on the cards, the three remaining MPs should have the whip reinstated. 'They should have listened to us from the get-go. There's still MPs who've lost the whip who are important to the Labour movement and represent huge swathes of the Labour movement. I think it's really important that they're given that back,' he said. McDonnell has already seen the opportunity in this moment. Writing for the Guardian, the former shadow chancellor accused Starmer's government of 'callousness and incompetency' and said that the removal of the whip from himself and six other colleagues for voting against the two-child benefit cap 'showed a remarkable combination of arrogance and lack of judgement'. He called on MPs to 'stand up and take back control of Labour'. The optics are clearly not great. And as the Labour leadership moves rightward to – as Starmer told a meeting of the PLP last week – take on the party's 'main rivals for power', Reform, they remain exposed on the left. (Although Farage, this week, shifted his party leftward, telling a press conference on Tuesday 27 May that Reform would remove the two-child benefit cap.) Byrne thinks this rightward move from the Labour leadership is a mistake. 'We cannot be outflanked by Nigel Farage,' he said. 'There seems to be an obsession with people around the leader with focus groups.' To Byrne, where the party's focus must really lie is on issues such as alleviating child poverty, 'things that George Osborne did, and the damage it did to our constituencies, in working class areas, that needs to be tacked – not a fixation on focus groups'. Rumours of a new leftward alliance have already been swirling; there have been suggestions that this could be driven by the former Labour leader Jeremy Corbyn (who was suspended from the party by Starmer in 2020) or even a member of the still suspended three (such as Zarah Sultana). But nothing material has happened yet. Two questions remain, however: will Starmer's Labour readmit McDonnell, Sultana and Begum? And if the offer is on the table for the three remaining rebels, how likely are they to say yes? Subscribe to The New Statesman today from only £8.99 per month Subscribe [See more: The economic fantasies of Reform] Related
New Statesman
6 days ago
- Politics
- New Statesman
Is Jeremy Corbyn planning a new left alliance?
Photo byIn the aftermath of this government's first King's Speech in September 2024, Labour suspended the whip from seven of its MPs: Apsana Begum, John McDonnell, Richard Burgon, Rebecca Long-Bailey, Zarah Sultana, Ian Byrne and Imran Hussain. This group was charged with voting – against the Labour whip – for an SNP amendment which called for the removal of the two-child benefit cap. This policy, designed by George Osborne and introduced by the government in 2017, limits the number of children for whom a family can claim financial support. According to data from the Resolution Foundation, 470,000 children would be lifted out of poverty if the cap was removed. Nine months later, the government has all but confirmed it is about to stage a U-turn. Reporting over the weekend suggested that Keir Starmer is convinced that the cap should be removed with the government hoping to unveil this decision in its upcoming Child Poverty Strategy, which has been delayed until the autumn (it was originally intended for publication in the spring). Doing the broadcast round on Tuesday morning, Bridget Phillipson confirmed that lifting the cap is 'something we're considering'. This follows Starmer's recent announcement that the government would retract its decision to cut the winter fuel payment for more than nine million pensioners, a policy that did a lot of damage in this year's local elections. For the seven MPs who voted to remove the cap, this is a vindication. 'I think it's pretty poor form,' said Byrne when we spoke over the phone. 'You've got people who actually voted on a point of principle for constituents [who were suspended], then there's been a realisation that they were actually doing the right thing, and the government follows on almost 12 months later,' he said. Byrne, along with three of the seven (Long-Bailey, Burgon and Hussain), had the whip restored in February this year. Sultana, McDonnell and Begum remain independent. Byrne, who has not spoken to the government about its impending decision, thinks that if a U-turn is on the cards, the three remaining MPs should have the whip reinstated. 'They should have listened to us from the get-go. There's still MPs who've lost the whip who are important to the Labour movement and represent huge swathes of the Labour movement. I think it's really important that they're given that back,' he said. McDonnell has already seen the opportunity in this moment. Writing for the Guardian, the former shadow chancellor accused Starmer's government of 'callousness and incompetency' and said that the removal of the whip from himself and six other colleagues for voting against the two-child benefit cap 'showed a remarkable combination of arrogance and judgement'. He called on MPs to 'stand up and take back control of Labour'. The optics are clearly not great. And as the Labour leadership moves rightward to – as Starmer told a meeting of the PLP last week – take on the party's 'main rivals for power', Reform, they remain exposed on the left. (Although Farage, this week, shifted his party leftward, telling a press conference on Tuesday 27 May that Reform would remove the two-child benefit cap.) Byrne thinks this rightward move from the Labour leadership is a mistake. 'We cannot be outflanked by Nigel Farage,' he said. 'There seems to be an obsession with people around the leader with focus groups.' To Byrne, where the party's focus must really lie is on issues such as alleviating child poverty, 'things that George Osborne did, and the damage it did to our constituencies, in working class areas, that needs to be tacked – not a fixation on focus groups'. Rumours of a new leftward shift have already been swirling; there have been suggestions that this could be driven by the former Labour leader Jeremy Corbyn (who was suspended from the party by Starmer in 2020) or even a member of the still suspended three (such as Zarah Sultana). Two questions remain, however: will Starmer's Labour readmit McDonnell, Sultana and Begum? And if the offer is on the table for the three remaining rebels, how likely are they to say yes? Subscribe to The New Statesman today from only £8.99 per month Subscribe [See more: The economic fantasies of Reform] Related
