UK politics: Police chiefs say funding ‘falls far short’ of what is needed to meet government’s ambitions – as it happened

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Here is Jessica Elgot’s assessment of the winners and losers in cabinet.

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Here is Heather Stewart’s analysis.

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And here is an excerpt from Heather’’s article.

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Wednesday’s statement … included significant investment in what Reeves called Labour choices: in particular, rekindling regional economies outside London and the south-east.

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Not coincidentally, these include areas that could prove vulnerable to Reform UK. Her plans would “make working people in all parts of our country better off”, she claimed.

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She hailed defence investment as a way of creating jobs and growth “in Aldermaston and Lincoln, in Portsmouth and Filton, on the Clyde and in Rosyth”.

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There is a rationale behind this capital-heavy approach. Economists broadly agree that a key cause of the UK’s catastrophically weak productivity – the specialist subject of Reeves’s chief economic adviser, John Van Reenen – is low investment.

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  The UK and Spain have struck a deal over Gibraltar’s future, concluding four years of on-off negotiations.

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  The US government has condemned the decision by the UK and four other countries to sanction two far-right Israeli ministers. (See 9.46am.)

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For a full list of all the items covered here today, scroll through the key events timeline at the top of the blog.

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Severin Carrell is the Guardian’s Scotland editor.

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There is scepticism about the significance of the chancellor’s pledge to fund the Acorn carbon capture scheme (CCS) in north-east Scotland (see 4.12pm), after ministers said they could not say how much money it involved.

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Rachel Reeves said the Acorn scheme, which has been championed for more than a decade by Scottish National party politicians and oil companies, would be added to the group of CCS schemes getting UK government support.

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Darren Jones, the chief secretary to the Treasury, told reporters in Scotland he did not have the specific figure to hand, but confirmed it was “development work” to first establish its feasibility and business case.

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He also stressed that no decision would be taken on building the Acorn scheme for at least three years, in the next spending review. He said:

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The important point here is that we are funding the development work that needs to be done in this spending review period to inform the overall spending commitment which will come in the next spending review period.

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Because it just needs to do a little bit more development work first. This is a signal of the intent of the UK government to support that project.

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Jones said they would see if a figure could be made available. However, Martin McCluskey, a well-connected Scottish Labour MP and government whip, said during a live BBC interview later that that figure was “commercially sensitive”.

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In contrast to that uncertainty, the Treasury was able to list specific figures on Wednesday for a host of other projects it is now funding in Scotland.

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A projected £1.2bn shortfall in police funding will continue to grow, leaving forces facing further cuts, police leaders have warned.

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According to the Treasury, police spending will rise by 2.3% between 2023-24 and 2028-29. But Gavin Stephens, chair of the National Police Chiefs’ Council, said this would not be enough. He said:

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It is clear that this is an incredibly challenging outcome for policing.

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In real terms, today’s increase in funding will cover little more than annual inflationary pay increases for officers and staff.

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Whilst we await further detail on allocation to individual forces, the amount falls far short of what is required to fund the government’s ambitions and maintain our existing workforce.

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A decade of under-investment has left police forces selling buildings, borrowing money and raising local taxes to maintain what we already have, with forces facing a projected shortfall of £1.2bn over the next two years, which is now expected to rise.

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This is against a backdrop of increasing crime rates, with new and escalating threats from organised crime and hostile states, and more offenders being managed in the community as a result of an overstretched criminal justice system.

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Cutting crime isn’t just about officer numbers, we need specialist skills and people, supported with the right systems and technology, to better protect communities.

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And this is from Liz Saville Roberts, Plaid Cymru’s leader at Westminster. She describes the spending review as “smoke and mirrors” and claims Wales is still losing out.

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The announcement of £44.5 million a year for Welsh rail over the next decade is Labour’s flimsy fig leaf to excuse the multi-billion-pound, multi-decade scandal that is the Welsh rail injustice. Today’s funding is only meaningful if it matches what Wales will continue to lose from HS2 and all other English rail projects in the future.

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Labour hopes a few token projects will distract from deep cuts to vital services that hit the most vulnerable hardest, all while shifting the goalposts on Welsh funding. The unfair Barnett formula remains open to manipulation, just as the recent example of the Oxford-Cambridge line displayed, with the Treasury bizarrely claiming that a railway line in the south-east of England would benefit Wales.

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For Wales, today’s statement was more smoke and mirrors. It’s time to deliver the fair funding Welsh communities desperately need and deserve.

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The Green party has renewed its call for a wealth tax in response to the spending review. This is from Adrian Ramsay, its co-leader.

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These ‘tough decisions’ are actually ‘Labour’s political choices’.

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They are choosing to leave the economy tilted towards those with considerable wealth.

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Our front-line services continue to deteriorate through a political choice of decline by design.

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By introducing a wealth tax on the super-rich, we could instead properly invest in our children’s future.

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We could give them the education they deserve and start now to invest in the climate resilience and preparedness they will need throughout their lives as the climate crisis unfolds.

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Reform UK has accused Rachel Reeves of “cratering” the public mood with the spending review. This is from Richard Tice, its deputy leader.

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The Chancellor is cratering public mood, economy and jobs.

Borrowing is soaring, debt costs are rising and wasteful spending is out of control.

Reform by contrast are already saving tens of millions in the councils we now run

Another reason we are leading in national polls pic.twitter.com/adBIJw9j62

— Richard Tice MP ?? (@TiceRichard) June 11, 2025

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Severin Carrell is the Guardian’s Scotland editor.

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Rachel Reeves has been accused of “short-changing” Scotland by more than £1bn after the Scottish finance secretary said the chancellor’s financial settlement failed to account for the costs of welfare cuts and tax rises.

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The chancellor said the three year funding deal for Scotland’s devolved government meant an annual average of £50.9bn a year, with a total funding uplift of £2.9bn, the highest real terms increase in the history of devolution.

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Shona Robison, the Scottish finance secretary, said that while that was equivalent to a 0.8% increase in real terms, it failed to account for the heavy costs to Scotland’s large public sector of funding the rise in employers national insurance, or the costs of meeting increased welfare commitments.

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Had it grown in line with increases for other departments, Scotland would have received a further £1.1bn, Robison said. She went on:

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This spending review is business as usual from the UK government, which is yet again treating Scotland as an afterthought and failing to provide us with the funding we need.

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In effect, Scotland has been short-changed by more than a billion pounds.

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The settlement included politically-symbolic funding decisions such as £750m towards a new exascale super-computer at Edinburgh University – set to be the largest in the UK. Funding for that was cancelled by Labour last year because the previous Conservative government had failed to budget for it.

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Alongside money for a green port in Inverness and Cromarty Firth, the Treasury has finally pledged development funding for the Acorn carbon capture project in north east Scotland, more than a decade after it was first proposed. Robison said it was odd that ministers had not spelt out how money was involved.

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Darren Jones, the chief secretary to the Treasury, said that despite Robison’s complaints, Scotland’s funding was still 20% higher than the UK average. The UK government was also spending £250m upgrading the Clyde nuclear submarine base west of Glasgow, and a further £1.7bn in regional growth deals.

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Emily Thornberry, the Labour chair of the foreign affairs committee, has said she is “deeply concerned” about the cuts to the Foreign Office’s budget. It is due to fall by 8.3% between 2025-26 and 2028-29. Thornberry said:

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At a time when Britain is back on the world stage, and has never been more needed as a force for good, it is very concerning that the FCDO appears to be suffering the harshest real-terms cuts. We will be looking very closely at this to make sure that, once the already-announced ODA cuts have been accounted for, the Foreign Office is not suffering major further cutbacks.

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The Foreign Office maintains a presence across the globe and does so with a budget that has been stretched thin over many years. I am deeply concerned about the strain that this spending review will place on the entirety of the department. Real-term cuts to the Foreign Office budget are alarming and inconsistent with the government’s objective to position the UK as a leader on the world stage.

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Richard Adams is the Guardian’s education editor.

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Schools budgets in England will rise by just 0.9% each year between 2025 and 2028, the Treasury’s spending review documents reveal.

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Rachel Reeves, the chancellor, said she was providing a “cash uplift” of more than £4.5bn for core school budgets by the end of the spending review period, which will be a real-terms increase of around 1.1% per pupil when including the recent extension of free school meals coverage.

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The Treasury document states: “Excluding the funding which the government has provided for the expansion of free school meals, the core schools budget will grow by an average of 0.9% per pupil in real terms each year.”

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The Institute for Fiscal Studies described the announcement as “a real-terms freeze” for school budgets but added that falling school rolls in England may allow a further rise in spending per pupil.

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Reeves said the government will also spend around £2.4bn a year for the next four years on its school rebuilding programme, and £2.3bn a year by 2029-30 on repairs and improvements to school campuses. Overall the Department for Education will be expected to meet 5% savings and efficiencies target.

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The government also announced that its plans for special educational needs reform would be delayed until the autumn.

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Julia Harnden of the Association of School and College Leaders said:

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n

Schools are already having to make significant cuts and the spending review announcements will not change that situation in the short-term and won’t be enough to reverse this situation in the longer term either.

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This additional funding does not include colleges and sixth forms and we are particularly worried about the financial sustainability of this vital sector. We look forward to seeing the government’s strategy for post-16 education and skills later in the year. This sector is terribly underfunded and this must be addressed if sixth forms and colleges are to play a central role in this strategy.

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Severin Carrell is the Guardian’s Scotland editor.

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UK and Scottish ministers are scrabbling to save around 400 jobs at one of the UK’s largest electric bus manufacturers, Alexander Dennis, after its owners announced a consultation on the closure of two Scottish sites.

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The company’s owners, NFI, said midway through the chancellor’s spending review statement at Westminster they wanted to consolidate all manufacturing to Scarborough because of the intense competition from Chinese electric bus makers.

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The closures raise fresh questions about the UK’s transition to net zero, which the Chancellor prioritised in her statement. Alexander Dennis’ factories are in Falkirk and Larbert, close to Grangemouth oil refinery which has recently closed with the loss of 400 jobs.

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Ian Murray, the Scottish secretary, said he was “a bit surprised” at the timing of NFI’s announcement given ministers in both governments were in talks about a deal to protect those jobs. He said that could include putting the workforce on furlough to “buy a little time”.

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Murray blamed the Scottish government for failing to give the firm enough orders. Andy Burnham, the mayor of Manchester, had placed an order for 200 of its EV buses while the Scottish government had only bought 44.

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Darren Jones, the chief secretary to the Treasury, has dismissed as “incoherent” claims that the spending review will lead to tax rises in the autumn.

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Speaking on Sky News, he said:

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n

It’s just such an incoherent argument, and let me tell you why.

n

This spending review is allocating the money that we have already raised at the budget last year and the spring statement. We are essentially dishing out the budget to the departments, and it is living within the budget settlement that the chancellor set.

n

If that’s the best argument that the oppositon has got, I think they need to go back and do some more homework.

n

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Here is the clip.

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“That is just such an incoherent argument.”

Darren Jones, the chief secretary to the Treasury, dismisses suggestions from the opposition that the government's spending review will require tax rises in the future.

Live: https://t.co/99mAeBetfi

? Sky 501, Virgin 602 and YouTube pic.twitter.com/P0XFayWYsA

— Sky News (@SkyNews) June 11, 2025

nn”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Technically, Jones is right. There are no spending commitments being announced today that require the Treasury so find a new source of revenue (tax, or cuts elsewhere) – although we did have one on Monday, when the Treasury announced that it will restore winter fuel payments for most pensioners.

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But the opposition – and thinktanks like the Institute for Fiscal Studies – are predicting tax rises not because they believe plans announced today are unfunded, but because they think that those commitments will turn out to be insufficient, and that political pressure will force the government to spend more on areas like the NHS (see 11.51am and 3.58pm), or to shelve welfare cuts that have already been pencilled in (see 12.14pm).

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Jillian Ambrose is the Guardian’s energy correspondent.

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Two major carbon capture projects will move ahead in Scotland and the Humber after Rachel Reeves committed to spend over £9bn to capture the emissions from heavy industry over the rest of the decade.

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The latest projects to win the government’s approval include the Acorn carbon capture project near the St Fergus gas terminal in Aberdeenshire, and the Viking carbon capture project in the Humber region which is the UK’s most industrialised area.

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The chancellor gave the greenlight to the projects as part of the government’s spending review which also includes plans to spend £14.2bn of taxpayer money on the Sizewell C nuclear power plant in Suffolk and £2.5bn on the UK’s first small modular reactors.

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Although the Labour party has set ambitious goals for renewable energy to create a clean power system by 2030, its official advisers have warned that it will need to replace its aging nuclear plants in the 2030s and develop technologies to remove carbon emissions from factories and refineries if it hopes to meet its legally binding net zero target by 2050.

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The Acorn carbon capture project is expected to pipe at least 5m tonnes of waste CO2 from refineries in central Scotland to St Fergus using redundant pipelines which previously carried North Sea gas towards the south of the country.

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The Viking carbon capture project plans to use a 34-mile pipeline to take up to 15m tonnes of carbon a year from industrial sites on Humberside and lock it under the North Sea.

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The projects are both backed by North Sea oil company Harbour Energy. It will develop the Viking project alongside oil giant BP, while the Acorn project will be developed by a consortium including Shell, Storegga and North Sea Midstream Parners.

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The Institute for Fiscal Studies has published its initial response to the spending review, in the form of a statement from its outgoing director, Paul Johnson. He says health and defence are the biggest winners.

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n

In pounds and pence, these two departmental behemoths – health and defence – were the big winners. But even here, one has to wonder whether this will be enough. Aiming to get back to meeting the NHS 18 week target for hospital waiting times within this parliament is enormously ambitious – an NHS funding settlement below the long-run average might not measure up. And on defence, it’s entirely possible that an increase in the NATO spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard.

n Still, the funding increases for health and defence are substantial. The corollary, of course, is a less generous settlement elsewhere. The schools settlement in England is tight. Strip out the cost of expanding free schools meals, and you get a real-terms freeze in the budget. With falling pupil numbers, this would in principle allow a rise in spending per pupil. Instead, the government may have to freeze spending per pupil in order to meet rising demand for special education needs provision.

n

Some departments – like Environment, Food and Rural Affairs and Culture, Media and Sport – are facing outright budget cuts.

n

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The Treasury says overall departmental spending is going up 2.3% in real terms. (See 1.35pm.) The IFS says that it is broadly flat. (See 2.06pm.) How can they both be right? Well, it depends whether you take this year (2025-26) as the baseline, or last year.

“,”elementId”:”07c8114b-1856-48fc-862a-73cf39a5533c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Johnson explains:

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n

To make sense of today’s spending review, you need to understand what the government is calling Phase One and Phase Two. Phase One is last year and this year, 2024–25 and 2025–26. Phase Two starts next year, 2026–27, covers the rest of the parliament, and is the focus of today’s announcements. Take Phase One and Phase Two together, as the government does, and growth in government spending looks rather strong. Take Phase Two only and things look tighter.

n The crux is that most departments will have larger real-terms budgets at the end of the parliament than the beginning, but in many cases much of that extra cash will have arrived by April. Eight departments will actually see cuts to their budget between this year and the end of the parliament. This is not an austerity spending review, though much of the government’s largesse, such as it is, was focused on the first two years of the parliament.

n

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Rachel Reeves said in her speech that she was introducing efficiency savings to make government “leaner” and “more productive”. She did not give many details, but the Treasury has published a document saying how these will be achieved department by department.

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It says:

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n

The departmental delivery plans have identified total annual efficiency gains of almost £14bn by 2028-29, the final year of the SR [spending review] period, through a combination of improved outcomes and reduced cost. This exceeds the initial expectation of £12bn efficiencies by 2028-29, measured against 2025-26 planned day-to-day budgets. Most departments developed efficiency plans to deliver at least 3% efficiency gains by 2028-29, with some delivering over 8%. Those departments that have not yet developed plans to deliver 3% efficiencies by 2028- 29 will continue to identify opportunities over the coming period.

n

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Transport, energy and HMRC are all promising efficiency savings of 8% or more.

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Robert Peston, ITV’s political editor, is sceptical of these figures. He says:

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n

Here is an extraordinary government claim. Of £13.8bn of efficiency savings it is promising each year by 2028/9, health and social care is promising to provide more than £9bn of them. Is that credible? The second biggest promiser of efficiency gains is defence

n

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The Treasury says the Deparment of Health and Social Care will achieve savings of £9bn through its productivity plan and IT modernisation.

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In her speech Rachel Reeves said that she would revise the Treasury “green book” to encourage more investment in projects outside London and the south-east. The green book gives guidance to officials on how it should evaluate whether projects represent value for money, and it has long been accused of being biased against the north (on the grounds that a new train station on the edge of London will normally look like better value for money, in a green book terms, than a new train station on the edge of Newcastle, given the value of incomes and economic activity in both areas).

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The Treasury has today published its review of the green book. It proposes changing it in various ways to improve it.

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But the review also concluded that there is no conclusive evidence the green book is biased against the north.

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It says:

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n

Many stakeholders claimed that over-emphasis on BCRs [benefit-cost ratios] is not merely bad practice, but that it also directly introduces regional bias into decision making. Stakeholders contended that BCRs are higher in London and the south-east of England than elsewhere in the country, due to factors such as higher population densities and land values. The review has not found conclusive evidence that the green book appraisal methodology is biased towards certain regions, nor that BCRs are systematically greater for proposals in London and the south-east compared to elsewhere.

n

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But it also says the rules could be more transparent.

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n

However, the poor transparency around government business cases makes it difficult for HM Treasury to demonstrate that BCRs are not biased towards London and the south-east of England. It also makes it difficult to demonstrate that any such bias, should it exist, would not materially skew government spending decisions. This lack of transparency undermines confidence in government decision making.

n

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The financial markets have taken Rachel Reeves’s spending review firmly in their stride.

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The yield, or interest rate, on UK government bonds (or gilts) held steady during the chancellor’s speech, showing that Britain has not suffered a Truss-style bond selloff today.

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Susannah Streeter, head of money and markets at Hargreaves Lansdown, says the chancellor’s spending plans have been greeted by “a calm reaction from financial markets,” adding:

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n

Key to the Spending Review was not scaring away investors in UK government debt. The UK needs to keep them onside, to keep the costs of borrowing lower, as if the UK is seen as fiscally untrustworthy, gilt holders demand more bang for their buck to bankroll the nation. For now, it seems to have done the trick.

n

Hopes appear to be kept alive that the focus on infrastructure spending will provide the essential ingredient to boost growth, which could increase the tax take and relieve pressure on government finances ahead.

n

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Gilt yields fell at 1.30pm UK time, just after Reeves’s speech, which will be welcomed by the Treasury as it lowers the cost of borrowing.

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But that’s mainly due to the latest US inflation report, which has shown prices rose more slowly than expected across the Atlantic in May. That’s led to a wider rally in bonds, pushing down yields.

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But, it’s worth noting that that yield on 30-year UK bonds, at 5.28%, is higher than after Liz Truss’s mini-budget statement fiasco, when they surged to 5%. The bond market panic in autumn 2022 was due to the rapid surge in borrowing costs, rather than the absolute level.

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Daisy Cooper, the Lib Dem deputy leader and Treasury spokesperson, has said the spending review is a “missed opportunity” because it does not address social care. She said:

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n

This spending review was a missed opportunity to repair the damage done by the Conservatives and finally deliver on the promise of change.

n

Behind the smoke and mirrors is a potential black hole for social care as local government budgets remain at breaking point. Putting more money into the NHS without fixing social care is like pouring water into a leaky bucket.

n

The chancellor must also raise her ambition for the country and boost growth through a much closer trade deal with the EU. That’s the best way to improve people’s living standards and unlock billions of pounds more for our public services.

n

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Only the wealthiest 10% have lost out from the Labour government’s decisions on tax, benefits and public spending, the Treasury says. And, proportionately, the poorest have gained the most, it says.

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The Treasury has published a distributional impact analysis and it includes these two charts, estimating the impact on households, by income, of government decisions relating to tax, welfare and public services. (The ‘benefits-in-kind’ calculation tries to capture the extent to which if, for example, education spending goes up, families with children at school benefit.)

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The Treasury says:

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n

On average, households in the lowest income deciles in 2028-29 will benefit the most from policy decisions as a percentage of net income and increases in tax will be concentrated on the highest income households. On average, all but the richest 10% of households will benefit as a percentage of income from policy decisions in 2028-29.

n

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Here is the chart showing the impact as a proportion of income.

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And here is the chart showing the impact in cash terms.

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Thinktanks also produce their own charts showing distributional impact analysis, and they might produce different results. That might be because they ignore the impact of public spending decisions, and just focus on tax and welfare changes.

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Earlier this week Sadiq Khan, the Labour mayor of London, let it be known he was unhappy about the spending review.

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He has now issued a statement confirming his concerns on the record. He says:

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n

I‘ve been determined to stand up for London and it’s good news that we have won extra resources for transport and housing. I have been campaigning for years for a multi-year deal for City Hall and for Transport for London and I welcome this agreement.
n However, I remain concerned that this spending review could result in insufficient funding for the Met and fewer police officers. It’s also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs. Projects such as extending the Docklands Light Railway not only deliver economic growth across the country, but also tens of thousands of new affordable homes and jobs for Londoners. Unless the government invests in infrastructure like this in our capital, we will not be able to build the numbers of new affordable homes Londoners need.

n

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Although the Department for Energy Security and Net Zero has got the biggest funding increase in percentage terms (see 1.35pm), health has got the biggest increase – by far – in cash terms. That is because it is a far bigger spending department. This chart from the spending review document illustrates this.

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Interestingly, the Treasury has decided in this chart to separate police spending (up 2.3%) from other Home Office spending (down 4.5%).

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Here is the table from the main spending review document (on pages 44 and 45) showing the spending figures for the spending review period, department by department.

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It shows that, if you look at growth between 2023-24 and 2028-29 as the metric for success, Ed Miliband, the energy secretary, is the real winner. His department’s spending is going up 16%.

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The Treasury has now published all its spending review documents.

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They are here.

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Mel Stride, the shadow chancellor, is responding on behalf of the Tories.

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He starts by saying the spending review is not worth the paper it is written on.

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It is a “spend now, tax later” review, he says.

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He says Reeves has “completely lost control”.

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He says people face a cruel summer waiting to see where taxes will go up.

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UPDATE: Stride said:

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n

This spending review is not worth the paper that it is written on, because the chancellor has completely lost control.

n

This is the spend now, tax later review, because [Reeves] knows she will need to come back here in the autumn with yet more taxes and a cruel summer of speculation awaits. How can we possibly take this chancellor seriously after the chaos of the last 12 months …

n

These spending plans are a fantasy, and is it not the truth that the chancellor has to maintain this fiction because she has left herself no room for manoeuvre?

n

She is constantly teetering on the edge of blowing her fiscal rules, which she already changed to allow even more borrowing.

n

And the only way she can claim to be meeting her rules is by pretending that she can control spending over the coming years.

n

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Rachel Reeves’s announcement has all been about explaining how money will be spent, rather than how it will be raised (it’s not a budget).

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But looking ahead, the National Institute of Economic and Social Research suspects the chancellor may be forced to raise taxes at the next fiscal event, in the autumn, to keep within her borrowing rules.

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Stephen Millard, NIESR interim director, explains:

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n

“The Chancellor has yet again said that her fiscal rules are ‘non negotiable’. But, given the small amount of headroom at the time of the Spring Statement and the increases in spending announced since then, it is now almost inevitable that if she is to keep to her fiscal rules, she will have to raise taxes in the Autumn Budget.”

n

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Reeves says the government will soon publish its 10-year plan for NHS renewal.

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To back that plan, she can announce she is making a record cash investment, in the NHS, increasing spending by 3% a year in real terms for every year of the spending review.

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That is more than the 2.8% real terms increase that was expected.

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Reeves says this spending review was as line by line review. The Tories did not do one like this, she says.

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And it means she has found savings, she says.

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n

I have found savings from the closure and sale of government buildings and land, cutting back office costs and reducing consultancy spend – all which the previous government failed to do, reforms that will make public services more efficient, more productive and more focused on the user. I have been relentless in driving out inefficiencies.

n

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Reeves does not give a figure for how much has been saved.

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Reeves says she is paying for more prison places.

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And she says police spending power will increase by an average 2.3% in real terms.

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This will fund the 13,000 extra police officer promised, she says.

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Rachel Reeves’s pledge to almost double the grants to support affordable housing to £39bn over the next decade has lifted shares in UK housebuilders today.

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Barratt Redrow ( 1.7%), Persimmon ( 1.66%), and Berkeley ( 1%) are all among the top rises on the FTSE 100 share index today in the City.

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Smaller rival Vistry, which is focused on affordable housing, are up over 8%.

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Rachel Reeves confirms almost doubling of spending on affordable housing to £39bn over next decade. All the detail in story by @kiranstacey here ?? https://t.co/2bboKeTG2d

— Pippa Crerar (@PippaCrerar) June 11, 2025

nn”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The construction sector are hopeful that the spending boost will lift housebuilding (as well as trickling down into housebuilders’ profits).

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Richard Beresford, chief executive of the National Federation of Builders (NFB), says:

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n

“Rachel Reeves is backing up her planning reforms with the funding required to build the social and affordable homes the nation so desperately needs.

n

This is a significant step in the right direction and demonstrates that both the Prime Minister and Chancellor have a long-term plan to fix the housing crisis and are not afraid to share the limelight for the good of the nation.”

n

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Reeves says today she is publishing the outcome of the review of the Treasury’s green book, the document setting out the rules that decide how the government funds investment.

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She says this will ensure the rules do not work against investment in the regions.

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Reeves says Transport for London will get a four-year settlement, to provide it with certainty.

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And there will be a four-fold increase in local transport grants in other parts of the country, she says.

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Reeves says funding for two carbon capture and storage plants were announced last year.

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And today she can announce that the government will back the Acorn carbon capture and storage project in Scotland, and the Viking project in Humberside.

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Reeves says the Tories lost control of the border.

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She says last year she set aside £150m for Border Security Command. This will increase by up to £280m a year, she says.

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And she says the government is tackling the asylum backlog.

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The government will end the use of hotel for asylum seekers “in this parliament”.

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She says this will save the taxpayer £1bn a year.

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Reeves says the Tories crashed the economy because they wanted to cut taxes for the rich. She will never do that, she says.

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And she says Reform UK would do the same thing.

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But Nigel Farage described the Liz Truss budget as “the best Conservative budget since the 1980s”.

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And she says Reform have alread racked up unfunded spending commitments worth £80bn since the election.

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Rachel Reeves is speaking now.

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n

My driving purpose since I became chancellor is to make working people in all parts of our country better off, to rebuild our schools and our hospitals, to invest in our economy so that everyone has the opportunity to succeed after 14 years of mismanagement and decline by the party opposite.

n

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Ed Davey, the Lib Dem leader, welcomes the sanctioning of the two Israeli ministers.

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He asks for an assurance that social carers and family carers will be prioritised in the spending review.

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Starmer says social care does need to be fixed. But he says Davey cannot welcome extra funding while opposing the policies that fund it.

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Davey says better and fairer funding models are available.

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There are £25bn of frozen Russian assets in the UK, he says. At the G7 will the PM seek agreement to seize them and use them to support Ukraine.

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Starmer says he is talking to allies about this. But it is complicated. He goes on:

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n

But I don’t want to pretend to the house that there’s an easy answer on this, because there isn’t.

n

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Here is the list of MPs down to ask a question at PMQs.

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Health is set to be one of the biggest winners from the spending review. But today the Times is running a story saying that even with extra money, the NHS is not set to meet a key performance target. In their story, Chris Smyth and Steven Swinford report:

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n

Starmer’s central promise on the NHS is to hit a routine operations target of treating 92 per cent of patients within 18 weeks, a goal that has not been met for a decade.

n

But The Times understands that internal Department of Health modelling shows that the NHS is on course to hit only about 80 per cent by the end of the parliament. Officials say the figures can only come close to 92 per cent by using “implausible” and “over-optimistic” assumptions.

n

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The NHS is expected to get a 2.8% real terms increase. But the Times quotes Matthew Taylor, chief executive of the NHS Confedertion as saying:

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n

There are fears that this uplift will not be enough to achieve all the government’s manifesto pledges, including hitting the stretching 92 per cent 18 weeks elective waiting time target by March 2029.

n

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Currently, only around 60% of routine operations take place within 18 weeks.

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We’ve got PMQs before the spending review, and there is a good chance that Kemi Badenoch will ask Keir Starmer about the Chagos Islands. There are two stories around this morning she could use.

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n
• n

  Mauritius has said that it is using the revenue it is getting from the UK under the Chagos Islands deal to cut taxes and reduce the national debt. Under the sovereignty transfer agreement, the UK will pay Mauritius £90m a year to rent Diego Garcia, the site of a major military base, for another 99 years. As Tony Diver reports in the Telegraph, Mauritians have been told they will benefit directly.

n

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n

Navin Ramgoolam, the Mauritian prime minister, has now announced that the money paid by the UK will help Mauritius cut taxes, so that 81 per cent of people in the African island nation will not pay any income tax …

n

The Mauritian reforms were announced in a budget speech by Mr Ramgoolam on Wednesday, when he said that the UK’s Chagos payments for the next three years would be used to help pay off the country’s national debt, which has reached 90 per cent of GDP.

n

He said that to reach a long-term debt level of 60 per cent, the government would adjust “both the expenditure side and the revenue side of the budget”, and raise the minimum salary before an employee pays income tax to £1,774 a year.

n

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The Conservatives are opposed to the deal, and now they can argue that Keir Starmer is cutting taxes for people in Mauritius but not in the UK. (The population of Mauritius is just over one million, and so £90m a year goes a lot further there than here.)

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n
• n

  A panel of experts appointed by the UN Human Rights Council has criticised the deal on the grounds that it does not fully respect the rights of Chagossians. In their statement, they say:

n

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n

By maintaining a foreign military presence of the United Kingdom and the United States on Diego Garcia and preventing the Chagossian people from returning to Diego Garcia, the agreement appears to be at variance with the Chagossians’ right to return, which also hinders their ability to exercise their cultural rights in accessing their ancestral lands from which they were expelled.

n

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The Conservatives are not always minded to side with foreign human rights experts criticising the UK government, but on this occasion they have. Priti Patel, the shadow foreign secretary, said:

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n

We have been warning from the start that this deal is bad for British taxpayers and bad for the Chagossian people.

n

Now even the United Nations is saying the very same.

n

Labour has completely ignored this community from the get-go, and failed to consult with them at every step of the way.

n

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Shelter, the housing charity, has warmly welcomed the overnight announcement that the spending review will include £39bn for affordable housing. Mairi MacRae, director of campaigns and policy at the charity, said:

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n

This increased investment is a watershed moment in tackling the housing emergency. It’s a huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country. To truly tackle rising homelessness, it must come alongside a clear target for delivering social rent homes.

n

For too long, past governments allowed thousands of social homes to be lost each year, while funnelling public money into so called ‘affordable homes’ which are priced far out of reach for many. The result has been record homelessness, and families, young people, and key workers priced out of their communities.

n

Social homes are the only genuinely affordable homes by design with rents tied to local incomes and around two thirds lower than private rents. They keep communities together, save public money and provide the stability people need to thrive. To ensure this funding tackles homelessness at its root, the government must now set a target for how many social rent homes it will deliver through this programme.

n

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But Ruth Curtice, chief executive of the Resolution Foundation thinktank, is sceptical. She posted this on Bluesky.

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n

News this morning dominated by money for affordable housing. The TOTAL funding of £39bn over ten years is being completed to the EXTRA capital investment by this government over five years. I’m reserving judgement on whether housing is a winner until we see more detail.

n

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One of the more popular decisions taken by the last Conservative government was capping bus fares in England at £2. The policy was introduced at the start of 2023, but the government did not commit to funding it permanently and it was only due to last until the end of 2024.

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When Labour came to office, it said that a new £3 cap would apply – but just until the end of 2025.

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Last night LBC reported that this will be extended at least until March 2027.

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The Liberal Democrats say the cap should be restored to £2. Paul Kohler, the Lib Dem transport spokesperson, said:

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n

Household budgets are still really feeling the squeeze, so many will be really disappointed to see that the government is moving to make the bus fare hike permanent.

n

This will hit those who rely on public transport to get around to their local high street or to work and school in the pocket. People have been telling them they got this wrong, but Labour clearly isn’t listening.

n

Meanwhile, vital local bus services are in a death spiral, with rural communities particularly badly hit as routes are slashed. The government should be heeding Liberal Democrat calls to scrap the bus tax and bring the cap back to its previous level.

n

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Yvette Cooper, the home secretary, was the last minister to settle in the spending review negotiatons and there have been reports that her talks with Rachel Reeves, the chancellor, got acrimonious. The police have claimed the financial settlement they have been offered is not high enough.

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But Cooper and Reeves have put on a united front in the Sun, where they have both put their names to a joint article saying there will be a significant increase in spending on border security. They say:

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n

We need to go much further and faster to get one step ahead of the tactics used by small boat gangs.

n

That is why we will boost investment to secure our borders, with up to £280m per year in the Border Security Command by 2028/29.

n

With this funding we will invest in new specialist investigators, new technology and cutting-edge surveillance equipment to disrupt and destroy this criminality.

n

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The Sun says £580m is being spent over three years on border security, with some of the money funding drones to monitor small boats in the Channel.

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The US government has condemned the decision by the UK and four other countries to sanction two far-right Israeli ministers.

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In a post on X, Marco Rubio, the US secretary of state, said:

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n

The United States condemns the sanctions imposed by the governments of United Kingdom, Canada, Norway, New Zealand, and Australia on two sitting members of the Israeli cabinet. These sanctions do not advance U.S.-led efforts to achieve a ceasefire, bring all hostages home, and end the war.

n

We reject any notion of equivalence: Hamas is a terrorist organization that committed unspeakable atrocities, continues to hold innocent civilians hostage, and prevents the people of Gaza from living in peace.

n

We remind our partners not to forget who the real enemy is. The United States urges the reversal of the sanctions and stands shoulder-to-shoulder with Israel.

n

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This is a rare example of the Trump administration and the UK government disagreeing publicly over an issue. While the two governments are worlds apart politically, Keir Starmer has invested a lot of time in trying to develop a good relationship with Donald Trump and he has been reluctant to criticise almost anything the Trump regime has done, arguing that getting on with the White House is in the national interest.

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When it comes to the public finances, graphs normally explain far better than words. Richard Partington has five charts explaining the context for the choices Rachel Reeves is making.

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