Reeves to say spending review will reflect priorities of working people

Rachel Reeves will unveil her spending review on Wednesday, arguing that her priorities are “the priorities of working people”.

The Chancellor is expected to focus on “Britain’s renewal” as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools.

Arguing that the Government is “renewing Britain”, she will acknowledge that “too many people in too many parts of the country are yet to feel it”.

She will say: “This Government’s task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people’s everyday lives, their jobs, their communities.”

Among the main announcements is expected to be a £30 billion increase in NHS funding, a rise of around 2.8% in real terms, along with an extra £4.5 billion for schools and a rise in defence spending to 2.5% of GDP.

But Wednesday could present a tough prospect for other government as the Chancellor seeks to balance Labour’s commitments on spending with her fiscal rules.

The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn.

This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement.

The Chancellor has already insisted that her fiscal rules remain in place, along with Labour’s manifesto commitment not to increase income tax, national insurance or VAT.

She will say on Wednesday: “I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal.

“These are my choices. These are this Government’s choices. These are the British people’s choices.”

Other announcements expected on Wednesday include £39 billion for social and affordable housing over the next decade as the Government aims to meet its target of building 1.5 million new homes by the next election.

The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026.

The additional spending has been welcomed by homelessness charities, with Crisis calling it “a determined political signal that housing really matters” and Shelter describing the move as “a watershed moment in tackling the housing emergency”.

The Chancellor has also already announced some £15.6 billion of spending on public transport in England’s city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk.

There is also expected to be an extension of the £3 bus fare cap until March 2027 and an extra £445 million for upgrading Welsh railways.

The Government has also promised £750 million for a new supercomputer – the UK’s most powerful – in Edinburgh.

But one of the big losers from the spending review could be London, which is not expected to receive funding for any significant infrastructure projects or powers to introduce a tourist levy – both key requests from Mayor Sir Sadiq Khan.

Published: 11/06/2025 by Radio NewsHubClick here to read this story in full at Radio News Hub