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Reeves sets out spending review as Labour government ‘moves to new phase’

11 Jun 2025 3 minute read
Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street, London, ahead of delivering her spending review in the House of Commons. Image: Stefan Rousseau/PA Wire

Rachel Reeves said “we are renewing Britain” as she set out how she plans to spend hundreds of billions of pounds of taxpayers’ money.

The Chancellor said total departmental budgets would grow by 2.3% a year in real terms.

Setting out the spending review in the House of Commons, Ms Reeves said the tax hikes and looser borrowing rules allowed her to spend £190 billion more on the day-to-day running of public services and £113 billion on investment.

The review marks a watershed moment for the Government, almost a year after Labour’s election landslide.

Prime Minister Sir Keir Starmer told the Cabinet that the spending review “marks the end of the first phase of this Government, as we move to a new phase that delivers on the promise of change for working people all around the country and invests in Britain’s renewal”.

“Broken system”

In a sign of the difficulties which face Sir Keir and the Chancellor, migrants continued to cross the English Channel in small boats on Wednesday.

Ms Reeves promised funding of up to £280 million more per year by the end of the spending review period in 2028/29 for the new Border Security Command and committed to end spending on hotels for asylum seekers by the next election.

In an attack on the Conservative legacy, she said: “The party opposite left behind a broken system: billions of pounds of taxpayers’ money spent on housing asylum seekers in hotels, leaving people in limbo and shunting the cost of failure onto local communities.

“We won’t let that stand.”

She said “we will be ending the costly use of hotels to house asylum seekers, in this Parliament” with funding to cut the asylum backlog, hear more appeal cases and return those with no right to be in the UK.

The plan would save taxpayers’ £1 billion a year, Ms Reeves said.

The Chancellor said her “driving purpose” was “to make working people, in all parts of our country, better off” as she promised cash to rebuild schools and hospitals, confirmed funding for nuclear power schemes and major transport projects across the country.

£23bn for Wales

She said the Government would set out plans for “Northern Powerhouse Rail” in the coming weeks and an additional £3.5 billion to upgrade the TransPennine route.

“We are renewing Britain,” she said. “But I know that too many people in too many parts of our country are yet to feel it.”

As well as changing Treasury rules to support investment in England’s regions, Ms Reeves said the spending review period would provide £52 billion for Scotland, £20 billion for Northern Ireland and £23 billion for Wales.

She said research and development funding would rise to more than £22 billion a year and promised £2 billion for the artificial intelligence action plan “because home-grown AI has the potential to solve diverse and daunting challenges as well as the opportunity for good jobs and investment in Britain”.


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Frank
Frank
3 hours ago

We are seeing more pictures of Rachel Reeves recently than the fake princess of Wales.

Adrian
Adrian
1 hour ago

What the member for Stepford hasn’t told you is that this is all going get paid for by taxing working people, and even more so anyone with savings.

Y Cymro
Y Cymro
32 minutes ago

So it’s official then. A measly £445 million to Wales for infrastructure builds , where England gets the three lionshare. This is effectively Keir Starmer & Rachel Reeves putting two fingers up to Wales and our self-serving excuses of Wales Labour MPs say nothing in the House of Commons and agree like nodding dogs. Absolutely pathetic the lot of them! May I remind Chancellor Rachel Reeves and that sellout Welsh Secretary Jo Stevens that the M4 relief road promised by that lump of lard Boris Johnson was well over £1.4 billion when the Welsh Government propose the build before costs… Read more »

Last edited 32 minutes ago by Y Cymro

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