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Key takeaways

The government will end use of hotels for asylum seekers in "this parliament", saving taxpayers about £1bn a year.
Rachel Reeves says NHS spending will rise 3% a year in real terms and a 10-year renewal plan will be published soon.
Spending review delivers efficiency savings, boosts police funding by 2.3% in real terms, and grants Transport for London a four-year settlement.
Opposition labels the review "spend now, tax later"; NIESR warns autumn tax rises are almost inevitable to meet fiscal rules.
Critics say the review fails to fix social care; Lib Dems call it a missed opportunity despite new "trailblazer neighbourhoods" investments.

Reeves says use of hotels for asylum seekers will end ‘in this parliament’

Reeves says the Tories lost control of the border.

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

And she says the government is tackling the asylum backlog.

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

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

Key events

Spending review ‘missed opportunity’ because it does not address ‘black hole for social care’, say Lib Dems

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:

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

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.

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.

Treasury claims only wealthiest 10% have lost out from Reeves’ decisions, with poorest gaining most in relative terms

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.

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.)

The Treasury says:

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.

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

Impact analysis from Treasury – as percentage of income Photograph: HMT

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

Impact analysis from the Treasury – in cash terms Photograph: HMT

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.

Paul Johnson, the outgoing head of the Institute for Fiscal Studies, is not impressed by today’s spending review.

Posting on X, Johnson warns that the spending plans are not as generous as a listener might think, saying:

Not sure I’ve ever listened to a chancellorial speech so hard to work out what is happening. Rattling off huge number of figures making it look like big increases in spending on everything.

Bear in mind current spending on average on all other than NHS not rising over SR period.

Sadiq Khan says it is ‘disappointing’ spending review does not fund infrastructure London needs

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

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

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.
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.

How spending is going up or down, department by department, up to 2028-29 – in cash terms

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.

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

How spending is rising, department by department, in cash terms Photograph: HMT

Alert readers may notice that the spending review document says health spending is going up 2.8%, while Rachel Reeves used the figure 3% in her speech to MPs. (See 1.17pm.)

That is because Reeves was talking specifically about NHS spending. The Department of Health and Social Care spends most of its money on the NHS, but it also funds some other health-related spending, and these bits of the budget are not getting 3%, which brings down the overall figure.

How spending is going up or down, department by department, up to 2028-29

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.

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%.

Departmental spending figures in spending review Photograph: HMT

The Treasury has revealed the 25 “trailblazer neighbourhoods” who will receive long-term investment through a new fund announced in the spending review.

They will receive up to £20m each. The Treasury says:

This investment will support communities to drive forward the changes they want to see in their neighbourhoods. It will support improvements people can see on their doorstep, champion local leadership, foster community engagement and strengthen social cohesion.

Here’s the list:

Orchard Park, Kingston upon Hull,
Little Layton and Little Carleton, Blackpool
Brinnington, Stockport
Bentilee and Ubberley, Stoke-on-Trent
Speke East, Liverpool
Thorntree, Middlesbrough
Batemoor and Jordanthorpe, Sheffield
Hartcliffe, Bristol,
Benchill South and Wythenshawe Central, Manchester
Warndon West, Worcester
Birkenhead Central, Wirral
Middleton Park Avenue, Leeds
Penhill, Swindon
Parkwood and Senacre, Maidstone
Walker North, Newcastle upon Tyne
Bootle South, Sefton
Pendleton, Salford
Birchwood West, Lincoln
Central Stockton and Portrack, Stockton-on-Tees
Barrow Central, Westmorland and Furness

In addition, the five trailblazers in Scotland, Wales and Northern Ireland will be a neighbourhood in each of the following:

Glasgow
Fife
Swansea
Cardiff
Belfast

Treasury publishes spending review documents

The Treasury has now published all its spending review documents.

They are here.

Tories accuses Reeves of announcing ‘spend now, tax later’ spending review

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

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

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

He says Reeves has “completely lost control”.

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

UPDATE: Stride said:

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

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 …

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?

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

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

Autumn tax rises ‘almost inevitable’, warns NIESR

Graeme Wearden

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).

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.

Stephen Millard, NIESR interim director, explains:

“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.”

Reeves is now wrapping up.

I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investments. In place of pessimism, division and defeatism, I choose national renewal. These are my choices, these are Labour choices, these are the choices of the British people, and I commend this statement to the house.

Reeves says NHS spending to increase by 3% a year

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

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.

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

Read the full article on the original source

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Reeves says use of hotels for asylum seekers to end ‘in this parliament’ and NHS spending to rise 3% a year – UK politics live | Politics

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