Reeves puts health, defence, and infrastructure at core of UK spending review

UK Finance Minister Rachel Reeves unveiled a major spending review on Wednesday, focusing on health, defence, and infrastructure to drive economic growth and restore confidence in the Labour government’s vision.

In a key fiscal update, Finance Minister Rachel Reeves outlined the Labour government’s spending priorities through 2030, emphasising investments aimed at "working people" and long-term national prosperity. The review sets departmental budgets from 2026 to 2029 and includes significant funding boosts for housing, transport, and clean energy.

Reeves reaffirmed her October budget framework, which introduced the largest tax increases in a generation and loosened fiscal rules to allow more borrowing for investment. These measures, she argued, have created the economic stability necessary to expand public services funding by £190 billion over Conservative-era plans.

A central component of the announcement is a £39 billion, 10-year programme to build affordable housing, nearly doubling current annual spending. An additional £10 billion will go toward building new homes across England.

Despite these efforts, Reeves acknowledged limited room for day-to-day spending increases in other government areas due to prioritisation of defence and healthcare. Departmental budgets are projected to grow by 2.3% annually in real terms.

The spending review comes at a politically sensitive time. Labour's popularity has waned since its landslide victory last July, with criticism over cuts to winter fuel payments and disability benefits. Reeves’ tax policy—targeting employers while strengthening workers’ rights—has also drawn fire from Conservatives, who link it to the highest unemployment rate in nearly four years.

The government has since partially reversed the winter fuel cuts, but the right-wing Reform UK party, led by Nigel Farage, has gained ground, outperforming Labour in recent local elections.

"At the budget last October and again in the spring, I made the choices necessary to fix the foundations of our economy," she said. "We are starting to see the results."

Following the unveiling of the spending review, Chancellor Rachel Reeves assured the public that council tax rates will not rise as part of the government’s new fiscal plans.

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