The Chancellor of the Exchequer (Rachel Reeves)
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, and to invest in our economy so that everyone has the opportunity to succeed after 14 years of mismanagement and decline by the party opposite, culminating in a £22 billion black hole in the public finances. That was the Conservatives’ legacy, and the first job I faced as Chancellor was to set it right. So at the Budget last October and again in the spring, I made the choices necessary to fix the foundations of our economy. We wasted no time in removing the barriers to growth: the biggest overhaul of our planning system in a generation; launching Britain’s first National Wealth Fund; and reforming our pensions system to unlock billions of pounds of investment into our economy.
We are starting to see the results. The stability we have provided has helped support four cuts in interest rates, saving hundreds of pounds a year for families with a mortgage. Real wages have grown by more in the first 10 months of this Labour Government than in the first 10 years of the Conservative Government. And the latest figures show that we are the fastest growing economy in the G7. Countries around the world are lining up to do business with Britain again, with new trade deals with India, the United States and the European Union.
We are renewing Britain, but I know that too many people in too many parts of our country are yet to feel it. This Government’s task, my task as Chancellor, and the purpose of this spending review is to change that—to ensure that renewal is felt in people’s everyday lives, in their jobs, and on their high streets. The priorities of this spending review are the priorities of working people: to invest in Britain’s security and Britain’s health and to grow Britain’s economy so that working people are better off.
Today, I am allocating the envelope I set out in the spring. I am enormously grateful to my excellent team of officials at the Treasury and to my right hon. Friend the Chief Secretary to the Treasury for his tireless work throughout this process, crunching the numbers and looking at the assets and liabilities. On that note, I thank all my Cabinet colleagues for their contribution to this process—they are all assets to this Labour Government.
In this spending review, total departmental budgets will grow by 2.3% a year in real terms. Compare that to the Conservatives’ choice of austerity. In contrast to our increase of 2.3%, they cut spending by 2.9% a year in 2010. Let us be clear: austerity was a destructive choice for both the fabric of our society and our economy, choking off investment and demand and creating a lost decade for growth, wages and living standards. That is their legacy.
My choices are different. My choices are Labour choices—the choices in this spending review that are possible only because of my commitment to economic stability and the decisions this Government have made. The Conservatives’ fiscal rules guaranteed neither stability nor investment, and that is why I changed them. My fiscal rules are non-negotiable, and they are the foundation for stability and investment.
My first rule is for stability: day-to-day Government spending should be paid for through tax receipts. That is the sound economic choice. It also the fair choice, because it is not right to expect our children and future generations to pay for the services we rely on today. This first rule allows me, as I set out in the Budget, to allocate £190 billion more to the day-to-day running of our public services over the course of this spending review compared with the previous Government’s plans.
My second fiscal rule enables me to invest in Britain’s economic renewal while getting public debt on a downward path. This rule allowed me to increase public investment by more than £100 billion in the autumn and a further £13 billion in the spring. That is investment to rebuild our transport networks, our defence capability and our energy security—in short, to grow our economy.
I have made my choices: tough decisions for stability and changing Britain’s fiscal rules for investment. Today, I am delivering that investment for the renewal of Britain. Now, it is time for the parties opposite to make their choices. The spending plans I am setting out today are possible only because of the decisions I took in the autumn to raise taxes and the changes to our fiscal rules, every one of which was opposed by the parties opposite. Today, they can make an honest choice and oppose these spending plans as they opposed every penny I raised to fund them, or they can make the same choice as Liz Truss: spend more and borrow more, with no regard for the consequences.
In their clamour to cut taxes for the richest, the Conservatives crashed our economy, sent mortgage rates spiralling and put our pensions in peril. I will never take those risks. Yet Reform is itching to do the same thing all over again. The hon. Member for Clacton (Nigel Farage) may be playing the friend of the workers now, but some of us are old enough to remember when he described the disastrous Liz Truss Budget as “the best Conservative Budget” since the 1980s. [Interruption.] Mr Speaker, after the damage is done, he still nods along. Reform has learned nothing. His party has been in Parliament for less than a year, yet it has already racked up £80 billion of unfunded commitments. Reform is simply not serious. Every day it becomes clearer that it is Labour—and only Labour—that has a credible plan for the renewal of Britain.
As I said in my spring statement, the world is changing before our eyes. Since the spring, the challenges that we face have become even more acute. The signs of our age of insecurity are everywhere, so we are acting on the promise in our plan for change: building renewal on the foundations of national security, border security and economic security. As the Prime Minister said earlier this month,
“A new era in the threats that we face demands a new era for defence and security.”
That is why we took the decision to prioritise our defence spending by reducing overseas development aid. Defence spending will now rise to 2.6% of GDP by April 2027, including the contribution of our intelligence agencies. That uplift provides funding for my right hon. Friend the Defence Secretary, with an £11 billion increase in defence spending and a £600 million uplift for our security and intelligence agencies. That investment will deliver not only security, but renewal in Aldermaston and Lincoln; in Portsmouth and Filton; on the Clyde and in Rosyth. Investment in Scotland, jobs in Scotland, and defence for the United Kingdom—opposed by the Scottish National party; delivered by this Labour Government.
Investing in our armed forces, our military technology and our supply chains also brings huge opportunities: £4.5 billion of investment in munitions, made in factories from Glasgow to Glascoed, Stevenage to Radway Green; and over £6 billion to upgrade our nuclear submarine production, supporting thousands of jobs across Barrow, Derby and Sheffield. We will make Britain a defence industrial superpower, with the jobs, the skills and the pride that come with that.
A more unstable world presents new challenges at our borders too. Conflict has opened the way for organised criminal gangs. The British people rightly expect us to have control of who comes into our country. The Conservatives said that they would “take back control”. Well, Mr Speaker, they lost control. With one failed policy after another, there was no control and no security. In contrast, in the Budget last year I announced £150 million to establish the new Border Security Command, and today, to support the integrity of our borders, I can announce that that funding will increase, with up to £280 million more per year by the end of the spending review period for our new Border Security Command.
Alongside that, we are tackling the asylum backlog. The Conservative party 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 on to local communities. We will not let that stand. I can confirm today that, led by the work of my right hon. Friend the Home Secretary, we will be ending the costly use of hotels to house asylum seekers in this Parliament. Funding that I have provided today, including from the transformation fund, will cut the asylum backlog; allow more appeal cases to be heard; and return people who have no right to be here, saving the taxpayer £1 billion per year. That is my choice, that is Labour’s choice, that is the choice of the British people.
If we want national security in a dangerous world, that does not stop at the strength of our armed forces or at our borders. I have long spoken about what I call “securonomics”—the basic insight that, in an age of insecurity, Government must step up to provide security for working people and resilience for our national economy. Put simply: where things are made, and who makes them, matters.
Take energy: the Tories neglected our nuclear and renewables sectors and closed our gas storage facilities, leaving us exposed to hikes in energy prices when Russia invaded Ukraine, and it was working people who paid the price for their mistakes. Labour understands that energy security is national security. Because it is the right choice for bills, jobs and growth, this Government are investing in the biggest roll-out of nuclear power for half a century, with a £30 billion commitment to our nuclear-powered future.
Yesterday my right hon. Friend the Energy Secretary and I announced £14 billion for Sizewell C, which will produce energy to power 6 million homes and support more than 10,000 jobs, including 1,500 apprenticeships, in order to build the nuclear workforce of tomorrow. That is not all. We are investing over £2.5 billion in a new small modular reactor programme. Our preferred partner is Rolls-Royce—a great British company based in Derby. This investment is just one step towards our ambition for a full fleet of small modular reactors, and it provides a route for private sector-led advanced modular reactor projects to be deployed across the UK.
Alongside these actions, we are making nuclear-approved land available in Sellafield to attract private investment and create thousands more jobs. I thank my hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) for his work in this area. To strengthen Britain’s position at the forefront of a global race for new nuclear technologies—a cause championed by Mayor of the East Midlands Claire Ward and my hon. Friend the Member for Bassetlaw (Jo White)—and to support pioneering work taking place in West Burton in Nottinghamshire, we are investing over £2.5 billion in our nuclear future.
To back British industries, pioneering work in carbon capture, usage and storage will take place. Last year we announced funding for two sites, one on Merseyside and one in Teesside, where we are building the world’s first commercial-scale CCUS plant. Today I can announce support for the Acorn project in Aberdeenshire to support Scotland’s transition from oil and gas to low-carbon technology—a challenge and an opportunity well understood by the leader of Scottish Labour Anas Sarwar and my right hon. Friend the Scotland Secretary. We are also backing the Viking project in Humberside—a cause long supported by my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn).
Because I am determined to ensure that the energy technologies of the future are built here and owned here and that jobs come to Britain, this spending review invests in the wholly publicly owned Great British Energy, headquartered in Scotland. These investments will ensure that the towns and cities that powered the last industrial revolution play their part in our next industrial revolution. Reducing our reliance on overseas oil and gas, protecting working families from price shocks, and a new generation of energy industries for a renewed Britain—that is my choice, that is Labour’s choice, that is the choice of the British people.
Economic security relies on our ability to buy, make and sell more here in Britain. In April, this Government faced a choice: to let British Steel in Scunthorpe go under or to intervene. [Interruption.] That choice was a choice not of the metal trader but of this Labour Government. We heard representations from workers, trade unions and my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin). My right hon. Friend the Business Secretary and I were not prepared to tolerate a situation in which Britain’s steel capacity was fatally undermined. We were not prepared to see another working-class community lose the pride, prosperity and dignity that industry provides, so we did intervene to save British Steel and the jobs that come with it, and I am proud of that decision.
The Government will invest in Scunthorpe’s long-term future and the future of steelworks across our great country. In a vote of confidence in our home-grown steel, Heathrow airport, where we are backing London by backing a third runway, has signed the UK steel charter—a multibillion-pound airport expansion backed by Labour and built with British steel.
Building our train and tram lines, our military hardware and our new power stations will mean orders for steel made in Britain at Sheffield Forgemasters, where we are investing in nuclear-grade steel, and in Port Talbot, where the spending review confirms the £500 million grant to Tata Steel. A future for British-made steel and a proud future for Britain’s steel communities. Things built to last, built here in Britain—that is my choice, that is Labour’s choice, that is the choice of the British people.
This Labour Government are backing British business. There will be more to come in the weeks ahead with our 10-year infrastructure strategy and our modern industrial strategy: a plan drawn up in partnership with businesses and trade unions. When I speak to businesspeople and entrepreneurs about what they need to succeed, they say that they need the chance to innovate, they need access to finance and they need a deep pool of talent. We have heard that message, and today we are taking action.
First, on innovation, which is a great British strength. Our universities are world-leading, and we are proud of them. We want our high-tech industries in Britain to continue to lead the world in years to come in car production, in aerospace and in life sciences, so we are backing our innovators, backing our researchers and backing our entrepreneurs with research and development funding rising to a record high of £22 billion a year by the end of the spending review. Because home-grown artificial intelligence has the potential to solve diverse and daunting challenges, as well as the opportunity for good jobs and investment here in Britain, I am announcing £2 billion to back the Government’s AI action plan overseen by my right hon. Friend the Secretary of State for Science, Innovation and Technology.
Secondly, to champion those small businesses seeking access to finance as they look to grow, I am increasing the financial firepower of the British Business Bank with a two thirds increase in its investments, increasing its overall financial capacity to £25.6 billion to help pioneering businesses to start up and scale up, backing Britain’s entrepreneurs and backing Britain’s wealth creators.
Thirdly, as we invest, if we are to thrive in the industries of the future, we must give our young people the skills they need to contribute to our national success as scientists, engineers and designers, and as builders, welders and electricians. I know the ambition, the drive and the potential of our young people; it cannot be right that too often those ambitions and that potential are stifled. Young people who want training find courses are oversubscribed and are turned away at the door, forcing growing businesses, eager to recruit that talent, to look elsewhere—potential wasted and enterprise frustrated. So today I am providing record investment for training and upskilling with £1.2 billion a year by the end of the spending review to support over a million young people into training and apprenticeships so that their potential, their drive and their ambition is frustrated no longer.
On the subject of skills, we should all recognise the Leader of the Opposition’s own commitment to lifelong learning. At the weekend, she promised to learn and “get better” on the job. I am sure that Opposition Members will be supporting her in that endeavour. Good luck with that.
As we build a strong, secure and resilient economy, working people must feel the benefits. That starts with the security of a proper home. Our planning reforms have opened up the opportunity to build. Now, we must act to make the most of those opportunities, and a plan to match the scale of the housing crisis must include social housing, which has been neglected for too many decades, but not by this Labour Government. So, led by my right hon. Friend the Deputy Prime Minister, we are taking action. I am proud to announce the biggest cash injection into social and affordable housing in 50 years with a new affordable homes programme in which I am investing £39 billion over the next decade—direct Government funding that will support house building, especially for social rent. I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build those homes in their communities.
I have gone further. Last autumn, I enabled greater use of financial transactions to support investments in our infrastructure alongside strict guardrails that ensure that money is spent wisely through our public financial institutions. So, in line with that commitment, I am providing an additional £10 billion for financial investments, including to be delivered through Homes England, to crowd in private investment and unlock hundreds of thousands more homes. Homes built by a Labour Government; homes built for working people.
But it is no good investing in new skills, new jobs and new homes if they are not properly connected. That is why last week, with the support of my right hon. Friend the Transport Secretary, I announced £15 billion of investment to connect our cities and our towns—the biggest ever investment of its kind—with investments in buses in Rochdale, train stations in Merseyside and Middlesbrough, mass transit in West Yorkshire and metro extensions in Birmingham, Tyne and Wear and Stockport. Alongside that, we are backing Doncaster airport.
Today, I am announcing a four-year settlement for Transport for London to provide certainty and stability for our largest local transport network to plan for the future. For other regions in the UK, I am today providing for a fourfold increase in local transport grants by the end of this Parliament to make the improvements put off for far too long, to improve the journeys that people make every day.
To unlock the potential of all parts of Britain, we are going further by investing in major rail projects to connect our towns and cities. In October, I announced funding for the trans-Pennine route upgrade—the backbone of rail travel in the north, linking York, Leeds and Manchester—with a quarter of that route expected to be electrified by this summer. I know the commitment of my hon. Friends the Members for Huddersfield (Harpreet Uppal), for York Outer (Mr Charters) and for Colne Valley (Paul Davies) to this issue, and today I can announce a further £3.5 billion of investment for that route. But my ambition, and the ambition of people across the north, is greater still, so in the coming weeks I will set out the Government’s plan to take forward our ambitions for Northern Powerhouse Rail.
I have also heard the representations of my hon. Friends the Members for Milton Keynes North (Chris Curtis), for Milton Keynes Central (Emily Darlington), and for Buckingham and Bletchley (Callum Anderson), and I can tell the House today that to connect Oxford and Cambridge and to back Milton Keynes’s leading tech sector I am providing a further £2.5 billion for the continued delivery of East West Rail. On a matter that I know is of great importance to my hon. Friends the Members for Lichfield (Dave Robertson), for Birmingham Northfield (Laurence Turner) and for Birmingham Erdington (Paulette Hamilton), I can announce today that I am providing funding for the midlands rail hub: the region’s biggest and most ambitious rail improvement scheme for generations, strengthening connections from Birmingham across the west midlands and into Wales, too.
For 14 years, the Conservatives failed the people of Wales. Those days are over. Following representations from my right hon. Friend the Secretary of State for Wales, the First Minister of Wales, and Welsh Labour MPs, today I am pleased to announce £445 million for railways in Wales over 10 years, including new funding for Padeswood sidings and Cardiff West junction. That is the difference made by two Labour Governments, working together to undo a generation of underfunding and neglect.
This Government take seriously their commitment to investment, jobs and growth in every part of the UK. I have heard the concerns of my hon. Friends the Members for Mid Cheshire (Andrew Cooper), and for Rossendale and Darwen (Andy MacNae), and the Mayor of the Liverpool City Region, Steve Rotheram, that past Governments have under-invested in towns and cities outside London and the south-east. They are right, so today I am publishing the conclusion of the review of the Treasury Green Book, which is the Government’s manual for assessing value for money. Our new Green Book will support place-based business cases, and make sure that no region has Treasury guidance wielded against it. I said that we would do things differently, and that we wanted growth in all parts of Britain, and I meant it.
Backing our nations and regions means backing our devolved Governments, and this spending review provides the largest settlement in real terms since devolution was introduced, with £52 billion for Scotland, £20 billion for Northern Ireland by the end of the spending review period, and £23 billion for Wales. Having heard representations from many Welsh Labour colleagues, and because I know the obligation that we owe to our industrial communities, I am providing a multi-year settlement of £118 million to keep coal tips safe in Wales.
I know what pride people feel in their communities—I see it everywhere I go—but I also know that, for too many people, there is a sense that something has been lost as high streets have declined, community spaces have closed, and jobs and opportunity have gone elsewhere. The renewal of Britain must be felt everywhere. Today I am pleased to announce additional funding to support up to 350 communities, especially those in the most deprived areas—funding to improve parks, youth facilities, swimming pools and libraries, and to support councils in fighting back against graffiti and fly-tipping, including in Blackpool South, Stockport, Stoke-on-Trent Central, Swindon North, and Newcastle upon Tyne East and Wallsend.
And there is more. Job creation and community assets are vital to our growth mission, but too often, regeneration projects are held back, gathering dust in bureaucratic limbo. We are changing that. We will establish a growth mission fund to expedite local projects that are important for growth—projects such as Southport pier, an iconic symbol of coastal heritage that has stood empty since 2022; Kirkcaldy’s seafront and high street, where investment would create jobs and new business opportunities; and plans for Peterborough’s new sports quarter, to drive activity and community cohesion. People deserve a Government who share their ambition for their communities, and who deliver renewal, growth, and opportunity, and that is what you get with a Labour Government.
If people are to feel pride in their community, enjoy their public spaces, and spend time on their high streets, they must feel safe when they do so—safe in the knowledge that when people break the law, they feel the full force of the law. The Conservative party left our prisons overflowing and on the brink of collapse, and left it to us to deal with the consequences. We are taking the necessary action, so my right hon. Friend the Justice Secretary and I have announced that we are investing £7 billion to fund 14,000 new prison places, and putting up to £700 million per year into reform of the probation system. Today, I will do more. I am increasing police spending power by an average 2.3% per year in real terms over the spending review period, to protect our people, our homes and our streets. That is more than £2 billion, supporting us to meet our plan for change commitment of putting 13,000 additional police officers, police community support officers and special constables into neighbourhood policing roles across England and Wales.
I am determined that every family, as well as every place, should feel the benefits of Britain’s renewal. Falling interest rates, supported by our commitment to economic stability, are already saving many families hundreds of pounds a month on their mortgage. I have accepted pay review body recommendations for our armed forces, nurses, teachers and prison officers, giving public sector workers the fair pay rises that they deserve. In autumn, I increased the national living wage—a pay rise for around 3 million hard-working people. This Government are doing more: we are banning exploitative zero-hours contracts, strengthening statutory sick pay, and ending the use of unscrupulous fire-and-rehire practices. Those are my choices; those are Labour choices.
I know that for many people the cost of living remains a constant challenge. That is why we are capping the cost of school uniforms. I can tell the House today that I am extending the £3 bus fare cap until at least March 2027. Earlier this week, we announced that over three quarters of pensioners will receive the winter fuel payment this year. And there is more: to get bills down, not just this winter but in winters to come, we have expanded the warm homes plan to support thousands more of the UK’s poorest households. That includes providing £7 million to homes in Bradford, £11 million to homes in Rugby, and £30 million to homes in Blackpool. Today I can announce that I will deliver in full our manifesto commitment to upgrading millions of homes, saving families and pensioners across the country up to £600 off their bills, each and every year. I am determined to do everything in my power to put more money in people’s pockets, to give people security and control in their lives, to make working people better off, and to show them that this Labour Government are on their side.
Taxpayers work hard for their money, and they expect their Government to spend their money with care. For the first time in 18 years, this Government have run a zero-based review, and made a line-by-line assessment of what the Government spend—something that the Tories did not bother to do in 14 years. As a result of that work, and our wider drive for efficiencies, led by my right hon. Friend the Chancellor of the Duchy of Lancaster, in this spending review I have found savings from the closure and sale of Government buildings and land, from cutting back office costs, and from reducing consultancy spend—all of which the previous Government failed to do. Those reforms will make public services more efficient, more productive, and more focused on the user. I have been relentless in driving out inefficiencies, and I will be relentless in cutting out waste, with every single penny reinvested in our public services.
I joined the Labour party almost 30 years ago because I knew, growing up, that the Conservative party did not care much about schools like mine, or the kids I grew up with. I joined because I believed that every young person should have an equal chance to succeed, no matter where they come from or what their parents do. I believe that just as strongly today as I did then. That is why, at the Budget last autumn, I ended the tax loophole that exempted private schools from VAT and business rates. I put that money where it belongs: into helping the 93% of children in our state schools. The Conservatives opposed money for their local state schools, but I will always prioritise those schools. That was my choice; that is the Labour choice.
Because of decisions that we made in this spending review, last week, this Government, working with my right hon. Friend the Education Secretary, announced that free school meals will be extended to over half a million more children. That policy alone will lift 100,000 children out of poverty—children in schools from Tower Hamlets to Sunderland, and from Swansea to Bridgend.
Last year, at the Labour party conference, I was proud to announce the first steps in our plan to deliver breakfast clubs for every child, with an initial roll-out to the first 750 schools. We will continue with that national roll-out as part of our manifesto commitment, so that no child goes hungry, and every child can have the best chance of thriving and succeeding. I know that a good start in life does not start at school, so I can also announce £370 million for school-based nurseries, to put us firmly on track to meet our plan for change commitment to a record number of children being school-ready. On children’s social care, to break the dangerous cycle of late intervention and low-quality care, I am providing £555 million of transformation funding over the spending review period, so that children do not needlessly go into care when they could stay at home, and so that, where state intervention is necessary, there is better care, and there are better outcomes.
Last week, I was pleased to announce, with my right hon. Friend the Secretary of State for Culture, Media and Sport, that more than £130 million from the dormant assets scheme, run with the financial services sector, will be allocated to funding facilities for our young people, to give every child the chance to take part in music, sport and drama, and to fund libraries in our schools, so that the confidence and opportunities that those resources open up are no longer the preserve of the privileged few. Those are my choices, those are Labour choices, and those are the choices of the British people.
Overall, I am providing a cash uplift of over £4.5 billion a year in additional funding for the core schools budget by the end of the spending review, backing our teachers and our kids. People who went to ordinary comprehensives in the ’80s and ’90s are all too familiar with the experience of being taught in temporary classrooms. The previous Conservative Government oversaw another generation of kids being herded into cold and damp buildings as school roofs literally crumbled. It was not acceptable when I was at school, and it is not acceptable now. I am therefore providing investment, rising to nearly £2.3 billion per year, to fix our crumbling classrooms, in addition to £2.4 billion per year to continue our programme to rebuild 500 schools, including Chace community school in Enfield, Woodkirk academy in Leeds and Budmouth academy in Weymouth. Investing in our young people, investing in Britain’s future and investing in opportunity for all: that is Labour’s choice.
Finally, let me turn—[Hon. Members: “More!”] I knew they would cheer. Let me turn to our national health service. It is our most treasured public service, and people rightly expect an NHS that is there when they need it; that an ambulance will come when they call one; that a GP appointment will be available when they need one; and that a scan will be performed when they are referred for one. I am hugely grateful to our nurses, our doctors, our paramedics and other healthcare professionals for everything that they do.
If we want a strong economy where working people can fulfil their potential, we must have a strong NHS—not, as the Reform party have called for, an insurance-based system. We believe in a publicly funded national health service, free at the point of use. Perhaps the hon. Member for Clacton should spend more time focusing on the priorities of the British people, and less time in the Westminster Arms—although, after this week, perhaps the Two Chairmen pub might be a better fit.
At the Budget, I took the decisions necessary to provide an immediate injection of funding to get the NHS back on its feet. I commend my right hon. Friend the Health Secretary for all the progress that he has already made. In less than a year, this Government have recruited 1,700 new GPs, delivered 3.5 million extra appointments and cut waiting lists by more than 200,000. Fixing our NHS also means delivering fundamental reform across social care, so we are backing the first ever fair pay agreement for that sector. I am also increasing the NHS technology budget by almost 50%, and we are investing £10 billion to bring our analogue health system into the digital age, including through the NHS app, so patients can manage their prescriptions, get their test results and book appointments all in one place.
We are shifting care back to the community and providing more funding to support the training of thousands more GPs to deliver millions more appointments. We are investing more in prevention, to meet our manifesto commitment of providing mental health support teams in all schools in England by the end of this Parliament. Those investments will enable the delivery of our upcoming 10-year plan for health and will put the NHS firmly back on the path to renewal.
To support that plan, to back the doctors and nurses we rely on, and to make sure that the NHS is there whenever we need it, I am proud to announce today that this Labour Government are making a record cash investment in our national health service, increasing real-terms, day-to-day spending by 3% per year for every single year of this spending review—an extra £29 billion per year for the day-to-day running of our health service. That is what the British people voted for and that is what we will deliver: more appointments, more doctors and more scanners. The national health service: created by a Labour Government, protected by a Labour Government and renewed by this Labour Government.
This is a spending review to deliver the priorities of the British people: security, with a strong Britain in a changing world; economic growth, powered by investment and opportunity in every part of Britain; and our nation’s health, with an NHS fit for the future. I have made my choices. In place of chaos, I choose stability; in place of decline, I choose investment; and in place of pessimism, division and defeatism, I choose national renewal. These are my choices, these are Labour choices, and these are the choices of the British people. I commend this statement to the House.
Sir Mel Stride (Central Devon) (Con)
This spending review is not worth the paper it is written on, because the Chancellor has completely lost control. This is the “spend now, tax later” review, because the right hon. Lady knows that 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? We were assured at the election that Labour’s plans involved barely any additional spending or borrowing. Now the Chancellor parades her largesse, with hundreds of billions in additional spending over this Parliament. The initial profile for that spending was, of course, significantly front-loaded, but the Chancellor now expects us to believe that she will let spending rise by only 1.2% a year. There is no chance whatsoever of that happening, for the lesson of the last year has been that when the going gets tough, the right hon. Lady blinks.
She presented herself as the iron Chancellor, but what we have seen is the tinfoil Chancellor: flimsy and ready to fold in the face of the slightest pressure. She said she would not fiddle her fiscal rules; then she did. She said that she would not make any unfunded commitments; with the humiliation of the winter fuel U-turn, she just has. She looked business leaders in the eye and said no more taxes, but we all know what happened next, and we all know what is coming in the autumn. Her own Back Benchers, her Cabinet colleagues, Labour’s trade union paymasters and even the Prime Minister himself have all seen that she is weak, weak, weak. They can smell the blood. They will be back for more, and they will get it.
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 has already changed to allow even more borrowing. The only way she can claim to be meeting her rules is by pretending that she can control spending over the coming years, but let us look at the record so far. Borrowing in the last financial year came out £11 billion above even the Office for Budget Responsibility’s March forecasts, and 70% higher than the plans she inherited from the Conservatives.
For someone so keen on borrowing, the Chancellor seems strangely reticent even to use the word. Indeed, Ministers bizarrely tell us that it is Labour’s fiscal rules themselves that have “generated investment”. The reality is a little more straightforward: they have loosened the fiscal rules so they can borrow more. They borrow and borrow and borrow, allowing the national debt to continue to rise higher every single year while Ministers pretend that it is not. There will be an eye-watering £200 billion of additional borrowing in this Parliament compared with the plans set out in the last Conservative Budget, with £80 billion more to be spent on debt interest alone. In fact, if the Chancellor had retained our fiscal rules—[Laughter.] Labour Members may laugh, but if she had retained our fiscal rules, as she said she would before the election, the OBR has confirmed that she would be breaking them right now.
Our country is now vulnerable to even the smallest changes in the bond markets. Should we face a sudden external shock, we have no fiscal firepower left with which to respond, all thanks to the right hon. Lady’s choices. So can I ask the Chancellor: will she be open about what she has done? Will she admit that she has made a conscious choice to borrow more and to accept higher debts? Does she accept that this means interest rates and mortgages will be higher than they would otherwise have been, as the OBR itself has said? Given that she continues to claim that she has brought stability to the public finances, can I ask her what on earth her definition of “stability” is?
The Chancellor must be delighted that she does not have to face a new OBR forecast today, because if she did, she would have to set out how she would fund her humiliating U-turn on winter fuel payments, having already blown the savings on buying off her trade union paymasters last year. She said this week that there was still
“work to do to ensure the sums always add up”.
From the person in charge of the nation’s finances, that is hardly reassuring. You do not need to have worked at the Bank of England for a decade to know that that pitiful utterance is unlikely to soothe the markets.
So can the Chancellor confirm categorically that there will be no additional borrowing to pay for this chaotic reversal? And if that is the case, can she explain how on earth it can be paid for without raising taxes? Can she explain why, last summer, apparently to avoid a run on the pound, this measure was so urgent that pensioners had to be left in the cold over the last winter? What exactly has changed? Because it certainly has not been made possible by an improvement in the economy or the public finances, which the Institute for Fiscal Studies said this week are both in a worse state now than when Labour came into office.
If we had an OBR forecast, we might also get some answers on how the Government intend to find £3.5 billion to abolish the two-child benefit cap, which we are led to believe is imminent—another addition to the ballooning welfare bill; another expensive surrender to the Labour left. And we would certainly get the OBR’s assessment of the economic outlook following the tariffs—changes that the right hon. Lady knew full well were coming. Meanwhile, her deluge of taxes and regulations has left business confidence at record lows, costing people their livelihoods. Only yesterday we saw the latest evidence of that. Figures for last month show that the number of people on payrolls fell by more than 100,000, after already falling by 55,000 in April. Unemployment is up by more than 10% since Labour came to office.
The right hon. Lady may trumpet extra spending today, but is it not the simple truth that she has trashed the economy and left no contingency in the face of a highly volatile global outlook? Is it not the reality that the Chancellor knows she will have to come back in the autumn with more tax rises to fund these plans? Or can she assure us right now that this is not the case—yes or no? We know that the Deputy Prime Minister has helpfully provided her with an entire brochure of tax rises that she will no doubt be perusing over the summer—the Corbynist catalogue. Can the Chancellor confirm that, as promised, the income tax thresholds will not be frozen at the Budget, a move she herself said would hurt working people?
What about the uncertainties in the departmental spending plan that the Chancellor has set out today? Can she assure us that these plans will not be topped up and that no backroom deals have been cut with disgruntled Cabinet Ministers? Can she assure us that the capital allocations announced today will actually be spent on capital and will not be diverted in-year, as she has done in the past, to day-to-day budgets to play more games with her fiscal rules?
The Chancellor has had to impose a settlement on the Home Secretary because this spending review will not deliver for our hard-working police officers across the country. Instead, the Home Office budget gets squandered on asylum costs because this Government simply do not have a plan on illegal migration. As the Defence Secretary has admitted, the Government have “lost control” of our borders. Small boat crossings are up by 42% on the same point last year.
On energy, at a time when businesses up and down the country are struggling with high energy costs, the Chancellor has chosen today to fund the Energy Secretary’s vanity projects such as GB Energy. And although we welcome the announcements on expanding nuclear capacity, the scale of ambition is a downgrade on the commitments made previously by the Conservatives.
Labour barely mentioned farming in its manifesto, and now we know why. It is not enough to have hit the farmers of our country with a family farm tax; today, what we see in black and white is a choice to make further cuts to the vital grants on which many farmers rely. This is a huge betrayal of our farming communities, and something that many Labour MPs in rural areas will have to go back to their constituencies later this week to explain.
On defence, we will always welcome any additional investment in our armed forces and capabilities, though I note nothing was said about when 3% will be achieved. All we heard was that intelligence services spending was to be included in defence spending to flatter the numbers. We left Labour a fully funded plan that they dithered over for a year, but now what we get is the Chancellor’s own black hole on defence spending and the lack of a timeline on when we will achieve 3%. Instead, we get a £30 billion bill for the Chagos surrender—money that should have gone to our brave armed forces rather than, as is being reported, funding lower taxation in Mauritius. The first tax cuts for which this Chancellor has been responsible are in Mauritius.
We would have made different choices. We would not have killed growth with huge tax rises and new regulations. We would not have talked down our economy and the great businesses up and down our country. We would be focusing on efficiency and productivity in the public sector, not handing out pay rises with no strings attached. We would be getting a grip on welfare. Labour cancelled our plans for fundamental reform to health and disability benefits that would have seen 450,000 fewer people on long-term sickness benefits—that is a disgrace. Instead of proper reforms to PIP, the Government’s own plans are a rushed cost-cutting exercise—so rushed they even had to change them after they were announced. Their own Back Benches are in full revolt. Yet again, the Government talk tough, but there is no substance.
The right hon. Lady has no grip. She has no clue. The markets and the public see a Chancellor completely out of her depth. Having blown her headroom and more from her Budget in the autumn, she was forced into an emergency Budget in March to scrabble around to try to repair the damage. Today she comes before us again with yet another fantastical tale that she knows will have completely fallen apart come the autumn. We are not left with stronger foundations, as she would have us believe, but rather another dose of that hallmark for which her actions have made her so renowned: uncertainty and failure.
So there the right hon. Lady sits, powerless to resist her disillusioned MPs and her panicking Prime Minister, like a cork on the tide, the drumbeat for U-turns pounding in her ears. Yet her tone today suggests that all is well; the sunlit uplands await. What a hopeless conceit—a masterclass in delusion. Inflation is up, unemployment is up, growth is marked down, business and households are hurting, investors are fleeing in their droves, the bond market vigilantes circle—and here we have the Chancellor who refuses to listen, not only tinfoil, but tin-eared, too.
Let me be clear: it is working people and businesses who will pay the price come the autumn, with yet more taxes to pay for her weakness and her failures. We cannot afford this spending review, and for many, the growing conclusion is that we cannot afford this Chancellor.
Rachel Reeves
I will address the shadow Chancellor’s specific points in a moment, but I want to start by acknowledging the progress he has made. After all, it has been quite a week for him. Last Thursday, he gave a speech saying that it will “take time” for his party to win back trust on the economy. Today he showed us how far he and his party have to go to achieve that. I want to give him some credit for last week’s analysis. He said that
“the Conservative Party was seen to have failed”,
and he is right. He said that the last Conservative Government
“put at risk the very stability which Conservatives had always said must be carefully protected”,
and I agree with him. [Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I need to be able to hear, and I am sure our constituents also want to hear.
Rachel Reeves
The shadow Chancellor said:
“The credibility of the UK’s economic framework was undermined by spending billions…with no proper plan for how this would be paid for.”
I could not put it better myself. He could have gone a lot further. For example, he could not even bring himself to mention Liz Truss by name—Stride by name, baby steps by nature—but at least he has made a start. He also spoke about
“the death of what we might call the Age of Thoughtfulness.”
Speaking of the death of thoughtfulness, let me turn to the shadow Chancellor’s response to the spending review. He welcomed our nuclear investment of £30 billion, but he said it is not enough. He welcomed our defence investment of £11 billion, but he said it was not enough. He and his party opposed the decisions that this Government have taken to make those announcements possible by voting against the Budget in October. You cannot spend the money if you will not raise the money. That is a lesson from Liz Truss that he has already forgotten.
The shadow Chancellor complained about the level of investment that I have announced, ignoring the fact that the reason this investment is so important is because his party oversaw 14 years of cratering investment, stagnating wages and public service collapse. Let me remind him of what I said: the Tories’ fiscal rules guaranteed neither stability nor investment, and that is why I changed them, so we can get stability and investment. All their fiscal rules enabled was them to crash the economy, and the working people of Britain will never forgive them for doing that.
The Conservatives set themselves against investment in the renewal of Britain. They set themselves against NHS investment, free school meals, investment in skills, investment in carbon capture and storage, investment in transport in our towns and cities—investment in everything that we have set out today—and yet the British people voted for that investment. The right hon. Gentleman says that the Home Office budget involves an increase in asylum costs. It does not. Asylum costs are coming down under this Labour Government because we are deporting more people and getting them out of hotels. He says we are cutting police spending; we are increasing it by 2.3% a year in real terms. We have had no apology for the damage the Conservatives did to our economy and our public services.
Interest rates have been cut four times in the past 11 months; GDP was the fastest growing of all G7 economies in the first quarter of the year; business confidence is rising; 500,000 more people are in work; record investment has been made in Britain; real wages have increased more in 10 months than they did in 10 years of a Conservative Government; the national living wage has increased, giving 3 million working people a pay rise; and we have done all that without increasing taxes on working people. Those are the choices we have made. That is the difference we are making.
In the spending review today, we set out the spending that we announced in the Budget last year and in the spring statement—not a penny more, not a penny less. I said in the Budget and in the spring statement that public services must now live within the means that we have set, and we have achieved that. There will be a Budget later this year, and in that Budget we will set out all the fiscal plans in the round. But we have already drawn a line under the Tory mismanagement, with tax rises last year, and we will never have to repeat a Budget like that again because we will never have to clean up after the mess that the Conservatives made again.
The reason that this Labour Government have spent their first year fixing the foundations of our economy and stabilising our public finances is because it is what we had to do. The Government of which the shadow Chancellor was a part of left an unenviable legacy, which is why his party is, in his own words, “in a difficult place.”
We have made our choices. We are removing barriers to growth, which were untouched by the Conservatives in their 14 years in office; strengthening Britain’s security with the biggest real-terms increase in defence spending since the end of the cold war, which the Conservatives did not do in their 14 years in office; bringing our health service into the 21st century after 14 years of Conservative neglect; investing in Britain’s renewal to repair the damage done by the Conservatives in their 14 years in office; and, in stark contrast to the Conservatives’ 14 years of chaos, waste and decline, we are delivering on the priorities of the British people.
Madam Deputy Speaker (Judith Cummins)
I call the Chair of the Treasury Committee.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I congratulate my right hon. Friend on delivering this spending review—the first zero-based review in a very long time. It is vital that as taxpayers—the citizens—are looking carefully at their spending in this cost of living crisis, that Government do that too. We look forward to having the Chief Secretary to the Treasury before the Committee in two weeks’ time to consider the review in more detail.
I note from the figures that the Chancellor has made a good fist of ensuring that Departments have more than they did under the Conservatives in many cases, and I welcome her work to deliver on tackling child poverty, a scourge on our society. I note from my brief glimpse, however, that there is a smaller increase for the Ministry of Housing, Communities and Local Government than there would have been—there is the £39 billion over a decade for affordable social housing. Children living in poverty also face poverty of situation in many cases. Will she expand on how she and the Deputy Prime Minister will deliver that money to provide the social housing that so many children in poverty desperately need?
Rachel Reeves
I appreciate my hon. Friend’s welcoming of the breakfast clubs, free school meals and the capping of school uniform costs, which will help families living in poverty. The free school meals will, as she knows, lift 100,000 children out of poverty. She mentions the affordable homes grant, which will have its biggest ever increase. We have set that budget for 10 years to give certainty to the sector, so that it understands what is available. In addition, we have set out some social rent changes to give certainty to the sector to invest for the future.
Daisy Cooper (St Albans) (LD)
It has been almost a year since Labour swept to power with the promise of change, but we are still not seeing the scale of ambition needed to turn the country around. We welcome the announcement of investment in the NHS, but it will not work unless the Government invest in social care too. We welcome the investment in infrastructure, but it will not work unless the Government invest in skilling up the workforce that we need to build it. Cutting billions in real terms from departmental budgets seems unnecessary when the Government could instead go for growth and get a much deeper trading relationship with Europe—a move that could raise an extra £25 billion a year for the public purse. As long as the Government fail to truly tackle the red tape and trading barriers blocking British businesses, the Government’s grip on economic growth is more akin to a handbrake than an accelerator.
The last Conservative Government left our NHS on its knees. On their watch, waiting lists were soaring, hospitals were crumbling and our high street healthcare was hollowed out. Can the Chancellor confirm that this funding will deliver the extra 8,000 GPs needed to guarantee everyone an appointment within seven days, or within 24 hours if the matter is urgent? Can she confirm that this funding will bring dentists back into the NHS and put an end to dental deserts? Will she promise that this funding will mean that every cancer patient starts treatment within 62 days? Will she promise that the Government will meet the Prime Minister’s own pledge for 92% of routine operations to take place within 18 weeks? Will she and the Health Secretary—they are sitting side by side—set up a crumbling hospitals taskforce to look at creative funding ideas, bring construction dates forward and put an end to the vicious cycle and false economies of delayed rebuilds leading to rising repair costs, as we saw under the previous Government?
Then, of course, there is the elephant in the NHS waiting room: the crisis in our social care services. The Chancellor knows, the Health and Social Care Secretary knows, this whole Parliament knows: today’s investment in the NHS will be like pouring water into a leaky bucket if hospitals cannot discharge patients who are well enough to leave because there are no care workers to help them recover at home. The fair pay agreement that the Chancellor talked about is of course welcome, but it is barely a baby step, and it is nowhere near enough to bring social care back from the brink. At a bare minimum, we need a higher minimum wage for our care workers to stop the sector haemorrhaging staff to other sectors. When will the Chancellor finally recognise that we will never fix the NHS if we do not fix social care too? Will the Government finally act with urgency by committing to conclude the social care review by the end of this year, not in three years’ time?
On housing, we warmly welcome the Government’s investment in social homes. Will they now commit to the Liberal Democrats’ target of building 150,000 social homes every year?
Other public services are crying out for investment, too. Our communities need proper neighbourhood policing to feel safe, our farmers need fair support payments to keep putting food on our tables, and people of all ages deserve access to training and skills to build their future and to power our economy forward. That is why it is so disappointing that the Chancellor has today made things so difficult for our public services by cutting unprotected budgets by billions. Yes, we know she was faced with the fallout from the most reckless, out-of-touch Conservative Government in recent memory, but being responsible is not just about making tough decisions; it is about having the moral courage to make the right ones. Yet this Government seem determined not to adopt the one policy that could put rocket boosters on our economy and raise billions for our public services: a proper trade deal with Europe.
A new, bespoke customs union with the European Union could boost our GDP by more than 2.2%, securing additional revenue to the tune of £25 billion a year—a huge boost to businesses and our struggling public services. If the Chancellor can U-turn on the winter fuel payment thanks to a skinny EU trade pact worth just 0.2% in extra GDP, just imagine how many more U-turns she could perform with a proper trade deal worth ten times as much.
We Liberal Democrats strongly support the allocation of 2.5% of GDP on defence, but we want Ministers to go further and faster to bolster our national security in today’s uncertain world. Will the Chancellor agree to cross-party talks in which we can work together to set a pathway to 3% of GDP well ahead of 2034? Will the Government use some of today’s investment to reverse the Conservatives’ irresponsible cut of 10,000 troops? Will she ensure that investing in our national security becomes a lever for economic growth, putting much greater emphasis on British steel producers and SMEs as we scale-up our defences, and ensuring that British start-ups can use defence innovation for the public good?
Before I conclude, I must thank the Chancellor for finally completing the world’s slowest U-turn, on the unfair winter fuel payment cut. Now that she has U-turned, will she do the right thing and backdate the payment for all those who lost out on support last winter but who are now eligible under the new rules? And now that she has U-turned once, will she make it a hat trick and also change course on the PIP and carer’s allowance cuts? Perhaps she might even look again at the growth-crushing jobs tax and the other changes affecting our high streets, small businesses and family businesses, and consider instead the fairer ways of raising the same amount of revenue that we Liberal Democrats have set out time and again: asking the big banks, social media giants and online gambling companies to start paying their fair share of tax.
After years of chaos and incompetence under the last Conservative Government, this was a unique opportunity to draw a line under the social care crisis, squeezed budgets and sluggish economic growth. I strongly urge the Chancellor to ignore those who talk down Britain’s economic potential, to rip up the red tape holding British business back, and to strike a properly ambitious trade deal with Europe that will turbocharge our economy and bring in billions to rebuild our public services. The Government say that their No. 1 mission is growth. That is the way to deliver it.
Rachel Reeves
I thank the hon. Lady for her comments. I know she has not had a chance to look at the figures yet, but it is not right to say that there are real-terms cuts to public services. Public service spending is increasing by 2.3% a year on average over the course of the spending review.
I will start on investment in the NHS and social care. As I set out in my speech, we have already delivered 1,500 more GPs and put £26 billion into the NHS in the first phase of the spending review. I note that that compares with the £8 billion that the Liberal Democrats said they were going to put into the NHS in their manifesto. We have already put £26 billion in, and we will put more money in today and in every year of this Parliament.
The new hospital programme is being rolled out. I think the Health Secretary met just last week with Members of Parliament who are having hospital improvements in their local communities, including many Liberal Democrat MPs, so the hon. Lady should be aware that we are making improvements to the fabric of our hospitals as well as investing in technology, scanners and so on to improve productivity in our health service.
With regard to social care, as the hon. Lady knows, we are introducing the fair pay agreement—that is something that the Health Secretary and my right hon. Friend the Deputy Prime Minister are very much committed to. As the hon. Lady will know when she looks at the documents, we have increased local government spending power so that we can put more money into social care. In addition, Louise Casey is doing her review into the future of social care.
We are going big on infrastructure. We announced £100 billion more in the Budget last year and another £13 billion in the spring statement, and we are backing that up with skills. As I set out in my speech and as is detailed in the spending review documents, we are making the biggest ever investment in young people’s skills so that they can access the new jobs that are being created in defence, house building and other infrastructure.
On red tape and backing business, it is a little bit ironic that the Liberal Democrats voted against the Planning and Infrastructure Bill yesterday, yet they come to the House today saying that they want to do away with red tape and go for growth. Well, we want to go for growth, and that is why we took that legislation through Parliament. Perhaps the hon. Lady will ask her party’s Lords to vote for growth in the other place.
We have done trade deals with the US, India and the EU. I think the Liberal Democrats opposed the trade deal with the US, but apparently they now think that trade deals are the way to go—well, so do we. That is why my right hon. Friend the Business and Trade Secretary has three of them helping our automotive sector, our steel sector and our farming communities.
We will use defence spending to support growth—the Defence Secretary and I have been very clear about that—and, as I set out in my speech, to make Britain a defence industrial superpower. I say gently to the Liberal Democrats and the hon. Lady that if we want to support investment in public services, we have to increase the tax rises to get there. They voted against the national insurance increase, which is what has enabled us to make the investments that I have set out today.
The hon. Lady says that she wants a wealth tax. We changed inheritance tax, and the Liberal Democrats voted against it. We introduced VAT on private schools, and the Liberal Democrats voted against it. Either they are serious about investing in public services, in which case they need to back the tax increases, or they want to go down the route of the magic-money-tree Conservative party and just borrow more to pay for things.
On the winter fuel allowance, we have made our choices clear: we will keep the means test, but it will be paid to people with a pension of less than £35,000. I think the Liberal Democrats want to make it a universal benefit again.
Rachel Reeves
Okay, that is just the Tories—well, they need to explain how they would pay for it.
I appreciate the fact that the hon. Lady welcomes some of our policies, but the job of the Chancellor and the Government is to ensure that the sums add up. We made difficult decisions last October, but I stand by those difficult decisions; without them, today we would not have been able to make the investments we have made in schools, energy and our health service. I am proud of what we have achieved as a Government, and I am proud of the investment that we are putting in today.
Bill Esterson (Sefton Central) (Lab)
The warm homes plan will mean healthier and warmer homes and will see lower bills and create jobs in communities right across the country. It is a very good plan, especially for those facing fuel poverty. The last Government’s home energy programme changed every few months, which meant that businesses could not plan and consumers had no confidence in it, not to mention the scandalous misapplication of fixed-wall insulation. Will my right hon. Friend confirm that this is a long-term warm homes plan that will deliver warmer homes and cut bills to the benefit of millions of our constituents for years to come?
Rachel Reeves
I thank the Chair of the Energy Security and Net Zero Committee for that question. Warm homes are a big part of our plan to tackle the cost of living crisis, and the money that we have put into the warm homes plan today will mean that millions more homes can be retrofitted with better boilers, insulation and solar panels. On average, that takes £600 a year off people’s bills not just for one year, but for every year to come. My hon. Friend is absolutely right. What we have done today is set out a five-year package of capital investment, because it is crucial that the industry is able to plan for the future and that young people are therefore willing to train up and businesses are willing to invest in apprenticeships. That is why on all of our capital spending, including the warm homes plan, we have set out a five-year plan.
Dame Harriett Baldwin (West Worcestershire) (Con)
My constituents in Tenbury Wells are seeking funding for a flood defence scheme. They will have listened very closely to the Chancellor’s remarks today to hear her mention flood defence capital spending, yet it was not mentioned in her speech. Can she confirm that the capital that will be allocated in the spending review period to flood defences will be as high in real terms as it was in the previous Parliament?
Rachel Reeves
The hon. Lady knows that we increased money for flood defences in the spending review in autumn last year, because we knew that there was no time to waste. We have already increased that flood defence spending, in addition to what the previous Government were spending.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
This spending review is good for Britain’s business, because it invests in the things that British business needs: it invests in skills, infrastructure and innovation, cuts red tape and supports small firms. Can the Chancellor clarify that this spending review will also open a new era of energy abundance for our country? The Business and Trade Committee heard directly from the International Monetary Fund in Washington yesterday that high energy costs are holding back growth. That is a consequence of the dither and delay from the Conservatives, who left us with the highest industrial energy costs in Europe. Will the Chancellor confirm to the House that we are consigning that era to history?
Rachel Reeves
My right hon. Friend is right. We are backing innovation, skills and infrastructure, because we are backing British business. We are also cutting red tape, as we did yesterday, when we took the Planning and Infrastructure Bill through the House, making it easier to get things built in Britain again. As we make the investments, we want those jobs to come to Britain, including in the energy sector, whether it is investment in small modular reactors, Sizewell C, carbon capture and storage or floating offshore wind. We will set out the industrial strategy in the next couple of weeks, in which we will have more to say about energy costs for business.
Gavin Robinson (Belfast East) (DUP)
I thank the Chancellor for engaging productively in the discussions about sustainable budgets for Northern Ireland, for the willingness to negotiate further and for the recognition that our need levels should be met. I thank her for that engagement and for the allocations to Northern Ireland for specific community projects that have been advanced by us. She has chosen through this allocation to make a budget available for the redevelopment of Casement Park. She will know about the political nature of some of the concerns around that redevelopment, and that in all previous agreements in the Executive, these things have been advanced in a balanced and non-partisan way. This Government have chosen to step into this issue in an unbalanced and partisan way. As such, in making financial transactions capital available—£50 million over the course of the next spending period—I ask the Chancellor to ensure that where there is a need for investment in football, as there is, she returns to the Executive’s agreement of 2011 in a balanced and non-partisan way. I hope that she will not be found wanting.
Rachel Reeves
I thank the right hon. Gentleman for his question and the way in which he has put it. I was pleased to be able to announce the settlement for Northern Ireland in today’s spending review, but also money through the Ministry of Housing, Communities and Local Government. He mentions Casement Park, and we have put £50 million in through this spending review. I will arrange for the right hon. Gentleman to meet either the Northern Ireland Secretary or a Minister from my Department to talk through what he wants to see.
Helen Hayes (Dulwich and West Norwood) (Lab)
I welcome the focus my right hon. Friend the Chancellor has placed on children and young people in this spending review, with additional investment in children’s social care, schools and skills. These announcements show the Government’s commitment to improving the life chances of every child, and my Committee looks forward to scrutinising the detail in the coming weeks. The Chancellor will know that universities are the life force of many local economies, generating jobs, improving skills and boosting life chances, yet a number of our universities are at the brink of insolvency. The sector has been calling for a transformation fund to help universities reform and secure a sustainable future, so can the Chancellor confirm that she will work with Cabinet colleagues to ensure that no town or city has to face the calamity of a university going bust?
Rachel Reeves
I thank my hon. Friend, the Chair of the Education Committee, for her question. I appreciate her welcoming the investment in children’s social care, in skills and in schools—issues that she knows and cares passionately about. In the spending review, we were able to set out a total of £86 billion of investment in research and development, much of it spent through our universities and research institutes, but I am certain that the Education Secretary or the relevant Minister will meet my hon. Friend to talk about the wider allocation from this spending review.
John Glen (Salisbury) (Con)
Scientists at the UK Health Security Agency at Porton Down make a massive contribution to the welfare of our country in difficult times. Ten years ago, the Chancellor’s predecessor wanted to invest £525 million in moving to a single science hub in Harlow. Some £400 million has already been spent, and last year, the National Audit Office said that it would cost £3.2 billion to complete the move by 2036. Three weeks ago, I had an Adjournment debate in which I was told that today, we would know the outcome of what was actually going to happen with this project. Can the Chancellor explain what is happening with the future of the UKHSA at Porton Down? Is it going to move to Harlow, at massive expense—six times the original estimate—and 15 years later than was estimated, or can we save some money and use it for better investment in our public estate?
Rachel Reeves
I thank the right hon. Gentleman and member of the Treasury Select Committee for his question. We have made the allocation to the Department of Health and Social Care—an annual uplift of £29 billion—and it will be up to the Secretary of State to allocate that money, but I will make sure that he has heard the right hon. Gentleman’s question and that he gets a proper reply to him.
Louise Jones (North East Derbyshire) (Lab)
With a £2.5 billion investment into nuclear in Derby, £2.5 billion into nuclear fusion in north Nottinghamshire, and half a billion into steel suitable for use in the nuclear industry in Sheffield, my constituency is surrounded by wonderful opportunities in these industries of the future. Can the Chancellor outline what more we can do to support young people in my constituency to access careers in those industries?
Rachel Reeves
We as a Government were proud to be able to step in and save British Steel at Scunthorpe, and again I thank my hon. Friend the Member for Scunthorpe, but it is not just Scunthorpe. There are also opportunities in Sheffield and Port Talbot, because as we build this infrastructure—whether it is trams and trains, nuclear power or submarines—we want to use steel made in Britain. That is a really exciting opportunity, and the investments we are making in small modular reactors and fusion in Nottinghamshire and Derby create great opportunities for jobs. That is why we are also making a record investment in skills through the spending review, so that young people in North East Derbyshire and beyond can get access to the jobs that are being created.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd. The announcement of just £44.5 million a year for the next 10 years for Welsh rail is Labour’s flimsy fig leaf of an excuse for the multibillion and multi-decade scandal that is HS2. The money announced today is only significant if it matches what Wales will continue to lose from all England-only rail projects, up to now and in the future. Can the Chancellor guarantee that from now on, Wales will receive the full £4 billion HS2 consequential funding, or will she admit that her announcement on Welsh rail funding is nothing but smoke and mirrors?
Rachel Reeves
I do not think £445 million is not real money. That money will be invested in the Burns review stations. In addition, we are putting in £118 million to make the coal tips safe. Maybe the right hon. Lady is not that concerned about that, but I know that plenty of Welsh Labour MPs are.
Matthew Patrick (Wirral West) (Lab)
I wonder whether the Chancellor can help me. I want to write a letter to my constituents, and I do not know which story I should lead with—whether it is the rapid investment in our NHS to get more doctors’ appointments, the money for our police to get more police on the streets, the transport investment to build new train stations, or the money to give hungry children in my constituency free school meals. Could she help me out? I only have one page. What should I start with?
Rachel Reeves
My hon. Friend will want to leave space on the leaflet to remind his constituents that he was lobbying for all those things so that he can take the thanks.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I welcome the U-turn on the winter fuel payment—of course I do, and lots of my constituents will do likewise—but there is no respite in this spending review for farmers in Scotland, business owners in Scotland, GP surgeries in Scotland, or the disabled in hospices in Scotland. Despite what the Chancellor says, there have also been real-terms cuts to the Home Office, Foreign Office and local government in this spending review.
The Chancellor is an open book. She plays roulette with the economy, but I would not encourage her to play poker any time soon, because she mentioned Reform and the hon. Member for Clacton (Nigel Farage) in her speech more times than she mentioned Scotland—what a disgrace! She mentioned that she has finally got around to Acorn, but without a figure attached. What funding is she going to allocate for Acorn? We know that if it is Merseyside or Teesside, there is £22 billion for them. How much for Acorn?
Rachel Reeves
I did mention the SNP—I questioned why the SNP does not support defence investment in Scotland—but I can mention it again, if the hon. Gentleman would like me to. Why has the SNP let down the people of Scotland with rising hospital waiting lists? Why has the SNP let down people in Scotland with more drugs deaths? Why has the SNP let people down time and again? We are putting money into Acorn and into defence investment, and we are giving a record settlement to the SNP Government, but hopefully they will not be there for much longer.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank my right hon. Friend the Chancellor for prioritising affordable housing, which is overdue. That extra investment will go a long way towards addressing the spiralling, broken housing system that has pushed so many people into poverty. Last year, a record 126,000 households faced homelessness, an increase of over 17,000 in one year alone. We see so many families placed in what we call temporary accommodation, but it is not temporary—five years or more is far from temporary. Children are travelling for hours to get to school, families do not have a space in which to grow up, and we have lost a decade of building the social homes that we need. I join with the likes of Shelter and the National Housing Federation in welcoming the investment in affordable housing and the certainty of a 10-year rent settlement, but we need more of these measures, and we need to build truly social homes. Can the Chancellor confirm what proportion of social rent homes will form the backbone of the affordable homes programme, to get those families into a safe, secure and stable home?
Rachel Reeves
I thank my hon. Friend for her campaigning on housing and homelessness, which is a big challenge in many of our constituencies, including hers in Vauxhall and Camberwell Green. We want to work closely with local councils and the Mayor of London to build the affordable homes that we desperately need in the capital city, where house prices and rents are still far too high for so many families. I look forward to working with my hon. Friend on just that.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
The billions of pounds that have been announced by the Chancellor are very big rises, and the Public Accounts Committee looks forward to scrutinising that expenditure—I am sure it will be welcomed by those who receive it—to ensure we are getting value for money, but can the Chancellor explain to the House how it will be funded, because debt and tax are at record levels? Can British workers look forward to a summer of expecting more tax increases?
Rachel Reeves
I look forward to that scrutiny, but the hon. Gentleman will know that the allocations we have made today are based on the tax increases we made in the Budget last year. We are not spending a single penny more or a single penny less than the money we set out in the autumn Budget and the spring statement.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I welcome the significant transport investment that the Chancellor has announced in the north and in the city regions. That is helped through her changes to the Green Book, but when will the place-based business cases be reviewed so that those areas can start planning for the local transport initiatives that they have waited so long for?
Rachel Reeves
I hope that my hon. Friend can already see the impact of our changed attitude and our changed perspective at the Treasury with our putting this record investment of £15.6 billion, which we announced last week, into eight mayoral combined authorities to better connect towns and cities. Because of the changes we have made, we have been able to put more money into the trans-Pennine route upgrade and the midlands hub, as well as significant investment in trains in Wales.
Tim Farron (Westmorland and Lonsdale) (LD)
My communities in Westmorland will be outraged by a 17% reduction in farm funding. We are perplexed, because we were told to expect a decision today on the vital scheme to dual the A66 from Penrith to Scotch Corner. That is crucial to east-west connectivity, to the northern economy and to saving lives. There was no mention in the statement or in the accompanying documents at all. Will the Chancellor confirm that the A66 upgrade will take place?
Rachel Reeves
The allocation has now been made to the Department for Transport. We have not set out every project that that will fund, but I am sure the Transport Secretary will come to this House or the relevant Select Committee in due course.
Graeme Downie (Dunfermline and Dollar) (Lab)
I thank the Chancellor of the Exchequer for putting her faith in young people and the future with investments in the AI, nuclear and defence opportunities that young people in Scotland deserve, alongside £1.2 billion for training and apprenticeships. Meanwhile, in my constituency, Fife college has recently warned about course cuts and campus closures, thanks to the mismanagement of the Scottish budget by the SNP. Does she agree that the best way to get young people the opportunities they deserve in defence, nuclear and other industries is with a Scottish Labour Government and Anas Sarwar as First Minister?
Rachel Reeves
We saw in the by-election last week how desperate the people of Scotland are for change, after two decades of SNP so-called leadership. We are investing in training and apprenticeships in this spending review, and I very much hope that the SNP will match that investment in Scotland.
Richard Tice (Boston and Skegness) (Reform)
The Chancellor supposedly inherited a black hole, and she has dug a crater into which public confidence and business confidence are plunging. The truth is that 250,000 jobs have disappeared since the blunder Budget. Despite all the noise we hear from those on the Government Benches, the reality is that Government spending is completely out of control. Inflation is up, unemployment is up, Government borrowing is up and the cost of Government borrowing is up. The only things that are going down are jobs and GDP. I have some good news for the Chancellor, however. The 10 councils that we control are already identifying savings of hundreds of millions of pounds. She may want to learn some lessons. That is why Reform is leading in the polls.
Rachel Reeves
I noted recently that the hon. Member said on a podcast that he wanted to cut Government spending by £300 billion, but that would mean getting rid of the whole of the NHS and the whole of the defence budget. We have increased spending by £300 billion to invest in our schools, our hospitals, our transport and our defence. I know that Reform is soft on defence, soft on workers’ rights and wants to privatise our NHS. I do not think those are the priorities of the British people.
John Grady (Glasgow East) (Lab)
Reform’s economic policies appear to have been cooked up after a heavy night at Moe’s bar in “The Simpsons”. In 18 years, the SNP has failed to invest in Glasgow’s transport infrastructure. We have no airport rail link, and no Parkhead station. We do not even have lifts at Bridgeton station. I contrast that with my right hon. Friend the Chancellor’s firm commitment to transport. There is also £50 billion extra for the Scottish Government to sort out the SNP’s NHS waiting lists; record investment in the defence industry and the Clyde to defend our nation, which the SNP objects to; investment in clean energy, which is critical for jobs in Glasgow; and continued support for the Glasgow and Clyde Valley city deal. Does she agree that those things demonstrate that Scotland is at the heart of this Labour Government? It is time that we turfed out the SNP, after its 18 years of failure.
Rachel Reeves
In the spending review today, we have set out: investment in defence to support jobs in Scotland; investment in Acorn to support jobs in Scotland; investment in nuclear, which will benefit the people of Scotland through lower bills; and a record settlement for the Scottish Government. It is up to them now to use that money wisely. I would not hold out much hope, under the SNP.
Esther McVey (Tatton) (Con)
I know the Chancellor considers herself to be a world-leading economist, so can she tell me how it is that everyone in the country knew that hiking taxes on employers’ national insurance contributions—making it more expensive to employ people—would destroy jobs, destroy businesses and destroy the economy, and the only people who did not know that were her and her socialist boss?
Rachel Reeves
I am sorry to disappoint the right hon. Lady, but there are 500,000 more jobs in Britain since the last general election. Business confidence is going up.
Dr Jeevun Sandher (Loughborough) (Lab)
My constituency of Loughborough, Shepshed and the villages is in the east midlands, a region that has been overlooked for too long. That ends today, first with the changes to the Green Book, which we all welcome. There will be more money outside London; I hope my colleagues do not mind too much. Secondly, we have more than £100 billion of investment. Can the Chancellor please set out how today’s investment will get bills down and wages rising in my constituency of Loughborough, Shepshed and the villages?
Rachel Reeves
I thank my hon. Friend for welcoming the changes to the Green Book, which will better enable the Government to invest, and will stop the situation whereby the Treasury used to wield the Green Book against local communities when it came to the investments that they wanted to make. This was a good spending review for the east midlands, as my hon. Friend mentioned, with investment in nuclear fusion and small modular reactors. Many businesses in the supply chain right across the east midlands will benefit from that significant investment and the jobs it will bring.
Bobby Dean (Carshalton and Wallington) (LD)
Last year, during the mayoral election, Sadiq Khan claimed that a Labour mayor working with a Labour Government would be a game changer for the city, but just now he has released a statement criticising the spending review for underfunding the Met police, failing to invest in our transport infrastructure, and potentially making the housing crisis in our capital worse. Was Sadiq Khan wrong to put his trust in this Labour Government?
Rachel Reeves
For London, today we have increased the spending power of the police by 2.3% in real terms every year; we have record investment in the affordable homes programme, which includes building new homes in London; and we have free school meals, lifting around 10,000 children in London out of poverty, and much more. We are also backing a third runway at Heathrow and investing in tunnelling to take HS2 to Euston. This is a good spending review for London, but most importantly, it is a good spending review for the whole United Kingdom.
Alex Baker (Aldershot) (Lab)
I congratulate the Chancellor on the spending review, and welcome her commitment both to defence spending and to our being a defence industrial superpower, which is vital to my community in Aldershot and Farnborough. This week, my hon. Friend the Member for York Outer (Mr Charters) and I published a report entitled “Rewiring British Defence Financing”, which supports the Chancellor’s work to fire up our defence industrial base. As part of that, will she support my campaign for a UK-led multilateral defence security and resilience bank to finance our national resilience, support our allies, and keep our country safe?
Rachel Reeves
I thank my hon. Friend for the work that she and my hon. Friend the Member for York Outer (Mr Charters) have done to make the moral case for financial services funds investing in defence, which is what keeps our country safe. As we uplift our defence spending, we want to get value for money. That is why we were so pleased that, in the deal that we did with the European Union, we secured a defence industrial partnership with the EU.
Adrian Ramsay (Waveney Valley) (Green)
Across the country, people see their health services severely overstretched, school headteachers face having to make cuts, and, of course, the most vulnerable people in society face cuts to disability benefits. According to the BBC’s analysis of the Chancellor’s statement, her figures will mean a sharp decline in budgets for public services after 2026. Is not the statement a matter of smoke and mirrors? Will the Chancellor instead consider the growing call for a wealth tax on the ultra-rich, so that she can raise the extra tens of billions that are needed to support our public services and restore much-needed pride and hope in Britain?
Rachel Reeves
It is difficult to tell whether the hon. Gentleman supports the spending review and the additional money that we are putting into public services, or is against it. The settlement for the NHS means 3% real-terms growth a year, and for the police the figure is 2.3% a year. There is also an increase in per-pupil funding, as well as a real-terms increase in the schools budget, so I am not exactly sure what the hon. Gentleman’s complaint is.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
There was a terrible, dangerous coal slip in my constituency last autumn, and the coal tips safety funding announced today is hugely welcome. It is great to see our Labour Government standing up for Wales. Looking forward, however, may I ask the Chancellor please to review the miners’ staff superannuation scheme? Hard-working families deserve fairness in their retirement, and I am sure that she will give them a fair hearing.
Rachel Reeves
I am very pleased that we were able to make this multi-year commitment on coal tip safety. The Government provided money for this in last year’s spending review, but that was for just one year, and today we have been able to give certainty that money will be available for the vital work that is necessary. I thank my hon. Friend for welcoming it; it is a shame that Plaid Cymru did not.
My hon. Friend has been a staunch supporter of reform of the miners’ pension scheme. We made reforms in the Budget last year, but I will ensure that the relevant Minister meets him to discuss what more we can do to secure a fair pension for miners in retirement.
Sarah Olney (Richmond Park) (LD)
London Members were hoping to hear more about infrastructure investment in the capital today. We are looking for spending on the Bakerloo line extension, and spending to deal with the Croydon bottleneck. I even dared to dream that Hammersmith bridge might one day be fixed, but all we have heard from the Chancellor is her reiterated support for the expansion of Heathrow airport. As she will know, Heathrow expansion is opposed by every political party in the capital, and by the Mayor of London. It is not welcome. The negligible economic benefits of expanding Heathrow do not compensate for the massive environmental and noise impact that expansion will have on many people in the capital, particularly my constituents. May I ask the Chancellor to look again at her support for Heathrow, and consider the greater merits of many other infrastructure projects across London?
Rachel Reeves
The hon. Lady started that question wanting to be a builder, and ended it by being a blocker. I suppose that is not surprising, given that the Liberal Democrats voted against the Planning and Infrastructure Bill yesterday, while we Labour Members supported it, because we want to get Britain building and to create prosperity and wealth in all our communities. In today’s spending review, we have provided an integrated settlement for the Mayor of London and a multi-year settlement for Transport for London. We have also supported expansion at City airport, and we have an in-principle commitment to expansion, and a second runway, at Gatwick. This Government are backing London, but most importantly, we are a Government for the whole country. That is why we have announced significant investments across the UK today, which are much needed.
Claire Hanna (Belfast South and Mid Down) (SDLP)
The SDLP’s priority continues to be funding Northern Ireland on the basis of need, and I urge the Government to take focused action, so that we can have sustainable public services and, hopefully, stable politics that will start to deliver for health and education and deal with the squeeze in housing and childcare.
I warmly welcome the funding allocation for Casement Park, which represents much more than just a stadium. It is a home for Ulster’s Gaelic Athletic Association, to match the wonderful homes that we have for soccer and rugby in Northern Ireland, and it is a flagship venue for west Belfast and an economic opportunity for the whole city. Does the Chancellor agree that, while there is a way to go to secure the funding for the stadium that the GAA’s hundreds of thousands of supporters and volunteers deserve, the onus is now on the Stormont Executive—on Sinn Féin, the Democratic Unionist party and the Alliance party—to get moving, end a decade of dither and delay, and finally get Casement Park built?
Rachel Reeves
This Government have provided £50 million in the spending review today, but we have also, I hope, done much more for Northern Ireland, providing a settlement that is a record since devolution, as well as significant investment in our defence sector. Northern Ireland has a proud history of producing for the UK’s defence needs.
Martin Vickers (Brigg and Immingham) (Con)
Of course I welcome the continuing support for Scunthorpe steelworks, but may I gently remind the Chancellor that that support came seven months after I first raised the issue in the House, and we then had the panic of the Saturday sitting in April?
The Chancellor mentioned support for the Viking carbon capture and storage project, for which, again, I have lobbied for a long time. Can she give me a little more detail about the timeframe?
Rachel Reeves
I thank the hon. Gentleman for welcoming what we did with British Steel in Scunthorpe. I know that he has been a strong voice advocating for British Steel there, unlike some of our late arrivals in another party. As for Viking CCS, I was very pleased to announce that funding today, along with the Acorn investment in Aberdeenshire. The Energy Secretary will set out, in due course, the timing and the money available, but after our investment in CCS in Merseyside and Teesside at the end of last year, we are now in a position to provide a second tranche in Aberdeen, and also in the Humber.
Yasmin Qureshi (Bolton South and Walkden) (Lab)
I thank the Chancellor for all her commitments to spending on education, health and transport, but I thank her particularly for the £39 billion that she has committed to housing. In my constituency, thousands of families are still waiting for social homes, and about 20,000 people are now on Bolton’s housing waiting list. May I ask whether some of that money could be used to build more social housing in areas like mine, so that we can meet the needs of our constituents?
Rachel Reeves
My hon. Friend speaks powerfully about the desperate need for more social and affordable homes in all our communities, including those in Bolton. That multi-year commitment and £39 billion of investment will help us to build the social and affordable homes that our country desperately needs, and the Ministry of Housing, Communities and Local Government will work with local authorities to bring forward those plans and get Britain building the homes that we need.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
What is most interesting about the spending review is what is not mentioned: there is no mention of the River Thames scheme, no mention of our rivers, no mention of the Animal and Plant Health Agency in New Haw, and no mention of improvements to rail, despite the nationalisation of South Western Railway. In fact, there is almost no mention at all of the south-east, despite the Chancellor saying that this a spending review for the whole UK. However, she has effectively confirmed the third runway at Heathrow, despite there being no local engagement. May I invite the Chancellor to come to Runnymede and Weybridge to meet people and see if their priorities are indeed hers, as she claims?
Rachel Reeves
It is difficult to understand exactly what the Conservative critique of this spending review is. The shadow Chancellor says that we should spend less, but the hon. Gentleman has just asked us to spend more. If hon. Members on either side of the House want to spend more, they need to say where the money would come from. I am not sure that he has an answer to that.
Lola McEvoy (Darlington) (Lab)
I welcome the Chancellor’s statement and her steely determination to ensure that everyone in Darlington is better off. I particularly welcome the capital infrastructure projects, which are essential not only for sovereign security but for regional growth. Does she agree that these projects will be transformational for engineering and fabricating SMEs in my constituency, many of which were set up and are staffed by incredibly highly skilled people who found themselves out of a job when the last Government turned their backs on British foundation industries?
Rachel Reeves
My hon. Friend is absolutely right: what this spending review does, through its investment in infrastructure, is create jobs in our supply chains for small businesses in communities right across our country. The investment in some of our foundational industries, such as steel, offers real opportunities for good, unionised jobs that pay decent wages, and I am really proud to be able to set out that investment and the jobs that young people in Darlington and around the country will be able to access because of the choices we have made today.
Chris Coghlan (Dorking and Horley) (LD)
As the Chancellor knows, our economy will only escape its difficult place if we raise economic productivity. On the Treasury Committee, I introduced the Chancellor to London Business School’s Paolo Surico’s research on how using public R&D, and especially defence spending, can help us to do that. In the spring statement, the Government used Professor Surico’s research to upgrade long-term GDP forecasts by £11 billion a year—that is how we pay for it. I strongly welcome the Government’s commitment to investing in public R&D in the spending review, but how will the Chancellor follow through to ensure that the R&D will be used to crowd in and stimulate public investment—especially from the more innovative, high-tech start-ups and venture capital firms—which is necessary to realise the potential of Professor Surico’s research?
Rachel Reeves
Every £1 of Government investment in R&D crowds in £2 of private investment and returns £7 of benefit to the wider economy. That is why we have put £86 billion of investment into R&D over the course of this spending review.
Imran Hussain (Bradford East) (Lab)
Madam Deputy Speaker, I am sure that your constituents, my constituents, the constituents of my hon. Friend the Member for Shipley (Anna Dixon), and indeed the Chancellor’s constituents, will greatly welcome the £2.1 billion for a new tram and a new bus station in Bradford, as well as the billions for social and affordable housing, which is much needed. However, the Chancellor will know that over half of all children in my constituency are still growing up in poverty, which is true of many hon. Members’ constituencies. Child poverty is not a statistic; it is a national disgrace. It is a direct result of 14 years of ideological austerity under the Conservatives. Today’s statement is a step in the right direction, particularly with the announcement that half a million more children will be eligible for free school meals, but frankly it does not go far enough. Will the Chancellor tell me what further measures this Government will announce to alleviate and finish child poverty, including scrapping the two-child limit, which continues to put thousands of children into poverty?
Rachel Reeves
I appreciate my hon. Friend’s welcome for the £2.1 billion for the West Yorkshire combined authority, which will help pay for mass transit to connect Leeds and Bradford, but also Kirklees and Calderdale. In today’s statement we were able to provide money for free school meals for 500,000 children, lifting 100,000 out of poverty, as well as continuing to roll out breakfast clubs and the warm homes programme, which will help insulate properties and bring down bills for millions of families. In addition, we have increased the national living wage by nearly 7%, and the Employment Rights Bill will ensure that more people have security and dignity at work—all part of our plan for change and lifting children and families out of poverty.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
High Speed 2 owns vast swathes of the Staffordshire countryside. In fact, it owns a third of all the properties in the village of Hopton, which is having an enormous impact on residents and causing an enormous blight. Could the Chancellor set out for the House, and for so many residents right across Staffordshire, when we will know whether farmers are going to have their land back and whether villages will be able to return to normal life, with people moving into the empty houses?
Rachel Reeves
I am sure that the right hon. Gentleman has apologised to his constituents for the total mess that the Conservatives made of HS2. We are fixing their mess and getting a grip of the project costs. Frankly, it is astounding for the right hon. Gentleman to raise HS2, given the mess they made of it.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
After almost 20 years of an SNP Government in Scotland, we have 43,000 Fifers on an NHS waiting list and a growing gap in educational achievement between kids from the richest and poorest areas. After less than one year of a Labour UK Government, we are delivering record funding for Scotland, falling energy bills, a pay rise for 8,000 Fifers, new defence jobs in Fife and, following an announcement that will be warmly welcomed by my constituents today, new investment in the renewal of Kirkcaldy town centre and the potential of our amazing seafront. Does the Chancellor agree that this is the difference a Labour Government can make?
Rachel Reeves
The work that this Labour Government are doing will reduce inequality. We are giving a pay rise to millions of workers and creating defence jobs that pay a decent wage, and GB Energy will be headquartered in Scotland. Today I have been able to announce additional investment in the seafront in my hon. Friend’s constituency, which will bring economic benefits.
Robin Swann (South Antrim) (UUP)
An NHS fit for the future—I congratulate the Chancellor and the Health Secretary on the investment in the health service in England. Given the money that has been allocated to Northern Ireland, will the Chancellor encourage the Executive to provide the same investment in the health service in Northern Ireland? The Executive have been working with single-year budgets since 2016. Does the Chancellor agree that this SR allows them to set a multi-year, recurrent budget that allows the transformation of health services and other public services in Northern Ireland?
Rachel Reeves
The hon. Gentleman makes a really important point. What we did today was not just set out money for next year; we have set out money for day-to-day spending for the next three years, and for capital spending for the next five years. Wherever people are in the UK, it is vital that local councils, the devolved Administrations and community groups can plan for the future with confidence. That is what we have done with this spending review, and I urge the devolved Administrations to do similar and make multi-year settlements in order to give certainty for the future.
Rachael Maskell (York Central) (Lab/Co-op)
Despite being the lowest-funded unitary authority in the country, we are doing everything possible to drive down inequality in the city of York, but the differential has stayed at 13 years. Today’s announcement of investment in health, investment in social housing and investment in education will make a real difference for my constituents. However, I worry about the inequality for disabled people in our country. I have looked through the statement. Will the Chancellor give assurances that if disabled people are unable to work, they will not be left behind, and that we will ensure that we have the social security they need, so that they, too, can gain from today’s statement?
Rachel Reeves
Part of the investment in the north of England is for the trans-Pennine route upgrade, which my hon. Friend and I both welcome. The investments in health and education are important, but so too is supporting disabled people, which is why £1 billion has been set aside in the spending review to help get people back to work. Many disabled people are desperate to work, if the right support is available. Of course, the social security system and the welfare state must always be there for people who cannot work, and under this Labour Government they will be.
Adam Dance (Yeovil) (LD)
I heard very little about Somerset, which is facing huge pressure on GP practices, affordable homes, SEND provision, reliable bus services and access to affordable energy. Can the Chancellor promise my constituents that Yeovil will not be overlooked, and does she believe that the decisions announced today leave Somerset council and Government Departments with enough to properly invest in communities in Yeovil?
Rachel Reeves
Let me put that right: the people of Somerset will benefit from a 3% uplift in NHS spending; the people of Somerset will benefit from free school meals for their children if they are on universal credit; and the people of Somerset will benefit from stronger defences and stronger borders through the investment that we are making. This is a spending review for the whole country, including people in Yeovil in Somerset.
Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)
The Chancellor, who visited Birmingham last week, knows that the west midlands region has the talent and ideas to thrive. A fair settlement in today’s spending review is not just support; it is a smart investment in Britain’s future. Over 26,000 people are on the housing register in Birmingham, so I thank her for doubling investment in the affordable homes programme. I also thank her for the announcement on the midlands rail hub investment, which I have been campaigning for. Does she agree that that will be transformational in delivering a decade of renewal and growth that works for everyone?
Rachel Reeves
I thank my hon. Friend for that question. We will build more housing, which is what the investment in affordable homes grants will achieve, and that goes alongside transport investment—significant transport investment—in the west midlands and Birmingham. I was very pleased that my hon. Friend joined me in Birmingham last week, when we were able to celebrate the investment to extend the Metro out to east Birmingham and then to Solihull.
Lincoln Jopp (Spelthorne) (Con)
I thank the Chancellor for her statement, but I fear that she may have misunderstood the question that my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) asked about the River Thames scheme. He asked whether the scheme is included in the £4.2 billion TDEL—total departmental expenditure limit—over three years referenced in paragraph 5.121 of the review. The Chancellor replied that my hon. Friend wants to put up expenditure and will not say where it is coming from, but both he and I are asking this: is the Environment Agency’s half of the River Thames scheme—Surrey county council pays the other half—funded from the £4.2 billion TDEL that she has announced today?
Rachel Reeves
The allocations have been made to Government Departments, and the Treasury is not going to micromanage every scheme, so it will be up to Departments to allocate the money in the way they choose. I am sure that the Transport Secretary will come to the House and set out those plans.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
The spending review says that there will be a report from the Office for Value for Money on temporary accommodation and the terrible waste of money going into poorly procured temporary accommodation. Some 90,000 children live in temporary accommodation in London. Does the Chancellor agree that the £39 billion for new, genuinely affordable homes, combined with that review of the cost of temporary accommodation, is really positive for all children living in London who, sadly, do not have a permanent home into the future, and does she agree that this will make a transformational change in London?
Rachel Reeves
My hon. Friend has spoken to me powerfully on many occasions about how much Westminster city council has to spend on temporary accommodation, which is why the investment in affordable homes grants is so important—and not just for London, but for the whole country—but there are specific issues. As I said in answer to my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), there are particular challenges in London because of the extraordinarily high house prices and rents. This investment in affordable and social housing can have a big impact in London. Combined with the additional money for free school meals, the roll-out of breakfast clubs and the increase in the national living wage, this is a spending review to benefit people across the whole country, including in Westminster and London.
Josh Babarinde (Eastbourne) (LD)
Fellow Eastbournian Mark Tonra and I were gravely ill together in the same ward at Eastbourne district general hospital last year. Harrowingly, because of the outdated and outgrown hospital buildings at the DGH, Mark watched from his bay as a patient opposite him died, and other patients watched Mark deteriorate, with only a flimsy curtain to protect his dignity, before he himself died. The delay to our new hospital will mean that many more Eastbournians will face this indignity until it is fully rebuilt come 2041. Short of heeding my town’s calls to unlock that investment sooner, will the Chancellor at least confirm to local families such as Mark’s and to my NHS trust that her NHS capital expenditure will specifically be able to fund the 98% unmet cost of our maintenance backlog in Eastbourne to help more patients get the care and dignity they deserve?
Rachel Reeves
I thank the hon. Gentleman for speaking powerfully about his experience and the experience of his constituents. After the 14 years and the broken promises of the Conservative party, our hospitals are not in a good enough condition. That is why we have set out the new hospital buildings programme, but it is also why we have put aside money in the spending review for improvements to hospital conditions in the meantime. I will make sure that the relevant Health Minister meets him to talk through what that means for people in Eastbourne.
Chris Webb (Blackpool South) (Lab)
Today’s announcement is a great day for Blackpool, which was mentioned more than any other place in the country. The Chancellor will know the issues we face from when she joined me in Blackpool last year and saw for herself the deprivation and the damage that 14 years of the Tories did to our town. Will she confirm that this is just the start and the beginning of new investment for deprived areas such as Blackpool across the country now that we have a Labour Government and a Labour Chancellor in charge?
Rachel Reeves
I thank my hon. Friend for that question, and he always passionately argues the case for Blackpool. Yes, there is deprivation in Blackpool, but there is also huge opportunity, which is why we are backing Blackpool with the investment we are putting in through the spending review.
Jim Allister (North Antrim) (TUV)
Why does the Chancellor think it appropriate to pledge £50 million on a preferential basis to a sporting organisation that has a political objective as its first and defining attribute, and that has named some of its sports grounds and trophies after IRA terrorists who brought such death and destruction to Northern Ireland, while other organisations are required to make do with what they were allocated in 2011? Does the Chancellor not see and agree that £50 million would make a far better contribution to meeting the housing needs, particularly for social housing, and the sewerage infrastructure needs that in my constituency have brought much of the building of new housing to a halt? What is the priority when matters like that are ignored?
Rachel Reeves
Alongside the investment at Casement Park, we have also made record investment, with a record settlement for the Northern Ireland Executive, in the announcements we have set out today. In addition, there is substantial investment in the defence sector, including in Northern Ireland. So there is plenty of money going into Northern Ireland, and it now needs to be spent wisely.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I commend the Chancellor on her statement, and I pay tribute to her, and to my right hon. Friend the Welsh Secretary and all my Welsh Labour colleagues for their advocacy in standing up for Wales at this spending review. I particularly welcome the investment in coal tips, which will be really important in constituencies across Wales, and in rail, with £445 million to turn the tide on 14 years of under-investment by the Conservatives, of whom four are left on the Opposition Benches. As she is here, can I take this opportunity to ask her whether, given the substantial rail investment that has been announced, she will use her good offices to support a campaign in my constituency for Ely Mill station to be built? Now all the stakeholders have the money they need, they can get on with it, can they not?
Rachel Reeves
Well, we did announce two new railway stations in Wales today with that £445 million. In the 10-year infrastructure strategy, which we publish next week, we will be setting out more details of investment right across the UK. I am pleased that my hon. Friend welcomes the £118 million for the coal tips work, which I know is so important and which so many Welsh Labour MPs have lobbied me about over the last few months. I am pleased that we can deliver for their communities in Wales.
Vikki Slade (Mid Dorset and North Poole) (LD)
I declare an interest as a sitting councillor. Local government will be pleased to see an increase in spending and to have clarity but, alongside social care, we have no clarity on another area that will sink councils: the statutory override on special educational needs. That was promised time and again, and we were hanging our hats on having it today. Will the Chancellor tell us what is happening and can we give security to councils on special educational needs?
Rachel Reeves
The hon. Lady makes a really important point. Every single MP in this House will have heard harrowing stories of parents desperate to get support for their kids with special educational needs. The Secretary of State for Education will be bringing forward a White Paper to make the reforms that are desperately needed. We will make sure that we do that in partnership with the parents and children who are most affected.
Chris McDonald (Stockton North) (Lab)
The Chancellor of the Exchequer may remember that the last Conservative Prime Minister boasted about moving funding from Teesside to Royal Tunbridge Wells. I am pleased to see that her statement plugs places such as Stockton North back into our economy. I thank the Chancellor for agreeing to make Stockton central one of the trailblazer areas, investing in our local facilities and tackling fly-tipping and graffiti. Does she agree that the statement shows that our Labour Government are providing jobs for working people, providing homes for working people and providing opportunities for our young people?
Rachel Reeves
I am pleased that Stockton will be benefit from some of those investments, because pride in place is so important for all our communities. Some of the most deprived parts of the country have missed out on funding for too long, which is why we are pleased to be able to rectify that and ensure, for example through the Green Book reforms, that money goes to where it is most needed.
Sammy Wilson (East Antrim) (DUP)
First of all, I welcome the fact that, at least in real terms, the Northern Ireland budget has been maintained over the spending period, although I would point out to the Chancellor that a 0.5% real increase will not enable the Northern Ireland Executive to match the real increase in spending on health and policing which will be taking place in the rest of the United Kingdom.
May I emphasise again the preference that she has given in this budget to money for a Gaelic Athletic Association ground? In blundering into this issue, she has given the Executive a massive financial headache. She requires £50 million to be matched by funding elsewhere. The Executive will be required to find about £200 million to make up the deficit, raising expectations and, I believe, creating tension within the Executive as a result. I think it was wrong for her to try to interfere in the minutiae of spending of the Executive in that way. As a general point, maybe in the autumn many people who welcome the headlines today will be regretting the tax increases they will face to pay for the announcements today.
Rachel Reeves
The announcements today are all within the envelope that I already set out through the tax increases and the changes to the fiscal rules in autumn and then the decisions in the spring statement. All we have done today is allocate the envelope that we already set out. As I said at the time, public services would now need to live within the means that we have set at that Budget. This statement does not spend a single penny more or a single penny less than the money that was already allocated.
On the specific issue the right hon. Gentleman raises, I am very happy to pass on what he says to the Northern Ireland Secretary and to ensure that there is a meeting between the relevant Minister and the relevant Members of Parliament.
Andy MacNae (Rossendale and Darwen) (Lab)
I wholeheartedly welcome this statement. It is a true Labour package that backs Britain and reverses years of declinism under parties on the Opposition Benches who seem to have given up on Britain. I particularly welcome the results of the Green Book review, which will get investment into the places that need it most. In that regard, does the Chancellor agree with me that, while big projects and city schemes will get the headlines, it is vital that the full benefits of renewal are felt in small towns like those that make up my constituency of Rossendale and Darwen, and that these previously left behind places must be at the forefront of our thinking as we develop local transport and infrastructure delivery plans?
Rachel Reeves
My hon. Friend is one of many MPs who has spoken to me about the need to reform the Green Book. I thank him for feeding in his concerns about the ways in which the Treasury has previously looked at requests for investment. I am pleased for the people of Rossendale and Darwen that we can start making a difference to the communities that were forgotten about for 14 years under the Conservatives. I was also very pleased to be in his constituency at the end of last year to open the 100th banking hub on a local high street.
John Milne (Horsham) (LD)
I welcome the Government’s decision to widen access to free school meals—a long-standing Liberal Democrat policy—but Castlewood primary school in my constituency tells me that it is currently losing 56p for every single meal it provides. Will the Chancellor undertake to fully fund school meals, or else is she asking schools to choose between teaching and eating?
Rachel Reeves
I am really pleased that what we have set out today will lift 100,000 children out of poverty by providing free school meals to an additional 500,000 children. Real-terms funding for schools is increasing and real-terms funding per pupil is increasing to ensure that schools are able to provide the free school meals and the teaching that our children need.
Matt Bishop (Forest of Dean) (Lab)
I thank the Chancellor for announcement of the extra funding for crumbling schools. As we know, schools across the country were left to fail under the 14 years of the previous Government. How can establishments such as Forest high school in my constituency, which is literally crumbling day by day and at serious risk of closure, access the vital funds so we can provide the service required by students in the Forest of Dean?
Rachel Reeves
I thank my hon. Friend for raising those concerns about schools in the Forest of Dean and that school in particular. The state that schools are in after 14 years of Conservative Government is just not good enough. After what they did in the ’80s and ’90s, I did not think that even a Conservative Government would leave schools in this state. Many MPs will be able to talk about examples similar to my hon. Friend’s from their constituencies. I will ensure that the Department for Education and the Education Secretary hear about the specific case that he raises, because we want to improve the conditions that our young children are taught in.
Gideon Amos (Taunton and Wellington) (LD)
I thank the Chancellor for her statement. As well as freeing people up by tackling the social care crisis, the real way to get the growth we all want is a target for publicly funded social homes—albeit, I welcome the funding that has been found for housing—and funding for the infrastructure that communities want, which will unlock tens of thousands of homes. The Wellington and Cullompton stations project was something I raised with the Chancellor last summer. She said at the Dispatch Box that it would be going ahead, because it had started. That project will bring £180 million of growth to the Cardiff-Bristol-Exeter corridor and generate hundreds of new jobs. Are my constituents right—a genuine question to the Chancellor—to be dismayed that there is no mention of any south-west projects in the statement today?
Rachel Reeves
Last week, we set out additional money for the Mayor of the West of England, and today we have announced a fourfold increase in local transport funding, which will be available for communities across the country. The hon. Member says that he wants to grow the economy—it is disappointing that the Liberal Democrats voted against the Planning and Infrastructure Bill yesterday, which will do exactly that.
Yuan Yang (Earley and Woodley) (Lab)
I strongly congratulate the Chancellor on the impact she has already had by reforming the way the Treasury works, in particular to unlock the capital investment that we need for the future of our economy. I also commend her for her commitment to future generations through her funding for schools and the extension of free school meals. Will she continue to work with the Treasury to change the way it appraises the benefits of human capital investment to ensure there is sufficient funding, particularly for early intervention in special educational needs and disabilities in local authorities like mine in Reading and Wokingham?
Rachel Reeves
I thank my hon. Friend for welcoming the reforms we have introduced at the Treasury—the reform to the fiscal rules to unlock money for investment, the reform of financial transactions to enable more money to be spent through public finance institutions, and particularly the reform of the Green Book. She is absolutely right to mention the importance of human capital, which is why we have announced in the spending review significant investment in skills and in the early years to ensure that children are ready for school.
Mr Will Forster (Woking) (LD)
As the MP for Woking, I represent the most bankrupt and indebted local authority in the country. I was very disappointed, therefore, that it appeared that the Chancellor did not mention councils or local government once in her statement. I am more disappointed, having listened to the detail of the statement, that the Government are investing only an extra 1.1% in local government next year and the year after. What does the Chancellor say to councils across the country and to my constituents in Woking to justify that lack of investment?
Rachel Reeves
This Labour Government are giving real-terms increases in spending to local authorities every year. Compare that with the Conservative-Liberal Democrat Administration from 2010 to 2015 that cut real spending by 2.9% every year. I am much happier to stand on my record as Chancellor than I would be to stand on what the Liberal Democrats did when they had a chance at being in government.
Anna Dixon (Shipley) (Lab)
I thank the Chancellor for listening to the priorities of people in my constituency and across the country and investing in our schools. It was great to see free breakfast clubs in action at Baildon Glen and Beckfoot Priestthorpe schools recently, and I am delighted to hear today that the Labour Government will be putting in some £2.3 billion to fix our crumbling schools, having recently visited Eldwick primary school, where pupils are being taught in a temporary building with half the school out of action due to reinforced autoclaved aerated concrete. Can the Chancellor reassure the pupils at Eldwick that they will finally be able to get back to their classrooms?
Rachel Reeves
I thank my hon. Friend for the passion with which she speaks about schools, which is something I very much share. That is why we are rolling out breakfast clubs at primary schools and introducing free school meals for all children whose carers are on universal credit; it is why we are putting in real-terms increases for school funding and per-pupil funding; and it is why we are addressing the terrible situation of children being taught in temporary classrooms and crumbling schools. I will ensure that the Department for Education hears about the experience in Shipley to hopefully ensure that that school is on the list.
Deirdre Costigan (Ealing Southall) (Lab)
A woman came to my surgery in Ealing Southall last Friday and showed me photos of the one bedroom she shares with her four children. The five of them share beds and they live with black mould on the walls. All the kids have been hospitalised, no doubt because of related bronchial infections. It is temporary accommodation, but she has been there 10 years. That is not unusual. Does the Chancellor agree that today’s record £39 billion investment in social and affordable homes marks an end to Conservative austerity and an end their failure to build, and that it will finally give hope to families stuck in damp, overcrowded flats in London and across the country?
Rachel Reeves
Stories like that are exactly why the Deputy Prime Minister and I have prioritised investment in affordable homes. Nobody should have to live in those conditions in the 21st century—and, with the reforms we are making and the money we are putting in, they will not have to for much longer.
Adam Thompson (Erewash) (Lab)
I thank the Chancellor for her statement today. I welcome all the choices she has made, but especially the investments in Derby and the wider east midlands, which will be an enormous boon to my constituents in Erewash. I also warmly welcome her commitment to ending the use of asylum hotels in this Parliament. The Tory party let the asylum system get completely out of control. Does the Chancellor agree that investment now will result in savings of billions as the system is fixed?
Rachel Reeves
The investment we are putting into Derby and Nottinghamshire is significant, with small modular reactors, investment in defence and investment in fusion, creating good jobs and paying decent wages right across the east midlands. I do not think that taxpayers’ money should be used to pay for asylum hotels, which is why we are reducing the cost of asylum accommodation by around £1 billion during the course of this Parliament and ending the use of asylum hotels.
Andrew Lewin (Welwyn Hatfield) (Lab)
It is a source of pride to see a Labour Chancellor announce such a transformative programme for social housing. My hope is that the boost to the affordable homes programme can be used to unlock stalled projects like those in Welwyn Garden City, in my constituency, where the Metropolitan Thames Valley development adjacent to the station needs to get motoring. I thank the Chancellor for her investment today. Does she agree that our message to councils and housing associations is, “We back you—now it is time for you to build”?
Rachel Reeves
The changes we have made to the planning system and the changes we are making through the Planning and Infrastructure Bill provide the opportunity to build. Today, we have backed those opportunities with money through the affordable homes grant to ensure that a good proportion of social and affordable housing is included in that, for all the reasons that hon. Members have mentioned. On the particular issue of housing around stations, there is huge potential there. The infrastructure is there—we want to have the housing there, too.
Dr Lauren Sullivan (Gravesham) (Lab)
I thank the Chancellor for the spending review. Local austerity is over—after being a local councillor for nearly a decade, I thank her for that. Labour-led Gravesham council has given thousands of permissions for stalled brownfield sites, many of which are needed for the homes that we need in Gravesham. I seek reassurance from the Chancellor that this can be supported by Homes England to deliver and retain council, social and truly affordable homes for our community.
Rachel Reeves
I know that there is great need for affordable homes in Gravesham. With today’s spending review, as well as the planning reforms we have introduced and continue to introduce—opposed, I think, by all the Opposition parties—we can get those homes built for families in Gravesham.
Jack Abbott (Ipswich) (Lab/Co-op)
I welcome the huge raft of announcements today, not least the announcement that we will expand free school meals, which will benefit 6,500 children in Ipswich. I also want to celebrate the enormous, multibillion-pound green light for Sizewell C. We all know its national importance, from energy security to powering 6 million homes, but I cannot overstate the difference it will make in Ipswich and Suffolk, particularly to our young people, who now have the promise of a skilled, secure and well-paid job. I thank the Chancellor from the bottom of my heart for the investment in my town and county. Can she expand on how else the new age of nuclear will benefit our whole country?
Rachel Reeves
The Prime Minister was in Ipswich yesterday with my hon. Friend to visit a local college. He came back from that visit even more determined to crack on and build Sizewell nuclear power station in Suffolk because of the impact it will have not just on bringing down bills, but on bringing good jobs to Britain—good jobs through the supply chain—and on giving young people their hope and future back, knowing that they will have good jobs in the places they live, where they can make a career for themselves and bring prosperity to their families and communities.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I know that my constituents across Bexleyheath and Crayford will welcome the investment that the Chancellor has announced today for new and affordable housing. The Government have set an ambitious target of 1.5 million homes, including 88,000 across London. To reach those targets, we will need investment not just in affordable homes, but in new transport infrastructure. Projects such as the docklands light railway extension to Thamesmead, for example, is forecast to unlock up to 40,000 new homes in brownfield sites across two of the most deprived boroughs in London. Will the Chancellor reaffirm the Government’s support for this important project and commit to providing funding for it?
Rachel Reeves
As my hon. Friend is aware, Bexleyheath and Crayford is a part of the country that I know well. It has huge potential for more homes and more investment. We have set a budget for the Department for Transport. We will set out the 10-year infrastructure plan next week to unlock further investment—both public and private—in housing and transport.
Antonia Bance (Tipton and Wednesbury) (Lab)
One of the first pieces of casework that I picked up was from a young woman pushing her two children through central Wednesbury. We moved to the side and she told me that she was in temporary accommodation, and then she showed me the insect bites up her arm. In my council area, there are 21,000 people on the housing waiting list and nearly 550 families in temporary accommodation—awful, substandard bed and breakfasts, from which it takes multiple buses to get the kids to school. Will my right hon. Friend confirm that our share of the £39 billion for council and social housing is coming to Tipton and Wednesbury and Coseley, to the Black Country and to the west midlands to build the homes that our local families need?
Laurence Turner (Birmingham Northfield) (Lab)
I was delighted to hear the official commitment today to backing the midlands rail hub. I thank the Chancellor and the Transport Secretary for listening to the, at times, persistent representations in support of this essential project. We inherited a set of engineering plans with no money behind them. Now there is a chance to turn them into something real, and that is good news for Birmingham and for the economy of the west midlands.
At the centre of those works is Kings Norton station in my constituency. We need the works there to unblock the cross-city line. On a matter of literary heritage, Kings Norton is also the birthplace of Thomas the Tank Engine—the Reverend Awdry lived a few yards down the road. Would it not be a great tribute if spades could go in the ground for the 80th anniversary next year? Will the Chancellor and her officials work with local representatives so that we can understand which of those individual projects are going to be started first and finally restore Kings Norton station to its former glory?
Rachel Reeves
I once spent a day at Thomas the Tank Engine world. I hope that the trains and the tram lines that we are going to be investing in will be a little less talkative and a bit more productive. The reason I mentioned my hon. Friend in my speech today is that he has persistently lobbied for the midlands rail hub, and we are very pleased as a Government to be able to make that commitment today, which will benefit his constituents and many others as well.
Kevin Bonavia (Stevenage) (Lab)
Today’s spending review is a great big boost for the defence and life science sectors in this country. My constituency of Stevenage is a national hub for both those sectors. This morning, I visited the Cell and Gene Therapy Catapult with the Minister of State for Science, Research and Innovation, Lord Patrick Vallance. Last week, my right hon. Friend the Secretary of State for Defence visited MBDA to see the Storm Shadow missiles being fitted out for Ukraine. Today’s extra investment will be hugely welcomed in my town of Stevenage. Young people want those new jobs. When can they expect to see the benefits of that new investment?
Rachel Reeves
There are huge opportunities in Stevenage, both in life sciences and in the defence sector, to take advantage of the investment that we are putting in—whether that is in research and development or lifting defence spending to 2.6% of GDP in the next two years. I know that businesses, working with their tireless local MP, will make sure that that investment gets to Stevenage.
Sam Rushworth (Bishop Auckland) (Lab)
A third of children in Bishop Auckland live in poverty, so I welcome today’s spending review, which set out how they will benefit not just from the free breakfast clubs, but from the extension to free school meals, warmer homes, more access to sports and the arts, and their parents getting the pay rises that they deserve under this Labour Government. But many of those children live in deprived neighbourhoods, which have seen big cuts to social infrastructure over the past 15 years, including the closure of swimming pools, youth clubs, Sure Start centres, boxing gyms and the like. I noted with interest that, on page 36, there was a reference to 350 deprived communities across the UK receiving Government investment. Will the Chancellor say more about that, because there are no figures in the spending review. If she cannot give a full answer today, perhaps I could engage with her office on this later.
Rachel Reeves
This will be a scheme operated from the Ministry of Housing, Communities and Local Government. We announced some of the neighbourhoods that will benefit from that investment today. This is not something that neighbourhoods will have to bid for; this will go to the communities that need it most. The Deputy Prime Minister will be setting out in due course all the 350 neighbourhoods that will benefit from this investment.
Joe Powell (Kensington and Bayswater) (Lab)
Under the Conservatives, London’s housing crisis escalated to dangerous levels, with one child in every classroom in temporary accommodation. I warmly welcome not only the £39 billion for the affordable homes programme, but the 10-year rent deal, the new low interest loans, and something that I have been pushing for—I can see that the Minister for Building Safety and Fire has just entered the Chamber—which is equal access to the building safety fund for housing associations, so that money can go towards improving conditions of homes and not to remediation. Can the Chancellor outline how this package will tackle London’s housing crisis, including in my constituency, which is one of the most unequal parts, not only of London, but of the country.
Rachel Reeves
I thank my hon. Friend for that question. It is good to see the Minister in his place to hear it, too. It is really important that, as we invest in the social and affordable housing needed both in our capital city and in the whole country, we are investing in the right places. That housing must have the potential not only to provide the homes that people need, but to reduce that pressure on local authority and national budgets, which, so often, are picking up the costs of previous Governments who failed to invest in social and affordable homes.
Jacob Collier (Burton and Uttoxeter) (Lab)
I, too, warmly welcome the investment in the midlands rail hub, which will mean 150 extra trains a week through Burton, and the investment in Rolls-Royce, which will produce small modular reactors and nuclear subs that will benefit my constituency and local jobs. The Chancellor also announced a huge package around transport. She will know that I have been pushing for improvements on the A50/A500 and in the infrastructure around Branston bridge. Can she say more about when we can expect an announcement on the road investment strategy?
Rachel Reeves
It sounds like it is a pretty good day to be an MP in Burton. We are pleased to be able to make those investments in the midlands rail hub and in nuclear technology. There will also be additional housing investment that will go into Burton and other places across the country. The allocation has been made to the Department for Transport, and the Secretary of State will set out her plans in due course. We will also be setting out more detail in the 10-year national infrastructure plan next week.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
Fourteen years of the Tories and 18 years of the SNP have left many Scottish high streets in desperate need of investment, including those in my constituency of Paisley and Renfrewshire South. I welcome the Chancellor’s announcement today of investing in new community funds, bringing the total UK Government direct investment in Scottish local growth funding to almost £1.7 billion. Will my right hon. Friend agree to come to Paisley to see why our high street deserves a slice of that very substantial pie.
Rachel Reeves
I thank my hon. Friend for that kind invitation. I look forward to being with her in Paisley and Renfrewshire before too long. It is the case that 14 years of Conservative Government and an additional 18 years of SNP Government in Scotland, have left many communities on their backs. The investments that we have announced—particularly with their multi-year nature—are about turning those communities around, so that more people can have pride in the places in which they live.
Mrs Elsie Blundell (Heywood and Middleton North) (Lab)
I welcome the Government’s announcement of an additional £2.5 billion in Greater Manchester. This will have a real benefit for my constituency and the town of Heywood, which will get the tram for the first time. What can the Government do, together with the Greater Manchester combined authority, to make sure that we get shovels in the ground as quickly as possible?
Rachel Reeves
I thank my hon. Friend for her lobbying; because of her efforts, Heywood will now get that metro station. Working together with the Mayor of Greater Manchester, we will ensure that the spades are in the ground quickly so that her constituents can benefit from the additional investment that this Government are putting in.
Dr Zubir Ahmed (Glasgow South West) (Lab)
It is clear from my right hon. Friend’s statement that she understands Scotland and that she has left no stone unturned in backing Scotland’s economy. Despairingly, her ambition is not matched by the SNP Government in Holyrood. Will she join me in urging the SNP Government to end their ideological blockade on the defence industry and nuclear industry so that my constituents can finally access the skills, jobs and prosperity that this Labour Government are investing in?
Rachel Reeves
In the statement today we were able to announce investment for Acorn in Aberdeenshire and for Great British Energy, headquartered in Scotland, as well as substantial investment in defence—£11 billion extra by the end of the spending review period—to keep our country and the continent of Europe safe. Scotland and Glasgow have a proud tradition in the defence sectors, but our ambition is not being matched by the SNP Government. This Labour Government are backing defence across the whole of the UK, including Scotland.
Amanda Martin (Portsmouth North) (Lab)
I thank the Chancellor for listening to me on behalf of Portsmouth residents with her commitments in today’s review to investing in building British in our defence sector, backing our SMEs, investing in our country’s security, our Royal Navy base and our NHS, and investing in the education of young people and our public services. A really important issue for my constituents is housing. With the £39 billion affordable housing pot and local growth funding targeted to reach hundreds of communities, under Labour there is now a real chance of addressing the housing need in Portsmouth. How can I work with the Chancellor and the Deputy Prime Minister to ensure that this ambitious investment is wholeheartedly embraced by my Lib Dem council, so that it is as ambitious for Portsmouth as we are, and so that we finally see action and much-needed homes for the people of Pompey?
Rachel Reeves
I think the whole House would pay tribute to the people of Portsmouth and their commitment to our country’s defence. On affordable housing, through the Planning and Infrastructure Bill and the planning reforms we have already announced, we are enabling the building of these homes. Through the £39 billon announced today, we are putting in money so that we can build social and affordable homes. It is disappointing that the Liberal Democrats do not back our planning and infrastructure reforms, because unless everyone backs those, it will be very hard to get Britain building again and to build the 1.5 million homes that people in Portsmouth and the rest of our country desperately need.
Gill German (Clwyd North) (Lab)
I warmly welcome the Chancellor’s statement and, like my hon. Friend the Member for Cardiff West (Mr Barros-Curtis), in particular the historic £445 million investment into rail in Wales. I also echo my hon. Friend’s thanks for the tireless representation of our Secretary of State for Wales and our Welsh Labour MPs. For my constituency, the investment means vital funding for Network North Wales to seamlessly connect with Northern Powerhouse Rail, bringing us closer to realising the ambitious vision of our UK Labour Government, our Welsh Labour Government, and our Labour metro mayors. Does the Chancellor agree that it is only with Labour working together that we can truly deliver for the people of north Wales?
Rachel Reeves
We finally have a Labour Government here and in Wales to work together for the people of Clwyd North and across Wales to make those investments, including the significant investments in transport that we have announced today. I pay tribute to all the Welsh Labour MPs who have lobbied me so extensively to get this investment into Welsh rail. I was left with no doubt about what the priority is for the people of Wales: transport investment and investment into coal tip safety. I am pleased to have been able to set that out in the spending review.
John Slinger (Rugby) (Lab)
In the age of anger that our opponents seek to exploit, we need a responsibility revolution. This Government have taken on that responsibility by taking tough decisions to stabilise the economy and carry out long-term reforms. Does my right hon. Friend agree that it is her responsible approach, not cakeism 2.0, Trussonomics or Reform’s fantasy economics, that enables today’s welcome investment? The investment will benefit my constituents—in healthcare, the green transition, and the defence investment that will help GE Vernova employ hundreds more people in my constituency.
Rachel Reeves
We had to make difficult decisions last year to put the public finances on a firm footing after the appalling economic management of the Conservatives sent interest rates soaring and put pensions in peril—something that was welcomed by the current shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller), and that is why he has the word “shadow” at the front of his title. Economic responsibility is essential. I set out the envelope for public spending in the Budget last year, and we have allocated that money today—not a penny more, not a penny less.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
A Labour Government, a Labour Chancellor, and a Labour plan. We have half a million children getting free school meals, huge investment into our national health service, jobs and opportunities closer to home, and £39 billion for affordable housing. This is fantastic for my community, but does the Chancellor agree that people in Gateshead and Whickham may benefit the most from the changes she made to the Green Book, and that it gives communities like mine huge opportunities for the future?
Rachel Reeves
My hon. Friend has been a big advocate of reforms to the Green Book, and after setting up the consultation in January, we are pleased to be able to announce changes today to get more investment into places such as Gateshead and Whickham in the north of England. My hon. Friend is also a big champion for free school meals. I am really pleased that in the spending review 500,000 more children will get free school meals, lifting 100,000 children out of poverty.
Lorraine Beavers (Blackpool North and Fleetwood) (Lab)
I welcome the Government’s commitment to investing in Britain’s future, tearing up the old rulebook that held back constituencies like mine for too long, but my constituents need to feel the benefits now. We need better transport infrastructure, including the reopening of our train line and more jobs. Can the Chancellor confirm that Blackpool North and Fleetwood will get the attention that the Conservatives refused to pay it?
Rachel Reeves
Blackpool will benefit from the affordable homes programme, free school meals for children and the roll-out of breakfast clubs. It also stands to benefit from the increase in the local transport grant—a fourfold increase compared with the plans we inherited from the Conservatives.
Jim Dickson (Dartford) (Lab)
People in my constituency will hugely welcome today’s statement—not just the investment in public services such as schools and the NHS and in new homes, but the commitment to investment in transport infrastructure. People in Dartford are sick and tired of living with the terrible congestion caused by the Dartford crossing as well as the collapsed Galley Hill Road in Swanscombe. Can the Chancellor reassure me that as a result of the spending review not only will families be better off, but Dartford will be helped to get moving?
Rachel Reeves
In January I gave the Government’s backing to the lower Thames crossing. We have set out the allocation for the Department for Transport and the 10-year infrastructure plan. The Secretary of State for Transport will set out more detail in due course.
Claire Hughes (Bangor Aberconwy) (Lab)
I thank the Chancellor for her statement and for what is a record-breaking settlement for the Welsh Government to invest in public services in Wales. On Wales, I understand that some Opposition Members might not be happy with the announcement, but my constituents who rely on the north Wales main line to get to work, as well as those of my constituency neighbour, my hon. Friend the Member for Clwyd North (Gill German), will be delighted. Does the Chancellor agree that investment in rail is about so much more than trains and tracks; it is about connecting people across Wales with opportunities and jobs?
Rachel Reeves
I thank my hon. Friend for making those representations to me and to the Secretary of State for Transport on the importance of better rail connections so that people in Bangor Aberconwy and across north Wales can better access good jobs and public services. That is why we have put in £445 million at the spending review.
Madam Deputy Speaker (Judith Cummins)
For the final question, I call Gregor Poynton.
Gregor Poynton (Livingston) (Lab)
I thank everyone for staying.
I warmly welcome the Chancellor’s statement, which shows that this Labour Government are investing in Scotland’s renewal. I particularly welcome the funding allocation for the Acorn carbon capture and storage project, which will unlock billions of pounds of private investment and create high-quality jobs in Scotland. May I ask the Chancellor how the project will create jobs in my constituency and support sites such as Grangemouth to thrive?
Rachel Reeves
After backing Teesside and Merseyside for carbon capture and storage last year, we are really pleased today to be able to announce tranche 2, with backing for both Acorn and Viking. We will crack on and get that investment to Aberdeenshire, as well as the investment that we are putting into Great British Energy. We know of the huge potential that Scotland has to contribute to those jobs and industries of the future in energy security, defence and so much more, and that is why we are backing Scotland with this spending review.