Chancellor Rachel Reeves has unveiled a major spending review, focusing heavily on healthcare and housing. Reeves prioritizes NHS and housing in new spending plans, allocating billions to these sectors while squeezing other departments.
First, the NHS in England will receive an extra £29bn annually. This 3% yearly rise aims to improve day-to-day operations. Additionally, £39bn over a decade will fund social and affordable housing.
Meanwhile, defence spending will increase to 2.6% of national income by 2027. However, plans to reach 3% by 2034 remain uncertain.
Although Reeves prioritizes NHS and housing in new spending plans, some departments face cuts. The Foreign Office loses 6.9% yearly, mainly in aid. Transport budgets drop by 5%, and the environment department shrinks by 2.7%.
Paul Johnson of the IFS warns these limits will strain public sector pay. Schools, especially special education, may struggle with rising demand. Beyond healthcare, Reeves pledged £280m for border security to stop small boat crossings. She also committed £7bn for 14,000 new prison spaces.
Moreover, bus fares in England stay capped at £3 until 2027. An extra £2bn boosts AI projects, while £750m funds a supercomputer in Edinburgh.
Conservative leader Kemi Badenoch criticized Labour for not reforming public spending. She warned debt interest could exceed £100bn yearly.
Reform UK’s Richard Tice called spending “out of control” and urged waste reduction. The Lib Dems demanded more social care funding, calling NHS investment “a leaky bucket.”
Reeves insists her plans differ from past austerity measures. She aims for economic growth through long-term investments. Yet, voters may grow impatient if services don’t improve quickly.
Ultimately, Reeves prioritizes NHS and housing in new spending plans, but tough choices remain for other sectors. The autumn Budget may reveal further tax hikes to balance the books.
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