Tax rises are now “very likely” following a raft of spending announcements by Rachel Reeves, a former government economist has warned.
In a speech to the Commons on Wednesday, the chancellor laid out the government’s updated spending plans across all government departments for the next four years.
She said her proposal was focused on "Britain's renewal”, as she announced big funding boosts to defence, nuclear energy projects, the NHS and transport in England’s city regions.
Shadow chancellor Mel Stride branded the spending review as a “fantasy”, while financial experts have warned that it could prompt future tax raises.
“Obviously things can and will change between now and October - but at present it looks very likely indeed that the spending totals today will mean that taxes need to go up in October so that the Chancellor can meet the fiscal rules,” former government and now Kings College London economist, Jonathan Portes, told The Independent.
In last year’s Autumn Budget, taxes were raised including a hike in National Insurance payments paid by employers and capital gains tax.
But speaking in the Commons on Wednesday, Ms Reeves said she would never “have to repeat a budget like that again”.
Key Points
- Former government economist warns tax hikes now 'very likely'
- At a glance: What has been unveiled in spending review
- Labour to end use of asylum hotels by next election
- Spending review: What’s not in after Reeves announces government budgets
- Billions for new prison places and policing announced
How will Rachel Reeves’ pledge to end asylum hotels work?
16:41 , Athena StavrouRachel Reeves has pledged to end the use of asylum hotels by 2029 as part of a spending review that saw the Home Office budget slashed.
Refugee charities welcomed the news, saying that hotels were “hugely expensive” and isolated asylum seekers from local communities, but urged ministers to move faster.
But how will the pledge work? The Independent answers below:
Labour is ‘losing control of the public finances’, says Mel Stride
16:27 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
Shadow chancellor Mel Stride has claimed Labour is “losing control of the public finances”.
He also held his hands up for the chaos under Liz Truss, saying the party “certainly made a mistake”.
“We have to recognise that but to reassure people that that will never ever happen again. And we are now going to be - and continue to be - the party of fiscal responsibility”, he said.
“Now I think that has never been more important than today. You’re seeing a labour government who are losing control of the public finances and are not behaving responsibly.
“And you’ve got Reform as well who are quite prepared to go out there and promise the earth without explaining in any credible way just how they will fund the various giveaways that they’re talking about.”
Spending review ‘beyond insulting’ to officers, Police Federation says
16:12 , Athena StavrouThe Independent’s Crime Correspondent Amy-Clare Martin reports:
The union for rank-and-file police officers has hit out at Ms Reeves police spending plans, warning officers have seen a 20 per cent real terms pay cut since 2010.
“This Spending Review should have been a turning point after 15 years of austerity that has left policing—and police officers—broken,” said Tiff Lynch, acting national chair for Police Federation of England and Wales.
“Instead, the cuts will continue and it’s the public who will pay the price.
“As rank-and-file officers kit up for night duty this evening, they’ll do so knowing exactly where they stand in the government’s priorities.
“It is beyond insulting for Cabinet Ministers to call on police to ‘do their bit’ when officers are overworked, underpaid, and under threat like never before.
“They are facing blades and bricks, managing mental health crises while battling to protect their own, and carrying the weight of trauma and financial stress home with them every day.
“Police pay has fallen by over 20 per cent in real terms since 2010. The number of crimes allocated to each officer has jumped by a third in a decade. We will lose 10,000 experienced officers a year to resignation by the end of this spending review period - driven out by poor pay and unacceptable working conditions.
“This Chancellor hasn't listened to police officers. She hasn't listened to the Home Secretary. She hasn't listened to the public's concerns about community safety.”
Wealth management advisers say Spending Review sets up Autumn tax raid – and will lead to millionaires leaving
16:01 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
The Spending Review sets the stage for a fresh wave of tax rises in the Autumn and will “accelerate” the number of high-net-worth individuals leaving the UK, wealth management firm deVere Group has warned.
Nigel Green, the chief executive, said: “Reeves is spending money she hasn’t got — and the tax reckoning will come this autumn.
“There’s simply no other path. The UK is already heavily taxed, growth is flat, borrowing costs are high, and the global appetite for gilts is thinning. The Autumn Budget is where the axe will fall.”
Starmer set to be biggest cutter of overseas aid ever
15:44 , Athena StavrouThe Independent’s Political Correspondent Archie Mitchell reports:
Sir Keir Starmer is on course to become the biggest cutter of overseas aid on record.
The prime minister slashed the international development budget to fund his plans to hike defence spending.
And now campaigners are warning it could land him with the damning legacy.
Adrian Lovett, executive director of the ONE Campaign, said: “Not only is Keir Starmer the first Labour Prime Minister on record not to increase aid spending, but he is on course to deliver the most severe cut to aid investment in other countries in decades – going further than Thatcher, Major, Johnson or Sunak ever did.
“These aren’t just numbers on a spreadsheet. This will lead to preventable deaths, diseases spreading faster and children going without vaccines. Some of the world’s most vulnerable people will pay the price for this decision, and it makes Britain less safe and strong, too.”
Rachel Reeves has set up ‘cruel summer of speculation’ on tax hikes
15:31 , Athena StavrouThe Independent’s Political Correspondent Archie Mitchell reports:
Investment platform AJ Bell has accused the chancellor of setting up a “cruel summer of speculation”, with tax hikes almost certainly on the horizon.
Head of investment analysis Laith Khalaf said “attention will now turn to what tax rises might be in the post”.
He said it is “not the Spending Review itself which will fan the flames of speculation, but the expansion of the Winter Fuel Allowance, which the government reckons will cost £1.25 billion”.
He added: “Amid growing fiscal pressure, there’s a real risk that pensions tax reform speculation, especially around tax-free cash and tax relief, will return to the headlines.”
Spending review 'huge net positive for net zero'
15:26 , Athena StavrouThe chancellor’s statement has been welcomed by net-zero backers.
Rachel Reeves confirmed funding for for nuclear power schemes during her spending review on Wednesday.
Responding to the announcements, the CEO of the UK Sustainable Investment and Finance Association (UKSIF) said it marked a “huge net positive for net zero”.
“We are pleased the government is expanding its pledge to deliver cleaner, more energy-efficient properties through its Warm Homes Plan. This will drive private investment in heat pumps and solar panels, which can save families hundreds of pounds each year,” James Alexander said.
“New funding for the Acorn Project, a carbon capture and storage facility based in Aberdeenshire, shows a massive vote of confidence in this rapidly growing industry. It also puts the country on a path to becoming a world leader, potentially unlocking billions of pounds in private investments and creating thousands of well-paid jobs in the sector.”
Defence spending hike should not be viewed as 'long term silver bullet'
15:14 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
The government's uplift to defence spending is welcome, but should not be viewed as a "long-term silver bullet", a drone defence-tech company has said following Rachel Reeves' spending review.
Jens Holzapfel, of Nordic Air Defence, urged the government to "prioritise our defence before it is too late", warning that the "heartbreaking devastation seen in...Ukraine could one day be London, or Berlin, or Paris, unless the threat is treated with the gravity and seriousness it deserves.”
The defence expert said: "Although small, the uplift to 2.6 per cent of GDP for defence spending alongside defence secretary John Healey's recognition that the UK needs to step-up its military technology is a positive move in the right direction."
However, we must ensure that this one spending uplift is not viewed as a long-term silver bullet and that it is invested in the right defence areas. It is vital we don’t fall behind the curve of states like Russia who have been harnessing tech warfare for some time now."
Boss of major health foundation says Reeves has not given the NHS enough
14:57 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
Laurie Lee, the chief executive of Guy’s & St Thomas’ Foundation said he welcomed the increase in spending directly on healthcare, investment in social housing, free school meals and clean energy which he said will "help deliver better health for all of us".
He added: “These are encouraging steps in the context of some tough spending decisions. But spending on these alone will not be insufficient to meet the growing demands on the NHS.
“Prevention is better than cure – and it is about more than the money. The roots of our health sit outside the NHS and the government can have a greater impact by ensuring they are addressing the issues that make people sick – from regulating unhealthy food, ensuring we have clean air to breathe, and affordable good quality homes to live in.
“As the government purse closes for now, these measures have greater potential to give Treasury and taxpayers more bang for their buck when it comes to creating a healthier society.”
New road and airport plans will wreck climate plan, green activists warn
14:48 , Jane DaltonSpending on new roads and airports risks sabotaging a climate plan ministers are due to unveil later this year, Friends of the Earth has warned.
Mike Childs, head of policy at the charity, welcomed investment into warm homes, buses and trains, but said the government must go further and faster.
“Ministers must publish a new climate plan later this year to deliver on legally binding targets and international commitments, but it risks being undermined by spending on new roads and airports while climate solutions face under-investment," he said.
“Despite modest investment in environmental farming, trees and peatland restoration, the reality is that Defra is still underfunded, farmers need more money, and planning reforms that strip away wildlife protections will accelerate nature's decline."
Home Office to slash costs through 'use of AI'
14:47 , Holly BancroftUnder efficiency plans published by the Treasury, the Home Office will be expected to save £533m per year by 2028-29.
This will be achieved though "reducing the use of third-party resources" and "increased automation and use of AI".
The document says that cuts will be achieved through "increased automation and use of AI to reduce reliance on manual processes so staff time can be focused on more complex tasks".
Economic think tank: Spending alone will not boost living standards
14:45 , Archie MitchellThe New Economics Foundation has warned that a spending splurge alone will not be enough to boost the living standards of struggling households.
Chief executive Danny Sriskandarajah said: “People across the country are already struggling to pay for the essentials, and we know that cuts to benefits and day-to-day spending in key departments will only leave people feeling worse off. Voters have already shown this is not something they will tolerate.”
He called on Rachel Reeves to ditch her self-imposed fiscal rules and impose a wealth tax to boost funding for public services.
Former government economist warns tax hikes now 'very likely'
14:21 , Millie CookeIt is very likely that the chancellor will be forced to raise taxes in October in order to balance the books, KCL economist Jonathan Portes has warned.
He said this is most likely to include an increased to taxes on savings and pensions, and possibly fuel duty.
“Obviously things can and will change between now and October - but at present it looks very likely indeed that the spending totals today will mean that taxes need to go up in October so that the Chancellor can meet the fiscal rules”, he told The Independent.
The former government economist welcomed the both the boost to social housing and investment in transport infrastructure, but added: “The best time to make these investments would have been a decade ago - when the government could have borrowed money at much lower rates than now - but the next best time is now.
“However, the counterpart to that is that some public services face very tight settlements and the government is relying on efficiency savings/productivity gains to improve service quality.”
Outgoing boss of the IFS reacts to The Independent's John Rentoul's comment on spending review
14:18After Rachel Reeves’ spending review was delivered to the House of Commons, The Independent’s chief political commentator, John Rentoul, responded with a post on X that said: “She’s finished. But she hasn’t said anything.”
Paul Johnson, the outgoing head of the Institute for Fiscal Studies, responded with his own disappointment at the chancellor’s speech.
He said: “Not sure I’ve ever listened to a chancellorial speech so hard to work out what is happening. Rattling off huge number of figures making it look like big increases in spending on everything.”
She's finished. But she hasn't said anything
— John Rentoul (@JohnRentoul) June 11, 2025
Reeves promises to 'never have to repeat' last year's Budget
14:12 , Alex RossTax rises were made last year but Rachel Reeves told the Commons she “will never have to repeat a budget like that again”.
She said said: “There will be a budget later this year and in that budget, we will set out in the round all of the fiscal plans, 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 party opposite made.”
Labour must seek a deeper trading relationship with Europe - Lib Dems
13:53Lib Dem’s Daisy Cooper says she welcomes the announcement in the increase in funding for the NHS, but says it “won’t work” unless Labour also invest in social care.
She says her party welcomes additional spend in infrastructure, but says government also needs to invest in skilling up workforce to build it.
She says cuts to departmental budgets is “unnecessary” when the government should instead “go for growth” and get a much deeper trading relationship with Europe, a move, she says, would raise an extra £25bn a year.
Has Rachel Reeves got the balance right in her first spending review? Join The Independent Debate
13:40 , Athena StavrouRachel Reeves’ first multi-year spending review as chancellor has delivered major investment pledges in health, housing and infrastructure, but critics have raised questions and warn that “sharp trade-offs are unavoidable”.
So what do you think? Has Rachel Reeves delivered a spending review that invests wisely in Britain’s future? Or is Labour already falling short of the promises it made just weeks ago?
We want to hear from you. Share your thoughts on Rachel Reeves’ spending review in the comments and vote in the poll below – we’ll feature the most compelling responses and discuss the results in the coming days.
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Have your say: Has Rachel Reeves got the balance right in her first spending review?
Tories accuse Reeves of coming up with 'another fantastical tale'
13:38 , Alex RossMel Stride, the shadow chancellor, has been responding to Rachel Reeves’s spending review.
He claims she was forced into an emergency budget in March after “blowing her headroom” in her budget in the autumn.
“Today she comes before us again, with yet another fantastical tale that she knows will have completely fallen apart come the autumn.”
He says the UK is not left with stronger foundations, but instead “uncertainty and failure”
Chancellor has shown she is 'committed to reducing child poverty', Save the Children says
13:34 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
Save the Children has welcomed the chancellor's spending review, saying Rachel Reeves has "demonstrated she is committed to reducing child poverty".
It comes after she unveiled significant investment in social housing and expanded free school meals.
But the charity has now urged her to go further and scrap the two child benefit cap, which was notably absent from her address.
Dan Paskins of Save the Children UK, said: "The scale of investment in social homes is a gear shift for the UK government.
"Alongside expanding free school meals, the chancellor has demonstrated she is committed to reducing child poverty. We must see this mission to support children in low incomes families continue throughout Parliament."
The next step is to scrap the two-child limit and benefits cap – without this, the chancellor won’t be able to ensure every young person has an equal chance to succeed.”
Reeves says spending review will 'deliver the priorities' of the British people
13:33 , Alex Ross“This is a spending review to deliver the priorities of the British people,” said chancellor Rachel Reeves, as she concluded the spending review.
She added: “Security, 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. In place of pessimism, division and defeatism… …I choose national renewal. These are my choices. These are Labour’s choices. These are the choices of the British people.”
No change to two child benefit cap
13:30 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
After weeks of speculation, there was no change to the controversial two child benefit cap at Rachel Reeves' spending review.
It comes despite mounting pressure on ministers to lift the cap, amid warnings that as many as 100 children are pulled into poverty every day by the limit.
It is now expected that any decision on the cap will come when the government publishes its child poverty strategy in the autumn.
Re-cap: What has been unveiled in spending review
13:29 , Alex RossRachel Reeves has unveiled the results of her spending review, setting out the budgets of government departments.
Here’ are the major points from her speech to the Commons:
- Total departmental budgets will grow by 2.3 per cent in real terms
- Labour will end the use of hotels to house asylum seekers, saving taxpayers £1bn a year
- Police funding to rise by 2.3 per cent a year in real terms, helping fund 13,000 extra police officers, PCSOs and special constables
- Day to day spending in the NHS to rise in real terms by 3 per cent per year of the review period,
- Defence spending to rise to 2.6 per cent of GDP by April 2027
- Spending on affordable and social housing to increase to £39bn over the next decade with the launch of a new programme for new-builds
Spending review 2025: What’s in and what’s not after Rachel Reeves announces government budgets
13:27 , Athena StavrouRachel Reeves has delivered her first spending review as chancellor after months of bitter negotiations with her cabinet colleagues.
She has unveiled what amount to cuts for some departments, fuelling accusations Labour is returning the country to the austerity agenda pursued by the Conservatives.
But the chancellor has also splashed the cash in key areas as she bids to convince voters Labour is listening to their concerns and reverse the party’s decline in the polls.
The Independent looks at what is in the spending review, and, crucially, what is not…
What’s in the spending review and what’s not? The key takeaways
Watch: Reeves tells Commons spending review key aims
13:25 , Athena StavrouShadow chancellor grilling Reeves
13:23 , Athena StavrouRachel Reeves is now facing questions from the shadow chancellor Mel Stride.
After she finished unveiling her plans, the Tory shadow minister grilled the chancellor on her spending review.
“She presented herself as the iron chancellor, but what we have seen is the tin foil chancellor,” Stride said.
“These spending plans are a fantasy. The chancellor has to maintain this fiction because she has left herself no room for manoeuvre.”
Record cash investment into NHS, Reeves announces
13:19 , Alex RossOn the NHS, Rachel Reeves says the government is making a record cash investment into the health service.
She says this will increase real term day-to-day spending by 3 per cent a year, the equivalent of £29m.
It will mean more appointments, more doctors and more scanners, she says.
“That is what the British people voted for, and that is what we shall deliver,” she says.
NHS funding boost announced
13:18 , Athena StavrouDelivering the government’s spending review in the Commons, Rachel Reeves has announced a funding boost for the NHS.
The chancellor said that under the review, the NHS has been given a £29 billion increase in funding - a rise of around 3 per cent in real terms.
“That is what the British people voted for and that is what we will deliver,” Reeves told the Commons.
Bringing down NHS waiting times was one of Labour's key commitments. Sir Keir Starmer has pledged to ensure that by the next election, 92 per cent of patients in England waiting for planned treatment are seen within 18 weeks of being referred.
Schools budget to go up by £4.5bn a year, Reeves announces
13:16Turning to education, Rachel Reeves announces that the schools budget will go up by £4.5bn a year.
She highlights a £370m spend on school-based nursers to ensure children are “school ready”.
And she says £550m of transformational funding will go toward stopping children go into care, fi they do not need to.
Aid money shrinking as asylum housing costs spiral
13:14 , Athena StavrouThe Independent’s Global Health Correspondent Rachel Schraer reports:
Roughly a fifth of the money set aside for overseas development is being spent on housing refugees and asylum seekers within the UK this year.
It’s something charities including those helping refugees have criticised.
Rachel Reeves’ promise to end to the “costly" use of hotels for asylum seekers by the end of this Parliament could mean more money for overseas aid in the future.
But for now, the government has already set aside £2.3bn of the aid budget for the Home Office, leaving a lower amount leftover for the Foreign, Commonwealth and Development Office to spend overseas.
While this announcement will be welcomed, aid organisations have been calling on the government to act more quickly, using a break clause in contracts to end hotel use next year.
Chancellor’s ‘non-negotiable fiscal rules’ will lead to tax hikes
13:11 , Athena StavrouThe Independent’s Political Correspondent Archie Mitchell reports:
Rachel Reeves has again highlighted her “non-negotiable” fiscal rules. But a top economist warned the chancellor’s refusal to tweak the constraints can only mean one thing - tax hikes.
Stephen Millard, interim director of the National Institute for Economic and Social Research (NIESR), said: “Given the small amount of headroom at the time of the Spring Statement and the increases in spending announced since then, it is now almost inevitable that if she is to keep to her fiscal rules, she will have to raise taxes in the Autumn Budget.”
£2bn increase in spend on policing, Reeves announces
13:09 , Alex RossPolice spending power is being increased by an average 2.3 per cent in real terms a year, the equivalent of £2bn, Rachel Reeves says.
She adds: “That will support our plan for 13,000 additional police officers, PCSOs and special constables.”
She says this will “protect our people, our homes and our streets”.
£7bn announced for 14,000 new prison places
13:06 , Alex RossRachel Reeves says £7bn will be invested in funding 14,000 new prison places.
£700m a year will also go into reforming the probation system too, she adds.
She says the party needs to take the “necessary action” after years of Tory rule.
Defence spending uplift 'could not come at a more crucial moment'
13:05 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
The uplift to Britain's defence spending "could not come at a more crucial moment", a TNT manufacturer has said, warning that the UK and Europe are "lagging dangerously far behind Russia, and access to munitions is deciding the outcome of the conflict in Ukraine".
Joakim Sjöblom, co-founder and CEO of SWEBAL, said: "This failure to keep pace with Russia can no longer just be an inconvenient truth. It has to be rectified urgently. In modern warfare, procurement, supply and innovation are as crucial as troop numbers. In the words of Sir Keir Starmer: ‘the front line is here’.
"The war in Ukraine has exposed just how far behind the rest of Europe is on artillery when compared to Russia.
Currently, Moscow can access five million artillery shells per year - Europe has the capacity for less than two million."
He added: "If the worst-case scenario comes to pass, the UK and Europe’s ability to produce munitions on a massive scale could be the deciding factor between victory and defeat."
Reeves names towns to benefit from social housing
13:03Chancellor Rachel Reeves has just announced a £39bn spend on affordable and social homes.
Towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses, she says.
Reeves is making her bet on the long term - but Labour MPs may not be pleased
13:02 , Athena StavrouThe Independent’s Political Editor David Maddox reports:
The chancellor is making a lot on the government’s support for British steel and projects in the future such as a third runway at Heathrow.
The problem is that much of these promises and investments are not things which will happen before the next election.
While Ms Reeves is right that the UK needs more long term investment, Labour MPs with small majorities and a slide in the polls might want something delivered a little more quickly to take to voters.
New affordable homes programme to be launched - Reeves
12:58 , Alex RossChancellor Rachel Reeves says a new affordable homes programme will be launched, supported by the biggest cash injection in 50 years.
She says working people in the country must have 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 the opportunities,” she says.
She adds that this must include social housing, which she says has been neglected by too many decades.
“We are taking action,” she says.
Government will invest in steel works across the country - Reeves
12:54 , Alex RossChancellor Rachel Reeves pledges to not allow Scunthorpe to lose its steel factory as she says the Labour government will invest in steel works across the country.
She goes on to say that Labour backs plans for a third runway at Heathrow airport, which has signed the steel charter.
She says this is hers and Labour’s choice; to go for “things built to last, things built here in Britain”.
Labour will end use of asylum hotels by July 2029, says Reeves
12:53 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
The government will end the use of hotels for asylum seekers within this parliament, Rachel Reeves has promised – meaning they must end their use by July 2029.
Labour has been struggling to bring down the use of hotels since it took office, despite promising in its manifesto to end their use.
Figures published in March revealed that the number of asylum seekers housed in costly hotels has increased by more than 8,000 since the general election, with 38,079 migrants being housed in hotels at the end of December.
And in April, The Independent revealed the government awarded a contract which allows for hotels and barges to house asylum seekers up until September 2027, despite Labour vowing to end the practice.
What is ‘spending funded by tax receipts’?
12:50The Independent’s Political Correspondent Archie Mitchell reports:
The chancellor is talking about her day to day spending pledges being funded by tax receipts, but what does she mean?
Rachel Reeves is spelling out that the government will only fund things like the NHS and other public services with the money they take in from income and other taxes.
She has separated that from spending for long-term investment in infrastructure projects, which her fiscal rules allow her to fund through borrowing.
'We will make Britain a defence industrial superpower' - Reeves
12:50 , Alex RossChancellor Rachel Reeves go on to say that a new era in the threats faced demands a new era for defence and security.
Ms Reeves said £4.5 billion would be invested in munitions in Glasgow, Glascoed, Stevenage and Radway Green.
£6 billion will be spent on upgrading nuclear submarine production in Barrow, Debry and Sheffield.
She says: “We will make Britain a defence industrial superpower. With the jobs, the skills and the pride that comes with that.”
Defence spending to rise to 2.6 per cent by 2027
12:48 , Alex RossAs we expected, defence spending will rise to 2.6 per cent by April 2027.
In delivering the announcement, chancellor Rachel Reeves quoted Sir Keir Starmer who said the global security situation meant a “new era for defence and security” was needed.
Increased spending would lead to jobs across the UK, she added.
Analysis: Liz Truss living rent free in Reeves' head
12:48 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
Within the first five minutes of Rachel Reeves’ 45 minute spending review address, the chancellor had already made not one but two references to Liz Truss.
It comes just minutes after Sir Keir Starmer made a similar reference at PMQs.
“In their clamour to cut taxes for the rich, the Conservatives crashed our economy. They sent mortgage rates spiralling and they put our pensions in peril. I will never take those risks”, she told MPs.
Minutes later, she added: “The 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, I quote, 'the best conservative budget since the 1980s’”.
Reeves is scrambling to reignite bad memories of the Tories' time in office as part of an attempt to deflect from the difficult choices she is about to unveil – and the pain she is about to inflict on public services.
Stopping use of hotels for asylum seekers to save £1bn a year
12:46 , Alex RossChancellor Rachel Reeves says the Labour government will be stopping the cost of hotels for asylum seekers “in this Parliament”.
She says her party will cut the asylum backlog and return people who have no right to the in the UK.
This, she says, will save the taxpayer £1bn a year.
Rise in defence spending annnounced
12:46 , Athena StavrouThe chancellor has confirmed a boost to the defence budget as part of her spending review.
Defence spending will rise of 2.6 per cent of GDP as Reeves sets out the Government’s priorities for the next three years.
This means an £11bn increase in defence spending.
“That investment will deliver not only security but renewal,” Reeves said.
Pictured: Rachel Reeves delivering spending review in Commons
12:44 , Athena Stavrou
Spending will be paid for by tax receipts - Reeves
12:42Chancellor Rachel Reeves tells the House that department spending will be paid for from tax receipts.
Compared to the Tories, she says she can allocate £190bn more for day to day services.
Rachel Reeves going back to her favourite phrases
12:40 , Athena StavrouThe Independent’s Political Editor David Maddox reports:
Just five minutes into the spending review statement we are already on to three references to “working people”.
Rachel Reeves watchers also looking for for “fixing the foundations”, “economic renewal” and “plan for change”.
She is also running out a phrase she first tried last week in The Independent: “My choices are Labour choices.”
That last one is no doubt a message to ministerial colleagues like Angela Rayner and Yvette Cooper who fought her all the way over cuts.
Reeves starts by attacking previous Tory government
12:38 , Alex RossChancellor Rachel Reeves says her spending review sees a 2.3 per cent rise per year in real terms for department budgets.
She says this is in contract to Tory “austerity”.
She says austerity was a destructive choice for the fabric of society, shaking off investment and creating a lost decade for growth and living standards.
Watch live: Rachel Reeves delivers spending review
12:37 , Athena StavrouWatch live: Rachel Reeves delivers her much-anticipated spending review as the chancellor pledges to make working people “better off”:
Live: Reeves delivers spending review and pledges to make working people ‘better off’
'We are renewing Britain'
12:36 , Alex RossChancellor Rachel Reeves says she wants working people in all parts of the country to benefit from a rebuilt economy, and become “better off”.
She says: “We are renewing Britain”.
'Purpose to make working people better off' - Reeves
12:34 , Alex RossChancellor Rachel Reeves starts by saying her driving purpose is to make working people better off, rebuild schools and hospitals and reinvest in the country after Tory governance.
She says “we’re starting to see the results”.
Reeves starts delivering spending review
12:33 , Alex RossChancellor Rachel Reeves has now stood up to unveil the results of her spending review, setting out day-to-day departmental spending for the next three years and investment spending for the next four.
We're expecting her to announce an increase in funding for the NHS, education and defence - but cuts in some government departments.
Badenoch blasts ‘terrible Chagos deal’ as Mauritius announces it is scrapping income tax
12:30 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
Kemi Badenoch has blasted the government’s “terrible” deal to hand over the Chagos Islands to Mauritius, pointing to reports the country is now able to scrap income tax as a result of the UK’s payments.
“Why on earth should the British taxpayer pay for £30bn for tax cuts in Mauritius”, the Tory leader asked.
Responding, the prime minister said the archipelago is home to a “vital intelligence and strategic capability and its absolutely clear that legal uncertainty would compromise it.”
“That is why they started the negotiations. And no responsible prime minister would let that happen. We’ve secured the base for the long term. That has been welcomed by our allies, by the US, by Nato, by Australia, New Zealand, India.
“It has been opposed by our adversaries – Russia, China and Iran. And in the second column, we have Reform following Putin, and the Tories following Reform.”
Labour MP warns Reeves against ‘balancing the books on the backs of disabled people’
12:26 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
The PMQs before the Spending Review is often a boring affair, as everyone waits to hear what the chancellor will say shortly.
But Keir Starmer has just been challenged on his plans, by one of his own Labour MPs.
Richard Burgon warned the PM against ‘balancing the books on the backs of disabled people’ – a reference to expected cuts to welfare payments.
His criticism is a sign that, whatever Ms Reeves announces today, she faces difficult times ahead with her own party.
PMQs: Kemi Badenoch goes for the most sensitive issue - does Starmer have the right chancellor?
12:23 , Athena StavrouThe Independent’s political editor David Maddox reports:
The Tory leader’s parting shot in PMQs was a question on many people’s minds - does Keir Starmer have the right chancellor?
Kemi Badenoch knows that if there is one politician who has had as much speculation as she has about keeping her position it is Rachel Reeves.
With the spending review shortly to be out of the way, there has been speculation that Sir Keir will appoint a new chancellor in a reshuffle expected after the summer recess.
The question at least forced the PM to stand by his chancellor but if economic growth continues to stagnate then he may change his mind.
Starmer could ‘go on all morning’ - in the afternoon
12:21 , Athena StavrouThe Independent’s Political Correspondent Archie Mitchell reports:
Sir Keir Starmer has said he could “go on all morning” about Labour’s achievements in government - apparently forgetting that PMQs starts at midday.
It was 12.10pm when the prime minister made the claim. He could always tap up Labour peer Lord Alli for a new watch.
Calls outside parliament for a wealth tax ahead of Reeves’ Spending Review
12:19 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
Campaigners have demanded wealth taxes outside parliament ahead of expected cuts in the Spending Review.
They include groups like Tax Justice UK and MPs such as Labour’s Rachael Maskell and the Greens Sian Berry and Adrian Ramsay.
Labour is under increasing pressure over the idea after unions, who are the party’s biggest financial advisers, piled pressure on Ms Reeves to adopt it at the weekend.
Polling commissioned by the Trades Union Congress (TUC) showed a majority the public (54 per cent) back taxes on big corporations and the most wealthy individuals as an alternative means of raising revenue.
Just 28 per cent oppose the move.
TUC general secretary Paul Nowak warned ministers people were “fed up with a system where those with the broadest shoulders don’t pull their weight”.
Keir Starmer accuses Tories of having ‘learnt nothing’ from Liz Truss
12:16 , Athena StavrouThe Independent’s Political Correspondent Millie Cooke reports:
Keir Starmer has accused the Conservative Party of having “learnt absolutely nothing” from the chaos of Liz Truss, saying the former prime minister is “haunting the Tories”.
It came after Kemi Badenoch accused Sir Keir’s government of failing to balance the books, saying: “This year the deficit is forecast to be £10bn higher since the budget.”
Responding, the prime minister said: “She stands there to lecture us. Liz Truss is obviously back in vogue, advising Reform, haunting the Tories… The leader of the opposition said that what was wrong with Liz Truss’s budget was not necessarily the package but the way it was sold. They’ve learnt absolutely nothing.”
Winter fuel row has not gone away
12:13 , Athena StavrouThe Independent’s political editor David Maddox reports:
Sir Keir Starmer must have hoped never to hear the words winter fuel again after the U-turn earlier this week.
But Kemi Badenoch is only too happy to pile in on the prime minister’s discomfort.
The questions about why the winter fuel payments to pensioners were unaffordable a year ago but affordable now when the economy is worse are not going to go away easily.
The wider issue though is whether the U-turn will be enough for voters to forgive Labour for chopping the benefit in the first place.Ms Badenoch is banking on them not being in a mood to forgive.
Badenoch tees up the spending review by going after Labour’s record
12:11 , Athena StavrouThe Independent’s political editor David Maddox reports:
There were a number of routes Kemi Badenoch could have taken in PMQs today but she has gone for the subject of the day - the economy.
With the spending review just half an hour away from being announced the Tory leader is focussing on job losses going up, inflation going up and debt going up.
Sir Keir Starmer’s answer is to revert back to the old chestnut of the Liz Truss mini budget.
Badenoch kicks off PMQs with question on economy
12:09 , Athena StavrouSir Keir Starmer and Kemi Badenoch have clashed over the economy as PMQs gets underway.
Asking her first question, the Tory leader said inflation had doubled since Labour took office, and asked: “Is this what the PM meant when he tweeted the economy is improving?”
Sir Keir replied: “She’s fixated on talking Britain down. We’re investing in the future.”
PMQs begins
12:04 , Athena StavrouSir Keir Starmer is facing tough questions from the leader of the opposition as he begins this week’s PMQs.
Starmer kicked off the weekly session by wishing the speaker a happy birthday and acknowledging the anniversary of the Grenfell Tower.
Immediately after PMQs, the chancellor will deliver the highly-anticipated spending review. Where she will outline how much each department will receive of the government’s £600bn budget.
Watch live: Starmer faces Badenoch at PMQs ahead of Rachel Reeves spending review
11:55 , Athena StavrouPictured: Starmer leaves Downing Street ahead of PMQs
11:49 , Athena Stavrou
Chancellor accused of 'betting the house on cash for infrastructure' while imposing 'austerity'
11:47 , Athena StavrouThe Independent’s Politics Correspondent Mille Cooke reports:
Rachel Reeves is under pressure to impose wealth taxes ahead of the spending review, with campaigners accusing her of "betting the house on cash for infrastructure" whilst unveiling "another round of austerity for key services we all rely on".
Aleema Shivji, interim executive director at Tax Justice UK warned the expected cuts to public services "would spell implausible consequences for areas like local social care, access to justice and social security".
She added: "It’s great the government is stumping up the money for transport and house building - but by taxing the obscene levels of wealth of the super-rich more, it could also raise tens of billions to invest in revitalising other public services at the same time, in turn strengthening the economy.”
Coming up:
11:39 , Athena StavrouThe government is facing a jam-packed agenda in the next two hours.
At midday, Sir Keir Starmer will face his weekly questions in the Commons.
Immediately after - at around 12:30pm - Rachel Reeves will deliver the government’s spending review.
This will be followed by questions from the opposition, which will see Shadow chancellor Mel Stride question Reeves on the review.
Reeves pictured leaving Downing Street ahead of review
11:30 , Athena Stavrou
Starmer: Review will help fix the housing crisis
11:25 , Athena StavrouThe government’s highly-anticipated spending review is set to be unveiled in just over an hour.
One of the areas getting a boost is housing, as £39 billion is allocated over the next 10 years to build affordable and social housing.
Sir Keir Starmer has said the move will help “make the dream of homeownership a reality”.
He wrote on X: “We are fixing the housing crisis with the biggest boost to affordable housing in a generation – to build the 1.5 million new homes this country needs.”
I am determined to make the dream of homeownership a reality.
— Keir Starmer (@Keir_Starmer) June 11, 2025
We are fixing the housing crisis with the biggest boost to affordable housing in a generation – to build the 1.5 million new homes this country needs.
'No job is safe': Tories criticise chancellor with Jaws jibe
11:09 , Athena StavrouThe Conservatives have launched a satirical attack on the chancellor ahead of her spending review announcement.
Posting a parody of a Jaws film poster to X, the party wrote: “Rachel Reeves is hungry for cash...and she's looking for it in your pocket.”
Rachel Reeves is hungry for cash...and she's looking for it in your pocket.
— Conservatives (@Conservatives) June 11, 2025
Whatever happens today, one thing's for sure...
You're gonna need a bigger wallet. pic.twitter.com/03stU9BuxC
Why Reeves is unveiling a Spending Review - not a budget
11:01 , Athena StavrouAnalysis by Kate Devlin, Whitehall Editor
What’s the difference? This is not a day filled with consumer policies.
The price of pints and cigarettes won’t go up or down depending on what Ms Reeves says.
But it is potentially more seismic than a yearly budget.
What the chancellor will do is set out the budgets for government departments for the next three years.
This will define - with potential tweaks along the way - how much the UK will spend on the NHS, defence, building more houses etc.
All of which in turn has knock-on effects for economic prosperity and quality of life.
It might not lead to punters handing over more money in the pub tonight.
But the Spending Review will impact how much cash they have in their pockets for years to come.
Review could prompt tax rises, IFS warns
10:43 , Athena StavrouFinancial experts have warned that Rachel Reeves could be forced to raise taxes as a result of today’s spending review.
The director of the Institute for Fiscal Studies suggested that the chancellor has left very little room for error in her forecasts.
“The risk is certainly that when we get to the next Budget this coming autumn, if the economic forecasts move at all in the wrong direction then we may have to have some more tax increases,” Paul Johnson told the BBC Radio 4 Today programme.
“It is important to be clear about this spending review, it is not announcing any new money. The Chancellor is sticking to the spending plans, at least we assume she is, she set out back in October and what she is doing is allocating that money.
“The risk in terms of further tax rises is if anything at all goes wrong with any of the current forecasts then they will come again in the autumn.”
Review to get NHS 'back on its feet', say Streeting
10:32 , Athena StavrouWes Streeting has promised today’s spending review will get the NHS “back on its feet”.
The health minister, who has just attended a Downing Street meeting to sign off on the plans, said they will help “build an NHS fit for the future”.
Under the review, the NHS has been given a £30 billion increase in funding - a rise of around 2.8 per cent in real terms.
It’s because of the choices made by this Labour government that waiting lists are lower now than when we came in.
— Wes Streeting (@wesstreeting) June 11, 2025
Thanks to the Chancellor’s Spending Review today, we’ll be able to deliver our Plan for Change, get our NHS back on its feet and build an NHS fit for the future.
