Chancellor Rachel Reeves has begun unveiling the government’s spending review, a pivotal moment for the Labour government that will lay the political ground for the next election.
Reeves confirmed that total departmental budgets will rise by 2.3 per cent a year in real terms over the three years of the spending review to 2028-29.
Much of the boost is set to go to defence-related expenditure, which is set to rise to 2.6 per cent of GDP from 2027, and health, leaving other departments facing real-terms cuts.
She also announced a £39bn investment for “affordable” homes over 10 years, and an additional £10bn to help “crowd in” private sector investment in housebuilding.
The affordable homes plans are part of a borrowing-fuelled spending spree on capital projects, including £113bn of extra cash over the current parliament.
The chancellor added that the government was investing in “the biggest rollout of nuclear power for half a century”.
As she began laying out her plans, Reeves sought to draw a contrast with the previous Conservative policy of austerity, which she labelled as “a destructive choice”. She added that her fiscal rules were “non-negotiable and . . . the foundation of stability and investment”.