The good, the bad, and the downright deceptive

Analysis of Rachel Reeves' 2025 Spending review

There’s a lot to get into so I’ll crack straight on.

The Good

£39 billion on social housing over the next decade doesn’t amount to all that much when it’s divided by ten, but still the biggest investment in Britain’s catastrophically neglected social housing sector in generations.

£10 billion for Homes England. Not clear exactly how it’s going to be spent, but they’ve been working on stuff like affordable housing and home insulation schemes, both good things.

Confirmation that she will honour the Labour manifesto commitment of £13.2 billion for home insulation, heat pumps, and solar panels, when rumours were rife that this was going to be the latest of Keir Starmer’s pledges to go through the paper shredder.

£14 billion for transport. No surprise that the single biggest chunk (£2.5 billion) going to a major new infrastructure project in the south (Oxford-Cambridge rail) while Wales and the north of England get comparative scraps (upgrades and minor extensions to existing infrastructure). Scotland’s funding is different, but they should receive a proportional increase that they can put towards their transport budget.

3% spending increase for the NHS. Still far from sufficient to reverse the damage inflicted during the Tory austerity years, but better than nothing.

Talk of accepting the guidance of Pay Review Body recommendations for public sector workers. Very good. Tory wage repression in the public sector has been one of the major causes of declining living standards over the last decade and a half, and it also created a wage-cutting environment for opportunistic private sector employers to hit their employees’ with below-inflation pay settlements too.

£1.2 billion on skills training for young people via the British Business Bank. Not sure why it needs to be routed through this quango, instead of restoring some of the funding that the Tories slashed from adult education, however skills training is a wise thing for the government to be investing in, so thumbs up.

£700 million more for probation services. Keeping people from going back to lives of crime is a much better use of public money than stupidly wasting it on building loads of new prison places (more on that below).

£350 million for local government to spend on amenities like parks, leisure centres, swimming pools, etc. Surely it would be better to reverse the devastating Tory local government funding cuts though, so local authorities can build their own new amenities, rather than having to go cap in hand to central government?

The Bad

A whopping £30 billion for nuclear energy, £14.2 billion of which has already been announced for Sizewell C, which is seeking to replicate the astronomically over-budget and absurdly delayed shambles at Hinkley Point C, a project that’s set to be not just the most expensive nuclear power station ever, but also the most expensive infrastructure project on planet Earth!

£2.5 billion on so-called “small modular reactors" (more on that policy here)

Significantly increased spending on magic beans, also known as Carbon Capture and Storage.

Military spending up to an absurd 2.6% of GDP by April 2027. £11 billion more for the military, and £4.5 billion for munitions. £6 billion on nuclear subs. This all adds up to way more than what she’s giving to the entire transport sector. Utter insanity!

£7 billion on prisons, to fund 14,000 new prison places. That’s half of the additional funding she’s committed to the entire transport sector, and ten times the amount she’s pledged to the probation system! It’s absolutely bonkers, and clearly intended as bait for the kind of right-wing reactionary who wants our jails filled with non-violent environmental activists. Why spend money on things that actually create long-term returns on investment, when you can burn it on cramming even more people into jails?

£2.3 billion for fixing crumbing schools, and £2.4 billion for new schools. Not just inadequate investment given the scale of the crumbing concrete problem, but also questions need to be asked about how much of this cash is going to be lavished on the greedy and unaccountable private academy spivs that the Tories handed so many of England’s state schools over to for free.

£2 billion for Artificial Intelligence. No details on how the government is actually going to spend such sizeable sum - unwisely, if their published AI Action Plan is anything to go by.

£280 million for Border Security Command, and a pledge to end the use of asylum seeker hotels by the end of the parliament. Both obvious bait for Reform voters, and absolutely no explanation of where else refugees will be housed, or at what cost.

The Downright Deceptive

This speech is riddled with so much deceptive bullshit, it’s going to be impossible to highlight it all. Here are some of the worst bits.

It takes a lot of brass neck to pretend that austerity is over, and refer to it as a "destructive ideology" when the first thing she did in government was to launch a new wave of austerity attacks; when she has more austerity cuts to the social security system in the pipeline; when she’s just as obsessed with myopic book-balancing exercises as George Osborne was; and when she refuses to reverse many of the most egregious and damaging Tory austerity cuts.

Cheekily trying to claim credit for falling interest rates and reduced mortgage costs for families, when these rates are set by the independent Bank of England Monetary Policy Committee.

Using cash terms figures that have not been adjusted for inflation to claim that the NHS funding boost is "the biggest ever", when 3% is actually below the 3.6% average increase over the 21st Century.

Loads of word salad about "efficiency savings", "cutting waste" and "improved performance" with little reference to specifics. George Osborne was using these exact same talking points a decade and a half ago.

Comparing the national economy to a household budget. One of the most egregious of all the economically illiterate fairy stories that politicians love to bamboozle the gullible with.

Loads of babble about the decline of our high streets and community spaces, but no reference to either of the main causes - the huge cost and tax advantages enjoyed by online retailers, and the devastating Tory local government funding cuts that she refuses to reverse.

Banning zero hours contracts and clamping down on exploitative "fire and rehire" practices are actually good policies, no doubt, but it’s deceptive to boast about them to fluff out what is supposed to be a review of government spending priorities, not employment legislation.

Reference to the government’s humiliating backtrack on Winter Fuel sanctions on pensioners as if it’s some kind of personal triumph, rather than a humbling retreat from public opinion.

Invoking Keynesian economics to argue that increased military spending creates jobs and prosperity, whilst outright ignoring what Keynesians have to say about how that money would definitely create much better returns on investment in other areas of the economy.

Claiming that her "fiscal rules are non-negotiable" when she’s already redrawn them once. Not only is her self-imposed fiscal straight-jacked a stupid idea, she’s not being honest about it either!

Only minutes later she’s boasting about "the changes to our fiscal rules"(facepalm emoji).

"Tough decisions". Amazing how these "tough decisions" always seem to mean taking money from the poor and vulnerable (children, pensioners, disabled people …), whilst keeping all the tax breaks and handouts for corporations, city speculators, property-hoarders, and the mega-rich.

References to "taxpayer’s money". Governments in fiat currency economies do not "spend taxpayers’ money", they create all of the money that they spend, then levy taxes to extract a proportion back in order to prevent runaway inflation.

So many cheap attempts at political point scoring against Kemi Badenoch, the Tories, and Reform. Yes the Tories laced all of their economic policy speeches with similar cheap jibes, but weren’t we told that "the adults are back in the room" when Starmer became PM-by-default last summer? Please can’t somebody actually try to do better?

Claiming an extra £113 billion in capital spending, when, according to Richard Murphy, £90 billion of it was already in the pipeline.

Reference to the supposed £22 billion budget black hole that Reeves pretended that she discovered after the election, and used to justify a load of austerity cutbacks. Reeves was perfectly aware that the sums didn’t add up before the election, which is why the Institute for Fiscal Studies accused her of engaging in a "conspiracy of silence" over the state of the public finances.

Claiming that she’ll beat child poverty, whilst maintaining the depraved two-child economic sanctions on families that will continue driving hundreds of thousands more kids into destitution for every year that it’s not scrapped.

Conclusion

Some good stuff, some terrible stuff, and far too much petty point-scoring and downright deceptive bollocks.