Spending review 2025 live: Reeves to pledge £39bn to tackle housing crisis with boost to NHS and defence expected

The Independent’s Political Correspondent Millie Cooke reports:

The Tory Party has failed to win back the trust of voters since Liz Truss’ disastrous mini budget which sent the markets into free fall.

But as Labour struggles in the polls amid criticism over its first year in office, the opposition is now trying to restore their image as the party that can be trusted with the public finances.

Speaking to Sky News ahead of Labour’s spending review, shadow Treasury secretary Richard Fuller has insisted that, for the party, “fiscal responsibility is the most important thing”.

While Labour’s struggles since taking office will perhaps make the Tories’ mission to regain trust easier, they should avoid assuming that voters’ memories are quite that short term.

Sir Keir Starmer’s cabinet has assembled in Downing Street this morning to sign off Rachel Reeves’ spending review.

Ministers were seen entering No 10 ahead of the announcement at 12:30pm.

The full details of Rachel Reeves’ spending review will be revealed in the Commons on Wednesday, but several announcements have already been made.

– £15.6 billion for public transport projects in England’s city regions.

– £16.7 billion for nuclear power projects, including £14.2 billion for the new Sizewell C power plant in Suffolk.

– £39 billion over the next 10 years to build affordable and social housing.

– An extension of the £3 bus fare cap until March 2027.

– £445 million for upgrades to Welsh railways.

Ongoing rows over cuts and economic policy will not go away with the announcement on Wednesday and will continue to fuel questions over the futures of Reeves and Starmer, says David Maddox.

Rachel Reeves will today unveil the government’s spending review.

The review is the process government uses to set all departments’ budgets for the years ahead.

Today’s announcement will set out day-to-day spending plans for the next three years and capital spending plans for the next four.

It covers public services such as the NHS, schools and transport as well as how the government will invest in research, energy security and how to drive economic growth.

The term spending review may feel less familiar than the budget. This is because they happen less often – around every two years.

The Independent’s Political Correspondent Millie Cooke reports:

In an hour’s time, Sir Keir Starmer’s cabinet will assemble to sign off Rachel Reeves’ spending review – a line by line audit of departmental budgets which will set out spending for the next three years.

Then, the chancellor will stand up in the Commons at 12.30pm and attempt to reassure voters that Labour is taking the economy in the right direction.

In recent weeks, we’ve seen an increasing number of big ticket spending pledges – the £1.25bn decision to reverse winter fuel cuts, £38bn for affordable housing, £14.2bn for Sizewell C – alongside the pledge to increase defence spending to 2.5 per cent of GDP and protect the NHS budget.

As nice as all of those pledges sound, in practice, they mean that unprotected departments will see cuts.

This is likely to manifest as an overall squeeze on public services and day to day spending, particularly when it comes to policing, the environment and local government.

Rachel Reeves will unveil her spending review on Wednesday, arguing that her priorities are “the priorities of working people”.

The Chancellor is expected to focus on “Britain’s renewal” as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools.

Arguing that the Government is “renewing Britain”, she will acknowledge that “too many people in too many parts of the country are yet to feel it”.

She will say: “This Government’s task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people’s everyday lives, their jobs, their communities.”

Dr Jeevun Sandher has said the spending review is a “crucial moment” for the Labour Party, and is all “about making us better off”.

The Labour MP, who sits on the Commons Treasury committee, says that Britain has faced the “most serious and difficult times in almost a century”.

He told Sky News: “These are the most serious times for any government in this century, we have to rise to the challenge, and part of rising to the challenge in a democracy is being honest with people about where we stand.”

“We’re making decisions today, yes making people better off in the short-run, but also years to come, decades and even generations.”

Shadow chancellor Mel Stride made a video on social media last night ahead of Labour’s spending review where he called Rachel Reeves the ‘Spend Today, Tax Tomorrow Chancellor’.

He said: “Labour is spending money it doesn’t have, with no credible plan to pay for it. That means more borrowing, more debt, and, inevitably, more tax rises in the Autumn Budget. Don’t be fooled. We can’t afford Labour.”