LONDON — Rachel Reeves pumped billions of pounds into Britain’s ailing health service in her first multi-year spending review Wednesday, daring opposition parties to defy her plans.
In a speech to parliament, the U.K.’s chief finance minister said state spending on the NHS would rise by 3 percent a year, every year, until 2029, after inflation.
The Chancellor suggested the economic squeeze she imposed in last fall’s budget now gave her the flexibility to increase government investment.
“I made the choices necessary to fix the foundations of our economy,” Reeves said, after national insurance contributions were increased for employers earlier this year.
Reeves, whose ruling Labour Party is under electoral pressure from Nigel Farage’s insurgent rightwing Reform UK, also confirmed she would end the use of hotels to house asylum seekers by the next general election, due in 2029. Funding will “cut the asylum backlog, hear more appeal cases and return people who have no right to be here, saving the taxpayer £1 billion a year,” she added.
Reeves also used her House of Commons platform to attack Farage, claiming he was “itching to do the same thing all over again” after he praised former Tory Prime Minister Liz Truss’ calamitous mini-budget in 2022, which triggered market chaos.
Labour has pledged to not increase income tax, VAT or national insurance at the last election. However, the Conservatives argue the government will have to raise taxes further to fund its promises.
Reeves also made public safety a center point of the funding allocation. She said police spending power would rise by an average 2.3 percent per year in real terms “to protect our people, our homes and our streets.”
More than £280 million more would also be allocated for the Border Security Command aiming to end people smuggling gangs transporting people in small boats across the English Channel.
The chancellor framed the review around providing investment in areas outside London, including transport projects and expanded social housing.
“I said we wanted growth in all parts of the Britain and Mr. Speaker, I meant it,” Reeves told MPs.
Funding for 350 deprived communities “to improve parks, youth facilities, swimming pools and libraries” was also allocated alongside money to incentivize growth projects.
Attacking the opposition
Reeves repeatedly framed her spending pledges as “Labour choices,” also ripping into the opposition Conservatives’ austerity policy during its previous 14-year stretch in power from 2010-24.
“Austerity was a destructive choice for the fabric of our society,” she said. “It was a destructive choice for our economy too, choking off investment and demand, creating a lost decade for growth, wages and living standards.”
Reeves referenced joining Labour nearly 30 years ago. “I knew that the Conservative Party when I grew up didn’t care much about schools like mine, or the kids I grew up with.”
She laid down the gauntlet to opposition parties to “make an honest choice, and they can oppose these spending plans as they opposed every penny I raised to fund them.”
Responding for the Conservative opposition, Shadow Chancellor Mel Stride attacked the government’s plans as not credible and accused Reeves of caving in to demands for U-turns. “The lesson of the last year has been that when the going gets tough, the right honorable lady blinks,” he told the Commons.
“She presented herself as the iron chancellor, but what we have seen is the tin foil chancellor, flimsy and ready to fold in the face of the slightest pressure,” Stride said. Her spending blueprint is a “fantasy,” he added.
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