UK (Parliament Politics Magazine) – Rachel Reeves will unveil a £113bn capital push in review, aiming to drive UK growth, jobs, and infrastructure under Labour’s revised fiscal rules.
As reported by The Guardian, Chancellor Rachel Reeves is to prioritise a £113bn capital plan in the review, saying such investment in housing, energy, and transport would not happen under other parties.
Labour’s revision of fiscal rules has freed up billions for the upcoming spending review. The move aims to offer MPs a stronger economic narrative amid growing public discontent.
The chancellor will stand by the investment push, even as government debt jumped to £20.2bn last month.
What did Rachel Reeves say about £113bn investment and job growth?
According to Rachel Reeves, the upcoming spending review will demonstrate how billions borrowed will stimulate growth, create jobs, and attract private investment.
She stated,
“We are building homes, building infrastructure, whether that’s transport or energy. I do want to make sure that we’re spending government money to create jobs, apprenticeships, and build supply chains in this country.”
Ms Reeves added,
“At the spending review coming up in June, we will invest more in capital, and we’re going to invest £113bn more in capital spending than the plans we inherited from the previous government. I do want to make sure that every penny of that money works for the British economy and creates jobs.”
The chancellor expects that details of the £113bn investment will help calm worries about tough cuts to routine spending. Departments face potential budget reductions of up to 7% over the next four years as part of planning.
What did Treasury sources say about Reeves’ £113bn spending plan?
According to Treasury sources, Ms Reeves understands the importance of presenting a new strategy for the billions’ expenditure.
One source stated,
“Part of our spending review argument is that this £113bn was only available because of the choices that she took. It is a political choice to have done that. So every pound of that £113bn would not be there had it not been for a Labour government. We will labour this as part of the spending review. The Tories and Reform all opposed those fiscal rule changes. So they are opposed to that additional investment.”
Another insider said,
“That is real money. It’s not empty promises, or the unsigned cheques the Tories used to do. It’ll be proper money, and this investment in Britain’s future will be a part of the theme of the spending review.”
The source added,
“There are trade-offs in spending reviews. But she’s made a clear political choice to invest in long-term projects that will make a real difference to people’s communities. These will be Labour homes built by a Labour government. All this investment is Labour – no one else would have done it. We changed those rules and now there is £113bn that was not there.”
Which key infrastructure schemes are set to receive funding after the spending review?
Health and defence are expected to be the biggest beneficiaries of the spending review, with significant prison construction funding already announced by Justice Secretary Shabana Mahmood. The new Sizewell C nuclear power station is among the projects expected to receive the green light.
The £113bn capital investment fund will also include projects such as:
- The East-West Rail development
- Major funding for housebuilding as Labour aims to deliver 1.5 million new homes
- Continued support for government research and innovation programs
- Financing for school reconstruction initiatives
- The initial phase of hospital rebuilding efforts
What pressure are Labour MPs putting on the Treasury over spending cuts?
Labour MPs from across the party have increased pressure on the Treasury, asking for relief from disability cuts and raising concern over the winter fuel reductions.
Former cabinet minister Louise Haigh and other MPs have urged for a fresh economic approach after Reform UK’s rise in the local elections.
Chris Curtis, chair of the Labour Growth Group, described the economy as trapped in a “doom loop.” He warned that without urgent action, Reform leader Nigel Farage could become prime minister.
What did Rachel Reeves say about the UK’s economic growth?
Rachel Reeves said, “We are set to be the fastest-growing economy in the G7 in the first three months of this year.”
She added, “We still have more to do. I absolutely understand that the cost of living crisis is still real for many families, but the numbers today do show that the economy is beginning to turn a corner.”
What is a spending review?
A governmental process led by HM Treasury to set multi-year expenditure limits for departments and align spending with national priorities.
The purpose is to allocate public funds, ensure fiscal sustainability, and balance immediate needs (e.g., healthcare) with long-term investments (e.g., infrastructure).
It typically conducted every 2–3 years, but reforms under the 2024 Labour government mandate reviews every 2 years with a 3-year planning horizon.