Chancellor to reveal Government’s departmental spending plans in June
Rachel Reeves said she would present the budgets to the Commons once the review had concluded on June 11.
Rachel Reeves has said she expects to reveal multi-year spending plans for government departments in June.
The Chancellor told Treasury questions that the spending review will conclude on June 11 and she will then present departmental budgets to the House of Commons.
Ms Reeves has previously said the review will require government departments to find efficiency savings amounting to 5% of spending, with the Treasury acknowledging this will mean “difficult” decisions.
Speaking in the Commons, Ms Reeves told MPs: “In December, I launched the second phase of our spending review where, for the first time in 17 years, every single pound of taxpayers’ money will be investigated line-by-line to ensure it is being spent well.
“The spending review will set resource or day-to-day departmental budgets until 2028/29 and capital departmental budgets until 2029/30.
“On June 11, when we conclude the review, I will present departmental budgets to the House.”
Shadow chancellor Mel Stride said Ms Reeves had stressed the importance of spending money wisely, adding: “Could I ask her, in light of the Treasury Select Committee’s conclusion that her new Office for Value for Money is a waste of money, would she agree that one of its early actions should be to abolish itself in order to save money?”
Ms Reeves replied: “I was pleased to appoint Tom Hayhoe to run the Office for Value for Money, somebody who has got a track record of delivering value for money for taxpayers.
“What this Government wants to scrap is giving contracts to friends and donors because that was a colossal waste of money instigated by the party opposite.”
Mr Stride then switched his focus to the increase in national insurance contributions for employers.
He said: “A full two-thirds of the revenues raised through Labour’s jobs tax is simply going on servicing the additional debt being run up by this profligate Government.
“Given this, does the Chancellor really believe that the catastrophic effects of this tax on businesses right up and down this country is a price worth paying?”
Ms Reeves said Labour inherited a “£22 billion black hole” in the public finances from the Tories, adding: “It was absolutely essential to close that gap to bring stability back to the public finances.
“That required difficult decisions, they were the right decisions to ensure that our country has the stability that it lacked for so many years under so many different prime ministers and chancellors under the party opposite.”
Conservative former minister Sir Oliver Dowden asked Ms Reeves about how the UK Government would fund the proposed deal to give up control of the Chagos Islands to Mauritius and then lease back the strategically important UK-US military base on Diego Garcia.
He said: “Does the Chancellor of the Exchequer propose to fund the reported £9 billion bill for the continued use of Diego Garcia to the Mauritians through higher taxes, through more borrowing or through spending cuts?”
Ms Reeves replied: “We’re in discussions with the new administration in the United States around the future of Diego Garcia and will set out details in the spending review, as you’d expect.”
Elsewhere at Treasury questions, Ms Reeves was labelled a “tin-eared Chancellor” over her plans to bring some agricultural property into inheritance tax.
Shadow Treasury minister James Wild said: “Farming’s vital role in growing our rural economy, growing our food and protecting the countryside is threatened by Labour’s family farm tax.
“The self-proclaimed iron Chancellor is proving herself to be the tin-eared Chancellor, ignoring the evidence from the NFU (National Farmers’ Union) and others showing that this tax is based on flawed assumptions.”
Ms Reeves replied: “The problem with the party opposite is that they support increases in spending in vital areas, but they haven’t supported any of the tax increases that are necessary to pay for them which, frankly, is why we are in the situation we are in today, that we inherited a £22 billion black hole in the public finances.
“Now, in the budget, (Mr Wild) will know that we announced £5 billion for the farming budget over two years, including the largest funding directed at sustainable food production and nature recovery in our country’s history, and £60 million to support farmers because of flooding.”
Shadow Treasury minister Richard Fuller said high street confidence is “sliding faster than the Chancellor will be down the ski slopes of Davos”, in a nod to Ms Reeves’ forthcoming visit.
