This article is from the source 'guardian' and was first published or seen on . The next check for changes will be
You can find the current article at its original source at https://www.theguardian.com/commentisfree/2025/jun/11/rachel-reeves-right-choices-our-panel-responds-spending-review
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Has Rachel Reeves made the right choices? Our panel responds to the spending review | Has Rachel Reeves made the right choices? Our panel responds to the spending review |
| (about 1 hour later) | |
| The chancellor announced spending on health, housing, defence, and infrastructure. But will it be felt by ordinary voters? | The chancellor announced spending on health, housing, defence, and infrastructure. But will it be felt by ordinary voters? |
| There is magic here – Labour must sell it better | |
| Polly Toynbee | |
| Guardian columnist | |
| This was a bonanza of build, build, build. Get those diggers digging for social purpose and growth, with rail, trams, insulated homes and much more. That £39bn for social housing stretches for a 300,000 new homes per year target, not reached for half a century. | |
| Meanwhile, it’s a win-win for net zero, with billions for macho nuclear plants trouncing anti-net zero, climate-denying Tories and Reform, who think windmills are for wimps. | |
| This £113bn capital spending story at last sounds solidly Labour. The facts on the ground are good, but a richer narrative of social justice is still missing. Borrowing rules are changing to permit capital spending, but why not invest in human capital, when nothing can be built without human skills? | |
| The chancellor’s shower of gold needs a sprinkle of political fairy dust: “renewal” sounds like repairs, but Labour’s messaging needs to lift hearts and hopes. Those spades need to be in the ground fast to kickstart growth, to ensure people give Labour the credit it deserves for ending austerity. | |
| Defence gets its necessary catapult, protecting us and undersea cables, but its vital purpose is to bind us back politically into the lost Europe we rashly departed. Health gets an unexpectedly bigger fillip, but at 40%, let that be the maximum proportion of GDP. No more growth in spending on the old, while schools get very little. Long-term thinking needs to reverse those priorities, tilting the balance towards the young and the future. Let the autumn’s child poverty taskforce do that, with a strong social democratic message to sharpen Labour’s legend. | |
| A housing crisis ‘solution’ based on a fallacy | A housing crisis ‘solution’ based on a fallacy |
| Kirsty Major | Kirsty Major |
| Deputy Opinion editor for the Guardian | |
| Rachel Reeves’s headline-grabbing pledge of £39bn for affordable and social housing is based on one big assumption: that the housing crisis is caused by a lack of supply. | Rachel Reeves’s headline-grabbing pledge of £39bn for affordable and social housing is based on one big assumption: that the housing crisis is caused by a lack of supply. |
| By increasing the number of homes, the logic goes, prices will be pushed down, and the crisis of affordability will be solved. The funding comes in addition to changes to planning regulations aimed at boosting housebuilding across the country. By putting shovels in the ground, the chancellor hopes to solve two problems at once – putting keys in hands and boosting economic growth. A neat solution, right? | By increasing the number of homes, the logic goes, prices will be pushed down, and the crisis of affordability will be solved. The funding comes in addition to changes to planning regulations aimed at boosting housebuilding across the country. By putting shovels in the ground, the chancellor hopes to solve two problems at once – putting keys in hands and boosting economic growth. A neat solution, right? |
| Well, it would be if Britain’s housing crisis was a supply-side problem. But it is not. If you don’t believe me, just ask the OBR. This spring the body predicted that these changes to planning policy could bring house prices down by only 0.8% by 2029. The average UK house price is £271,415 – this means it would drop to £269,243. It’s not nothing, but it’s far from something. | Well, it would be if Britain’s housing crisis was a supply-side problem. But it is not. If you don’t believe me, just ask the OBR. This spring the body predicted that these changes to planning policy could bring house prices down by only 0.8% by 2029. The average UK house price is £271,415 – this means it would drop to £269,243. It’s not nothing, but it’s far from something. |
| Demand in the UK has been artificially inflated since the 1980s by a mix of lending rules relaxation and pressure from buy-to-let landlords and foreign investors. There is no point in affordable housing – housing sold at a percentage of the market rate – if the market rate goes up. Yes, families will be able to leave emergency accommodation and have roofs over their heads, and some private renters might be able move into housing association accommodation. This is to be celebrated in the short term. But there is no point in more council housing if waiting lists keep going up because rents in the private sector continue to rise. There is no point in more houses if people can’t afford to buy them. | Demand in the UK has been artificially inflated since the 1980s by a mix of lending rules relaxation and pressure from buy-to-let landlords and foreign investors. There is no point in affordable housing – housing sold at a percentage of the market rate – if the market rate goes up. Yes, families will be able to leave emergency accommodation and have roofs over their heads, and some private renters might be able move into housing association accommodation. This is to be celebrated in the short term. But there is no point in more council housing if waiting lists keep going up because rents in the private sector continue to rise. There is no point in more houses if people can’t afford to buy them. |
| Labour’s renters’ rights bill may go some way to easing some of this demand. Proposals being floated to loosen mortgage lending will not. We will have to wait and see how these policies play out in the housing market. As things stand, the new funding is a step in the right direction, but by no means the solution. | Labour’s renters’ rights bill may go some way to easing some of this demand. Proposals being floated to loosen mortgage lending will not. We will have to wait and see how these policies play out in the housing market. As things stand, the new funding is a step in the right direction, but by no means the solution. |
| Substantial spending – but not for the many | |
| Sahil Dutta | |
| Lecturer in political economy | |
| By the raw numbers alone, Labour can say this is no return to austerity. The government, after all, will dole out billions for capital projects, and day-to-day NHS spending will rise. But for many, it won’t feel that way. | |
| Because the lived reality of austerity was never just about spending in the aggregate. It was about who and what we prioritised as a society. Money was stripped from the young, the sick, the poor, the arts, education and local government. Workers and regions of “low productivity” sectors decayed, while riches were showered on the already wealthy. | |
| In its fixation on the fantasy of high economic growth, Labour is unable to fully break from that. Instead, it has concentrated fiscal largesse on high-productivity sectors in the hope that this amounts to an industrial strategy. Investing in tech, R&D and AI will always sound impressive. But the sector is awash with cash already – what it lacks is a useful purpose and proper regulation. Likewise, whatever the geopolitical context, there is little evidence that military-industrial spending is an efficient way to boost employment and growth, or improve people’s lives. More promising is the extra funding for affordable housing. Yet under-resourced councils could struggle to contain the predatory costs of private building contractors. | |
| There was once a time when Rachel Reeves spoke about the importance of the everyday economy, but from the military to tech to construction companies, it is the commanding heights of the private sector who should be happiest today. | |
| ‘Treasury brain’ still reigns | ‘Treasury brain’ still reigns |
| Dhananjayan Sriskandarajah | Dhananjayan Sriskandarajah |
| Chief executive of the New Economics Foundation | |
| Capital spending alone won’t improve people’s living standards. The extra investment may mean we can build more homes, renewable energy, public transport and other vital infrastructure. Despite her hopes that this will rejuvenate our economy in the years to come, we also need urgent action to improve people’s lives today. | Capital spending alone won’t improve people’s living standards. The extra investment may mean we can build more homes, renewable energy, public transport and other vital infrastructure. Despite her hopes that this will rejuvenate our economy in the years to come, we also need urgent action to improve people’s lives today. |
| There was lots of talk of security – 17 mentions in the speech, no less – but I fear with the diversion of funds to defence spending, the chancellor is overlooking household economic security as a lever for growth. Unless we also boost day-to-day spending in key departments, living standards will continue to decline. Indeed, keeping the two-child benefit cap and slashing support for disabled people is making millions of people feel less secure. Investing in social infrastructure will improve lives almost immediately and have just as great long-term effects. | There was lots of talk of security – 17 mentions in the speech, no less – but I fear with the diversion of funds to defence spending, the chancellor is overlooking household economic security as a lever for growth. Unless we also boost day-to-day spending in key departments, living standards will continue to decline. Indeed, keeping the two-child benefit cap and slashing support for disabled people is making millions of people feel less secure. Investing in social infrastructure will improve lives almost immediately and have just as great long-term effects. |
| On days like this, it is clear that the government has fallen victim to “Treasury brain”, clouded by outdated and arbitrary fiscal rules that it has set itself. Instead it should find better ways to assess safe borrowing levels, and tax wealth in line with other forms of income so we can tackle poverty, reduce inequality and protect our planet. | On days like this, it is clear that the government has fallen victim to “Treasury brain”, clouded by outdated and arbitrary fiscal rules that it has set itself. Instead it should find better ways to assess safe borrowing levels, and tax wealth in line with other forms of income so we can tackle poverty, reduce inequality and protect our planet. |
| Families like mine have been left with more questions than answers | |
| Jonny Roberts | |
| Single parent, working part-time, who takes part in Changing Realities, a collaboration of almost 200 parents on a low income working with researchers at the University of York | |
| The chancellor’s speech today marked a welcome change in tone about the future – less focus on economic misery, heavier on hope and investment. But what I and the millions of parents like me, struggling with costs, needed to hear more about is how Reeves’s vision actually converts into reality. | |
| How will the promise to make sure “every child has the chance to thrive” be realised? Especially when there was nothing in this spending review on ending the two-child benefit limit or providing support for families in poverty through investing in social security, all the more ominous when Department for Work and Pensions spending is scheduled to contract by 0.2%. | |
| What will the (excellent) expansion of free school meals to all universal credit claimants mean for extended support in-school via the pupil premium? And when will the free breakfast clubs, which have started in 750 schools, be rolled out everywhere? | |
| The chancellor opened by noting that people want to feel change in their communities. Last week, Changing Realities and PPR set out a series of measures that would make real inroads into tackling the economic hardship faced by families like mine. Today we are still left waiting in anxious anticipation of the budget and child poverty strategy this autumn, and in the hope of real change, which simply must come. |