Treasury minister says claims spending review will lead to tax rises in autumn ‘incoherent’
Darren Jones, the chief secretary to the Treasury, has dismissed as “incoherent” claims that the spending review will lead to tax rises in the autumn.
Speaking on Sky News, he said:
It’s just such an incoherent argument, and let me tell you why.
This spending review is allocating the money that we have already raised at the budget last year and the spring statement. We are essentially dishing out the budget to the departments, and it is living within the budget settlement that the chancellor set.
If that’s the best argument that the oppositon has got, I think they need to go back and do some more homework.
Here is the clip.
“That is just such an incoherent argument.”
Darren Jones, the chief secretary to the Treasury, dismisses suggestions from the opposition that the government’s spending review will require tax rises in the future.
Live: https://t.co/99mAeBetfi
📺 Sky 501, Virgin 602 and YouTube pic.twitter.com/P0XFayWYsA
— Sky News (@SkyNews) June 11, 2025
Technically, Jones is right. There are no spending commitments being announced today that require the Treasury so find a new source of revenue (tax, or cuts elsewhere) – although we did have one on Monday, when the Treasury announced that it will restore winter fuel payments for most pensioners.
But the opposition – and thinktanks like the Institute for Fiscal Studies – are predicting tax rises not because they believe plans announced today are unfunded, but because they think that those commitments will turn out to be insufficient, and that political pressure will force the government to spend more on areas like the NHS (see 11.51am and 3.58pm), or to shelve welfare cuts that have already been pencilled in (see 12.14pm).
Key events
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Green party renews call for wealth tax, saying tough choices in budget are really Labour’s political choices
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Reform UK accuses Reeves of ‘cratering’ confidence in economy with spending review
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Spending review treats Scotland ‘as an afterthought’, Scotland’s SNP government says
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Cuts to Foreign Office budget ‘alarming’, says Emily Thornberry, chair of Commons foreign affairs committee
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School budgets in England to rise in real terms by just 0.9% per pupil per year, excluding free school meals, Treasury says
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Scottish secretary Ian Murray says he’s ‘surprised’ as bus firm proposes 400 job cuts during Reeves’ statement
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Treasury minister says claims spending review will lead to tax rises in autumn ‘incoherent’
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How Acorn and Viking projects will benefit from £9bn investment in carbon capture and storage
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Spending increases for health and defence ‘substantial’, says IFS, but some departments face outright cuts
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Government will save £14bn by 2028-29 through efficiency measures, Treasury says
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Treasury review finds no ‘conclusive evidence’ its green book rulebook for spending is biased against north
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Reeves succeeds in not scaring the City
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Spending review ‘missed opportunity’ because it does not address ‘black hole for social care’, say Lib Dems
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Treasury claims only wealthiest 10% have lost out from Reeves’ decisions, with poorest gaining most in relative terms
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Sadiq Khan says it is ‘disappointing’ spending review does not fund infrastructure London needs
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How spending is going up or down, department by department, up to 2028-29 – in cash terms
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How spending is going up or down, department by department, up to 2028-29
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Treasury publishes spending review documents
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Tories accuses Reeves of announcing ‘spend now, tax later’ spending review
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Autumn tax rises ‘almost inevitable’, warns NIESR
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Reeves says NHS spending to increase by 3% a year
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Reeves says spending review includes efficiency savings
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Reeves says police funding will rise by 2.3% in real terms
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Housebuilder shares cheered by affordable housing pledge
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Reeves confirms Treasury green book rules to be changed to allow more investment in regions
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Reeves say Transport for London to get four-year funding settlement
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Reeves backs two new carbon capture and storage projects, Acorn in Scotland and Viking in Humberside
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Reeves says use of hotels for asylum seekers will end ‘in this parliament’
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Reeves attacks Tories and Reform UK, saying Reform have made unfunded spending commitments worth £80bn
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Rachel Reeves delivers statement on spending review
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Starmer says there is ‘no easy answer’ to finding way of seizing frozen Russian assets to support Ukraine
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Starmer faces Badenoch at PMQs
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Internal modelling says NHS on course to miss hospital operations waiting time target, report says
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UN human rights panel criticises Chagos Islands deal, as Mauritius says it will cut taxes with money from UK
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Shelter welcomes extra funding in spending review as ‘watershed moment’ for housing emergency
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Lib Dems call for £2 bus fare cap in England to be restored
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Reeves and Cooper says Border Security Command to get funding boost worth up to £280m a year by 2029
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Trump administration condemns decision by UK and others to sanction far-right Israeli ministers
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Five charts that explain background to spending review decisions
Green party renews call for wealth tax, saying tough choices in budget are really Labour’s political choices
The Green party has renewed its call for a wealth tax in response to the spending review. This is from Adrian Ramsay, its co-leader.
These ‘tough decisions’ are actually ‘Labour’s political choices’.
They are choosing to leave the economy tilted towards those with considerable wealth.
Our front-line services continue to deteriorate through a political choice of decline by design.
By introducing a wealth tax on the super-rich, we could instead properly invest in our children’s future.
We could give them the education they deserve and start now to invest in the climate resilience and preparedness they will need throughout their lives as the climate crisis unfolds.
Reform UK accuses Reeves of ‘cratering’ confidence in economy with spending review
Reform UK has accused Rachel Reeves of “cratering” the public mood with the spending review. This is from Richard Tice, its deputy leader.
The Chancellor is cratering public mood, economy and jobs.
Borrowing is soaring, debt costs are rising and wasteful spending is out of control.
Reform by contrast are already saving tens of millions in the councils we now run
Another reason we are leading in national polls pic.twitter.com/adBIJw9j62
— Richard Tice MP 🇬🇧 (@TiceRichard) June 11, 2025
Spending review treats Scotland ‘as an afterthought’, Scotland’s SNP government says
Severin Carrell is the Guardian’s Scotland editor.
Rachel Reeves has been accused of “short-changing” Scotland by more than £1bn after the Scottish finance secretary said the chancellor’s financial settlement failed to account for the costs of welfare cuts and tax rises.
The chancellor said the three year funding deal for Scotland’s devolved government meant an annual average of £50.9bn a year, with a total funding uplift of £2.9bn, the highest real terms increase in the history of devolution.
Shona Robison, the Scottish finance secretary, said that while that was equivalent to a 0.8% increase in real terms, it failed to account for the heavy costs to Scotland’s large public sector of funding the rise in employers national insurance, or the costs of meeting increased welfare commitments.
Had it grown in line with increases for other departments, Scotland would have received a further £1.1bn, Robison said. She went on:
This spending review is business as usual from the UK government, which is yet again treating Scotland as an afterthought and failing to provide us with the funding we need.
In effect, Scotland has been short-changed by more than a billion pounds.
The settlement included politically-symbolic funding decisions such as £750m towards a new exascale super-computer at Edinburgh University – set to be the largest in the UK. Funding for that was cancelled by Labour last year because the previous Conservative government had failed to budget for it.
Alongside money for a green port in Inverness and Cromarty Firth, the Treasury has finally pledged development funding for the Acorn carbon capture project in north east Scotland, more than a decade after it was first proposed. Robison said it was odd that ministers had not spelt out how money was involved.
Darren Jones, the chief secretary to the Treasury, said that despite Robison’s complaints, Scotland’s funding was still 20% higher than the UK average. The UK government was also spending £250m upgrading the Clyde nuclear submarine base west of Glasgow, and a further £1.7bn in regional growth deals.
Cuts to Foreign Office budget ‘alarming’, says Emily Thornberry, chair of Commons foreign affairs committee
Emily Thornberry, the Labour chair of the foreign affairs committee, has said she is “deeply concerned” about the cuts to the Foreign Office’s budget. It is due to fall by 8.3% between 2025-26 and 2028-29. Thornberry said:
At a time when Britain is back on the world stage, and has never been more needed as a force for good, it is very concerning that the FCDO appears to be suffering the harshest real-terms cuts. We will be looking very closely at this to make sure that, once the already-announced ODA cuts have been accounted for, the Foreign Office is not suffering major further cutbacks.
The Foreign Office maintains a presence across the globe and does so with a budget that has been stretched thin over many years. I am deeply concerned about the strain that this spending review will place on the entirety of the department. Real-term cuts to the Foreign Office budget are alarming and inconsistent with the government’s objective to position the UK as a leader on the world stage.
School budgets in England to rise in real terms by just 0.9% per pupil per year, excluding free school meals, Treasury says
Richard Adams
Richard Adams is the Guardian’s education editor.
Schools budgets in England will rise by just 0.9% each year between 2025 and 2028, the Treasury’s spending review documents reveal.
Rachel Reeves, the chancellor, said she was providing a “cash uplift” of more than £4.5bn for core school budgets by the end of the spending review period, which will be a real-terms increase of around 1.1% per pupil when including the recent extension of free school meals coverage.
The Treasury document states: “Excluding the funding which the government has provided for the expansion of free school meals, the core schools budget will grow by an average of 0.9% per pupil in real terms each year.”
The Institute for Fiscal Studies described the announcement as “a real-terms freeze” for school budgets but added that falling school rolls in England may allow a further rise in spending per pupil.
Reeves said the government will also spend around £2.4bn a year for the next four years on its school rebuilding programme, and £2.3bn a year by 2029-30 on repairs and improvements to school campuses. Overall the Department for Education will be expected to meet 5% savings and efficiencies target.
The government also announced that its plans for special educational needs reform would be delayed until the autumn.
Julia Harnden of the Association of School and College Leaders said:
Schools are already having to make significant cuts and the spending review announcements will not change that situation in the short-term and won’t be enough to reverse this situation in the longer term either.
This additional funding does not include colleges and sixth forms and we are particularly worried about the financial sustainability of this vital sector. We look forward to seeing the government’s strategy for post-16 education and skills later in the year. This sector is terribly underfunded and this must be addressed if sixth forms and colleges are to play a central role in this strategy.
Scottish secretary Ian Murray says he’s ‘surprised’ as bus firm proposes 400 job cuts during Reeves’ statement
Severin Carrell
Severin Carrell is the Guardian’s Scotland editor.
UK and Scottish ministers are scrabbling to save around 400 jobs at one of the UK’s largest electric bus manufacturers, Alexander Dennis, after its owners announced a consultation on the closure of two Scottish sites.
The company’s owners, NFI, said midway through the chancellor’s spending review statement at Westminster they wanted to consolidate all manufacturing to Scarborough because of the intense competition from Chinese electric bus makers.
The closures raise fresh questions about the UK’s transition to net zero, which the Chancellor prioritised in her statement. Alexander Dennis’ factories are in Falkirk and Larbert, close to Grangemouth oil refinery which has recently closed with the loss of 400 jobs.
Ian Murray, the Scottish secretary, said he was “a bit surprised” at the timing of NFI’s announcement given ministers in both governments were in talks about a deal to protect those jobs. He said that could include putting the workforce on furlough to “buy a little time”.
Murray blamed the Scottish government for failing to give the firm enough orders. Andy Burnham, the mayor of Manchester, had placed an order for 200 of its EV buses while the Scottish government had only bought 44.
Treasury minister says claims spending review will lead to tax rises in autumn ‘incoherent’
Darren Jones, the chief secretary to the Treasury, has dismissed as “incoherent” claims that the spending review will lead to tax rises in the autumn.
Speaking on Sky News, he said:
It’s just such an incoherent argument, and let me tell you why.
This spending review is allocating the money that we have already raised at the budget last year and the spring statement. We are essentially dishing out the budget to the departments, and it is living within the budget settlement that the chancellor set.
If that’s the best argument that the oppositon has got, I think they need to go back and do some more homework.
Here is the clip.
“That is just such an incoherent argument.”
Darren Jones, the chief secretary to the Treasury, dismisses suggestions from the opposition that the government’s spending review will require tax rises in the future.
Live: https://t.co/99mAeBetfi
📺 Sky 501, Virgin 602 and YouTube pic.twitter.com/P0XFayWYsA
— Sky News (@SkyNews) June 11, 2025
Technically, Jones is right. There are no spending commitments being announced today that require the Treasury so find a new source of revenue (tax, or cuts elsewhere) – although we did have one on Monday, when the Treasury announced that it will restore winter fuel payments for most pensioners.
But the opposition – and thinktanks like the Institute for Fiscal Studies – are predicting tax rises not because they believe plans announced today are unfunded, but because they think that those commitments will turn out to be insufficient, and that political pressure will force the government to spend more on areas like the NHS (see 11.51am and 3.58pm), or to shelve welfare cuts that have already been pencilled in (see 12.14pm).
How Acorn and Viking projects will benefit from £9bn investment in carbon capture and storage
Jillian Ambrose
Jillian Ambrose is the Guardian’s energy correspondent.
Two major carbon capture projects will move ahead in Scotland and the Humber after Rachel Reeves committed to spend over £9bn to capture the emissions from heavy industry over the rest of the decade.
The latest projects to win the government’s approval include the Acorn carbon capture project near the St Fergus gas terminal in Aberdeenshire, and the Viking carbon capture project in the Humber region which is the UK’s most industrialised area.
The chancellor gave the greenlight to the projects as part of the government’s spending review which also includes plans to spend £14.2bn of taxpayer money on the Sizewell C nuclear power plant in Suffolk and £2.5bn on the UK’s first small modular reactors.
Although the Labour party has set ambitious goals for renewable energy to create a clean power system by 2030, its official advisers have warned that it will need to replace its aging nuclear plants in the 2030s and develop technologies to remove carbon emissions from factories and refineries if it hopes to meet its legally binding net zero target by 2050.
The Acorn carbon capture project is expected to pipe at least 5m tonnes of waste CO2 from refineries in central Scotland to St Fergus using redundant pipelines which previously carried North Sea gas towards the south of the country.
The Viking carbon capture project plans to use a 34-mile pipeline to take up to 15m tonnes of carbon a year from industrial sites on Humberside and lock it under the North Sea.
The projects are both backed by North Sea oil company Harbour Energy. It will develop the Viking project alongside oil giant BP, while the Acorn project will be developed by a consortium including Shell, Storegga and North Sea Midstream Parners.
Here are verdicts on the spending review from a Guardian panel, with contributions from Polly Toynbee, Kirsty Major, Sahil Dutta, Dhananjayan Sriskandarajah and Jonny Roberts.
Spending increases for health and defence ‘substantial’, says IFS, but some departments face outright cuts
The Institute for Fiscal Studies has published its initial response to the spending review, in the form of a statement from its outgoing director, Paul Johnson. He says health and defence are the biggest winners.
In pounds and pence, these two departmental behemoths – health and defence – were the big winners. But even here, one has to wonder whether this will be enough. Aiming to get back to meeting the NHS 18 week target for hospital waiting times within this parliament is enormously ambitious – an NHS funding settlement below the long-run average might not measure up. And on defence, it’s entirely possible that an increase in the NATO spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard.
Still, the funding increases for health and defence are substantial. The corollary, of course, is a less generous settlement elsewhere. The schools settlement in England is tight. Strip out the cost of expanding free schools meals, and you get a real-terms freeze in the budget. With falling pupil numbers, this would in principle allow a rise in spending per pupil. Instead, the government may have to freeze spending per pupil in order to meet rising demand for special education needs provision.
Some departments – like Environment, Food and Rural Affairs and Culture, Media and Sport – are facing outright budget cuts.
The Treasury says overall departmental spending is going up 2.3% in real terms. (See 1.35pm.) The IFS says that it is broadly flat. (See 2.06pm.) How can they both be right? Well, it depends whether you take this year (2025-26) as the baseline, or last year.
Johnson explains:
To make sense of today’s spending review, you need to understand what the government is calling Phase One and Phase Two. Phase One is last year and this year, 2024–25 and 2025–26. Phase Two starts next year, 2026–27, covers the rest of the parliament, and is the focus of today’s announcements. Take Phase One and Phase Two together, as the government does, and growth in government spending looks rather strong. Take Phase Two only and things look tighter.
The crux is that most departments will have larger real-terms budgets at the end of the parliament than the beginning, but in many cases much of that extra cash will have arrived by April. Eight departments will actually see cuts to their budget between this year and the end of the parliament. This is not an austerity spending review, though much of the government’s largesse, such as it is, was focused on the first two years of the parliament.
