Rachel Reeves begs Cabinet to cool war over spending cuts and talks up transport investment – as police warn crimes ‘will be ignored’
Rachel Reeves blamed the Tories for looming spending curbs today as she tried to cool Cabinet infighting.
The Chancellor acknowledged ministers will not get ‘everything they want’ in the spending review due next Wednesday.
But in a speech in Manchester she urged them to recognise ‘this is a result of 14 years of Conservative maltreatment of our public services’ – signalling she will stick to her fiscal rules. She also repeated the manifesto commitments not to increase income tax, national insurance or VAT.
Ms Reeves talked up £15.6billion of capital investment for mayoral authorities in the North and Midlands, saying she wanted ‘renewal for our country’.
The package includes funding to extend the metros in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit systems in West Yorkshire.
The borrowing-funding splurge on major investment is being overshadowed by intense haggling over day-to-day budgets.
Chancellor Rachel Reeves acknowledged ministers will not get ‘everything they want’ in the spending review due next Wednesday
In a letter to Keir Starmer, Metropolitan Police chief Mark Rowley said there would be ‘far-reaching consequences’ from inadequate funding
Angela Rayner is said to be holding out over cash for housing and local government
Ms Reeves is due to announce spending plans for the next three years in a week’s time, but several Cabinet ministers have yet to reach settlements with the Treasury.
Tensions with Home Secretary Yvette Cooper surfaced today with warnings that cuts for police will mean some crimes effectively being ignored.
Ed Miliband is also embroiled in horse-trading over Net Zero funding, while Angela Rayner is said to be holding out over cash for housing and local government.
Economists have been warning that Ms Reeves faces having to hike taxes again and break her fiscal fules, with demands for defence spending heaping more pressure on the government’s books.
In her speech, the Chancellor said: ‘Over the next week you will hear a lot of debate about my so-called self-imposed fiscal rules.
‘Contrary to some conventional wisdom, I didn’t want to come into politics because I care passionately about fiscal rules.
‘I came into politics because I want to make a difference to the lives of working people, because I believe as strongly now as I did when I was inspired to join the Labour Party almost 30 years ago that every person should have the same opportunities to thrive and to succeed.’
She added: ‘I know that economic responsibility and social justice go hand-in-hand.’
After claiming a Reform UK government would repeat the ‘reckless borrowing’ of the Liz Truss era, Ms Reeves said: ‘Let’s be clear: It is not me imposing borrowing limits on Government, those limits are the product of economic reality.’
Ms Reeves said despite a £190billion increase in funding over the spending review period ‘not every department will get everything that they want next week and I have had to say no to things that I want to do too’.
‘That’s not because of my fiscal rules. It is a result of 14 years of Conservative maltreatment of our public services, our public realm and of our economy.
‘It is the stability that my rules support and the choices that we made as a government in October that have helped facilitate four cuts in interest rates since the last election, saving £650 a year for a family taking out a new typical two-year fixed mortgage.’
On top of the increase in day-to-day spending, funded in part by the tax hikes Ms Reeves has set out in her budget, looser borrowing rules will help support a £113 billion investment package.
She said: ‘Britain faces a binary choice: investment or decline, and I choose investment because I believe in an entrepreneurial and an active state and I reject wholeheartedly the old-fashioned, dogmatic view, that the only good thing a government can do is get out of the way.’
In a letter to Keir Starmer, Metropolitan Police chief Mark Rowley said there would be ‘far-reaching consequences’ from inadequate funding.
The letter, also signed by other senior police officers, voiced alarm that negotiations between the Treasury and the Home Office were going ‘poorly’.
‘A settlement that fails to address our inflation and pay pressures would entail stark choices about which crimes we no longer prioritise,’ it read according to The Times.
Answering questions after her speech, Ms Reeves said she did not recognise the criticism because the spending review will ‘increase funding on police’.
Meanwhile, in a separate letter, Domestic Abuse Commissioner for England and Wales Dame Nicole Jacobs and Victims’ Commissioner for England and Wales Baroness Newlove wrote to Sir Keir saying victim support services are being ‘pushed to the brink’, hit by funding cuts and rising costs.
Ed Miliband is still embroiled in horse-trading over Net Zero funding
Last week, senior police officers – including Sir Mark – wrote a letter in the Times calling on the Government for ‘serious investment’ in the spending review, which will set out the Government’s day-to-day departmental budgets for the next three years.
‘A lack of investment will bake in the structural inefficiencies for another three years and will lose a once-in-a-generation opportunity to reform the service,’ the letter warned.
Sir Mark also voiced his concern that fewer criminals serving jail time under proposals to end prison overcrowding will ‘generate a lot of work for police’.
