After a year in office — and months of Westminster whispers — Rachel Reeves stepped up to the Despatch Box today and made her call: “I have made my choices.”
Her headline choice? Health. NHS budgets are getting a near 3 per cent real-terms boost, which should help pay for more staff, more appointments, and (in theory) shorter waits. But while salaries rise, the hospital buildings those staff work in might still crumble — with no major uplift for capital spending, patients may find themselves in new clinics one day and leaking wards the next.
Beyond the NHS, Reeves unveiled a focus on visible change. The kind of change that wears a hi-vis vest and hard hat. In her fiscal plan, Labour is betting that voters want to see where their taxes go. Billions will flow into the regions: Midlands rail, mass transit in Yorkshire, East West Rail, £39 billion for affordable housing, regeneration in 350 communities, and a step forward on small modular reactors to power Britain’s Net Zero ambitions.
Against the odds, Reeves also handed a win to Ed Miliband — whose Energy Security department gets the biggest capital boost of all, despite months of anonymous briefings against him and the wider Net Zero agenda. And after tweaking the Treasury Green Book, Labour is making sure this money doesn’t just stick to London and the South East. Instead, the focus is on regions long starved of investment — and key to Labour’s electoral map.
But all of this comes with a monumental caveat: savings. Cuts to Whitehall admin budgets and real-term squeezes elsewhere mean Reeves is relying on efficiencies to balance the books. Whether those savings materialise is another question entirely. DEFRA, FDCO and the Home Office all see cuts to their budgets over the spending period, and schools are likely to see increases in staffing costs eating away any additional money. It’s unlikely that the police will be happy with the outcome of the review either. A small increase in budgets is unlikely enough to help them hit their recruitment targets, or Labour’s mission pledge on reducing knife crime.
For Labour, today wasn’t just about the numbers — it was about narrative. Gone is the doom and gloom of Reeves’ first fiscal events. Renewal is the new buzz word.
The Chancellor also used part of her speech to attack Reform directly, a sign that Labour is already playing a long game for 2029. But ultimately, it won’t be Reform or the Tories who decide Labour’s fate — it’ll be voters judging whether any of these big projects actually get built, or their hospital wait goes down.
After a bumpy start in government, Labour is facing up to the reality that delivery is now everything.
A gamble on big projects may bring economic growth in the future, but will it be quick enough to get Labour the recognition it needs? With the OBR forecasting just 1 per cent for the rest of 2025 very little in the budget will bring an immediate economic stimulus. The gamble is that this will all come to fruition some time before the next general election.
