The UK Labour government is preparing for a crucial Spending Review, aiming to present a confident, deliverable economic vision to investors by prioritizing long-term capital spending and research & development, despite internal caution and ongoing fiscal pressures from the pandemic's long shadow.
Spending Review: The Labour government must escape its own shadow
Spending reviewsRachel ReevesUK government spending
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The UK Labour government is preparing for a crucial Spending Review, aiming to present a confident, deliverable economic vision to investors by prioritizing long-term capital spending and research & development, despite internal caution and ongoing fiscal pressures from the pandemic's long shadow.
Trending- 1 1829: Stephenson's Rocket launched.
- 2 2000: Capital spending proportion of GDP was 0.5%.
- 3 2010: Capital spending proportion of GDP higher than under Brown-Darling.
- 4 Mid-2024: Labour government elected (nearly one year old).
- 5 Last week (early June 2025): Increase in defence spending announced.
- 6 This week (June 9-15, 2025): Spending Review to be announced.
- 7 Wednesday (June 11, 2025): Documents published.
- 8 Autumn 2025: Possible further tax rises.
- Potential for highest sustained level of capital spending in nearly half a century.
- Aims to attract private investment and boost future economic growth.
- Increased spending on research and development.
- Potential for new major infrastructure projects (e.g., Liverpool-Manchester high-speed rail).
- Tight settlements on day-to-day spending due to new borrowing rules.
- Ongoing budgetary pressures from pandemic-related demand for services.
- Possible further tax rises in autumn if growth targets aren't met.
What: The UK Labour government is preparing a Spending Review to outline its economic vision, focusing on long-term capital spending and R&D.
When: This week (likely June 9-15, 2025), article published 2025-06-08. Government nearly one year old (elected mid-2024).
Where: UK, Downing Street, Liverpool, Manchester.
Why: To demonstrate a confident economic vision to the private sector and international investors, boost future growth, and address long-term challenges.
How: By allocating significant sums to capital spending (highest sustained level in nearly half a century), increasing R&D spending, and potentially announcing major infrastructure projects like the high-speed rail line.