Spending Review 2025 Speech

Thank you Mr Speaker.

My driving purpose since I became Chancellor is to make working people, in all parts of our country, better off.

To rebuild our schools and our hospitals…

…to invest in our economy so that everyone has the opportunity to succeed, [political redaction]…

…culminating in a £22bn black hole in the public finances.

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So at the Budget last October and again in the Spring, I made the choices necessary to fix the foundations of our economy.

And we wasted no time in removing the barriers to growth:

The biggest overhaul of our planning system in a generation;

Launching Britain's first National Wealth Fund;

And reforming our pensions system to unlock billions of pounds of investment into our economy.

We are starting to see the results.

The stability we have provided has helped support four cuts in interest rates…

…saving hundreds of pounds a year for families with a mortgage.

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And the latest figures showed we are the fastest growing economy in the G7;

With countries lining up to do business with Britain once again…

…backed by new trade deals with India, the United States and with the European Union.

We are renewing Britain.

But I know that too many people in too many parts of our country are yet to feel it.

This Government's task…

…my task as Chancellor…

… and the purpose of this spending review…

… is to change that.

To ensure that renewal is felt in people's everyday lives, in their jobs, and on their high streets.

The priorities of this spending review are the priorities of working people.

To invest Britain's security;

In Britain's health;

And to grow Britain's economy so that working people are better off.

Mr Speaker, today I am allocating the envelope I set out in the Spring.

I am enormously grateful to my excellent team of officials at the Treasury…

…and my RHF the Chief Secretary to the Treasury, for his tireless work throughout this process…

…crunching the numbers…

…looking at the assets…

…and the liabilities.

And on that note, can I thank all my Cabinet colleagues for their contribution to this process…

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In this spending review, total departmental budgets will grow by 2.3% a year in real terms,

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So let's be clear,

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My choices are different.

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The choices in this spending review that are possible only because of my commitment to economic stability…

…and the decisions that this government has made.

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My fiscal rules are non-negotiable…

…and they are the foundation of stability and of investment.

My first rule is for stability:

That day-to-day government spending should be paid for through tax receipts.

That is the sound economic choice

And it is also the fair choice…

…because it is not right to expect our children and future generations to pay for the services that we rely on today.

This first rule allows me…

…as I set out in the Budget last year…

…to allocate £190bn more to the day to day running of our public services over the course of this spending review…

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My second fiscal rule enables me to invest in Britain's economic renewal…

…while getting public debt on a downward path.

This rule has allowed me to increase public investment by over £100bn in the Autumn…

…and a further £13bn in the Spring…

…investment to rebuild our transport network, to rebuild our defence capability and to rebuild our energy security.

In short, to grow our economy.

Mr Speaker, I've made my choices.

Tough decisions, yes - for stability.

Changing Britain's fiscal rules, yes - for investment.

And today, delivering that investment - for the renewal of Britain.

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The spending plans I am setting out today are only possible…

… because of the decisions I took in the Autumn to raise taxes..

…and the changes to our fiscal rules.

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In the Spring Statement I said, the world is changing before our eyes.

And since the Spring, the challenges that we face have only grown more acute.

The signs of our age of insecurity are everywhere.

So we are acting on the promise in our Plan for Change:

Building renewal on foundations of national security, border security and economic security.

As the Prime Minister said earlier this month:

A new era in the threats that we face…

…demands a new era for defence and security.

That's why we took the decision to prioritise our defence spending by reducing Overseas Development Aid…

…so that defence spending will now rise to 2.6% of GDP by April 2027…

…including the contribution of our intelligence agencies.

That uplift provides funding for my RHF the Defence Secretary…

…With a £11bn increase in defence spending…

…and a £600m uplift for our security and intelligence agencies.

That investment will deliver not only security, but also renewal…

…in Aldermaston and Lincoln;

In Portsmouth and Filton;

On the Clyde and in Rosyth.

Investment in Scotland.

Jobs in Scotland.

Defence for the United Kingdom.

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And as we invest in our armed forces, our military technology and our supply chains…

…that also brings huge opportunities:

£4.5bn of investment in munitions, made in factories from Glasgow, to Glascoed…

…Stevenage to Radway Green.

And over £6bn to upgrade our nuclear submarine production…

…supporting thousands of jobs across Barrow, Derby and Sheffield.

We will make Britain a defence industrial superpower.

With the jobs…

…the skills…

… and the pride that comes with it.

A more unstable world presents new challenges at our borders too…

… where conflict has opened the way for organised criminal gangs.

The British people rightly expect us to have control of who comes into our country.

[political redaction] at the Budget last year…

…I announced £150m to establish the new Border Security Command.

And today, to support the integrity of our borders…

…I can announce that funding of up to £280m more per year by the end of the spending review for our new Border Security Command.

Alongside that, we are tackling the asylum backlog.

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So I can confirm today…

…that led by the work of my RHF the Home Secretary…

…we will be ending the costly use of hotels to house asylum seekers, in this Parliament.

Funding that I have provided today…

…including from the Transformation Fund…

…will cut the asylum backlog;

hear more appeal cases;

and return people who have no right to be here…

… saving the taxpayer £1bn per year.

That is my choice, Mr Speaker.

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And that is the choice of the British people.

And Mr Speaker, if we want national security in a dangerous world…

…that does not stop at the strength of our armed forces or at our border.

I have long spoken about what I call 'securonomics':

The basic insight that, in an age of insecurity, government must step up…

…to provide security for working people…

…and resilience for our national economy.

Put simply: where things are made, and who makes them, matters.

Take energy.

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On this side of the House, we understand that energy security is national security.

And so, because it is the right choice for bills…

The right choice for jobs…

And the right choice for growth…

… this government is investing in the biggest rollout of nuclear power for half a century:

-A £30bn commitment to our nuclear-powered future.

Yesterday my RHF the Energy Secretary and I announced £14bn for Sizewell C…

…producing the energy to power six million homes…

…supporting more than 10,000 jobs…

…Including 1500 apprentices - to build the nuclear workforce of tomorrow.

And Mr Speaker, that's not all.

We are investing over £2.5bn in a new Small Modular Reactor programme.

Our preferred partner is Rolls Royce…

… a great British company, based in Derby.

This investment is just one step towards our ambition for a full fleet of Small Modular Reactors…

… as well as providing a route for private sector-led Advanced Modular Reactor projects to be deployed across the UK.

Alongside these, we are making nuclear-approved land available in Sellafield, to attract private investment and create thousands more jobs.

And I'd like to thank my HF for Whitehaven and Workington for his work in this area.

And to strengthen Britain's position at the forefront of a global race for new nuclear technologies…

… a cause championed by the Mayor of the East Midlands Claire Ward and my HF the Member for Bassetlaw…

… and to support pioneering work taking place in West Burton in Nottinghamshire…

… we are investing £2.5bn in nuclear fusion.

And to back British industry's pioneering work in Carbon Capture, Usage and Storage…

…last year, we announced funding for two sites, on Merseyside - and in Teesside…

… where we are building the world's first commercial scale CCUS power plant.

Today I can announce support for Acorn project in Aberdeenshire…

… supporting Scotland's transition from oil and gas, to low carbon technology…

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And we are also backing the Viking project in Humberside…

…a cause long supported by my HF the Member for Great Grimsby and Cleethorpes.

And because I am determined to make sure that the energy technologies of the future…

…are built here and owned here…

…and that those jobs come to Britain…

… with spending review decisions that mean we can invest in the wholly publicly owned Great British Energy…

…headquartered in Scotland.

These are investments to make sure the towns and cities which powered the last industrial revolution…

…will play their part in our next industrial revolution.

To reduce our reliance on overseas oil and gas…

And protect working families from price shocks.

A new generation of energy industries - for a renewed Britain.

That is my choice.

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And that is the choice of the British people.

Economic security relies on our ability to buy, make and sell more here in Britain.

In April, this government faced a choice:

To let British Steel in Scunthorpe go under;

Or to intervene.

We heard representations from workers.

Mr Speaker, that choice was the choice not of the metal trader but this Labour Government.

We heard representations from workers, trade unions and from my HF the Member for Scunthorpe.

My RHF the Business Secretary and I were not prepared to tolerate a situation in which Britain's steel capacity was fatally undermined;

We were not prepared to see another working-class community lose the pride, lose the prosperity, the dignity that industry provides.

So we did intervene.

To save British Steel and the jobs that come with it. And i am proud of that decision.

And this government will invest in Scunthorpe's long-term future…

…and the future of steelworks across our great country.

And in a vote of confidence in our homegrown steel…

…Heathrow Airport - where we are backing London by backing a third runway - has signed the UK Steel Charter:

A multi-billion pound airport expansion,

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built with British steel.

And as we build our train and tram lines, our military hardware and our new power stations, that will mean orders for steel made in Britain…

In Sheffield Forgemasters, where we are investing in nuclear-grade steel;

And in Port Talbot, where this spending review confirms the £500m grant to Tata Steel.

A future for British-made steel.

And a proud future for Britain's steel communities.

Things built to last, built here in Britain.

That is my choice.

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That is the choice of the British people.

This [political redaction] government is backing British business.

There will be more to come in the weeks ahead in our ten-year Infrastructure Strategy;

And in our modern industrial strategy too…

…a plan, drawn up in partnership with businesses and trade unions.

And when I speak to businesspeople and entrepreneurs about what they need to succeed, they say they need a chance to innovate.

They need access to finance.

And they need a deeper pool of talent.

We have heard that message.

And so today I we are taking action.

First, innovation.

A great British strength.

Our universities are world-leading…

…and we are proud of them.

And we want our high-tech industries in Britain today continue to lead the world in years to come:

In car production, in aerospace, and in life sciences.

So we are backing our innovators, backing our researchers, and backing our entrepreneurs…

… with R&D funding rising to a record high of £22bn per year by the end of the spending review.

And because home-grown AI has the potential to solve diverse and daunting challenges…

…as well as the opportunity for good jobs and investment here in Britain…

…I am announcing £2bn to back this government's AI Action Plan, overseen by my RHF the SoS for Science and Technology.

And, second, to champion those small businesses seeking access to finance…

… as they look to grow…

… I am increasing the financial firepower of the British Business Bank…

…a two-thirds increase in its investments, increasing its overall financial capacity to £25.6bn…

… to help pioneering businesses start up, and scale up…

…backing Britain's entrepreneurs and backing Britain's wealth creators.

And third, as we invest…

…if we are to thrive in the industries of the future…

…we must give our young people the skills that they need to contribute to our national success…

…as scientists, engineers and designers…

…as builders, welders and electricians.

I know the ambition, the drive, and the potential of our young people.

And it cannot be right that too often those ambitions and that potential are stifled…

…when young people who want training find courses are oversubscribed…

…and are turned away at the door…

… forcing growing businesses, eager to recruit, to look elsewhere.

Potential wasted and enterprise frustrated.

And so, today I am providing record investment for training and upskilling our young:

£1.2bn a year by the end of the spending review to support over a million young people into training and apprenticeships…

… so that their potential, their drive and their ambition is frustrated no longer.

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As we build a strong and, secure and and resilient economy…

… working people must feel the benefits.

That starts with the security of a proper home.

Our planning reforms have opened up the opportunity to build.

Now we must act to make the most of those opportunities.

And a plan to match the scale of the housing crisis must include social housing…

…neglected for too many decades…

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And so, led by my RHF the Deputy Prime Minister, we are taking action.

I am proud to announce the biggest cash injection into social and affordable housing in 50 years.

A new Affordable Homes Programme - in which I am investing £39bn over the next decade.

Direct government funding to support housebuilding…

…especially for social rent…

…and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have already had plans to bring forward bids to build new houses in their communities.

And I have gone further.

Mr Speaker, last autumn I enabled greater use of financial transactions to support investment in our infrastructure…

…alongside strict guardrails that ensure that money is spent wisely through our public financial institutions.

And so, in line with that commitment…

…I am providing an additional £10bn for financial investments including to be delivered through Homes England…

…to crowd in private investment and unlock hundreds of thousands more homes.

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Homes built for working people.

But, Mr Speaker, it is no good investing in new skills, new jobs and new homes if they are not properly connected.

That is why last week, with the support of my RHF the Transport Secretary…

….I announced £15bn of investment to connect our cities and our towns…

…the biggest ever investment of its kind.

Investments in buses in Rochdale…

…train stations in Merseyside and Middlesbrough…

…mass transit in West Yorkshire…

And metro extensions in Birmingham, in Tyne and Wear and in Stockport.

And alongside that, we are backing Doncaster Airport.

Today I am announcing a 4 year settlement for Transport for London…

…to provide certainty and stability for our largest local transport network to plan for the future.

And, for other regions in the UK…

…I am today providing for a fourfold increase in Local Transport Grants by the end of this parliament…

… to make the improvements, put off for far too long…

…to improve the journeys people make every day.

And to unlock the potential of all parts of Britain…

… we are going further:

Investing in major rail projects to connect our towns and cities.

In October, I announced funding for the Transpennine Route Upgrade…

…the backbone of rail travel in the North…

…linking York, and Leeds and Manchester…

…with a quarter of the route expected to be electrified by this summer.

I know the commitment of my HFs, the Members for Huddersfield, York Outer, and Colne Valley to this issue…

…and today, I can announce a further £3.5bn of investment for that Route.

But my ambition and the ambition of people across the North is greater still…

…and so in the coming weeks I will set out this government's plans to take forward our ambitions for Northern Powerhouse Rail.

I have also heard the representations of my HFs the Members for Milton Keynes North, Milton Keynes Central, and Buckingham & Bletchley.

And I can tell the House today:

To connect Oxford and Cambridge…

… and to back Milton Keynes' leading tech sector…

… I am providing a further £2.5bn for the continued delivery of East-West rail.

And…

… on a matter I know is of great importance to HF Members for Lichfield, Birmingham Northfield, and Birmingham Erdington:

I can announce today that I am providing funding for the Midlands Rail Hub…

…the region's biggest and most ambitious rail improvement scheme for generations…

… strengthening connections from Birmingham, across the West Midlands and into Wales.

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Following representations from my RHF the Welsh Secretary, the First Minister of Wales and Welsh Labour MPs…

…I am pleased to announce today £445m for railways in Wales over ten years including new funding for Padeswood Sidings and Cardiff West Junction.

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This government takes seriously its commitment to investment, jobs and growth in every part of the UK.

And I have heard the concerns of HFs the Members for Mid-Cheshire and Rossendale & Darwen and the mayor of Liverpool City Region, Steve Rotheram…

…that past governments have underinvested in towns and cities outside London and the South East.

They are right.

… so I am today publishing the conclusion of the review of the Treasury's Green book, the government's manual for assessing value for money.

Our new Green Book will support place-based business cases and make sure no region has Treasury guidance wielded against them.

I said we would do things differently;

I said that we wanted growth in all parts of Britain;

And, Mr Speaker, I meant it.

Backing our nations and regions means backing our devolved governments.

And this spending review provides the largest settlements in real terms since devolution was introduced:

With £52bn for Scotland;

£20bn for Northern Ireland, by the end of the spending review;

And £23bn for Wales.

And having heard representations from many Welsh Labour colleagues…

… and because I know the obligation we owe to our industrial communities…

… I am providing a multi-year settlement of £118m to keep coal tips safe in Wales.

Mr Speaker, I know the pride that people feel in their communities.

I see it everywhere I go.

But I also know that for too many people, there is a sense that something has been lost…

…as high streets have declined…

… as community spaces have closed…

…as jobs and opportunity have gone elsewhere.

The renewal of Britain must be felt everywhere.

Today I'm pleased to announce additional funding to support up to 350 communities…

…especially those in the most deprived areas.

Funding to improve parks, youth facilities, swimming pools and libraries…

…supporting councils' fightback against graffiti and fly-tipping…

…Including in Blackpool South;

In Stockport;

In Stoke Central;

In Swindon North;

And In Newcastle Upon Tyne East and Wallsend.

And there's more.

Job creation and community assets are vital to our growth mission…

…but too often, regeneration projects are held back, gathering dust in bureaucratic limbo.

We are changing that.

We will establish a Growth Mission Fund to expedite local projects that are important for growth…

…Projects like Southport Pier-an iconic symbol of coastal heritage which has stood empty since 2022;

Kirkcaldy's seafront and High Street, where investment would create jobs and new business opportunities;

And plans for Peterborough's new sports quarter, to drive activity and community cohesion.

Because people deserve a government which shares their ambition for their communities…

… to deliver renewal…

… to deliver growth…

… to deliver opportunity…

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If people are to feel pride in their community, enjoy their public spaces, and spend time on their high street…

…they must feel safe when they do so.

Safe in the knowledge that when people break the law, they will feel the force of the law.

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We are taking the necessary action:

So with my RHF the Justice Secretary we have announced that, we are investing £7bn to fund 14,000 new prison places…

…and putting up to £700m per year into reform of the probation system too.

Today, I will do more.

I am increasing police spending power by an average 2.3% per year in real terms over the spending review period…

…to protect our people, our homes and our streets.

That is more than £2bn…

…supporting us to meet our Plan for Change commitment of putting 13,000 additional police officers, PCSOs and special constables into neighbourhood policing roles across England and Wales.

And as well as every place…

… I am determined that every family feels the benefits of Britain's renewal.

Falling interest rates, supported by our commitment to economic stability, are already saving many families hundreds of pounds a month on their mortgage.

I have accepted Pay Review Body recommendations for pay in our armed forces, for nurses, our teachers and our, prison officers…

…giving public sector workers the fair pay rise they deserve.

And in Autumn I increased the National Living Wage…

…a pay rise for around three million hardworking people.

And this government is doing more:

We're banning exploitative zero hours contracts;

…we're strengthening statutory sick pay;

…and ending the injustice of unscrupulous fire-and-rehire practices.

Those are my choices.

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Mr Speaker, I know that for many people…

… the cost of living remains a constant challenge.

Which is why we are capping the cost of school uniforms.

And I can tell the House today that I am extending the £3 bus fare cap until at least March 2027.

Earlier this week, we announced that over three quarters of pensioners will receive the Winter Fuel Payment this year.

And there is more…

…to get bills down not just this winter but in winters to come.

We have expanded the Warm Homes Plan to support thousands more of the UK's poorest households…

…including providing £7 million to homes in Bradford;

£11m to homes in Rugby;

And £30m to homes in Blackpool.

And today, I can announce that I will deliver in full our manifesto commitment to upgrade millions of homes…

…saving families and pensioners across the country up to £600 each and every year off their bills,

I am determined to do everything in my power to put more money in people's pockets.

To give people security and control in their lives.

To make working people better off.

And to show them…

That this government [political redaction] is on their side.

Mr Speaker, taxpayers work hard for their money…

…and they expect their government to spend their money with care.

So for the first time in 18 years, this government has run a zero based review…

…a line-by-line assessment of what government spends.

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And as a result of that work…

…and of our wider drive for efficiencies led by my RHF the Chancellor of the Duchy of Lancaster…

… in this spending review I have found savings:

from the closure and sale of government buildings and land;

cutting-back office costs;

and reducing consultancy spend.

Reforms that will make public services more efficient, more productive and more focused on the user.

I have been relentless in driving out inefficiencies;

I will be relentless in calling out waste…

…with every single penny reinvested back into our public services.

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I joined because I believed that every young person should have the equal chance to succeed…

…no matter where they come from…

…no matter what their parents do.

I believe that just as strongly today as I did then.

That is why, at the Budget last Autumn, I ended the tax loophole which exempted private schools from VAT and business rates.

And I put that money where it belongs…

…into helping the 93 percent of children in our state schools.

Mr Speaker, I will always prioritise them. That was my choice [political redaction].

Because of the decisions we have made in this spending review…

…and working with my RHF the Education Secretary…

… last week, this government announced that Free School Meals will be extended to over half a million more children.

That policy alone will lift 100,000 children out of poverty…

Children in schools…from Tower Hamlets to Sunderland to Swansea to Bridge End.

Last year, at Labour Party conference…

…I was proud to announce the first steps in our plan to deliver breakfast clubs for every child…

… with an initial rollout to the first 750 schools.

And we will continue with that national rollout as part of our manifesto commitment…

…so that no child goes hungry, and every child can have the best chance to thrive and succeed.

But because I know that a good start in life does not just start at school…

…I can also announce £370m for school-based nurseries…

…to put us firmly on track to meet our Plan for Change commitment - for a record number of children being school-ready.

And for children's social care - to break the dangerous cycle of late intervention and low-quality care…

… I am providing £555 million of transformation funding over the spending review period…

… so that children do not go needlessly into care when they could stay at home…

… and, for children where state intervention is necessary, better care and better outcomes.

And last week, I was pleased to announce, with my RHF the Culture Secretary…

…that more than £130m from the Dormant Assets scheme with the financial services sector…

…will be allocated to fund facilities for our young people…

…to give every child the chance to take part in music, sport and in drama…

…to fund libraries in our schools…

… so that the confidence and opportunities that those resources open up, are no longer the preserve of the privileged few.

Those are my choices.

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And those are choices of the British People.

Overall, I am providing a cash uplift of over £4.5bn a year of additional funding in the core schools budget by the end of the spending review;

Backing our teachers, and backing our kids.

Mr Speaker, People who went to ordinary comprehensives in the 80s and 90sare all too familiar with the experience of being taught in temporary classrooms

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It wasn't acceptable when I was at school, and it isn't acceptable now.

So I am providing investment rising to nearly £2.3bn per year to fix our crumbling classrooms,

In addition £2.4bn per year to continue our programme to rebuild 500 schools…

…including Chace Community School in Enfield;

Woodkirk Academy in Leeds;

and Budmouth Academy in Weymouth.

Investing in our young people.

Investing in Britain's future.

Investing in opportunity for all.

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Finally, Mr Speaker, let me turn to our National Health Service.

It's our most treasured public service.

People rightly expect an NHS that is there when they need it.

An ambulance that comes when they call one

A GP appointment available when they need one

A scan that is performed when they are referred for one.

I am hugely grateful to our nurses, our doctors, our paramedics and other healthcare professionals for everything that they do.

If we want a strong economy, where working people can fulfil their potential, then we must have a strong NHS.

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…we believe in a publicly funded National Health Service, free at the point of use.

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At the Budget, I took the decisions necessary to provide an immediate injection of funding - to get the NHS back on its feet.

And I commend my RHF the Health Secretary for all the progress that he has already made.

In less than a year, this government has:

Recruited 1,700 new GPs;

Delivered 3.5 million extra appointments;

And cut waiting lists by more than 200,000.

Fixing our NHS also means delivering fundamental reform across social care…

…which we will back with the first ever fair pay agreement.

And I am increasing the NHS technology budget by almost 50%.

and we are investing £10bn to bring our analogue health system into the digital age…

… including through the NHS app…

…so patients can manage their prescriptions, get their test results, and book appointments all in one place.

We are shifting care back to the community…

…providing more funding to support the training of thousands more GPs to deliver millions more appointments.

We are investing more in prevention to meet our manifesto commitment of providing mental health support teams in all schools in England by the end of this Parliament.

These investments will enable the delivery of our upcoming 10-year plan for health and put the NHS firmly back on the path to renewal.

And to support that plan…

To back the doctors and nurses that we rely on…

And to make sure the NHS is there whenever we need it…

… I am proud to announce today that this Labour Government is making a record cash investment in our National Health Service…

… increasing real-terms, day to day spending by 3% per year for every single year of this spending review.

An extra £29bn per year for the day to day running of our the health service.

More appointments.

More doctors.

More scanners.

The National Health Service:

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Mr Speaker.

This is a spending review to deliver the priorities of the British people:

Security - a strong Britain, in a changing world.

Economic growth - powered by investment and opportunity in every part of Britain.

And our nation's health - with an NHS, fit for the future.

I have made my choices.

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These are my choices, Mr Speaker.

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These are the choices of the British people.

And I commend this statement to the House.