Day-to-day spending on the NHS will increase by £29bn a year, Rachel Reeves has announced as she accepted voters are yet to feel an improvement under Labour.
Delivering her spending review, the chancellor also declared an end to the use of asylum hotels this parliament by investing in cutting the backlog and returning more people with no right to be here – which she said would save the taxpayer £1bn.
Politics live: Reaction to spending review
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Spending Review: Five things you need to know
Ms Reeves acknowledged that almost a year on from Labour’s landslide election victory, “too many people” are yet to feel their promise of national renewal.
She said the purpose of her spending review is “to change that”, with total departmental budgets to grow by 2.3% a year in real terms.
Key settlements include:
• NHS: The health service gets £29bn for day-to-day spending – a 3% rise for each year until the next election;
• Defence: Spending will rise from 2.3% of GDP to 2.6% by 2027 – an £11bn uplift;
• Housing: Social and affordable housing will get £39bn – the biggest cash investment for 50 years;
• Science and tech: Research and development funding will hit £22bn with AI plans getting £2bn;
• Transport: £15bn for new rail, tram, and bus networks in the North and the West Midlands, a new rail line between Liverpool and Manchester, and a four-year settlement for TfL, plus the £3 bus fare cap extended to 2027;
• Nations: Scotland gets £52bn, Northern Ireland £20bn, and Wales £23bn, including for coal tips;
• Education: Free school meals extended to 500,000 children, while the extra £4.5bn per year will also go on fixing classrooms and rebuilding schools
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£11bn increase in defence spending
Ms Reeves drew a distinction between her plans and the Tories’ austerity agenda in 2010, saying they cut spending by 2.9%.
She said austerity was a “destructive choice for the fabric of our society” and “different choices” would be made under Labour.
Read more: The key announcements
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Reeves attacks Tory economic record
The chancellor also attacked Reform UK, claiming the party want an “insurance-based system” for the NHS.
She said the money she was announcing today would fund more appointments, more doctors and more scanners.
“The National Health Service: Created, by a Labour government, protected by a Labour government and renewed, by this Labour government,” she said.
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