Rachel Reeves warned tax rises are ‘inevitable’ as billions pledged for NHS and housing

Chancellor Rachel Reeves has pledged to put billions into the NHA and housing in hopes of “renewing Britain” but critics have said it was “almost inevitable” that their will be further tax rises

Rachel Reeves pledged billions more for the NHS and housing as she sought to see off the threat from Reform.

The Chancellor claimed “we are renewing Britain” after a “lost decade” under the Tories, as she confirmed departmental budgets will rise by 2.3% a year.

She said the health service will get an extra £29bn per year, a real-terms 3% annual rise, while £39bn will be spent on social and affordable housing.

But critics warned the state of the public finances meant further tax rises were “almost inevitable” in the autumn Budget.

The Labour minister accepted that “too many people in too many parts of our country” were yet to feel the benefits of the change they voted for when Labour was swept to power last year.

It follows Reform’s rising popularity as it soars in the polls.

Announcing her spending review on Wednesday, Ms Reeves vowed to end “costly” asylum hotels by 2029, which she claimed would save taxpayers £1bn per year.

She said border security funding will increase by £280m more a year by the same point.

The core schools budget will rise to £69.5 billion by 2029 while defence spending will increase to 2.6% of GDP by 2027.

She also outlined plans for an average 2.3% rise in police spending per year, providing more than £2bn for forces, while border security funding will increase.

But National Police Chiefs’ Council chairman Gavin Stephens said it will “cover little more than annual inflationary pay increases”.

He added: “The amount falls far short of what is required to fund the Government’s ambitions and maintain our existing workforce.”

Ms Reeves made repeated digs about Reform and its leader Nigel Farage, dismissing the party as “simply not serious” over its “unfunded” spending commitments.

Attacking the Conservatives, she told MPs: “Let’s be clear, austerity was a destructive choice for the fabric of our society.

“And it was a destructive choice for our economy too, choking off investment and demand creating a lost decade for growth, wages and living standards.”

Shadow chancellor Sir Mel Stride dismissed the spending review as a “fantasy” and labelled his opponent the “tinfoil Chancellor, flimsy and ready to fold in the face of the slightest pressure”.

He said: “This is the spend now, tax later review, because the Chancellor knows she will need to come back here in the autumn with yet more taxes and a cruel summer of speculation awaits.”

Alison Ring, of the Institute of Chartered Accountants in England and Wales, said: “Tax rises are now all but inevitable following the Chancellor’s decision to significantly bolster defence and health spending, no matter what measures are taken between now and the autumn Budget.

“The government’s sticking plaster strategy remains an obstacle to addressing the deep-set challenges facing the country.

“Instead, we need a clear, long-term plan to fix and futureproof the UK’s balance sheet, and without this there is little hope of achieving the transformative change needed to propel the country forward.”

Reform UK’s deputy leader Richard Tice said “spending was out of control” as he slammed the spending review.

Lib Dem Treasury spokesperson Daisy Cooper warned: “Putting more money into the NHS without fixing social care is like pouring water into a leaky bucket.”

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