Newslinks for Thursday 12th June 2025

Tories round on Reeves for reckless gamble after spending spree that must lead to tax hikes

“Britons face “substantial” tax rises after Rachel Reeves gambled that a significant boost to public spending would help Labour win the next election. The chancellor used her spending review to announce plans to “renew Britain”, betting that £20 billion a year in extra funding for public infrastructure such as railways, roads and power would spur the economy and improve living standards by the time voters go to the polls. Reeves promised an extra £29 billion a year for the NHS and cut spending elsewhere to channel money to “our most treasured public service”. However, economists said tax rises were “almost inevitable” in the autumn because of the strain on the public finances. Writing in The Times, Kemi Badenoch, said: “Labour’s spending review shows how unserious they are. More debt. More borrowing. More fantasy economics. We are facing an absurd situation where, because Labour have raised taxes and thereby killed growth, they will now have to raise taxes even further. We can’t afford four more years of this.” – The Times

• ‘Weak!’ Mel Stride tears Reeves’ ‘fantasy’ spending plans apart – Daily Express
• Fact check: how accurate are Rachel Reeves’s spending figures? – The Times
• Reeves places a long-term bet on UK ‘renewal’. Will voters notice?  – FT
• The charts that show why Reeves’s spending plans are a fantasy – Daily Telegraph
• Spending review 2025: winners and losers – FT
• Economy shrinks in blow for Reeves – Daily Telegraph
• Reeves gambles on ‘renewing Britain’ to win trust of voters and see off Reform – Guardian
• Spend now, tax later! Rachel Reeves splurges on NHS and Net Zero… despite fears she has no idea where the money is coming from – Daily Mail

Comment

• Labour’s spending review shows how unserious they are – Kemi Badenoch, The Times  
• Only proper welfare reform can bring true ‘national renewal’ – James Kirkup, Spectator
• Businesses up and down the land will be laughing in the Chancellor’s face – Jeremy Warner, Daily Telegraph
• Rachel Reeves has just taken a huge gamble – and it’s YOUR money that’s on the line – Jason Groves, Daily Mail
• How Rachel Reeves lost her air of invincibility – Jane Merrick, Hugo Gye, The i
• Rachel Reeves has opted to spend like a drunken sailor on shore leave in the Chagos Islands. It’s now a matter of ‘when’ not ‘if’ she comes back to pick our pockets with tax rises – Daily Mail
• It is now too late for Britain to avoid financial Armageddon – Allister Heath, Daily Telegraph
• Is Rachel Reeves ready for the coming crisis? – Andrew Lilico, CapX

>Today on ConHome

• ‘But already it was impossible to tell which was which’
• Labour’s Winter Fuel Payment U-turn is a win for the opposition, but not for fiscal conservatism
• “Tax freedom day” comes later in the year than ever and it doesn’t look like getting better

NHS budget now ‘as big as Portugal’s GDP’ after Spending Review

The NHS has “done really well” out of the spending review and now has a budget equivalent to the national income of Portugal, the head of the health service has said. Sir Jim Mackey, interim chief executive of NHS England, said the government had “done us a really good turn compared to other parts of the public service”. Rachel Reeves, the chancellor, gave the NHS a real-terms increase of 3 per cent, equivalent to an additional £29 billion on its £200 billion annual budget by 2028. Mackey told the NHS ConfedExpo conference in Manchester: “The NHS has done really well relative to other parts of the public service. “We’re always going to be in a world where we want more money, but I think everyone’s starting to accept and understand that we’ve got what the country can afford to give us. “We really need to get better value for that money — it is broadly the equivalent of the GDP of Portugal, so it’s a huge amount of money by any standards.” – The Times

• NHS the only winner in Reeves’s spending review – Spectator
• Rachel Reeves unveils 3% NHS spending boost but cuts other budgets – FT
• NHS ‘won’t hit waiting list target’ despite budget boost – The Times
• Reeves sacrifices defence and police for NHS splurge – Daily Telegraph

 Spending review piles pressure on Home Secretary over small boats and crime

“[The Spending Review]…. involved squeezes for other departments as the Chancellor seeks to keep within the fiscal rules she has set for herself. Her room for manoeuvre has also been further constrained by the Government’s U-turn on winter fuel payments, which will see the benefit paid to pensioners receiving up to £35,000 per year at a cost of around £1.25 billion to the Treasury. Among the expected losers are the police, with Yvette Cooper’s pleas for more cash to help with lowering crime believed to have fallen on deaf ears, despite warning it could lead to fewer bobbies on the beat. Chancellor Rachel Reeves is announcing real-terms increases for the service every year, but there are fears that it may not be enough. However the Home Secretary will get more than half-a-billion pounds to plough into strengthening the UK’s borders – including drones to spot migrants in the Channel. Ms Reeves also vowed to end the use of hotels to house Channel migrants before 2029.” – Daily Mail

• Policing crisis as chiefs accuse Reeves of failing to protect the public – Daily Express
• Police leaders say they will struggle to fulfil Labour’s promise to recruit 13,000 officers – Guardian
• Sadiq Khan swipes that Rachel Reeves risks ‘levelling down London’ as he warns Met could see officers cut after police funding squeeze – Daily Mail
• Rachel Reeves vows to end use of ‘costly’ hotels to house asylum seekers – but not for up to four years – Daily Mail
• Reeves under scrutiny over claimed £1bn asylum saving given size of backlog – Guardian
• Vive la Farce! French cops shrug & claim ‘it’s difficult’ as they stand & watch migrant family almost drown in bid to board small boat – The Sun
• The dangerous new strategy used by people traffickers to outwit French police and smuggle boat loads of Channel migrants into the UK – Daily Mail
• More conflict in 2024 ‘than any year since Second World War’ – The Times
• Rachel Reeves under fire for ‘insufficient’ defence funding – Daily Express

Comment

• Rachel Reeves may have just killed Nato – Ben Wallace, Daily Telegraph

Most Mauritians to get total tax break paid for by UK after Labour’s Chagos deal

“Sir Keir Starmer’s deal to hand over the Chagos Islands will fund sweeping tax cuts in Mauritius, it has emerged. The Prime Minister last month signed an agreement to cede sovereignty of the stretegically-important Indian Ocean archipelago to Mauritius. The deal will see the UK lease back a military base on Diego Garcia, the largest of the islands, with Britain paying Mauritius an average of £101million a year for 99 years. Sir Keir said the ‘net cost’ of the agreement will be £3.4billion, after adjusting for factors including inflation. But opponents said the true cost is ten times as much. Mauritius will use almost £500million of the payments to help clear its national debt. This will allow the east African country to abolish income tax entirely for 81 per cent of employed Mauritians and raise minimum salaries. It has also been pointed out how, under the Chagos Islands deal, UK taxpayers are now funding more than 4 per cent of the Mauritian government’s total budget.” – Daily Mail

• Lord Hermer handed biggest increase in spending review – Daily Telegraph

Spain will have border controls inside Gibraltar after Labour signs new post Brexit deal

“Britain and Spain have reached a deal to resolve their longstanding dispute over Gibraltar, almost a decade after Brexit put the future of the territory in limbo. Under the agreement, Spanish officials will be given powers to check passports at Gibraltar’s airport and port in return for an open land crossing between ‘the Rock’ and Spain. Gibraltar will also end its VAT-free regime, a key demand of Madrid, which has long complained that lower taxes on the territory distorted the Spanish economy and encouraged contraband trade in some products, like cigarettes. Instead there will be a new levy with be a higher rate of import duty called a “transaction tax”. The government and Gibraltar had strongly objected to the presence of Spanish police on UK territory. However, under the deal police will be deployed at the airport in exchange for effectively making Gibraltar part of the EU’s Schengen free-travel zone, which should boost its economy.”  – The Times

• Britain ‘surrendering Gibraltar’ after agreeing to EU passport controls – Daily Telegraph
• Starmer’s Gibraltar ‘surrender’ deal: UK agrees to a ‘fluid border’ between The Rock and Spain as Labour post-Brexit deal with EU is finalised – Daily Mail
• Gibraltar ‘surrender’ as David Lammy agrees to fluid border with Spain – Daily Express

News in Brief

• Labour’s winter fuel U-turn is government by PR stunt – Jack Smith, Unherd
• What Reform don’t understand about monetary policy – Damian Pudner, CapX
• A clean-up job for bullshit politics – Victoria Smith, The Critic
• Why corporate wokery refuses to die – Rupert Redwald, Spectator

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