The next few days are vital – "one of the last moments to weave it all together – to look politically credible to the people Labour has lost", one senior figure reckons. There have been huge fights inside government about the looming Spending Review. As I write, the home secretary and deputy prime minister are both still in dispute with the mighty Treasury over the amount of cash they'll have to spend. But the Treasury's already trying to convince the public the review is about significant investment. On Wednesday Rachel Reeves boasted of funnelling billions more taxpayers' cash to big transport projects outside the wealthier south east of England, having tweaked the Treasury rules to do it. Now, with five days still to go, I've been passed some of the information that'll be in the pages of Wednesday's review. It's one crucial chart that will be in the huge bundle of documents heading to the printing presses on Tuesday night that shows what's called TDEL – the Total Departmental Expenditure Limit. In other words, the total that government spends, including the day-to-day costs of running public services and long-term spending on big projects. The chart spans 2010 to 2030, so takes in the coalition years, where you can see the total sliding down, then the Conservative years when spending starts rising after the Brexit referendum, then leaps up during Covid. And then, when Labour took charge, the red line going up steeply at first, then more slowly towards the end of this parliamentary term. The total real terms spending by 2029-30? More than £650bn – roughly £100bn more than when Labour took office. The pale blue line is what would have happened to spending if the Conservatives had managed to hang on to power last year. The government now is allergic to accusations that any cuts they make will be a return to austerity. And this chart shows that overall spending is going up considerably, compared to those lean years. The political argument around spending will rage but the chancellor did - to use the ghastly technical term – set out the "spending envelope" in her autumn Budget, indicating rises were coming. You can bet they'll want to use every chance they have to say they are spending significantly more than the Tories planned to under Rishi Sunak. The government's political opponents on the other hand, may look at that red line as it climbs steeply upwards and say: "See, public spending is ballooning out of control". This chart does illustrate very significant rises in public spending. But be careful. What this chart doesn't give us is any idea of how those massive totals break down. Massive chunks will go to favoured departments, suggestions of an extra £30bn for the NHS today. And a very significant part of that steep rise will be allocated to long-term projects, not running public services, some of which are struggling. The overall total may be enormous, but a couple of parts of government greedily suck in billions - others will still feel the pain. A case in point – as I write on Saturday morning, the Home Office is still arguing over its settlement, believing there isn't enough cash to provide the number of police the government has promised, while the front pages are full of stories about the NHS receiving another bumper deal. So observe this big health warning. The chart gives us a sense of the political argument the chancellor will make. But it doesn't tell the full story or give the crucial totals, department by department, decision by decision. It's worth saying it's incredibly unusual to see any of this before the day itself, hinting perhaps at jitters in No 11 about how the review will be received. Until we hear the chancellor's speech, and then see all of the documents in full on Wednesday, the story of the Spending Review won't be clear. There will be reams of statistics, produced by government, and the official number crunchers, the OBR, and then days of analysis by think tanks and experts in the aftermath. But bear in mind these three core facts. Rachel Reeves will put a huge amount of cash, tens and tens of billions, towards long term projects. Short-term spending money will be tight, with no spare cash for sweeteners. And the government is not popular, so there's huge pressure to tell a convincing story to try to change that, not least because of what went wrong the last time. "We can't ever do it like this again." After Labour's first Budget, government insiders concluded next time, it had to be different. A source recalls: "It was a very brutal exercise - it was literally just making the sums add up, there was no collective approach to what the priorities were." Alongside a lot of extra cash for the NHS, there was a big tax rise for business that came out of the blue. No one wants a repeat of that experience. The "next time" is now – and a Labour source warns the review might be as "painful as hell" . So the task for a government struggling in the polls is to make this moment more than just a gruesome arithmetic problem, instead, to use the power of the state's cheque book to make, and go on to win an argument. Stick a fiver on Rachel Reeves referring back to that first Budget as "fixing the foundations" of the economy and public services, this week then being the moment to start, "rebuilding Britain". Sources suggest she has three aspects in mind: security for the country (which will explain all those billions for defence), the health of the nation - that does what it says on the tin, and "investing", all that cash for long-term projects. Next week's decisions will be followed soon after by the government's industrial strategy which will promise support for business, possibly including cash to help with sky-high energy costs. And it comes after several big staging posts – the immigration white paper, trade deals, the defence review. In government circles there's hope of denting some of the criticisms that they have been slow to get moving in office, that, frankly, Sir Keir Starmer arrived in government without having worked out what he really wanted to do. One Whitehall insider tells me, "Now the buses are all arriving at once – maybe the idea of this lacklustre government that didn't have a plan will be blown away by July?" Another Labour source suggests the threat from Nigel Farage has actually forced the government to get moving, visibly, and decisively: "Reform gives us the impetus to actually shake this stuff down." That's the rosy view of how the chancellor might be able to play a difficult hand. It might not be reality. It is profoundly uncomfortable for a Labour government to make cuts. There is already a whiff of rebellion in the air over ministers' welfare plans. Expanding free school meals for kids in England seems designed to placate some of those critics in advance, but there could be more to make them mutinous. Don't forget Reeves has several different audiences – not just the public and her party, but the financial bigwigs too. This time last year all Labour's schmoozing was paying off, and she enjoyed good reviews in the City. One year on, that mood has shifted, in part because of the autumn budget. According to one city source, it "damaged her. People saw it as an about turn on her promises. Raising National Insurance, however they want to present it, went against the spirit of the manifesto… confidence in her in the City is diminished and diminishing", not least because there is chatter about more tax hikes in the autumn budget. Sign up for theOff Air with Laura Knewsletter to get Laura Kuenssberg's expert insight and insider stories every week, emailed directly to you. You probably don't need me to remind you that the level of taxes collected by government are historically sky high. So too, at the other end, is the amount of government debt. A former Treasury minister told me this morning, "debt is the central issue of our time, nationally and globally". "There is a real risk our debt becomes unsustainable this Parliament, unless we make tough choices about what the state does. We can't keep on muddling through." Add in the twists, tariffs and tantrums of the man in the White House, that make the global economic situation uncertain and the picture's not pretty. But politics hinges on finding advantage in adversity. Polling suggests much of the country reckons Labour inherited a bad hand and has played it badly. This week, the chancellor has a chance to change the game. No 11 is determined to prove that she has made decisions only a Labour chancellor would make. And Reeves is gambling that her decisions to shovel massive amounts of money into long term spending helps the economy turn, and translates into political support well before the next general election. A senior Labour source said, Wednesday will be "the moment, this government clicks into gear, or it won't". There's no guarantee. BBC InDepthis the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.
Spending Review: Massive cheques from the chancellor for some - but what do totals hide?
TruthLens AI Suggested Headline:
"Labour Government Faces Challenges Ahead of Crucial Spending Review"
Bbc News
6.7
TruthLens AI Summary
The upcoming Spending Review is a critical moment for the Labour government, as internal disagreements within the government highlight the urgency to present a politically credible budget to regain support from lost voters. Tensions between the Home Secretary, Deputy Prime Minister, and the Treasury continue, particularly over budget allocations. Meanwhile, Labour's Rachel Reeves has emphasized significant investments in transport projects outside the affluent South East, framing the Spending Review as a means to demonstrate fiscal responsibility and growth. The Total Departmental Expenditure Limit (TDEL) chart, which illustrates government spending from 2010 to 2030, shows an increase in spending under Labour compared to previous years, particularly in the wake of the COVID-19 pandemic. However, critics warn that while the overall spending appears to rise, the distribution of funds may favor certain departments, leaving others, like the police, struggling for resources amidst promises of increased funding for health services.
As Labour prepares for the Spending Review, the party faces the dual challenge of addressing public spending concerns while also appeasing financial stakeholders. The government aims to position itself as a responsible fiscal manager, despite the historical context of high taxes and government debt. The upcoming decisions are seen as pivotal, with insiders indicating that the effectiveness of the review could determine the government's trajectory leading up to the next general election. Key themes for the review are expected to include national security, health, and long-term investments, all of which are crucial for Labour to convey a strong narrative. The political landscape remains fraught, with rising public skepticism about Labour's ability to manage the economy effectively. The outcome of this Spending Review could either bolster the government's standing or exacerbate existing discontent among both the public and within party ranks.
TruthLens AI Analysis
The article highlights the complexities surrounding the upcoming Spending Review amid internal government disputes, particularly between the home secretary and the Treasury. As the government attempts to present a narrative of increased investment, key financial metrics, such as Total Departmental Expenditure Limit (TDEL), are scrutinized to understand the bigger picture of public spending trends.
Political Credibility and Public Perception
The article suggests that the government is at a critical juncture where it must regain the trust of voters, particularly those who have shifted away from Labour. By presenting a narrative of significant investment, the government aims to counteract criticisms of austerity and demonstrate fiscal responsibility. This effort reflects a broader strategy to reshape public perception and reinforce political credibility.
Financial Metrics and Trends
The mention of TDEL provides a concrete basis for understanding the government's spending patterns over the years. The graph illustrating spending trends from 2010 to 2030 reveals fluctuations tied to political changes, notably the impact of the Brexit referendum and the COVID-19 pandemic. The government seems intent on emphasizing that overall spending is increasing, which could be a strategic move to alleviate concerns about austerity measures that may arise in the future.
Potential Concealment of Information
While the article focuses on the positive aspects of spending increases, it may downplay or obscure potential challenges such as rising debt levels or the sustainability of this spending in the long term. The framing of the narrative may lead the public to overlook the implications of increased spending and any associated economic risks.
Manipulative Aspects of the Article
There are elements of manipulation in how the data is presented. The selective focus on rising spending without addressing the context of economic pressures may create a misleading sense of security regarding the government's fiscal policies. This could be seen as an attempt to rally public support while glossing over the complexities of the economic situation.
Public Response and Support Base
The article is likely to resonate more with communities that prioritize government investment in public services and infrastructure, particularly those in regions outside the affluent South East. The focus on enhancing transport projects may appeal to voters who feel neglected in the past.
Economic and Market Implications
In terms of its impact on financial markets, the narrative surrounding increased spending can influence investor sentiment, particularly in sectors such as construction and infrastructure. Stocks related to these industries may see positive movement as the government signals its commitment to funding large projects.
Geopolitical Context
While the article primarily addresses domestic fiscal issues, it indirectly connects to larger themes of economic stability and governance, which are critical in a global context. The spending review can have ripple effects on the UK’s economic standing, potentially affecting its position in international markets.
AI and Content Creation
There is no clear indication that AI was used in crafting this article. However, if AI were involved, it might have influenced the narrative's tone and structure to align with typical media framing that emphasizes positive developments while minimizing negative aspects.
The overall reliability of the article hinges on its selective presentation of facts and data. While it provides valuable insights into spending trends, the framing may lead to a skewed understanding of the government's fiscal position. The focus on investment without adequate discussion of potential downsides suggests a need for critical engagement with the information presented.