On Wednesday, the British government announced hundreds of billions of pounds of spending on Defense, Healthcare and Investments in Infrastructure and Housing, because it has set out its economic priorities for the coming years.
Rachel Reeves, the Chancellor of the Treasury, presented a breakdown of the public finances in parliament and describes how much money each government department will have to spend until 2029, around the time of the next general elections. It brings an end to months of tense negotiations between Mrs. Reeves and other ministers while trying to balance competing priorities and navigate economic challenges at home and abroad.
“We are renewing Great -Britain,” Mrs. Reeves told the legislators. “But I know that too many people in too many parts of our country still have to feel it.”
The multi -year expenditure review is the clearest signal so far from how the government will fulfill its top mission to increase economic growth. It has been following announcements in recent days to spend heavily to improve local public transport, Construct a nuclear power plant And build more affordable homes.
A vow to ‘repair the foundations’
When the Labor party came to power less than a year ago, an economy inherited under serious stress. Public services struggled, with long waiting lists for medical agreements; Productivity growth has been stagnating for more than ten years; And recent tax cuts put pressure on public finances. The rebellion of the bond market on the expenditure and tax plans of former Prime Minister Liz Truss were still fresh in the heads of people.
The government under Prime Minister Keir Starmer has tried to “resolve the basis” of the economy and to concentrate on major changes in the longer term, such as updating The development system for development And invest in cheaper energy generation.
But the government’s plans are repeatedly overshadowed by economic unrest from the United States. President Trump’s rates have sent shock waves all over the world and ushered in Warnings for a global economic delay. At the same time, Mr. Trump suggested that the support of his administration for arming Ukraine could falter against Russia and the European governments have encouraged to considerably increase the expenditure for their soldiers, so that budgets are pinched.
The country was strengthened by unexpectedly strong economic growth at the start of the yearAnd this year the International Monetary Fund recently upgraded its prediction for the British economy, which predicted 1.2 percent growth. But there are still worries about how the growth potential of Great Britain can be lifted in the longer term, which has been stubbornly low since the 2008 financial crisis.
An increase in military expenditures
One of the top priorities in the expenditure review was to send more money for the defense, after the government’s promise to increase military expenses to 2.5 percent in two years and 3 percent thereafter, as a share of gross domestic product.
That will lead to an increase of £ 11 billion in military editions and £ 600 million for security and intelligence services, said Mrs. Reeves.
It represents a crucial change: for more than half a century, the British government, in addition to others in Europe, has led less on defense and instead generously money to health care and welfare, A so -called peace dividend. Now, in the midst of Russian aggression, that era is over.
And there is busy to spend even more. Mark Rutte, NATO -General Secretary, insists on members to commit to 5 percent of their gross domestic product defense.
Protect funds for healthcare
But even if the military expenses increase, there is little room to withdraw from the financing of health care, the largest department of the government. In the midst of the pressure of an aging society and more people work and do not claim disease benefits, the British government has protected the spending on its National Health Service, which will get the greatest increase in a department.
In England, the health care budget for daily costs will increase on average £ 29 billion a year until 2029.
“The financing increases for health and defense are considerable,” says Paul Johnson, the director of the Institute for Fiscal Studies. “The result is of course a less generous regulation elsewhere.”
Other departments, such as the home office, Ministry of Foreign Affairs, the Culture, Environment and Food Department department, are confronted with a squeeze. Expenditure in schools, then The costs for expanding free school mealsWill also be tight.
Offer more money for investments
Because of A change in the tax rules that Mrs. Reeves made last yearShe unlocked an extra £ 113 billion for capital investments and imposed plans to invest more than £ 15 billion in public transport networks, £ 39 billion in 10 years in affordable homes and £ 30 billion for a “nuclear -driven future”.
“I made my choices,” Mrs. Reeves told legislators. “Instead of chaos I choose stability. Instead of deterioration, I choose investment. Instead of pessimism, division and defatism, I choose national renewal.”
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