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Rachel Reeves will vow to “invest in Britain’s renewal” as she reveals her spending plans for the coming years on Wednesday.
The Chancellor is expected to announce big increases in spending on the NHS, defence and schools as part of a spending review set to include £113 billion of investment thanks to looser borrowing rules.
She will also reveal changes to the Treasury’s “green book” rules that govern which projects receive investment in an effort to boost spending outside London and the South East.
Arguing that this investment is “possible only because of the stability I have introduced” after the October budget, Ms Reeves is expected to say her spending review will “ensure that renewal is felt in people’s everyday lives, their jobs, their communities”.
She will say: “The priorities in this spending review are the priorities of working people.
“To invest in our country’s security, health and economy so working people all over our country are better off.”
Among the other announcements expected at the spending review is £39 billion for affordable homes over the next 10 years as the Government seeks to meet its promise of building 1.5 million homes by the next election.
The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026.
A Government source said: “We’re turning the tide against the unacceptable housing crisis in this country with the biggest boost to social and affordable housing investment in a generation, delivering on our plan for change commitment to get Britain building.”
The Chancellor has also already announced some £15.6 billion of spending on public transport in England’s city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk.
But the spending review is expected to set out tough spending limits for departments other than health, defence and education.
Although Ms Reeves is reported to have agreed to an above-inflation increase in the policing budget, this is thought to have come at the expense of cuts in other parts of Home Office spending.
And sources close to London Mayor Sir Sadiq Khan have expressed concern that the spending review will have nothing for the capital.
Ahead of the spending review, the Institute for Fiscal Studies has warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments or further tax rises to come in the budget this autumn.
The Chancellor has already insisted that her fiscal rules remain in place, along with Labour’s manifesto commitment not to increase income tax, national insurance or VAT.
She will say on Wednesday: “I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal.
“These are my choices. These are this Government’s choices. These are the British people’s choices.”
