To spend or not to spend
Coffee House Shots
The Spectator
4.4 • 2.1K Ratings
🗓️ 4 June 2025
⏱️ 16 minutes
🧾️ Download transcript
Summary
Rachel Reeves unveiled billions of pounds of investment today for transport and infrastructure projects, as Labour attempts to demonstrate that next week’s spending review is not just about departmental cuts. However, most of the political noise today has centred on her announcement that the winter fuel cut will be reversed by the end of the year. But what does this all mean for the average voter, for the Chancellor’s fiscal headroom – and why is the government still blaming its own ‘fiscal rules’?
James Heale and Michael Simmons join Lucy Dunn to unpack the Chancellor’s announcements and explain the economic jargon, plus a look at today’s PMQs.
Produced by Patrick Gibbons and Oscar Edmondson.
Hosted on Acast. See acast.com/privacy for more information.
Transcript
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| 0:00.0 | As a Coffee House Shots listener, you will be all too familiar with the headlines that have dominated the news cycle in the past month. |
| 0:06.4 | Trump, tariffs, trade wars, stock market crashes, and general economic instability. |
| 0:11.8 | But it's during these periods of uncertainty that it's most important to have a steady hand guiding your finances. |
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| 0:37.0 | And remember, investment |
| 0:38.6 | involves risk. Hello and welcome to copy house shots. I'm mostly done and today I'm joined |
| 0:46.8 | by Michael Simmons and James Heel. Today the Chancellor of Rachel Reeves is in Manchester where |
| 0:51.5 | she has unveiled billions of pounds of investment across the Red Wall ahead of her spending review next Wednesday. Michael, can you tell us a bit more about what |
| 0:58.9 | Rachel Reeves has announced today? Well, it's a bit confusing, isn't it? Because all the sort of |
| 1:03.5 | coverage we've had over the last few weeks building up to this spending review that's coming next |
| 1:08.3 | week is that to meet her fiscal rules, we're going to be |
| 1:11.7 | seeing departmental spending cuts and, you know, austerity is going to be back. So it's a bit |
| 1:17.2 | odd that we've got all these stories coming about, as you say, of about 15 billion pounds of |
| 1:21.7 | infrastructure spending. And this is Reeves trying to change in agitiv to say, look, this review |
| 1:27.2 | is not just about cuts. It's about investing in the north, investing in areas where we want to redistribute wealth or read that as where we don't want to lose our seats to reform. But the reason that those two things can actually happen at the same time is because of this sort of accounting trickery |
| 1:45.0 | about how the Treasury does things. So there's two important points about the spending today. |
| 1:50.3 | Firstly, it's all capital spending. So not that day-to-day resource spending. And the headroom |
| 1:56.6 | that she's having to make cuts for next week is all about the current day-to-day deficit. |
| 2:02.4 | The fiscal rule that we're always moaning that the headroom's been wiped out for |
| 2:06.6 | is about getting rid of that deficit by the end of the OBR's forecast period. |
... |
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