Spending Review: This government means business on the housing crisis
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Two days before Rachel Reeves stood at the dispatch box she was already telling the country it needed a little “re-education” to understand her spending review. She was concerned we might not comprehend why so many essential services may need to swallow “efficiencies”, on the cusp of her promised decade of sustained growth and investment.
The re-education she sought was around her “non-negotiable” fiscal rules: a set of self-imposed standards which hem in all her decision making, preventing her from investing in both public services and infrastructure without breaking them, unless she raises taxes.
Reeves says nothing has changed in her commitment to her golden rules, but we don’t need a re-education to know that the facts have changed. The world has changed.
The promise to invest more heavily in defence and the UK’s intelligence agencies is clearly the right one for the febrile times we’re living in, both morally and practically. Nuclear power is an expensive but essential part of the plan to decarbonise our energy supply, as well as firm up its security at a time when global conflict is often a power play, in a very literal sense. Funding for cutting the asylum backlog and to move desperate migrants out of the misery of hotel accommodation is a welcome acknowledgement of the human, as well as political, urgency of the crisis.
There are other reasons to be buoyed by Reeves’ decisions this week. She invested a further £39bn in housing over 10 years – which is almost double what the Tories were spending, but more importantly is focused more closely on tackling the root cause of the housing crisis – our lack of social and affordable housing. There was also a promise for £10bn for financial investments through Homes England, to find innovative ways to fund development. It’s not a local housing bank, as campaigners want, but it’s very helpful.
Though neither were highlighted in the Chancellor’s speech, two other amendments suggest this government is really listening to housing experts. A 10-year rent settlement has been agreed with social landlords, with annual uplifts of CPI+1 per cent in social rent and, after more than 200 years, rough sleeping is finally to be outlawed, with the scrapping of the 1824 Vagrancy Act. This government means business on the housing crisis.
A significant boost in NHS funding for day-to-day running costs is also a welcome acknowledgement that people need to feel their health service is still available when they need it. Funding for early-years support, with cash for school food, £370m to create new school-based nurseries and a £555m fund to transform child social care, is also a long-overdue investment in the place where economic growth starts – the stability of people’s lives.
So, yes, the world has changed, but for most British citizens those changes still mean their lives are becoming more expensive and uncomfortable. Major infrastructure investment – which made up the bulk of this spending review – is something they won’t feel in the lifetime of this parliament; for children stuck in child poverty, they won’t feel it until well into adulthood.
What they will feel, however, are the parts left unsaid by Reeves when she addressed the Commons: the spending cuts and efficiency savings that have allowed her to keep within her fiscal rules.
The Home Office, the Foreign Office and the Department of Transport are all facing large cuts: entire projects will be axed to handle this, and the Police will bear a major brunt. A boon for housing, yes, but still the wider ministry which includes local government is expected to make 1 per cent savings. That may sound like a small figure but in practice it means tinkering with bin collection (just ask the people of Birmingham about that), difficult decisions about adult social care and other very tangible changes.
The Department for Work and Pensions is chasing a 3 per cent efficiency saving even after the reinstatement of the winter fuel payment to pensioners; no wonder there was no mention of the two-child benefit cap, or any acknowledgement of the size of rebellion the government admits is coming from its own backbenches over cuts to disability benefits.
In the week up to the spending review, there was much discussion in the national press about a new, potentially powerful voting demographic known as the HENRYs (High Earner, Not Rich Yet). These relatively well-off workers – taking home a salary of £100,000 or more but still feeling the pinch – will also feel the impact of each of these efficiency savings on their lives. They may not like the idea of the Chancellor borrowing to spend on daily costs such as adult social care or public services, but when the public realm is so broken, their aspirations – to live and work in a country that is growing, prosperous and can support its people to live in comfort and security – may require it.
Reeves’ test is not only to keep Reform from the door but to actually make the country feel better for everyone who believed last July – and perhaps still hopes – that she can. In response to her announcement on housing, developers’ share prices rocketed. If the Chancellor is committed to retaining her fiscal rules, she should ask herself a difficult question: who exactly is she growing the economy for?■
About the author: Hannah Fearn is a freelance journalist specialising in social affairs. She was comment editor of The Independent for seven years, and has previously worked for The Guardian, Times Higher Education and Inside Housing. She has a special interest in inequality, poverty, housing, education and life chances.
The centre isn’t holding. As parties and policies drift further to the right, and radical talking points become manifesto pledges, The Lead is committed to being a progressive voice holding Reform to account. We keep an eye on the movements of Reform UK – and we’ll be reporting back to you here, with our new ReformWatch section – appearing each week. If you’ve spotted a councillor doing something daft, downright scary, or a Reform politician up to something they shouldn’t be then let us know about it…
Not only did Zia Yusuf return to Reform just 48-hours after he decided working to get the party elected would be a waste of his time. He is now planning to stand as an MP. What a U-Turn. According to Farage, the former chairman was burnt out and “overreacted” to “pretty vile [Islamaphobic] abuse” after discussions of a burka ban were triggered by MP Sarah Pochin. For now, according to the BBC, Yusuf will lead the Doge team. However, he is expected to be parachuted in to whichever constituency Reform sees fit in the next by-election.
The whole saga with Yusuf saw the party lose 3,000 members in just seven days, according to LBC. The largest drop – of 1,000 – took place over four days, from the 5th to the 9th of June. Despite the drop, Reform’s membership numbers are still higher than they were at the start of May.
The new chairman is TalkTV host David Bull, who was previously the Deputy Leader for Reform and, at one point, a Member of the European Parliament (MEP) for the North West of England. Farage said Bull's job was “not to get involved in the admin” but to “give leadership” to activists and “inspire” the party’s base. The rest of Yusuf’s former role will be split, with a new head of operations and head of treasury expected to be announced soon.
It has recently become very apparent that Reform needs new funding streams. Despite promising to become a fundraising powerhouse, Reform managed to garner just half the donations of the Tories and, as reported by our friends at Democracy for Sale, more than half of donations (58 per cent) came from two people quite close to the party: its deputy leader Richard Tice, and ex-chief of staff George Cottrell’s mum. Perhaps David Bull can “give leadership” and “inspire” on the fundraising front. Shortly after the first Covid lockdown began, Bull (commendably) started a GoFundMe page for the National Emergencies Trust. The grand total the well-known TV personality raised? £130.
A Reform councillor in Kent, Daniel Taylor, who represents Cliftonville, has been suspended from the party with immediate effect. Kent County Council leader Linden Kemkaran (Reform) said the decision was made “due to a very sensitive set of circumstances.” The matter is apparently being handled by police. Kent Greens are already calling for a by-election in the ward.
During a Q+A on Tuesday, Farage admitted that the party does not have a plan for implementing its policy on illegal immigrants, which is to deport all 1.2 million of them from the UK. Asked for a plan, Farage said: “As President Trump is discovering in Los Angeles, this is not an easy thing to do, which is why, whilst it has to happen, I’ve always been cautious about delving into specifics on it.” He added that there’ll be no deportations until the UK leaves the European convention on human rights – and even then, he said, it might not. Brilliant!
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The Lead Digest
Ella has been listening to the audiobook version of Year of the Rat, the compelling story of journalist turned HOPE Not Hate researcher Harry Shukman’s year spent undercover in the British far right. Ella has finished approximately one audiobook in her entire life, so for this one to have sticking power says a lot.
Padraig enjoyed a recent episode of The Times’ The Story podcast featuring James Bloodworth, about his new book Lost Boys: A personal journey through the manosphere. More reporting on the toxic world of men’s rights – and excerpts from the book – can be found on Bloodworth’s Substack, For The Desk Drawer.
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Ed recently started reading Politically Homeless by Matt Forde. It's very funny and there's a really good section about when he worked for the Sherwood MP Paddy Tipping. He reflects on Tipping's absolute mastery of engaging with local people, being the face of a place. A lot of the new intake of 2024 MPs could learn a lot. (Forde also took Padraig’s last cigarette at 3am on Brexit referendum night. Must have needed it!)
Moving away from the manosphere and towards a more wholesome time of the internet, Natalie enjoyed Michaela Makusha’s Observer piece reflecting on the internet’s “cosy era” with child-centred games like Club Penguin. Natalie notes that she is too old for Club Penguin, but her Millennial version of this was Neopets.
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In what could be a sign of where the conversation will move, Blackpool South MP Chris Webb has spoken to The Blackpool Lead about how tackling child poverty is his priority. His constituency has some of the highest levels of child poverty in the country and he feels removing the two-child benefit cap would have a far greater impact than the new terms of the winter fuel payments (which he also welcomed).
Efforts from Reform UK in Lancashire to separate themselves from potentially embarrassing terminology such as DOGE (in relation to audits, not cryptocurrency) have not stopped the entire process being mired in controversy. Opposition leaders have told The Lancashire Lead about how easy it would’ve been for the Reform UK leader to allow questions about the process at a recent cabinet meeting. They decided not to.
And in Southport, plans for a home to be converted into a residential children’s home have highlighted how NIMBYism can blight the entire process. Complaints from neighbours have been branded as ‘factually incorrect and sometimes upsetting’. That’s explored by Jamie at The Southport Lead. If there’s stories you think we should be reporting across the North of England, tip-offs and ideas always welcome to luke@thelead.uk
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Ed, Ella, Luke, Natalie, Padraig, Zoe, and The Lead team
Reeves’ ignorance of macroeconomics is staggering. Her continued “household” analogy is deeply flawed. There is absolutely no requirement to “balance the books” or for “fiscal rules”. This review will fail as have her previous utterances.
Unbelieveable... and scary