Spending Review: Some MPs resigned to cuts but others warn PLP won’t play ball

Gloom is setting in among Labour MPs amid fears of swingeing cuts to some departmental budgets next week, with one saying they are “resigned” to unavoidable spending restraint but others issuing last-ditch pleas to shake up Labour’s fiscal rules instead.

In less than a week Rachel Reeves will deliver the Spending Review, which will set budgets for government departments over the next few years.

Through high-profile pre-announcements on infrastructure and school spending – plus a major new U-turn on winter fuel cuts – the government clearly hopes to shift attention away from potential cutbacks, and the apparent disquiet among several cabinet members involved in last-minute stand-offs over their budgets.

But how are MPs feeling ahead of the major set-piece?

It’s going to be ‘brutal’

One MP predicted departmental budgets would be “rough”.

“Resigned is probably the right word. It’s going to be brutal, and needs to be brutal,” they added, speaking before today’s significant winter fuel U-turn and some of the weekend’s spending pledges. I

They also added that they hoped departments would use more partnerships, co-design and pooling of budgets with other services and bodies to save money, rather than “salami-slicing”, giving the example of successful work already on preventing ill health to cut hospital costs.

But they praised the extra “Keynesian” capital spending briefed in advance, and hinted they expected there would be more to come. “It’s good the Northern capital spending has come out, and it’s really important – because we don’t want this narrative that it’s just about the South East, because it’s not.”

They also welcomed the fact Labour had≠ moved to more “efficient” multi-year spending reviews and longer-term capital spending plans, calling it a “huge economic stimulus”.

‘I can’t see cuts being taken well by the PLP’

Another warned that Labour MPs would be unlikely to support cuts, arguing that times have changed and the Chancellor needs to recognise it.

“I can’t see that being taken well by the PLP (Parliamentary Labour Party), I can’t see them acknowledging that cuts need to happen. The economy’s growing, the wealthier have more wealth, there are other options.

“And I think this is another thing about being timid with the fiscal rules. There is enough of an argument for the Chancellor to get up next week and say, things have changed, the economy has changed, the country has changed, the world has changed, we now need to adapt.

“We’ve been in for nearly a year, we are now going to make that change, and I think the markets will react fine. You will see it taking up well. And I think that’s the hope of many MPs going forward.”

While they welcomed more investment in the north of England, they also called for a “complete rethink” of the Green Book.

“The last Labour government re-energized and transformed cities. This Labour Government needs to transform towns in that same, same way, because towns, especially coastal towns, are in bad, bad ways.”

‘The world has fundamentally changed’

In particular, they said they wanted to see Rachel Reeves change her fiscal rules, as the world has “fundamentally changed”.

“We can’t talk about increasing Trident and the Spending Review for the military and money for Ukraine, and we found billions for the car industry and steel… But then telling pensioners and the disabled: Sorry, we can’t find the money.

“You can’t do that, people will not accept that at the moment. And then also, when you get the figures in for the ridiculous amounts of money that we’re spending on immigration and processing after the Tories lost control of the borders, people will not accept it now.”

Graeme Downie, MP for Dunfermline and Dollar, said he wanted to see measures next week that put money in people’s pockets.

“The Chancellor already said it’s going to be quite difficult in some regards, but I think what I’m looking for is measures that are best at putting money into people’s pockets, frankly, and particularly in communities in my constituency that tend not to have much.

“I think we need to look at how we create opportunities for people from working class communities as best as best we can.”

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