Rachel Reeves battles to deliver Labour’s financial roadmap with ministers resisting cuts and calling for major investment across UK sectors

Rachel Reeves is currently caught in a tricky situation trying to finalize the upcoming spending review.

With just over a week left before she announces the crucial three-year budget settlements for government departments, she’s still wrestling with disagreements from key ministers who aren’t fully on board yet.

Ministers Holding Out on Funding Agreements

Reports say four ministers are still holding out on the spending review details.

Ed Miliband is deep in discussions over funding for Net Zero projects, trying to secure enough cash for initiatives like home insulation and carbon capture.

Angela Rayner is pushing hard for more support on housing and local government budgets.

Meanwhile, Home Secretary Yvette Cooper is demanding a bigger police budget to meet Labour’s crime reduction goals, and Bridget Phillipson hasn’t yet settled on her education funding package.

Starmer’s Cabinet Faces Government Challenges Head-On

This morning, Keir Starmer gathered his Cabinet to face these challenges, especially after a defence strategy was published yesterday that highlighted just how complicated things have become.

Starmer has promised to make Britain ‘war-ready,’ pointing to threats from Russia and other hostile nations, but he hasn’t committed to a strict timeline for spending 3% of GDP on defence.

On the social side, Starmer is showing signs he might give in to pressure from Labour MPs demanding the return of the winter fuel allowance and a relaxation of the two-child benefit cap.

These moves come as the UK economy shows signs of stalling.

Economic Pressure and Grim Growth Forecasts

The economic backdrop is tense.

The OECD has just lowered the UK’s growth forecast for this year from 1.4% to 1.3%, and for 2026 from 1.2% to 1%.

This slowdown adds more strain on the government’s finances.

Financial experts warn that unless Rachel Reeves eases her strict fiscal rules and allows for more borrowing, tax hikes will be unavoidable—potentially significant ones—by the autumn.

What the Spending Review Means in Practice

The spending review distributes the money set aside by the Chancellor at last year’s Budget, which included a £40 billion annual tax increase and altered borrowing rules to allow upfront spending on services and infrastructure.

However, analysts have long said that the planned budgets for the later years look too tight, especially now with slower growth worsening the picture.

Yvette Cooper’s demand for more police funding is reportedly tied to Labour’s commitment to crime reduction.

Meanwhile, Ed Miliband is entrenched in one of the biggest budget battles over energy and environmental projects, including the “warm homes” insulation plan and carbon capture.

A Message of Investment and Renewal

A close ally of Rachel Reeves told the Financial Times: “Within this spending review, there’s £300 billion to be allocated between departments based on decisions made by the Chancellor at last year’s Budget.”

The overall message, they emphasized, is that the government is focused on investing in Britain’s renewal—covering security, health, and the economy.

What Comes Next?

With so many moving parts and conflicting priorities, the question remains: will Rachel Reeves manage to get everyone on board and deliver a spending review that balances investment with fiscal responsibility?

The coming days will reveal whether the government can avoid painful tax hikes or spending cuts and keep its promises on crime, housing, green energy, and more.