Rachel Reeves delays multi-year UK spending review until June

Unlock Editor's Digest for free

FT editor-in-chief Roula Khalaf picks her favorite articles from this week's newsletter.

Rachel Reeves has postponed the Treasury's multi-year spending review until June as the government struggles to keep track of the amount of decisions it needs to make about funding priorities.

The Prime Minister had previously promised to complete the process by spring 2025, but officials and ministers told the Financial Times they were behind schedule.

They had previously been working on a timeline for a spending review, expected around April, according to an official briefed on the process.

The new June 2025 date will mark almost a year since Labor's landslide victory in the UK general election this July.

The work was supposed to be completed in the spring, but as talks began with ministers it was realized it could be a much longer and more complex process, said a person briefed on the process.

The UK government uses the Spending Review to decide how to allocate funds between government departments. The last multi-year review was in 2021, when then Chancellor Rishi Sunak allocated the budget for three years. The review, a major event on the Treasury calendar, has seen months of bargaining as ministers try to protect their budgets.

Labour's delay in the multi-year review will extend a period of uncertainty for government departments that have waited almost four months since Reeves' first budget election in October.

Her budget sets departmental spending caps for 2025-26 with a £40bn package of tax increases that will pump billions of pounds into public services this year and next.

But Reeves has postponed difficult long-term decisions on public spending, with overall spending growth set to slow to a real rate of 1.3% per year after 2025-26. The Prime Minister has pledged not to commit another major tax increase in the budget.

Next year's spending review will later determine exactly which departments will be the winners and losers in parliament. The review covers at least three years of day-to-day expenditure and also sets out a capital budget for five years.

The delayed target date is likely to reflect the difficult trade-offs Labor faces as it balances competing demands for public service investment in areas ranging from health, education, defence, and asylum.

The delay in Labour's spending review means Reeves is likely to receive full economic and fiscal forecasts from the official watchdog before announcing the results.

The Office for Budget Responsibility will release two full sets of forecasts for the fiscal year, meaning the next set of forecasts is due by the end of March.

The forecast could lead to difficult decisions for the Treasury if the OBR suggests Reeves is at risk of failing to comply with the newly restructured fiscal rules.

The Prime Minister has promised to hold only one major financial event a year, which ministers expect will take place in the autumn.

Analysts have warned that the government's margin of error on fiscal rules has already narrowed due to developments such as rising borrowing costs.

Ruth Gregory, UK economist at Capital Economics, said further tax rises were not inevitable but more likely than the chancellor would have us believe.

Britain's public finances are under severe pressure. Borrowings for the first seven months of this fiscal year amounted to KRW 96.6 billion, an increase of KRW 1.1 billion from the same period last year, and the third largest amount since monthly aggregation.

The exact timing of spring varies from person to person, but according to the UK government's Met Office, meteorologists run until May 31. It was typically March when the Treasury held its spring accounting event.

One minister joked that Whitehall might write a piece looking at the historical precedent for using spring.

The Treasury said: The Prime Minister confirmed that Phase 2 of the SR will be implemented. [spending review] It will be concluded in late spring and has made clear that she will never be too hasty or lax in handling public finances.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos