Spending Review 2025

Lord Lansley Excerpts

Thursday 12th June 2025 Lords Chamber

[Lord Livermore (Lab)]

My noble friend is absolutely right when she says that a lot of our capital spending is long term. I think that is perfectly right. For example, the noble Baroness earlier talked about pension funds. I met representatives of some of the largest Canadian-Australian pension funds recently, and they told me that one of the most attractive parts of the UK economic landscape at the moment is the long-termism of our policy-making. They want to see long-term commitments and long-term investment so that they can invest into this country. The long-term nature of the policies is important, but my noble friend is absolutely right that people need to see improvements in their lives much sooner than that, because obviously they have lived through the cost of living crisis brought about by the previous Government. We need to see those cost of living improvements quickly.

One of the funds established yesterday was the pride in place fund. It is important that people see improvements quickly in their local communities. We also announced funding for the warm homes plan, with a total of £13 billion allocated across this Parliament to improve the energy efficiency of people’s homes. We did a big boost to social and affordable housing, with £39 billion, and expanded free school meal eligibility in England to all children with a parent receiving universal credit. We invested more to fund childcare entitlements for working parents. We funded the freeze to prescription charges at below £10 over the spending review period, and we launched a new crisis and resilience fund to help families when in crisis.

[Lord Lansley (Con)]

My Lords, the Minister will recall the table to the spending review which lists the departmental expenditure limits. Within that there is a line for the reserve, which I assume is essentially the contingency reserve. I recall that, back in 2023-24, the contingency reserve was over £9 billion, and that was completely blown and we had to have supplementary estimates. The table shows that, for phase 2, the reserve is at 1% of the totals for DEL and does not increase over the three years: it goes from £6.7 billion, to £6.7 billion, to £7.1 billion. This seems to be an inadequate figure for contingency that far out and is not, as one would expect, a rising figure—a wedge of contingency—in the later years. I wonder whether the Minister might explain why that wedge does not appear as one would have expected.

[Lord Livermore (Lab)]

If I may say so, the rising wedge, as the noble Lord describes it, is his analysis. It clearly is not analysis shared by the Government. I do not know whether it is based on any economic theory. It may be, but it is clearly not one that the Government share, because they are the numbers that the Government have set out.