'Spending like a drunken sailor': Rachel Reeves’s splurge-a-thon

0:03The Telegraph.

0:09It's spending review day and I'm outside the Houses of Parliament where the Chancellor Rachel Reeves has just given her speech setting out how she's going to be spending all of our hard-earned taxpayers' cash. Government spending's up, but how on earth is the Labour government going to pay for it with very, very little fiscal headroom? What do the opposition make of it all? And why is the Chancellor so obsessed with Nigel Farage? We're going to be speaking to Chris Curtis from Labour, Andrew Griffith from the Conservatives and Farage's own right-hand man, Richard Tice, to find out what reform makes of it all.

0:46Welcome to The Daily Tea in sunny Westminster with me, Camilla Tominy.

1:01I'm standing in college green. The Chancellor has just finished her speech. Mel Stride, the shadow Chancellor, has been having a go at her and doesn't like what he's heard. And I've got in my hand The Spending Review 2025. It's an HM Treasury document. It's blue. It's 128 pages. I can't confess to have read it all at this stage, and I'm sure it will make for some very exciting bedtime reading. But let's just summarise what Rachel Reeves has announced as far as how she's going to be spending our taxpayers' cash. So just the overall figure, it's quite extraordinary really to think how much is spent by the government in general.

1:39So£552 billion worth of public spending in 2024-25. That seems to add£12.7 billion to the government bill for what they need to spend on various different departments. In total, Whitehall budgets are going to be up 2.3%. And as is ever the case with a spending review, it's been preceded by a lot of argy-bargy between the Chancellor and the various Secretaries of State who are all clamouring for their own piece of the pie. We know that there were tensions between Rachel Reeves and the Home Secretary, Yvette Cooper, because Yvette Cooper feared she wouldn't give enough money towards policing and even got the Metropolitan Police Commissioner, Sir Mark Rowley to back her up in that claim by saying we must have more funding for the police.

2:29So let's look at some of these top line figures. I think health is probably the department that benefits the most from this spending review. Their budget is going to go up by 3 % per year for every year of the review. An extra£29 billion per year for the day-to-day running of our health service. More appointments, more doctors, more scanners. the National Health Service, created by a Labour government, protected by a Labour government, and renewed by this Labour government. Now, that is quite controversial, because as we heard from Jacob Rees-Mogg yesterday, NHS productivity has been down. According to the Office for National Statistics, it's down 24 % over the course of the last 30 years.

3:17So people may well ask themselves, are we actually just ploughing money into the health service but not getting the kind of service that we deserve, not least when the funding has been upped by that amount. I suppose most heavily pitch-rolled of all was the defence spending uplift. Now, Rachel Reeves says that defence spending is going to be 2.6 % of GDP by 2027. That uplift provides funding my right honourable friend, the Defence Secretary, with£11 billion increased in defence spending and a£600 million uplift for our security and intelligence agencies. That investment will deliver not only security, but also renewal.

4:02However, what's significant is what she didn't say about when it would become that magical 3%. We had again a row between, it seems, the Treasury and John Healy, the Defence Secretary, as to when they could get to that 3 % figure. and you may also remember that what was once a commitment then became an ambition to spend that much money on defence. Social housing, Angela Rayner, is going to be very, very happy with this spending review, the Deputy Prime Minister, because that is getting a boost of£39 billion. And a plan to match the scale of the housing crisis must include social housing. Neglected for too many decades, but not by this Labour government.

4:49And so, led by my right honourable friend, the Deputy Prime Minister, we are taking action. I am proud to announce the biggest cash injection into social and affordable housing in 50 years. That's in order to fulfil that pledge of 1.5 million homes being built by the end of Parliament. Many people say they can't do it, but to certainly plough that money into social housing and I think try and make up for the selling off of social housing and council housing to private owners will be a move that will certainly play very well on the Labour backbenches. Bridget Phillipson the Education Secretary should be happy with£4.5 billion on schools also extending free school meals to half a million children in the UK and perhaps unsurprisingly for a Chancellor that very much likes to stress that she came from quite humble beginnings and then ended up at Oxford University and let's also not forget that her own sister Ellie Reeves who is the Labour Party chairman has advocated completely abolishing private schools in the past.

5:56So it was perhaps no wonder that she very much wanted to defend Labour's decision to slap VAT on private school fees. I believe that every young person should have the equal chance to succeed, no matter where they come from, no matter what their parents do. I believe that just as strongly today as I did then. That is why at the budget last autumn, I ended the tax loophole, which exempted private schools from BVAT and business rates. And I put that money where it belongs, into helping the 93 % of children in our state schools. We knew about the huge amount of money that's going to new nuclear projects.

6:36Ed Miliband, absolutely delighted to see nearly£17 billion being spent, and 14 billion of that will go to building size well C. Producing the energy to power 6 million homes, supporting more than 10 ,000 jobs, including 1 ,500 apprentices, to build the nuclear workforce of tomorrow. And, Mr Speaker, that's not all. We are investing over 2 ,500 ,000 pounds in a new small modular reactor programme. Our preferred partner is Rolls-Royce. a great British company based in Derby. Will Yvette Cooper running the Home Office be happy? Well,£7 billion on 14 ,000 new prison places, but a 2.3 % uptick in police funding, probably not quite what she wanted.

7:26I'd imagine she'd want more. There had been a rumour that Border Command was going to be slashed. Quite an unbelievable proposal when you consider Yvette Cooper and the Labour government's pledge to stop the boats and smash the gangs. In fact, the budget for Border Command is going to be increased from£150 to£280 million. So that's to help the government's quest to bring down legal and illegal immigration. And it seems as if the beef between those two women went beyond the spending review because it was later noted that one of the only members of the Cabinet that the Chancellor refused to name-check or declined to name-check was indeed Yvette Cooper, the Home Secretary.

8:04although she will have been very, very pleased with Labour's announcement that they plan to close all asylum hotels by the end of this Parliament. Funding that I have provided today, including from the Transformation Fund, will cut the asylum backlog, hear more appeal cases and return people who have no right to be here, saving the taxpayer a billion pounds a year. But of course it then begs the question, where are you going to house asylum seekers if not in hotels? And transport. Transport was a very big topic of the spending review. We'd already heard that£15 billion was going to be pledged towards northern projects, so projects in the north, feeling neglected after the abandonment of that extra leg of HS2 going into the north.

8:52So again, you've got Labour playing to its northern heartlands. Also talked about nearly half a billion pounds on rail projects in Wales. again that might be to see off the threat from reform more money for regional rail and this will keep the newly knighted Mayor of London Sadiq Khan happy a four year settlement for transport for London. So those are the headline figures. Let's just go through the speech because as ever Rachel Reeves doesn't always show that much charisma at the dispatch box. However she wanted to make this about renewing Britain and was very much keen to stress that the decisions the Labour government and she were taking were the ones that people want out in the country.

9:37And there was one particular catchphrase that she repeated maybe half a dozen times. In place of chaos, I choose stability. In place of decline, I choose investments. In place of pessimism, division and defeatism, I choose national renewal. These are my choices, Mr Speaker. These are Labour choices. These are the choices of the British people. The other thing that Rachel Rees referred to was the A word. Haven't heard it in a while, not since the Cameron and Osborne days. Austerity. In contrast to our increase of 2.3%, they cut spending by 2.9 % per year in 2010. So let's be clear. Austerity was a destructive choice for the fabric of our society.

10:29And it was a destructive choice for our economy too. Choking off investment and demand, creating a lost decade for growth, wages and living standards. That is their legacy. My choices are different. My choices are Labour choices. She's very much trying to make sure that she does not gain a reputation for stripping back government funding. There was an interesting question earlier at Prime Minister's Questions from Richard Bergen, who's very much on the Corbynista wing of the Labour Party, saying, I very much hope this spending review doesn't involve cuts to services for disabled people. So you've got lots of lefty Labourites very, very worried that some of these departments are going to be squeezed and Labour are then going to get a reputation for being rather too Tory-ish in their approach to government spending.

11:23We also had a very interesting situation during the speech where twice, not just once, but twice, the Chancellor referenced the Member of Parliament for Clacton on sea. Let's have a listen to that. The Member for Clacton may be playing the friend of the workers now, but some of us are old enough to remember when he described the disastrous Liz Trust budget as, and I quote, the best Conservative budget since the 1980s. Mr Speaker, our group David has done, he still nods along. They have learnt nothing. Now, perhaps a member for Clacton should spend some more time focusing on the priorities of the British people and less time in the Westminster arms.

12:08Although, Mr Speaker, after this week, perhaps the two-chairman pub might be a better fit. As ever, the Chancellor there proving that humour isn't always her strongest point, and she did actually attempt another joke when it came to Kemi Badenock, the leader of the opposition. On the subject of skills, Mr Speaker, we should all recognise the leader of the opposition's own commitment to lifelong learning. At the weekend... At the weekend, she promised to learn and to get better on the job. Well, I am sure that members of the benches This opposite will be supporting her in that endeavour. Good luck with that.

12:50Lifelong commitments to learning, though, may not also be Rachel Reeves' key strength. I'm not sure whether she studied geography, GCSE or A-level, but there was a little mishap when she talked about just how far-reaching Labour's government spending would be on schools. Free school meals will be extended to over half a million more children. That policy alone will lift 100 ,000 children out of poverty. Children in schools from Tower Hamlets to Sunderland and from Swansea to Bridgend. Now, you don't necessarily need to get out AA Route Planner to know that the distance between Swansea and Bridgend is about 25 miles.

13:31It'll probably take you about half an hour to get there in a car. Clearly, she didn't quite have the map in front of her as she was speaking. It should probably be said that there wasn't the best prelude or the most positive prelude to the spending review. Both the Prime Minister and the Chancellor were forced to admit that despite all their protestations on how well the economy is doing, so well that they've been able to reverse the winter fuel allowance cut, they did have to concede, both of them, that not many people actually feel better off in Britain today. And I'm sure they weren't particularly gratified either to hear Paul Johnson of the Institute for Fiscal Studies say, quotes, if anything does go wrong with any of the current forecasts, then they will come again in the autumn.

14:14And what he meant by that is to say they will come again for our taxes. So it now seems as if, with all of this spending laid out, that tax rises are going to be an inevitability. The Tories seized on that, and they put out an advert this morning which appeared to be a little bit of a rip-off of Steven Spielberg's film Jaws. But instead of the catchphrase that we're used to knowing from that film, they changed it into, you're going to need a bigger wallet, suggesting that we will be hit in the pocket when the autumn statement comes round in a few months' time. This is how the Shadow Chancellor, Mel Stride, reacted to the spending review in the House of Commons.

14:54This is the spend now, tax later review. because the Right Honourable Lady knows she will need to come back here in the autumn with yet more taxes. And a cruel summer of speculation awaits. Hundreds of billions in additional spending over this Parliament. The initial profile for that spending was of course significantly front-loaded but the Chancellor now expects us to believe that she will let spending rise by only 1.2 % a year. There is no chance whatsoever of that happening. For the lesson of the last year has been that when the going gets tough, the right honourable lady blinks. She presented herself as the Iron Chancellor but what we have seen is the tinfoil Chancellor.

15:51Flimsy and ready to fold in the face of the slightest pressure.

16:00Well, we've heard from Mel Stride, the Shadow Chancellor. Let's now speak to the Shadow Business Secretary, Andrew Griffith, also the MP for Arundel and South Downs. Lovely to see you today in College Green. Mel Stride, they're absolutely scathing, saying that the Labour government is spending too much money, but isn't the truth of the matter that the Tories spent equally eye-watering amounts? Well, look, too many governments have spent too much of other people's money without being completely honest with that, and that's one reason why we're seeing, on the basis of today's figures, the debt to GDP reach almost 100%.

16:33It means we're borrowing as much as the country we produce. So you're not wrong about the big background to this. Of course, there were things like Covid, the energy crisis caused by the war in Ukraine, that I'd say were an extenuating factor under the last Conservative government. But what we didn't hear today, what this country, this wonderful country, with great opportunity ahead of us, so badly needs, is a plan for growth. We got a plan to spend, to spend other people's money. We didn't get a plan for public sector productivity. We didn't get a plan to curtail public sector pensions. We didn't get a plan to actually restore the nation's finances.

17:10And because they've been very good at spending money, world class at spending other people's money what this means is we're going to have this big period of uncertainty again now before the autumn budget, we'll be back here in a few months time, the weather won't be quite as good and we'll be hearing about tax rises that are going to land on Middle Britain. Well how do you know that for definite? Because we've seen the advert, you know the Jaws advert saying you're going to need a bigger wallet we've heard from Mel Stride saying it's spend now tax later, you don't actually know that, I mean she didn't and I know we can have a debate about national insurance and all of the other measures.

17:45She didn't put up income tax VAT, did she, in the last budget? So why are you saying it might happen now? Well, first of all, every time they have raised a tax, it's been something that they denied that they were going to do. They told us before the election they weren't going to attack family farmers through inheritance and they went and did that. They said they weren't going to put a tax on work and without being too semantic about it, a£25 billion tax on work through national insurance. So look, no one knows exactly what's going to be in the budget. That's part of the problem. So she wouldn't commit today not to put up taxes.

18:19And what we've seen is every time Rachel Reeves, frankly, every time Rachel Reeves opens her mouth, there is no headroom left by the time she sits down. So today she's been spending like a drunken sailor. When she first put those forecasts in place, the OBR said there was barely 9.9 billion of headroom. That's a tiny number on the£1.4 trillion that the government spends every year. As a former finance director, there's no prudence in having that little headroom. But then she sits down. The next day, interest rates go up. They nationalise British Steel. They decide to restore the winter fuel payments that they took away.

18:54All of these things, Camilla, remove the headroom that she's got. So far too much public spending, not enough reform, spending in many cases in the wrong places. And we are going to see those taxes rise in the autumn. So we have£552 billion of public spending in 2024-25. That's an additional£12.7 billion, calculated by my Telegraph colleague. What would you change? What would you do? How much less would you spend? It's all about tough choices, and we would make those tough choices. It's also about honesty in finances. One of the things that pains me the most, I was a finance director, is the way that she's fiddled her fiscal rules.

19:33She's effectively saying, look, the only part of the nation's books we're going to balance is the income account and I'm going to redesignate anything I spend on capital outside of that borrowing limit. Now you can only do it once because after that the gilt market, the bond markets won't lend money to you again so she's gone on this big splurge from fiddling the fiscal rules but that money still has to be paid back. Government generally of all different parties has not balanced its books, has not raised as much in taxes as it spends each year for nearly 25 years And this takes us further away from the goal of ever balancing our budget, ever living within our means.

20:11But you were badly bitten, weren't you, by the austerity tag? I mean, that was a problem, wasn't it, for the Conservatives? And you ended up in coalition with the Liberal Democrats because it became a dirty word. And I know there is a difference. You know, one man's efficiency savings is another person's austerity. I do get that. But would you have done the£29 billion into the NHS, knowing what waiting lists are like and how reliant the public is? and the fact we've got an ageing population. Look, there's always... I'm not going to redo a spending review. There is always upward pressure on the public purse.

20:42We've talked in the past about specific numbers, £12 billion from welfare reform. There is scope over time to get more people back into work if you can grow the economy. I'm the Shadow Business Secretary. Right now, I am fighting the 300-page employment red tape bill for unemployment that Labour are bringing forward. We've seen over the last 12 months 100 ,000 people move off employed payrolls. Where do we think they have gone? They are on the welfare bill. And so there's lots of levers that you can pull if you are determined to and if you're willing to take tough choices. We don't see those tough choices today.

21:17You didn't hear from Rachel Reeves about how she's going to face down the public sector unions, how we're going to really drive productivity in some of our public sectors. And you didn't hear anything about welfare reform. When Liz Truss tried these things, when she tried to be radical, it all blew up in her face. And that was a complicated moment in time. Are you going to do a male stride and slag her off? I'm not slagging anybody off. I was starting to explain that that was a complicated moment in time. Liz herself has said that mistakes were made, but it's never a mistake to seek to dry and grow the economy.

21:52We are sad to say, if you're born in Britain today, you're no longer in one of the 20 most prosperous countries on a per capita basis. I'm ambitious for this country. I'm ambitious for our children and grandchildren. It doesn't seem to me an extraordinary thing in the home of the Industrial Revolution with our formidable global natural advantages where we shouldn't one day aspire once again to get ourselves into the top 20 countries from prosperity. But you're only going to do that if you can grow the economy. That does include cutting tax, cutting the burden, allowing the productive private sector to grow.

22:25That's why I don't understand why Mel Stride and others have sort of disowned trossonomics. Surely there were ideas there that many, many conservatives and righties liked. It was just a problem of execution. It was politically stupid of him to have attacked one of his own. It's an absolute gift to Labour and it was exploited by the Prime Minister at PMQs today. Well, look, Camilla, I'm not apologising or explaining anything. What I am saying is a core set of Conservative beliefs that I've held since I first joined this Conservative Party many, many years ago, I'm afraid. that it is better when you have a small state that seeks to do a few things well, allows people to keep more of what they earn, and incentivises people to do all of the good things we want, whether it's starting a business and passing it on to the next generation, whether it's saving for our own old age, whether it's establishing a pension and not having a Labour Chancellor direct where that pension is invested.

23:20Now, those are tried and tested Conservative philosophies. we did not get everything right in government, to be clear. We should not have attacked lots of different things. We shouldn't have tried to ban lots of different things. But today's all about public spending. And our point is this Chancellor's lost control of the economy. Pick an economic metric. It's going in the wrong direction. Inflation is going up. Interest rates are going to be higher for longer. Even the gilt market is now higher than it was after the mini-budget. Final question. She twice referenced Nigel Farage, the Honourable Member for Clacton on Sea, and only once referenced Kemi Badenock.

23:56It seems as if Labour are more afraid of reform than they are the Conservatives right now. Are reform actually the unofficial opposition here? Listen, I don't mind who they're afraid of. By the time we are finished with our policy reviews, going back to core Conservative principles, a team that is working hard to articulate those, then they'll be afraid of us. If in the meantime they want to waste their time and energy elsewhere, bring it on because the Conservative Party is still here we are still fighting, we're attracting donors and I talk to businesses every day who say for goodness sake we need an economically competent centre right party that believes in business, is on our side wants a small estate but doing things well Andrew Griffith, thank you very much indeed for joining me on The Daily Tea as ever lovely

24:43Chris Curtis, the Labour MP for Milton Keynes North joins me now Defence spending, Chris, can I ask you, because Mark Rutter, who is the NATO Secretary-General now, has said that the British better learn to speak Russian if we don't up defence spending. I know you're going to say the Chancellor has put it up to 2.6 % of GDP by 2027. Where's the commitment on 3 %? Is this 3 % happening? It was going to be a certainty, now it's just an ambition. No, we know we need to get to 3 % as quickly. Firstly, we should acknowledge that we have increased defence spending. Unfortunately, it's incredibly important.

25:17that we do so in this increasingly unstable world. And there is that ambition to get to 3 % as quickly as possible. But look, we need to make sure that the money is there in order to do so. And that means making decisions to get the British economy growing again. Because the best defence strategy this country can have is a good economic strategy. Because that is the only way we can afford the weapons, the tanks, the defence that is going to be necessary to ensure that we can defend Britain and defend Europe against the Russian threat. Oh, we're competing with helicopters overhead. But do you think then that we are not at the point where the Chancellor can commit to 3 %?

25:53We can't put a time limit on it because we haven't got enough money at this stage. It's been perfectly clear. The economy that we inherited was pants. If the British economy had grown over the last 10 years as quickly as the OECD average, there'd be£40 billion that the Chancellor could be spending today without having to raise a single penny in tax. And we would have been able to get to that 3%. So because of what we've inherited, it's not easy to be able to... So it is a U-turn, really? It's not a U-turn, it's about how we get there as quickly as possible. The stories couldn't set out when they could get to 3 % for similar reasons, because of what they've inherited.

26:21We've started to make the changes. We've also made difficult decisions on the international age budget that have allowed us to get that percentage up to 2.6 % and make commitments on that. But I'm under no illusion that we are going to have to get to 3 % as quickly as possible. All right. £29 billion for the NHS, which on the surface looks like a great funding boost that West Street and the Health Secretary will be cock-a-hoop about. However, according to the Office for National Statistics, productivity in the NHS is down by a staggering 24 % over the last 30 years. So we're ploughing in ever greater taxpayer sums for, it seems, not as a productive service.

26:59That's problematic for the electorate, isn't it? Yes, it's a real problem and it's not sustainable into the future. So we know that there are going to be increasing demands on our national health service. You think about the ageing population we've got. You also think about the increased costs of healthcare as the technology develops. And that means the only way to keep our NHS sustainable into the future is, yes, extra funding. But that extra funding has to be spent on things that are going to get us those productivity gains. That's thinking about new technology. In fairness, Wes Streeting has spent a lot of time thinking and talking about that.

27:32He visited a hospital up in Milton Keynes to look at some of the new technologies that we are putting in place there to increase that productivity of our workforce. But don't you have to have it as a condition of the spending? You have to say, right, if we're going to give nearly 30 billion quid of taxpayers' cash towards the NHS, we do require different NHS trusts to increase productivity by, say, 10%. Why not have that target? I think you'll be hearing a lot from Wes Streeter about how he's going to ensure that we get productivity gains across the NHS. But it's basic things. The amount of time our staff in the National Health Service waste just trying to find equipment around hospital.

28:09You could do basic things with this new cash, for example, like making sure that you've got tags on some of the equipment so that you can locate it, so staff know where it is, so our highly trained, highly qualified nurses and doctors are not wasting their time looking for equipment and instead productively seeing patients again. And I think we're going to be hearing a lot from Wes about how we're particularly going to be using new technology to increase productivity within our national health schools. Are we going to be hearing a lot about tax rises come the autumn? And I'm not saying that just from a Telegraph perspective, although that might be the case.

28:38It's also Paul Johnson's words for the IFS, the Institute for Fiscal Studies, telling the BBC's Today programme this morning that tax rises are inevitable because of the Chancellor's difficult, minimal fiscal headroom. We'll have to see where we end up. And I am not the Chancellor and therefore I can't speak on behalf of her. But what I would say is this. We've had to make difficult decisions on tax, particularly at that budget last year. but that's a consequence of low economic growth. We have not really grown as an economy in the last 20 years. Wages are pretty much the same as they were before the financial crash and that's the real reason that we're having to have these conversations about tax rises in the first place.

29:19The only way out of the economic doom loop that was left to us by the previous government is to be as bold and as radical as necessary in order to bring growth back to the economy. I hear Andrew Griffith, for example, talking about that. but actually when you look at it he's opposing the very things that would create economic growth they're opposing the changes to the planning system which we know is going to create over£6 billion for the British economy. He's opposing the Gatwick expansion in his own constituency because he decided to live near an airport and now thinks it's too noisy. We're clear that if we're going to get British economy growing again we're going to have to get Britain building again and that means standing up to the blockers and the anti-growth coalition of which Andrew Griffith and many on the Conservative benches are a clear part.

30:03I mean, I think he's saying that the budget was unfortunately business bashing because of the increase in national insurance contributions for employers, you know, 25 billion on their bills. And we've seen that reflected in the unemployment figures today. Unemployment is up. We've got also 100 ,000 fewer employees in the system since Labour took power. You can't blame that on the Tories. It's just since the budget. There would be thousands of new jobs created as a consequence of the Gatwick Airport being expanded. Something that Andrew Griffiths seems to be dedicating his political career to blocking.

30:38Sure, but the general picture, Chris, is that unfortunately... And the growth projections over the course of this Parliament, so by the end of this Parliament, growth is now going to be higher because of the changes that we've made to the planning system already. And that's before you account for the other changes that we've made, for example, the bill that we voted through this week. And at every stage of that process, every time we introduce pro-growth measures that will put more money into the pay packets of working people, that will ensure there is more money going into the Treasury to support our public services, the Conservatives have been voting in the lobbies to vote against economic growth and therefore to take money away from working people and to take money away from our public services.

31:11And as far as I'm concerned, that's unforgivable. With the tax burden at an all-time high, do you think the good people of Milton Keynes can afford to pay more in tax come autumn if necessary? Because you're not ruling out tax rises. The point about tax, I want to bring taxes down. Taxes are higher than they've ever been before. That is a consequence. I don't want to keep making the same point, but it is true, right? You can cut spending for our National Health Service. I don't think that is an option, given the mess that we're in. And given that in Milton Keynes, we've got the longest waiting lists of anywhere in the country, or we did have when I came to power.

31:40They're coming down now. You can't do what Liz Trust did and just pretend that you can borrow loads of money, crash the British economy and cut taxes without saying where the money is going to come from. Well, the Labour government is borrowing a hell of a lot of money, isn't it? What we're doing is we're borrowing money to invest in things that get the British economy growing again. But you are borrowing a lot of money, Chris. You're criticising Liz Truss's borrowing. You're borrowing a lot of money. And the gilt yield at the moment is higher than it was after the mini budget. Well, thankfully, over the last couple of hours since Rachel's fantastic pro-growth spending review, the 10-year gilt yield has started coming down.

32:09And at the same time, the pound against the dollar is going up, which is a real, I think, testament to market confidence in the pro-growth spending review that the Chancellor just made. but it is only by bringing growth back. For example, by spending money in research and development, by standing up to NIMBYs like Andrew Griffith and building... You're having a right go. You've got to be in your body about Andrew Griffith. It just bothers me. It just bothers me when I hear Conservative MPs talk about economic growth and then when it comes to a difficult conversation with their own constituents about things that might create economic growth, deciding to back down and block the kind of projects that would put money into the pay packets of working people across the country, I think it's unforgivable.

32:45I'm going to stand up to Tory MPs who keep thinking it's okay to do it. least of your worries. I mean, the Chancellor decides to reference Nigel Farage not once but twice in her speech. You're worried because reform have parked their tanks on your lawn. Yeah. I completely understand the appeal of people like Nigel Farage and reform at the moment. It comes back to the economics. You know, never really in the history of this country have we had economic stagnation that's lasted as long as the economic stagnation that we inherited. Well, we had it back with the Labour government of the 1970s, to be fair, Chris.

33:14And only if we get ourselves out of that economic stagnation can we stand up to the forces of people like Nigel Farage, who I think would do untold damage to our country and privatise our National Health Service. But we can only stop that as a government if we are as bold and radical as is necessary to bring back economic growth. I'm being very on message, but it is only growth. You are on message. You're always on message. It is only growth that we get out of. We all want growth. Growth is the only option. Nobody wants to be in Liz Truss's anti-growth coalition, let's be perfectly honest. No, it is true.

33:43We are not. We are bringing it back. We've got research and development spending. We've got more house building. And we're going to have nuclear power stations. Well, I know. Cheap energy for consumers and businesses. Some people say the technology is a little outdated in the plans for size we'll see. But I tell you this. SMRs, AMRs, they're the nuclear power stations of the future. We should be watching that Q2 growth figure very carefully because Q1 was unexpectedly high. But we think the awful April may have had an effect. Do you want to say that again? What was growth under this government?

34:11Unexpectedly high? Well, it was unexpectedly higher. Unexpectedly high growth under this Labour government. Well, hang on a minute, Chris Curtis, you be careful because Q2 hasn't come in yet. But we thank you very much indeed for your candor on the Daily Tea today. Thank you. We've heard Labour and the Conservatives attack reform there and Nigel Farage. Well, coming up next, let's get the response from the Deputy Leader of the party, Richard Tice.

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35:18Welcome back. Well, joining me now is Reform UK's Deputy Leader Richard Tice, also the MP for Boston and Skegness. Now, tell me something. why is the Chancellor so obsessed with Nigel Farage? It's extraordinary. I mean, rather like the Prime Minister, they are obsessed with reform, with Nigel, which pub he goes to. They've sort of given up. Does he like the two chairmen's or does he prefer the Westminster Arms? Well, I think, you know, I mean, any pub that serves a good pint is a welcome pub. Yes. But look, I mean, this, today what we've seen with this Chancellor is a Chancellor that's completely out of control.

35:53I mean, just splurging spending everywhere. I've just come out of the Commons. I've described it, I mean she's literally cratering the economy, borrowings going through the roof, government debt costs are going through the roof, inflation's up, unemployment's up, and there's about a quarter of a million jobs that have gone, disappeared down the crater that she's dug since her blunder budget and extraordinarily Camilla, in this huge spending thrift there's nothing that helps by way of infrastructure for my constituents or the good folk of Lincolnshire so I'm pretty grumpy about it. So there were transport projects, but not in Lincolnshire.

36:28Funnily enough, nothing in Lincolnshire. I spotted Wales, I spotted stuff for the north, I spotted, I think, stuff for Oxford. Do you think those are the areas... You've been snubbed. Do you think it's Wales and the north that Labour is terrified, where reform is polling so well? I did remind her that we are leading in the polls. You're suggesting that the Chancellor has been using cynical political ploys. Oh, I mean, surely, surely, yes, that is the reality. So you put all this to her in the House just earlier, and she said, well, you think that you can cut government spending by£300 billion, which would mean the end of the health department, and I think she said defence, didn't she?

37:06Do you want to cut government spending by£300 billion? It's currently£520 billion. She's dreaming numbers on her magic tree. Well, have you ever said that? No, what I said to her, I don't think I've ever said that. I think she's dreaming it. What I have said in the chamber just now is that already in the ten councils that we are now running, we've identified over£100 million of savings in just a matter of weeks. So that actually, I think what we should do is we should give some lessons to this Chancellor. She touched on savings, but not seriously, and the waste in the spending. I mean, spending tens of billions on a carbon capture technology that even the Greens say doesn't work and will make no difference to anything.

37:43I hope Richard Tice hasn't started listening to the Greens. What's going on here? But sorry, on your councils then, what's the end game? Can you guarantee that in the 10 councils in which you are controlling, that reform will bring people's council tax bills down? What I can guarantee is that we will find and save huge sums of money. But what will you do with them? Well, it's a nice position to be in, isn't it? I said we can save£5 in£100. That's hundreds of millions of pounds a year. I'm confident we can do it based on what we're originally seeing. And then once you've saved the money, you can then decide, do you want to save money from the back office and spend it in the front office?

38:18Do you want to freeze council tax? Do you want to reduce council taxes? Those are nice choices to have. Let's save the money first, and then we can work out what are the right priorities for our taxpayers. On government spending, though, I mean, you're saying she's being profligate. It's a lot of largesse. We can't afford it. What would you rather government spending was? How many billion would you spend? I would spend what we talked about in our contract at the general election. So it's funny, she attacked me on defence when she replied to my question, but it was actually reforming myself who said we need to get to 2.5 % on GDP on defence spending in three years and 3 % in six, and they copied us on that.

38:58But on government spending, so we've got£552 billion worth of public spending in 2024 to 2025. These are colossal sums. What would that sum look like under reform? Those are colossal sums. How much would you shave off it? What I know from everything I know is that they are wasting money. For example, on public sector pay... Richard, I fear you're not answering my question. I'm trying to. You need to give me a chance. What I'm saying is that from all of the public sector pay settlements we're already seeing, there's no productivity requirements. There's no performance requirements. That's the sort of thing that we would do as we settle.

39:31Do you know what? It's a lot less inflationary if you increase the income tax threshold than if you add people's pay at the top end with all of the extra benefits and pensions. So we actually understand economics and how to run things much better than this Chancellor from the Complaints Department and anybody else, frankly, on their front bench. Yes, I mean, you've talked about the jobs figures. Yes, unemployment has gone up. It's gone up to 4.6%. Strangely, jobs in the public sector have gone up. And the number of civil servants working from home, exactly. And all the extra costs of that, and that is wasteful spending.

40:02Can I pin you down, though, on this public spending? If the Labour government is suggesting£5.52 billion, genuinely, what would reform spend? How much less would you spend? We've literally only just... So we only see the numbers after she sits down. So we've not yet studied. What I do know is just I see waste everywhere. And until I'm satisfied that I stop wasting existing spend, I'm not convinced that in many of these areas you need to spend vast extra sums. She's talking about spending across the piece an extra 2.3 % in real terms. I tell you what, actually, I think what you need to do, start spending the money you're already spending properly and wisely, stop wasting it, and then focus on where you need to spend more effectively in frontline services.

40:48But you can only... Last year, we borrowed£150 billion. In April alone, an extra£20 billion was borrowed. So borrowing is out of control. We've got to stop spending more, start saving more. We're the best at that. We're going to prove that. We're going to deliver that. And that will show people why they should vote for us in Wales, vote for us in Scotland, and then vote for us in the general election. Although somebody did land quite a good political blow on reform today. I don't know whether it was the Prime Minister or the Chancellor, but they made the point that Nigel Farage welcomed Liz Truss's mini-budget with open arms, said like a great many people, this is the greatest budget since the 1980s.

41:24And that was a budget that borrowed very, very heavily. So do you regret supporting Liz Truss's budget now? Well, the reality is, what I said at the time, is I said the drawback with that budget is that it didn't talk about the savings. And we all recognise that. So you can have, you know, some of the headlines were good, some of them I actually thought was wrong, but the key point, they didn't talk about the savings. And I'd advise them through the back door, beforehand, you've got to talk about the savings you're going to make. They didn't do that. I've always been talking about that. I'm delighted now that we're starting to prove that as we start to run, manage and govern councils.

41:58And that, I think, is why we're leading in the polls. While I've got you, I was really intrigued to read a Telegraph headline earlier suggesting that Zia Youssef is going to run for Parliament at the next general election. Wouldn't that be great? Zia in Palma alongside of him. Is that confirming it then? That's definitely true. I mean, it'd be great. Obviously, he's got to get elected, but the sooner the better. And it's great that Zia is with us. It's great we've got a new fantastic chairman, a doctor who knows what he's talking about on health and motivating our wonderful branches. Once had a go at Nigel Farage about his stance on AIDS and HIV.

42:25Oh, come on, but, you know, occasionally we all have a go at each other, and that was 11 or 12 years ago. Famously on Ghost Hunters. Famously on Ghost Hunters. Look, and so that's great. But look, I think what we're showing is that we're starting to save wasteful spending. And I'm really proud of that. Happy to share those lessons with the Labour government. Well, we'd like to see the figures when you have them. Well, you will indeed fairly soon be seeing some figures. But back to Youssef, was that always the plan? Was he always going to run as an MP? Well, I hope so. I mean, obviously people can change their mind.

42:54But, I mean, I've always assumed that Zia would want to ultimately stand. But as and when he's ready, when there's by-elections or general elections... But you need to find hundreds of people, right? And the great thing is we've got so many hundreds of people asking and applying. Now, we're not obviously appointing parliamentary candidates this early ahead of an election, but Zia would be a brilliant Member of Parliament alongside many others that are applying. And we're very excited. We're going to form the next government of the United Kingdom. With Richard Tice as Chancellor. Well, let's wait and see.

43:22I focus on money and business, but ultimately I serve at the boss's pleasure. Indeed you do. Thank you very much for your time today, Richard Tice. Thank you. Well that's the spending review wrapped up for another year. We'll be back tomorrow 5pm.

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