Labour will deliver their first full spending review today - here is how it can effect their chances of winning the next general election.
Chancellor Rachel Reeves will deliver the Labour government’s first full Spending Review today, defining the political and economic landscape through to the next general election - the favourite date for the next election is 2029 or later.
With departmental budgets to be set until 2028/29, the review offers a crucial insight into the priorities of Keir Starmer’s administration and the difficult choices it must make amid tight fiscal rules, high public service demand and voter anxiety over the cost of living.
Going into today, we already know that the government has partially reversed cuts to winter fuel payments at a cost of around £1.2bn, while defence spending will rise from 2.3% of GDP to 2.5% by 2027/8 and free school meals will be expanded to 500,000 children whose parents are receiving Universal Credit.
The political implications are significant. Labour enters the review with a commanding parliamentary majority but faces falling poll numbers and a narrow lead on the issues that matter most to voters.
For Reform UK and the Conservatives, this review offers a potential opening to critique Labour’s spending priorities, particularly if public services struggle.
The other parties will watch closely for opportunities to carve out influence in disaffected areas.
The choices made in this Spending Review may determine more than just departmental budgets, they could decide the next government.
UK Election Odds
| Party | Odds |
|---|---|
| Reform | 6/4 |
| Labour | 6/4 |
| Conservatives | 9/2 |
| Liberal Democrats | 50/1 |
| Green | 500/1 |
The odds are currently close between Keir Starmer's Labour and Nigel Farage's Reform Party with both parties given a 6/4 (40% chance) at best price of winning the most seats in the next general election.
The spending review has the potential to both bolster and undermine the Labour government depending on how it is received by the public and the media.
Labour’s first spending review gives the party a chance to showcase its long-term economic vision, with major investment in infrastructure and public services expected.
It allows Labour to draw a contrast with the Conservatives by highlighting higher overall spending and a focus on rebuilding essential systems like health and transport, while maintaining a message of fiscal discipline.
However, the review also exposes political risks. Tensions within the cabinet over funding cuts, combined with tight day-to-day budgets for many departments, could undermine Labour’s promise of change.
If public services like continue to feel stretched and tax rises follow in the autumn, the party may struggle to maintain public support.
Rows with key ministers like Yvette Cooper and Angela Rayner over funding for policing and housing have already emerged, while squeezed budgets in education, local government and the environment may provoke public backlash.
The review will ultimately test whether Labour can balance their bold promises with the realities of governing.
Next UK Prime Minister Odds
| Party | Odds |
|---|---|
| Nigel Farage | 5/2 |
| Yvette Cooper | 9/1 |
| Wes Streeting | 10/1 |
| Kemi Badenoch | 10/1 |
| Robert Jenrick | 12/1 |
Keir Starmer is currently a best price of 1/1 (William Hill) to not be the Prime Minister at the next general election. Nigel Farage leads the betting to replace him at a best price of 5/2 (PricedUp).
Next Labour Leader Odds
Second and third behind Farage in the next Prime Minister without Starmer market lead the way in the next Labour leader market. Wes Streeting is the 11/2 favourite (shortest price 9/2), while Yvette Cooper can be backed at 10/1 on Ladbrokes despite being as short as 5/1 elsewhere.
