Today Rachel Reeves announces her spending review. What are Liberal Democrats looking for from it?

It will surprise nobody to hear that social care is top of the agenda, alongside a closer relationship with Europe. Without the latter, Treasury Spokesperson Daisy Cooper says, Labour will be trying to drive the economy forward with the handbrake on. And anyone who has tried to do that in a car will know how impossible that feels and how much of an idiot you feel when you realise that you have forgotten to take the handbrake off.

Daisy said:

People have been left desperately disappointed in the Government’s failure to break clean from years of Conservative neglect and finally start delivering the change that people were promised.

Today’s spending review must deliver progress on social care. The Government’s bid to start reforms has barely progressed since it was announced six-months ago. Yet we all know the simple truth: without solving the social care challenge, putting money into the NHS today will be like pouring water into a leaky bucket.

Ministers should also be slashing the reams of red tape that are holding local businesses back and negotiate a bespoke UK-EU customs union, rather than pursuing painful cuts to already stretched budgets. Until they do, the Chancellor will still be trying to drive the economy forward with the handbrake on.

Here she is speaking about the key issues:

“This spending review could be make or break for social care.”@libdemdaisy pic.twitter.com/3YrjCfSTOs

— Liberal Democrats (@LibDems) June 10, 2025

The Party has also commissioned House of Commons library research into the impact of possible cuts.  The Independent reports;

However, the analysis, carried out by researchers at the House of Commons library commissioned by the Lib Dems, found that unprotected departments — which excludes NHS England, the core schools budget and defence — could see real-terms cuts worth nearly £5 billion in total by 2028/29.

The calculation, based on Reeves’ promise that will not hike taxes, was made before the chancellor committed a further £1.25bn a year to reversing cuts of winter fuel payments to pensioners, a U-turn which was confirmed on Monday. It also does not take into account another potential U-turn on ending the two child benefit cap, which could cost a further £3bn.

The Home Office budget is forecast to take a huge hit, being almost half a billion quid short. The Independent report forecasts dire outcomes for social care and education. These would be incredibly short-sighted. It is so obvious that fixing social care is vital to sorting out the whole NHS, and why would you cut back on skills development when you are also hell bent on cutting social security and putting even greater holes in the safety net than the Conservatives’ best efforts managed?

Major departments could be in line for large cuts, with concerns that unprotected elements of the education budget covering areas such as adult education and apprenticeships could face real-terms cuts worth over £685 million by 2028-29.

Meanwhile councils, who are responsible for social care provision, could see their central government funding squeezed even further, with potentially £350 million in real-terms cuts to the MHCLG across the next three years.

DEFRA and the Home Office could also be hit with funding cuts ranging around £110 million and £490 million over the next three years respectively. It comes after several police chiefs said any spending cuts could have “far reaching consequences” with some services already having been “pushed to the brink”.

All of this will also have huge implications for the governments in the devolved nations ahead of their elections next year.

It looks as though today will be pretty grim and that Rachel Reeves will have rejected the sensible measures put forward by the Liberal Democrats in terms of raising taxes from large corporations. Will that be enough though? Is it not time to tell the public the truth that if they want decent public services, we all, especially the more affluent of us,  need to pay a bit more in personal tax.

Vince Cable touched on this in his analysis on LDV on Monday:

Rachel Reeves faces even sterner tests ahead. Most of these centres on taxation, since more will be very likely be required in the autumn budget. She will need to confront the popular myth that Britain is a relatively highly taxed country. Tax as a share of GDP is in fact close to the OECD average.

It is surely time to slaughter the sacred cow of manifesto commitments which were made in wholly different geopolitical and economic circumstances. But fear of deepening public cynicism and inflaming populist politics of left and right probably makes that impossible. Absent a rethink about tax, the Chancellor will be forced into measures like a continued freeze on tax thresholds which is a more regressive way to raise income tax than the manifesto pledge not to raise rates. Or raiding business in ways that hit productive investment.

The pain would be eased if Rachel Reeves does turn out to be the Growth Fairy after all. She could be excused if she isn’t. Beyond short-term bursts, no post-war Chancellor -from George Brown to Thatcher’s Chancellors to Gordon Brown – has been able to do much to shift the long-term trend growth in productivity upwards. But some hope lies in her creative ideas for steering British savings into British investment and in the welcome return of industrial strategy.

Vince also points out that today’s commentary will almost certainly have a dose of good old fashioned misogyny. He describes Rachel Reeves as

a competent and decent, economically literate individual, tied hand and foot by political and economic bondage. She inherited an almost stagnant economy burdened by barely sustainable public debt, the legacy of a series of damaging economic shocks: the financial crisis; Brexit; the Covid lockdown; the Ukraine War and ‘cost of living crisis’. She also inherits a nonsensical set of commitments on tax from the Labour Manifesto. And to add to all that, the madness and badness of Trump are creating chronic uncertainty in global markets.

I don’t think anyone doubts the challenges of the economic environment, but Liberal Democrats generally think that Labour could be making much better choices.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings