Rachel Reeves

The 'Be the Chancellor' tool, built by IFS researchers in partnership with Nesta, illustrates key choices and fiscal challenges Rachel Reeves faces.

The upcoming Spending Review has the potential to be one of the defining domestic policy moments of the parliament. We will learn how the government has chosen to prioritise different public services. But that won’t be the end of the difficult choices Rachel Reeves faces. The Autumn Budget will need to confront the implications of shocks to the global trading environment and a potential downgrade to the outlook for economic growth.

Our interactive ‘Be the Chancellor’ tool illustrates the key choices and fiscal challenges ahead. The tool, built by IFS researchers in partnership with Nesta, has been enhanced with new features, and updated to reflect this government’s changes to tax, spending and the fiscal rules. It demonstrates that:

  • Staying within published plans for the overall level of departmental spending at the upcoming Spending Review will almost certainly require cuts to some departmental budgets between 2025–26 and 2029–30. The decision of what to give the NHS is by far the most consequential in budgetary terms.
  • Plans can easily be blown off course. Even small changes to the outlook for growth or interest rates would be enough to eliminate the fine margin the Chancellor has left against her ‘non-negotiable’ fiscal rules.
  • If the government wanted to raise large sums in tax revenue – for instance, to allow for higher public spending without additional borrowing – it would be exceedingly difficult to do so without touching one of income tax, National Insurance contributions or VAT.

There are, as ever, a huge number of choices to be made, and myriad options available. To explore them for yourself, see the ‘Be the Chancellor’ tool here.

Helen Miller, incoming Director of IFS, said:

‘Labour started the parliament by turning on the spending taps, adding some £60 billion to the spending plans for 2025–26 inherited from the previous government, including £40 billion for public services. In coming years, growth in overall public spending will slow to more of a dribble. Given commitments on health and defence, the question is not whether some departments will face funding cuts, but which departments and by how much. The Spending Review will reveal, when push comes to shove, which public services this government wants to prioritise. The choices made now could define the parliament.’ 

Tim Leunig, Chief Economist at Nesta, said:

‘To govern is to choose. This tool will help policymakers, would-be policymakers, and those who seek to influence them make better choices. As it makes clear, there are no easy choices facing our country today.’

Access the 'Be the Chancellor' tool here.

See the tool here