In this Institute of Economic Affairs podcast, Communications Director Callum Price is joined by Executive Director Tom Clougherty and Editorial Director Kristian Niemietz to examine the government's latest spending review. The conversation covers Rachel Reeves' announcement of increased NHS funding - another 3% real terms increase annually - while implementing spending cuts across most other departments through what they describe as "classic salami slicing" rather than genuine zero-based budgeting. They discuss how the government has abandoned any meaningful NHS reform agenda, reverting to simply throwing money at the health service despite previous promises of structural change.

The hosts analyse the broader economic context, noting that GDP shrank 0.3% in April while national debt sits at around 100% of GDP with over £100 billion spent annually on debt interest. With taxation at generational highs and borrowing costs extremely elevated, they argue the government faces an inevitable fiscal black hole that may require further tax increases come autumn. The discussion critiques the government's approach to capital spending, which focuses heavily on defence and social housing rather than growth-generating infrastructure.

The conversation concludes with an examination of missed opportunities for genuine economic reform, particularly in housing and planning where the government could deliver significant growth through deregulation rather than subsidies. They argue that despite Labour's stated focus on growth as their "number one mission," the actual policies - from employment rights legislation to continued planning restrictions - point in the opposite direction. The hosts express frustration at the government's failure to pursue supply-side reforms that could address the UK's fundamental economic challenges without requiring additional public spending.

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