The UK government has revealed a raft of major infrastructure projects at today’s ‘spending review’. The review focused largely on housing, defence and transport across the country, although there were a few further details on the £86bn package of science and tech investments announced earlier this week.
Chancellor Rachel Reeves opened her speech by claiming Labour had started “renewing” Britain, pointing to relaxed planning restrictions and trade deals with the US, India and Europe – although she conceded the effects of this renewal were not yet being felt by many.
Reeves underscored that this new lease of life was built on the foundations of “national security, border security and economic security” and reiterated her vision to make the UK a “Defence Industrial Superpower” – a tactic some have labelled ‘military Keynesiasm’, where government boosts public spending through defence.
“I have long spoken about what I call ‘securonomics’,” said Reeves. “In an age of insecurity, government must step up.”
Defence spending will therefore increase to 2.6% of GDP by April 2027 to support these aims, including further investment in munitions and Britain’s nuclear submarines.
What the spending review promised for energy security
Energy security also falls under Reeves’ securonomics. She pointed to recent announcements from the energy secretary to invest in the “biggest rollout of nuclear power” for half a century, including the development of small modular reactors, which some believe will be fundamental to powering the future of artificial intelligence.
This nuclear investment will ensure that “energy technologies of the future are built here and owned here”, Reeves said.
In addition to these atomic ambitions, the government will plough further money into advanced clean energy projects such as nuclear fusion and the creation of the ‘Acorn’ carbon capture project in Aberdeenshire.
A major boost for science and technology
Meanwhile, Reeves said, AI has the “potential to solve diverse and daunting challenges” and so the government will fund domestic AI capabilities by a further £2bn to meet the goals of the AI action plan.
Innovation, said Reeves, is “a great British strength” and the UK government will boost R&D funding to £22bn per year. The British business bank will have its funding capacity raised to £25.6bn, along with a “record investment” into skills, with £1.2bn each year for training and apprenticeships.
More will be announced over the coming weeks when the ‘10-year infrastructure strategy and modern industrial strategy’ is published.
Shadow chancellor Mel Stride, however, said the review was “not worth the paper that it is written on” because the “Chancellor has completely lost control”. Stride also warned of further taxes in Autumn. “A cruel summer of speculation awaits,” he said.
Earlier this week, to coincide with London Tech Week, the government announced a series of science and technology initiatives as part of a broader £86bn package.
That included a U-turn on funding for a new national supercomputer in Edinburgh, to the tune of £750m. In 2024, Labour had scrapped £800m towards such a supercomputer when the party won the general election.
The government also launched a £100m “AI Life Sciences Accelerator Mission”, aiming to position the UK as a global leader in drug discovery. The initiative will focus on accelerating the development of new treatments for diseases such as cancer and dementia, with new partnerships planned between industry and academia to drive breakthroughs in medical research.
Mixed response from UK tech sector on spending review
Commentators welcomed Reeves’ commitments to clean energy, future-looking technology and artificial intelligence, although warned that moving from pilot projects to deployments would be the real test of such plans.
“This spending review sends a clear message that the government is doubling down on its commitment to achieve clean power by 2030,” said Laura Fleming, UK MD for Hitachi Energy. “I am grateful that the chancellor seems to recognise the enormous growth opportunity of clean energy and investing in the grid, but the next step is providing visibility beyond 2030, which is critical to leveraging further investment.”
Businesses will need more certainty around supply chains and skills in order to deliver critical “energy infrastructure and a grid that can enable growth and achieve clean power by 2030”, Fleming said.
Meanwhile, Ben Miles, cofounder of specialist venture capital firm, Empirical Ventures, described the £86bn science and technology commitment as “genuinely encouraging”.
“Multi-year R&D investment of this scale provides a critical runway for deep tech and life sciences,” Miles said.
However, the community-based funding model tied to specific tech verticals raises concerns, he said. Scientific capabilities do not cluster regionally, he said, adding that breakthroughs are usually “interdisciplinary and distributed”.
“We should be funding people and ideas, not presupposed regional specialisms,” Miles said.
While it is clear that the announcements promise a great deal for the technological transformation of the UK, it is too early to say how many of these commitments will become a reality.
The UK government has revealed a raft of major infrastructure projects at today’s ‘spending review’. The review focused largely on housing, defence and transport across the country, although there were a few further details on the £86bn package of science and tech investments announced earlier this week.
Chancellor Rachel Reeves opened her speech by claiming Labour had started “renewing” Britain, pointing to relaxed planning restrictions and trade deals with the US, India and Europe – although she conceded the effects of this renewal were not yet being felt by many.
Reeves underscored that this new lease of life was built on the foundations of “national security, border security and economic security” and reiterated her vision to make the UK a “Defence Industrial Superpower” – a tactic some have labelled ‘military Keynesiasm’, where government boosts public spending through defence.
