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The government’s long-awaited Spending Review landed last week, setting out over £100 billion in new capital investment by the Autumn. But any hope of a quiet domestic reset was quickly overshadowed by spiralling tensions in the Middle East as Israel and Iran traded a series of escalating military strikes.

Just days after announcing a significant uplift in defence and energy spending, Chancellor Rachel Reeves and Prime Minister Keir Starmer are facing fresh pressures both at home and abroad. Over the weekend, Reeves doubled down on her commitment to protect UK households from the potential economic fallout of the conflict, as global oil prices spiked and concerns grew over potential disruption in the Strait of Hormuz, a vital passageway for around 20% of the world’s oil shipments.

While the government insists the current rise in oil prices remains manageable and that household energy bills are still on track to fall in July, ministers are clearly aware the situation could turn quickly. Reeves indicated rising instability in the Middle East had reinforced the case for boosting spending on defence and energy security. The government’s plans include major long-term investments in nuclear power, wind energy and carbon capture alongside shorter-term measures like improved home insulation, all aimed at reducing the UK’s dependence on global energy markets.

With over £100 billion in capital investment, the Review put defence and energy security front and centre. Among the headline announcements was a pledge to raise defence spending to 2.6% of GDP by April 2027 which marked a significant increase designed to future-proof the UK’s military capabilities and reassure international allies. The latest spending package is not just as a long-term economic plan but also a signal of the government’s intent to strengthen the UK’s resilience amid growing global uncertainty.

Meanwhile, in Ottawa, Prime Minister Keir Starmer began an intense diplomatic effort aimed at avoiding further escalation. He has already discussed the conflict with Canadian Prime Minister Mark Carney, with further talks expected with US President Donald Trump, French President Emmanuel Macron and German Chancellor Friedrich Merz at this week’s G7 summit. The Prime Minister’s message to international partners is focused on de-escalation, but the UK’s posture remains cautious. Officials have not ruled out evacuations from Israel and have issued one of the strongest travel warnings in recent memory.

In military terms, the UK has stepped up its presence in the region, yet ministers are at pains to stress this is precautionary, not provocative. Despite increasing pressure from allies, Downing Street has pushed back against suggestions it would support Israeli strikes aimed at broader regime change in Tehran, instead reinforcing its traditional position of backing Israel’s right to self-defence within international law.

Whether this careful balancing act holds remains to be seen. For now, the Spending Review has ended up serving a double purpose as both a long-term plan and an early response to a rapidly changing global situation. What it really comes to represent will depend on how things unfold from here. With instability overseas disrupting energy markets and straining diplomatic ties, the political stakes for the government are growing increasingly acute.

Headlines 

What’s on in Parliament

Monday 16th June

House of Commons 

  • Oral Questions: Education 

  • General Debate: Windrush Day 2025

  • Westminster Hall Debate: Relating to the use of cages and crates for farmed animals

House of Lords 

  • Oral Questions: Social energy tariffs

  • Oral Questions: The defence industry industrial base

  • Legislation: Employment Rights Bill - committee stage (day 9)

  • Grand Committee Legislation: Public Authorities (Fraud, Error and Recovery) Bill - committee stage (day 4)

Tuesday 17th June 

House of Commons 

  • Oral Questions: Health and Social Care

  • Legislation: Crime and Policing Bill (Day One): Remaining Stages

  • Westminster Hall Debate: Hydrogen powered aviation

  • Westminster Hall Debate: UK compliance with the Convention on the Prevention and Punishment of the Crime of Genocide

  • Westminster Hall Debate: Government support for disabled people in poverty

House of Lords 

  • Oral Questions: Developing and maintaining the specialist branch of learning disabilities nursing

  • Legislation: Holocaust Memorial bill - third reading

  • Legislation: Children's Wellbeing and Schools Bill - committee stage (day 5)

Wednesday 18th June 

House of Commons 

  • Prime Minister’s question time 

  • Oral Questions: Women and Equalities

  • Legislation: Crime and Policing Bill (Day Two): Remaining Stages

  • Westminster Hall Debate: Future of the gas grid

House of Lords 

  • Oral Questions: The safe return of abducted Ukrainian children forcibly deported to Russia and Belarus

  • Legislation: Employment Rights Bill - committee stage (day 10)

  • Grand Committee Legislation: Public Authorities (Fraud, Error and Recovery) Bill - committee stage (day 5)

Thursday 19th June 

House of Commons 

  • Oral Questions: Environment, Food and Rural Affairs 

  • Oral Questions: Solicitor General

  • Westminster Hall Debate: Role of careers education in improving social mobility

House of Lords 

  • Oral Questions: Number of new homes built or received planning permission in the past six months

  • Oral Questions: Prohibition of bottom trawling and dredging in all English marine protected areas

  • Legislation: Children's Wellbeing and Schools Bill - committee stage (day 6)

Friday 20th June 

House of Commons 

  • Private Members’ Bills: Green Belt (Protection) Bill: Second Reading

  • Private Members’ Bills: Water Safety Bill: Second Reading 

  • Private Members’ Bills: Public Procurement (British Goods and Services) Bill: Second Reading 

House of Lords 

  • The House of Lords is in recess and will next sit on 23rd June 2025

Consultations

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