conservativehome--2020-11-24--Chris Hossack: The costs of the lockdown have not been honestly presented. Not least that it is kill

Chris Hossack: The costs of the lockdown have not been honestly presented. Not least that it is killing our high streets.

Cllr Chris Hossack is the Leader of Brentwood Borough Council .
2020 has seen the government introduce unprecedented protection measures at huge cost to the economy and Treasury .
The Bank of England warning this will be the worst financial crisis for over 300 years ; surely we will not recover for many years hence ?
Controversial lockdown measures have largely been applied on the basis of geography as well as the shutting down of certain business sectors , notably in hospitality , that are deemed to be non-essential .
At a local economy level , it is evident that @ @ @ @ @ @ @ big supermarket brands and killing our independent traders i.e .
traditional high streets .
For instance , Tesco overall sales soared nearly seven per cent in the first half , with on-line purchases up a staggering 69 per cent .
The much documented High Street demise has been a long time in the making , as supermarkets are effectively high streets under one roof , often incorporating florists , money exchanges , key cutting , clothing etc .
Covid lockdowns have only exposed how this disproportionately affects independents , sending them further towards @ @ @ @ @ @ @ to feel aggrieved that their business is closed at the observance of unworkable attempts to close off greeting card isles in the superstores .
Consumers have traditionally held the key to the survival of the high street in the way they choose to purchase their goods , by putting local support above convenience .
Under the lockdown approach , consumers can not help their local businesses even if they want to .
Thousands upon thousands of businesses have closed this year , many will never re-open again .
We simply have to think @ @ @ @ @ @ @ to accept the accelerated shift towards retail conglomeracy .
The statistical case for the lockdown is hugely one sided .
The unreadable PowerPoint slides delivered by Professor Whitty and Sir Patrick ( over estimations and miscategorisations aside ) only ever make the case for further restrictions based on clinical data around projected infection and mortality rates .
All at the end of the day , designed to manage the pressure on the NHS .
In order to make a more robust decision on a workable strategy , a multiple-criteria decision-making method must be @ @ @ @ @ @ @ closures , rates of depression and suicide , stats on delayed treatments for cancer patients , and the subsequent mortality rates in patients aside from Covid .
Never mind the impact on the Treasury as jobs are lost , Tax and National Insurance income depletes , the DWP budget soars to help replace lost household income .
As homeowners try to cling onto the paying the bills , rents and mortgage with what little income they have .
No wonder council house waiting lists are also set to soar too .
When do @ @ @ @ @ @ @ understand the need to protect the NHS but I fear how the massive tilt from income to expenditure on the Treasury ’ s books is going to make this possible at all , as the economy as a whole is burned for the whole purpose of saving it .
Where will the funding come from ?
The blanket approach centred on regional and economic shutdown isn ’ t working .
Hopefully England will come out of this current lockdown on December 2nd , then what ?
Yes we want some assemblance of normality @ @ @ @ @ @ @ we ease off the restraints and socialise more , the infection rate will once again rise .
We should anticipate entering a third lockdown sometime in the New Year .
Society and the economy simply can not keep going through this yo-yo existence purely for the purpose of managing hospital patient throughput .
We hope to see a Covid 19 vaccination programme start in December but before the benefits are realised , transmission and infection will remain a problem for months to come .
What we do know is which segments of our @ @ @ @ @ @ @ as a result of the virus , namely the elderly and those with pre-existing conditions .
Surely the focus of effort must be intensified towards shielding this sector of our community , whilst the majority can focus on getting our economy moving again , to fund the machinery of state that we all depend on ?
The civil liberties case , worthy of an entirely separate article , is a huge consideration .
For instance , the liberty of a healthy active 80 year old to be curtailed against their will would not @ @ @ @ @ @ @ twilight years to be forced into isolation would be wrong .
But to understand the risks and make the personal choice of whether to avail themselves of the protections available or not , is something all those in the vulnerable categories should be trusted to make for themselves .
Again , these hugely difficult moral questions are all predicated on the engrained refrain to ‘ Protect the NHS ’ .
So finally , let ’ s look at that .
If the phenomena of the pandemic is to be a more regular occurrence @ @ @ @ @ @ @ absolutely need to plan for that as a society .
The billions spent on furlough and business support grants , need now to be thought of in the context of investment for NHS planning and preparation , to increase infrastructure , capacity , staffing and training .
We simply can not ever again sacrifice everything to protect the NHS ; we must re-align the NHS if it is to have the capability to handle global pandemic scenarios in the future .

Cllr Chris Hossack is the Leader of Brentwood Borough Council.
2020 has seen the government introduce unprecedented protection measures at huge cost to the economy and Treasury. The Bank of England warning this will be the worst financial crisis for over 300 years; surely we will not recover for many years hence?
Controversial lockdown measures have largely been applied on the basis of geography as well as the shutting down of certain business sectors, notably in hospitality, that are deemed to be non-essential.
At a local economy level, it is evident that these blunt lockdown measures are benefitting the big supermarket brands and killing our independent traders i.e. traditional high streets. For instance, Tesco overall sales soared nearly seven per cent in the first half, with on-line purchases up a staggering 69 per cent.
The much documented High Street demise has been a long time in the making, as supermarkets are effectively high streets under one roof, often incorporating florists, money exchanges, key cutting, clothing etc. Covid lockdowns have only exposed how this disproportionately affects independents, sending them further towards extinction. An independent stationer is entitled to feel aggrieved that their business is closed at the observance of unworkable attempts to close off greeting card isles in the superstores.
Consumers have traditionally held the key to the survival of the high street in the way they choose to purchase their goods, by putting local support above convenience. Under the lockdown approach, consumers cannot help their local businesses even if they want to.
Thousands upon thousands of businesses have closed this year, many will never re-open again. We simply have to think of another way unless we are prepared to accept the accelerated shift towards retail conglomeracy.
The statistical case for the lockdown is hugely one sided. The unreadable PowerPoint slides delivered by Professor Whitty and Sir Patrick (over estimations and miscategorisations aside) only ever make the case for further restrictions based on clinical data around projected infection and mortality rates. All at the end of the day, designed to manage the pressure on the NHS.
In order to make a more robust decision on a workable strategy, a multiple-criteria decision-making method must be used.
Mainstream statistics seldom include businesses closures, rates of depression and suicide, stats on delayed treatments for cancer patients, and the subsequent mortality rates in patients aside from Covid. Never mind the impact on the Treasury as jobs are lost,Tax and National Insurance income depletes, the DWP budget soars to help replace lost household income. As homeowners try to cling onto the paying the bills, rents and mortgage with what little income they have. No wonder council house waiting lists are also set to soar too. When do we ever see these graphs?
We understand the need to protect the NHS but I fear how the massive tilt from income to expenditure on the Treasury’s books is going to make this possible at all, as the economy as a whole is burned for the whole purpose of saving it. Where will the funding come from?
The blanket approach centred on regional and economic shutdown isn’t working. Hopefully England will come out of this current lockdown on December 2nd, then what? Yes we want some assemblance of normality to return for Christmas, but as we ease off the restraints and socialise more, the infection rate will once again rise. We should anticipate entering a third lockdown sometime in the New Year. Society and the economy simply cannot keep going through this yo-yo existence purely for the purpose of managing hospital patient throughput.
We hope to see a Covid 19 vaccination programme start in December but before the benefits are realised, transmission and infection will remain a problem for months to come.
What we do know is which segments of our society are most likely to be hospitalised as a result of the virus, namely the elderly and those with pre-existing conditions. Surely the focus of effort must be intensified towards shielding this sector of our community, whilst the majority can focus on getting our economy moving again, to fund the machinery of state that we all depend on?
The civil liberties case, worthy of an entirely separate article, is a huge consideration. For instance, the liberty of a healthy active 80 year old to be curtailed against their will would not be right. For those in their twilight years to be forced into isolation would be wrong. But to understand the risks and make the personal choice of whether to avail themselves of the protections available or not, is something all those in the vulnerable categories should be trusted to make for themselves.
Again, these hugely difficult moral questions are all predicated on the engrained refrain to ‘Protect the NHS’. So finally, let’s look at that. If the phenomena of the pandemic is to be a more regular occurrence, as is anticipated, then we absolutely need to plan for that as a society. The billions spent on furlough and business support grants, need now to be thought of in the context of investment for NHS planning and preparation, to increase infrastructure, capacity, staffing and training.
We simply cannot ever again sacrifice everything to protect the NHS; we must re-align the NHS if it is to have the capability to handle global pandemic scenarios in the future.


conservativehome--2020-11-25--Sunak opts to suck it and see

Sunak opts to suck it and see

We must be thankful that no-one is forecasting that Government borrowing will rise to record levels this year .
Or Rishi Sunak wouldn ’ t have been in a position to announce that Government spending will rise at its fastest rate for 15 years .
Apologies for the sarcasm – which isn ’ t aimed at the Chancellor ’ s measures , but is meant instead to provide an introduction to the thinking behind them .
One response to a ballooning deficit is to cut the rate of growth of spending .
That ’ s what the Coalition did after @ @ @ @ @ @ @ per cent of GDP .
The Office for Budget Responsibility is forecasting a peak of 19 per this year .
But Sunak ’ s response is to raise the rate of spending .
Why ?
Because in 2010 George Osborne judged the deficit to be structural ( he was right ) , and his successor judges this one to be exceptional ( he ’ s right , too ) .
It is almost entirely a product of the pandemic and what has followed .
It is in this context that the OBR forecasts @ @ @ @ @ @ @ cent this year and unemployment to hit 2.6 million next year .
In these circumstances , the Chancellor has found it impossible to produce the four year spending review he hoped for , and has been forced to issue one for a single year instead .
Furthermore , his statement was only one side of the tax and spending coin .
Today , we got the spending .
In the Spring , we will get the Budget – and the tax .
Given all this , it will be very odd if Sunak @ @ @ @ @ @ @ to raise revenue quickly .
The foundation of his measures today appears to be : suck it and see .
Broadly speaking , the spending package suggests that the Chancellor is going for growth .
That ’ s the logic of the infrastructure spending , the coming review of regulation , the new northern bank and the enlarged Restart programme .
The Levelling-Up Fund is a classic Treasury exercise in the English centralist tradition , with its central feature of bids from the provinces to Westminster for money .
So it is in @ @ @ @ @ @ @ .
On that point , Sunak announced “ extra flexibility for Council Tax and Adult Social Care precept ” .
Local authorities will like that , council taxpayers not so much .
It ’ s worth stressing that the OBR ’ s forecasts , like all such animals , shouldn ’ t be taken too seriously .
Our columnist Ryan Bourne debunked its record on this site earlier this week .
If you walk down the sunny side of the street , you will smack your lips at the thought of a Roaring @ @ @ @ @ @ @ consumers spend , the hospitality sector booms and people pile into holidays abroad .
And it may be that post-Covid changes even out for the better , with a shift in activity and spending from city centres to the suburbs and countryside , together with music , art , theatre and all the rest of it .
That might not be such a bad things for towns and their centres , at which the new Levelling Up Fund is partly aimed .
Our columnist James Frayne believes they are a core concern for @ @ @ @ @ @ @ him .
If on the other hand you stick to the shady side , you will point to the economic equivalent of Long Covid : fearsome economic and social bills for damaged mental health , postponed operations , lost educational opportunities .
All that is a big minus for levelling-up – because it ’ s the disabled , poor and disadvantaged who have been hit hardest by restrictions and lockdowns , especially if they work in the private sector .
The background in recent years is not encouraging .
Since the financial crash @ @ @ @ @ @ @ at more than 2.6 per cent a year .
That suggests recovery may be sticky .
Sunak ’ s persuasive manner , grip of detail and spare eloquence have served him well during this crisis .
Others holding his post would not have survived roughly ten major finance annoucements in less than a year .
It ’ s not as though he hasn ’ t sometimes had to recast his plans – as in October , when he pumped more money into his Job Support Scheme .
And if the economics of his @ @ @ @ @ @ @ was sometimes a bit odd .
If the Government ’ s overall plan in the short-term is expansionary , why raise the minimum wage but curb public sector pay ?
If spending on nearly everything else is rising , why crack down on the 0.7 per cent aid spend ?
Doing so because you think aid is wasted or the target is wasteful is one thing .
But that wasn ’ t the basis of Sunak ’ s decision – since , after all , he said that the Government intends to return @ @ @ @ @ @ @ fiscal situation allows ” .
The Chancellor also left a big unresolved question hanging in the air .
What will the Government do about the Universal Credit uplift ?
Will it be extended or not ?
The sense of a statement with contradictory messages was picked up Rob Covile of the Centre for Policy Studies .
( The Treasury would do well when the Budget approaches to look at its supply side ideas . )
“ Feels slightly like Treasury couldn ’ t decide whether the message was ‘ tighten belts ’ or @ @ @ @ @ @ @ , ” he tweeted .
“ So we ’ re getting two or three minutes of each in turn.
” That first element in the Chancellor ’ s statement , plus the OBR ’ s horrid short-term forecasts , comes at a bad time for the Government .
For tomorrow , the toughened tiering details are announced .
Lots of Conservative MPs won ’ t like them .
The detail of which tiers apply in which areas will be published , too .
Many Tory MPs will like those even less .
Graham @ @ @ @ @ @ @ , and the Covid Recovery Group will say that the economic damage of restrictions is so severe that the Commons should not vote for more – at least , without an impact assessment .
They may not be alone .
“ These measures may be a short-term strategy , but they can not be a long-term one , ” Jeremy Wright declared in the Commons during the recent debate on the lockdown regulations .
He and Edward Timpson ( another ex-Minister ) plus other MPs backed the Government but , sounded a cautionary @ @ @ @ @ @ @ be sufficient to rally the doubters round ?
Or will they take a leaf from the book of Theresa May , who savaged the regulations during the same debate ?
We shall see – but Ministers are not helping themselves by dodging requests for that impact assessment , urged by this site and others , and the subject of a dogged campaign by Mel Stride , Chair of the Treasury Select Committee .
All in all , Sunak is shaping up to go for growth .
Good for him .
Nonetheless , he @ @ @ @ @ @ @ and when the economy rebounds .
Brady and company are less patient .

We must be thankful that no-one is forecasting that Government borrowing will rise to record levels this year. Or Rishi Sunak wouldn’t have been in a position to announce that Government spending will rise at its fastest rate for 15 years.
Apologies for the sarcasm – which isn’t aimed at the Chancellor’s measures, but is meant instead to provide an introduction to the thinking behind them.
One response to a ballooning deficit is to cut the rate of growth of spending. That’s what the Coalition did after 2010, when the deficit hit seven per cent of GDP.
The Office for Budget Responsibility is forecasting a peak of 19 per this year. But Sunak’s response is to raise the rate of spending. Why?
Because in 2010 George Osborne judged the deficit to be structural (he was right), and his successor judges this one to be exceptional (he’s right, too).
It is almost entirely a product of the pandemic and what has followed. It is in this context that the OBR forecasts the economy to shrink by 11 per cent this year and unemployment to hit 2.6 million next year.
In these circumstances, the Chancellor has found it impossible to produce the four year spending review he hoped for, and has been forced to issue one for a single year instead.
Furthermore, his statement was only one side of the tax and spending coin. Today, we got the spending. In the Spring, we will get the Budget – and the tax.
Given all this, it will be very odd if Sunak turns up then with large-scale tax rises to raise revenue quickly. The foundation of his measures today appears to be: suck it and see.
Broadly speaking, the spending package suggests that the Chancellor is going for growth. That’s the logic of the infrastructure spending, the coming review of regulation, the new northern bank and the enlarged Restart programme.
The Levelling-Up Fund is a classic Treasury exercise in the English centralist tradition, with its central feature of bids from the provinces to Westminster for money. So it is in a country with relatively few local taxes.
On that point, Sunak announced “extra flexibility for Council Tax and Adult Social Care precept”. Local authorities will like that, council taxpayers not so much.
It’s worth stressing that the OBR’s forecasts, like all such animals, shouldn’t be taken too seriously. Our columnist Ryan Bourne debunked its record on this site earlier this week.
If you walk down the sunny side of the street, you will smack your lips at the thought of a Roaring Twenties effect, as employment recovers, consumers spend, the hospitality sector booms and people pile into holidays abroad.
And it may be that post-Covid changes even out for the better, with a shift in activity and spending from city centres to the suburbs and countryside, together with music, art, theatre and all the rest of it.
That might not be such a bad things for towns and their centres, at which the new Levelling Up Fund is partly aimed. Our columnist James Frayne believes they are a core concern for provincial voters, and government listens to him.
If on the other hand you stick to the shady side, you will point to the economic equivalent of Long Covid: fearsome economic and social bills for damaged mental health, postponed operations, lost educational opportunities.
All that is a big minus for levelling-up – because it’s the disabled, poor and disadvantaged who have been hit hardest by restrictions and lockdowns, especially if they work in the private sector.
The background in recent years is not encouraging. Since the financial crash exploded, we haven’t grown at more than 2.6 per cent a year. That suggests recovery may be sticky.
Sunak’s persuasive manner, grip of detail and spare eloquence have served him well during this crisis. Others holding his post would not have survived roughly ten major finance annoucements in less than a year.
It’s not as though he hasn’t sometimes had to recast his plans – as in October, when he pumped more money into his Job Support Scheme.
And if the economics of his strategy are straightforward enough, its politics was sometimes a bit odd. If the Government’s overall plan in the short-term is expansionary, why raise the minimum wage but curb public sector pay?
If spending on nearly everything else is rising, why crack down on the 0.7 per cent aid spend? Doing so because you think aid is wasted or the target is wasteful is one thing.
But that wasn’t the basis of Sunak’s decision – since, after all, he said that the Government intends to return to 0.7 per cent “when the fiscal situation allows”.
The Chancellor also left a big unresolved question hanging in the air. What will the Government do about the Universal Credit uplift? Will it be extended or not?
The sense of a statement with contradictory messages was picked up Rob Covile of the Centre for Policy Studies. (The Treasury would do well when the Budget approaches to look at its supply side ideas.)
“Feels slightly like Treasury couldn’t decide whether the message was ‘tighten belts’ or ‘we’re still spending’,” he tweeted. “So we’re getting two or three minutes of each in turn.”
That first element in the Chancellor’s statement, plus the OBR’s horrid short-term forecasts, comes at a bad time for the Government.
For tomorrow, the toughened tiering details are announced. Lots of Conservative MPs won’t like them. The detail of which tiers apply in which areas will be published, too. Many Tory MPs will like those even less.
Graham Brady, Steve Baker, Mark Harper, and the Covid Recovery Group will say that the economic damage of restrictions is so severe that the Commons should not vote for more – at least, without an impact assessment.
They may not be alone. “These measures may be a short-term strategy, but they cannot be a long-term one,” Jeremy Wright declared in the Commons during the recent debate on the lockdown regulations.
He and Edward Timpson (another ex-Minister) plus other MPs backed the Government but, sounded a cautionary note.
Will the prospect of vaccines be sufficient to rally the doubters round? Or will they take a leaf from the book of Theresa May, who savaged the regulations during the same debate?
We shall see – but Ministers are not helping themselves by dodging requests for that impact assessment, urged by this site and others, and the subject of a dogged campaign by Mel Stride, Chair of the Treasury Select Committee.
All in all, Sunak is shaping up to go for growth. Good for him. Nonetheless, he must watch and wait to see how and when the economy rebounds. Brady and company are less patient.


conservativehome--2020-11-25--Spending Review 2020: Think tank response round-up

“ The Chancellor set out plans for big-spending and big-borrowing to get the country through the pandemic , and set the course for the country in the years ahead .
It is necessarily expensive to confront the Covid-19 pandemic .
But this public sector spending splurge fails to put the United Kingdom onto a strong fiscal footing for the recovery .
Rishi Sunak can not tax our way out of debt or spend our way out of a recession .
“ Increasing departmental budgets as the economy shrinks is just spending money we don ’ t have .
It is @ @ @ @ @ @ @ fallen , public sector wages do not rise .
Every public sector worker does not automatically deserve a pay rise while the rest of the UK loses out .
“ Raising the minimum wage during a recession will hit the most vulnerable the hardest by preventing businesses from hiring out-of-work Brits .
It risks fewer jobs and hours for the lowest skilled , young , and minority workers .
For the party of business , the lack of thought about their needs and the increase in costs they ’ re facing coming from @ @ @ @ @ @ @ and unforgivable oversight.
” “ The Chancellor ’ s diagnosis was correct – and it is encouraging that he grasps the scale of the problem .
The eye of the economic storm has yet to hit .
The Covid contraction is more than double that of the Great Depression in 1931 .
Five years from now our economy will be smaller than it was at the start of 2020 .
“ If the diagnosis is good , the medicine is inadequate .
‘ No return to austerity ’ is a good slogan , @ @ @ @ @ @ @ in the public or the private sector .
It is just a question of when , and the longer the delay the more austere it will be .
“ While today was a Spending Review rather than a Budget , the Chancellor must swiftly turn his attention to mapping out a path to recovery .
This will involve creating a better tax and regulatory environment , so businesses can bounce back and thrive.
” “ Amidst the eye-watering barrage of numbers , the focus first and foremost on jobs , was the right @ @ @ @ @ @ @ for the recovery of the economy but as the Chancellor said , a job is the best route to personal prosperity – an identity , purpose , and reason to get up each morning .
Various investments in housing , city growth deals , and a very welcome community levelling-up fund will all help to enable this .
“ And for those out of work the announcement of the £3bn Restart Programme is welcome too .
This can build on and expand the Work Programme and Work and Health Programme .
But it @ @ @ @ @ @ @ per the original design of Universal Support , to go alongside Universal Credit .
As the Shadow Chancellor said it must address the needs of those furthest from the job market and work with the small local actors , who know their communities best .
“ Lastly , support for the most vulnerable such as rough sleepers , and our prisons was welcome , but warm words on families and communities , where many find their greatest support , must be followed by action.
” “ The lack of focus on value for @ @ @ @ @ @ @ will no doubt disappoint taxpayers .
“ Coronavirus has undeniably left a large hole in the nation ’ s finances .
But instead of forever dipping back into taxpayers ’ pockets , the government should prioritise policies to get the economy going .
“ With the tax burden at a 50 year high , targeted tax cuts will be vital for employment , productivity and , ultimately , economic growth.
” “ Today ’ s spending review recognises the extraordinary scale of the Government ’ s fiscal response to the pandemic , but @ @ @ @ @ @ @ that it has inflicted .
“ It is right to prioritise jobs , health and public services now , rather than immediately closing the deficit , but also right to acknowledge the enormity of the challenges ahead .
The temporary cut to international aid and the imposition of public sector pay restraint , both called for by the Centre for Policy Studies , recognised this changed environment – but the country is still committed to increasing spending on a shrunken tax base .
“ The Chancellor ’ s announcements on infrastructure investment and @ @ @ @ @ @ @ for example the CPS ’ s proposal for a National Infrastructure Bank .
But ultimately it will be the private sector , not the public , which digs us out of this economic hole – so as the pandemic recedes we urge the Chancellor to embrace pro-growth , pro-enterprise stimulus measures , such as tax incentives to encourage businesses to hire and invest.
” “ Remarkably for a much-hyped statement on levelling up opportunity across the country , the Chancellor ’ s word ’ s ring hollow as weaker local economies will be @ @ @ @ @ @ @ aftermath of the pandemic .
“ The growing numbers of people in or at risk of being pulled into poverty in our country will have taken little solace from the plans laid out by the Chancellor today .
The latest economic forecasts are stark and deeply troubling .
“ Behind the figures there are real families wondering how they will get through this winter and beyond .
The Chancellor has not risen to the challenge facing the nation .
In the here and now families need to know how they will pay for @ @ @ @ @ @ @ over their heads .
“ The Chancellor has failed to live up to their manifesto commitment to invest significantly in skills around the UK and allow the funds to be administered locally via mayors , devolved administrations and local authorities .
The additional funding for employment support is eye catching and necessary because of the anticipated wave of long-term unemployment in the coming months .
“ There is mounting concern in the UK about tackling poverty and inequality , and the time to tackle these issues is now , as we recover from @ @ @ @ @ @ @ worst off hardest .
This was a moment when the Chancellor could have taken action to solve poverty – instead many families will now be preparing for still harder times ahead.
” “ The Chancellor has confirmed a modest increase in the National Living Wage for next April – the smallest since 2013 .
After large increases in recent years , the slowdown reflects that the wage floor is rightly linked to typical earnings which have taken a hit during the crisis .
“ Crucially , this increase still leaves the Government on @ @ @ @ @ @ @ middle of the decade , with one of the highest minimum wages in the world .
“ Continuing on the path towards ending low pay – with bigger rises in the National Living Wage coming as earnings recover – should form part of a wider post-Covid settlement for low-paid workers , including more dignity and security at work .
”

Adam Smith Institute
Matt Kilcoyne, Deputy Director:
“The Chancellor set out plans for big-spending and big-borrowing to get the country through the pandemic, and set the course for the country in the years ahead. It is necessarily expensive to confront the Covid-19 pandemic. But this public sector spending splurge fails to put the United Kingdom onto a strong fiscal footing for the recovery. Rishi Sunak cannot tax our way out of debt or spend our way out of a recession.
“Increasing departmental budgets as the economy shrinks is just spending money we don’t have. It is fair that while private sector wages have fallen, public sector wages do not rise. Every public sector worker does not automatically deserve a pay rise while the rest of the UK loses out.
“Raising the minimum wage during a recession will hit the most vulnerable the hardest by preventing businesses from hiring out-of-work Brits. It risks fewer jobs and hours for the lowest skilled, young, and minority workers. For the party of business, the lack of thought about their needs and the increase in costs they’re facing coming from the government, this is a massive and unforgivable oversight.”
Institute of Economic Affairs
Mark Littlewood, Director General:
“The Chancellor’s diagnosis was correct – and it is encouraging that he grasps the scale of the problem. The eye of the economic storm has yet to hit. The Covid contraction is more than double that of the Great Depression in 1931. Five years from now our economy will be smaller than it was at the start of 2020.
“If the diagnosis is good, the medicine is inadequate. ‘No return to austerity’ is a good slogan, but austerity there will be – either in the public or the private sector. It is just a question of when, and the longer the delay the more austere it will be.
“While today was a Spending Review rather than a Budget, the Chancellor must swiftly turn his attention to mapping out a path to recovery. This will involve creating a better tax and regulatory environment, so businesses can bounce back and thrive.”
Centre for Social Justice
Edward Davies, Director of Policy:
“Amidst the eye-watering barrage of numbers, the focus first and foremost on jobs, was the right one. It is not just important for the recovery of the economy but as the Chancellor said, a job is the best route to personal prosperity – an identity, purpose, and reason to get up each morning. Various investments in housing, city growth deals, and a very welcome community levelling-up fund will all help to enable this.
“And for those out of work the announcement of the £3bn Restart Programme is welcome too. This can build on and expand the Work Programme and Work and Health Programme. But it must be personalised and human, as per the original design of Universal Support, to go alongside Universal Credit. As the Shadow Chancellor said it must address the needs of those furthest from the job market and work with the small local actors, who know their communities best.
“Lastly, support for the most vulnerable such as rough sleepers, and our prisons was welcome, but warm words on families and communities, where many find their greatest support, must be followed by action.”
TaxPayers’ Alliance
John O’Connell, Chief Executive:
“The lack of focus on value for money in today’s spending review will no doubt disappoint taxpayers.
“Coronavirus has undeniably left a large hole in the nation’s finances. But instead of forever dipping back into taxpayers’ pockets, the government should prioritise policies to get the economy going.
“With the tax burden at a 50 year high, targeted tax cuts will be vital for employment, productivity and, ultimately, economic growth.”
Centre for Policy Studies
Robert Colvile, Director:
“Today’s spending review recognises the extraordinary scale of the Government’s fiscal response to the pandemic, but also the extraordinary and long-lasting economic damage that it has inflicted.
“It is right to prioritise jobs, health and public services now, rather than immediately closing the deficit, but also right to acknowledge the enormity of the challenges ahead. The temporary cut to international aid and the imposition of public sector pay restraint, both called for by the Centre for Policy Studies, recognised this changed environment – but the country is still committed to increasing spending on a shrunken tax base.
“The Chancellor’s announcements on infrastructure investment and levelling up were extremely welcome, echoing for example the CPS’s proposal for a National Infrastructure Bank. But ultimately it will be the private sector, not the public, which digs us out of this economic hole – so as the pandemic recedes we urge the Chancellor to embrace pro-growth, pro-enterprise stimulus measures, such as tax incentives to encourage businesses to hire and invest.”
Joseph Rowntree Foundation
Helen Barnard, Director:
“Remarkably for a much-hyped statement on levelling up opportunity across the country, the Chancellor’s word’s ring hollow as weaker local economies will be getting less money than previously in the aftermath of the pandemic.
“The growing numbers of people in or at risk of being pulled into poverty in our country will have taken little solace from the plans laid out by the Chancellor today. The latest economic forecasts are stark and deeply troubling.
“Behind the figures there are real families wondering how they will get through this winter and beyond. The Chancellor has not risen to the challenge facing the nation. In the here and now families need to know how they will pay for food, childcare and keep a roof over their heads.
“The Chancellor has failed to live up to their manifesto commitment to invest significantly in skills around the UK and allow the funds to be administered locally via mayors, devolved administrations and local authorities. The additional funding for employment support is eye catching and necessary because of the anticipated wave of long-term unemployment in the coming months.
“There is mounting concern in the UK about tackling poverty and inequality, and the time to tackle these issues is now, as we recover from a crisis which has already hit the worst off hardest. This was a moment when the Chancellor could have taken action to solve poverty – instead many families will now be preparing for still harder times ahead.”
Resolution Foundation
Hannah Slaughter, Economist:
“The Chancellor has confirmed a modest increase in the National Living Wage for next April – the smallest since 2013. After large increases in recent years, the slowdown reflects that the wage floor is rightly linked to typical earnings which have taken a hit during the crisis.
“Crucially, this increase still leaves the Government on track to abolish low pay by the middle of the decade, with one of the highest minimum wages in the world.
“Continuing on the path towards ending low pay – with bigger rises in the National Living Wage coming as earnings recover – should form part of a wider post-Covid settlement for low-paid workers, including more dignity and security at work.”


conservativehome--2020-11-25--Andrew Gimson’s Commons sketch: The Chancellor brings a mysterious poetry to his numbers

“ Numbers alone can ring hollow , ” Rishi Sunak said at the end of his statement .
But in his mouth , numbers did not ring hollow .
He brought a mysterious poetry to these figures .
We are borrowing and spending far more than we can afford , or expected only a few months ago , and have also suffered “ the largest fall in output for over 300 years ” .
The Chancellor avowed that the debt we are accumulating is “ clearly unsustainable over the medium term ” .
And yet his transcendent lucidity and preternatural @ @ @ @ @ @ @ , the recovery just a matter of remaining as clear-headed and unflustered as Sunak .
Many Chancellors sound bored by the figures they read out to the House , or at least make those figures sound boring to the less numerate Members of Parliament .
Sunak somehow conveyed his love of spreadsheets in a way that Philip Hammond , his predecessor but one , never managed to do .
There was a music of the spheres in all those noughts .
Lord Chesterfield said that Sir Robert Walpole , Prime Minister from 1721-42 @ @ @ @ @ @ @ the same gift .
And just as Walpole was trusted to clear up after the South Sea Bubble of 1720 , so Sunak is trusted , at least for now , to clear up after the pandemic .
His lustrous black hair contains more streaks of grey than it did when he started in February , but otherwise he seems unaffected by the burden he bears .
In a level tone he announced “ a new Levelling Up Fund worth £4 billion ” from which any local area will be allowed to bid @ @ @ @ @ @ @ impact and be “ delivered within this Parliament ” .
Sunak does not wish those Labour voters who turned Conservative last December to feel in 2024 that the Chancellor has let them down .
Nor does he wish anyone to suppose he is an unfeeling technocrat , who thinks only the figures matter .
He ended by saying that the spending he had announced was “ secondary to the courage , wisdom , kindness and creativity it unleashes ” .
We are united in a moral mission , “ a common endeavour ” @ @ @ @ @ @ @ Labour Party , was left with nothing much to say , and could not be blamed for that .
She is a great improvement on her predecessor , but could not spoil Sunak ’ s day .

“Numbers alone can ring hollow,” Rishi Sunak said at the end of his statement. But in his mouth, numbers did not ring hollow.
He brought a mysterious poetry to these figures. We are borrowing and spending far more than we can afford, or expected only a few months ago, and have also suffered “the largest fall in output for over 300 years”.
The Chancellor avowed that the debt we are accumulating is “clearly unsustainable over the medium term”.
And yet his transcendent lucidity and preternatural calm made the whole situation seem sustainable, the recovery just a matter of remaining as clear-headed and unflustered as Sunak.
Many Chancellors sound bored by the figures they read out to the House, or at least make those figures sound boring to the less numerate Members of Parliament.
Sunak somehow conveyed his love of spreadsheets in a way that Philip Hammond, his predecessor but one, never managed to do. There was a music of the spheres in all those noughts.
Lord Chesterfield said that Sir Robert Walpole, Prime Minister from 1721-42, when addressing MPs was
“So clear in stating the most intricate matters, especially in the finances, that while he was speaking the most ignorant thought that they understood what they really did not.”
Sunak has the same gift. And just as Walpole was trusted to clear up after the South Sea Bubble of 1720, so Sunak is trusted, at least for now, to clear up after the pandemic.
His lustrous black hair contains more streaks of grey than it did when he started in February, but otherwise he seems unaffected by the burden he bears.
In a level tone he announced “a new Levelling Up Fund worth £4 billion” from which any local area will be allowed to bid for projects which will have a noticeable impact and be “delivered within this Parliament”.
Sunak does not wish those Labour voters who turned Conservative last December to feel in 2024 that the Chancellor has let them down.
Nor does he wish anyone to suppose he is an unfeeling technocrat, who thinks only the figures matter. He ended by saying that the spending he had announced was “secondary to the courage, wisdom, kindness and creativity it unleashes”.
We are united in a moral mission, “a common endeavour”. Anneliese Dodds, replying for the Labour Party, was left with nothing much to say, and could not be blamed for that. She is a great improvement on her predecessor, but could not spoil Sunak’s day.


conservativehome--2020-11-25--The Chancellor’s Spending Review statement. Full text – “The UK is forecast to borrow a total of £39

The Chancellor’s Spending Review statement. Full text – “The UK is forecast to borrow a total of £394 billion this year”

“ On Monday , the Prime Minister set out the action we need to take between now and the start of December to control the spread of coronavirus .
Today ’ s Spending Review delivers on the priorities of the British people .
Our health emergency is not yet over .
And our economic emergency has only just begun .
So our immediate priority is to protect people ’ s lives and livelihoods .
Paying for new hospitals , better schools and safer streets .
And it delivers a once-in-a-generation investment in infrastructure .
Creating jobs , growing the economy @ @ @ @ @ @ @ call home .
Our immediate priority is to protect people ’ s lives and livelihoods .
So let me begin by updating the House on our response to coronavirus .
The furlough scheme , support for the self-employed , loans , grants , tax cuts and deferrals as well as extra funding for schools , councils , the NHS , charities , culture and sport .
Today ’ s figures confirm that taken together : This year , we are providing £280 billion to get our country through coronavirus .
Next year , @ @ @ @ @ @ @ PPE , vaccines – we are allocating an initial £18 billion .
To protect the public services most affected by coronavirus , we are also providing : £3 billion to support NHS recovery , allowing them to carry out up to a million checks , scans and operations .
Over £2 billion to keep our transport arteries open , subsidising rail networks .
And an extra £250 million to help end rough sleeping .
And while much of our coronavirus response is UK-wide , the government is also providing £2.6 billion to support @ @ @ @ @ @ @ and Northern Ireland .
Taken together , next year , public services funding to tackle coronavirus will total £55 billion .
Let me turn to the OBR ’ s economic forecasts .
And can I thank the new Chair , Richard Hughes , and his whole team , for their work .
The OBR forecast the economy will contract this year by 11.3 % , the largest fall in output for more than 300 years .
As the restrictions are eased , they expect the economy to start recovering growing by 5.5 % @ @ @ @ @ @ @ , then 2.3 % , 1.7 % and 1.8 % in the following years .
Even with growth returning , our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022 .
And the economic damage is likely to be lasting .
Long-term scarring means , in 2025 , the economy will be around 3 % smaller than expected in the March Budget .
The economic impact of coronavirus , and the action we ’ ve taken in response , means there has been a significant but @ @ @ @ @ @ @ .
The UK is forecast to borrow a total of £394 billion this year , equivalent to 19 % of GDP .
The highest recorded level of borrowing in our peacetime history .
Borrowing falls to £164 billion next year , £105 billion in 2022-23 , then remains at around £100 billion , 4 % of GDP , for the remainder of the forecast .
Underlying debt – after removing the temporary effect of the Bank of England ’ s asset purchases – is forecast to be 91.9 % of GDP this year @ @ @ @ @ @ @ , and a forecast persistent deficit , underlying debt is forecast to continue rising in every year , reaching 97.5 % of GDP in 2025-26 .
High as these costs are , the costs of inaction would have been far higher .
But this situation is clearly unsustainable over the medium term .
We could only act in the way we have because we came into this crisis with strong public finances .
And we have a responsibility , once the economy recovers , to return to a sustainable fiscal position .
This @ @ @ @ @ @ @ s why we have taken , and continue to take , extraordinary measures to protect people ’ s jobs and incomes .
And it is clear those measures are making a difference .
The OBR now state – as the Bank of England and the IMF already have – that our economic response has protected jobs , supported incomes and helped businesses stay afloat .
They ’ ve said today that business insolvencies have fallen , compared to last year .
And the latest data shows the UK ’ s unemployment rate is @ @ @ @ @ @ @ , Canada and the United States .
And we ’ re doing more to build on our Plan for Jobs .
I ’ m announcing today nearly £3 billion for My Right Honourable Friend the Work & Pensions Secretary to deliver a new , three-year Restart Programme to help over a million people who ’ ve been unemployed for over a year , find new work .
But I have always said : we can not protect every job .
Despite the extraordinary support we ’ ve provided , the OBR expects unemployment @ @ @ @ @ @ @ second quarter of next year , of 7.5 % – 2.6 million people .
Unemployment is then forecast to fall in every year , reaching 4.4 % by the end of 2024 .
Today ’ s statistics remind us of something else : coronavirus has deepened the disparity between public and private sector wages .
In the six months to September , private sector wages fell by nearly 1 % compared to last year .
Over the same period , public sector wages rose by nearly 4 % .
And unlike workers in @ @ @ @ @ @ @ jobs , been furloughed , seen wages cut , and hours reduced , the public sector has not .
In such a difficult context for the private sector – especially for those people working in sectors like retail , hospitality , and leisure I can not justify a significant , across-the-board pay increase for all public sector workers .
Instead , we are targeting our resources at those who need it most .
To protect public sector jobs at this time of crisis , and ensure fairness between the public and private sectors @ @ @ @ @ @ @ .
First , taking account of the pay review bodies advice , we will provide a pay rise to over a million Nurses , Doctors and others working in the NHS .
Second , to protect jobs , pay rises in the rest of the public sector will be paused next year .
But third , we will protect those on lower incomes .
The 2.1 million public sector workers who earn below the median wage of £24,000 , will be guaranteed a pay rise of at least £250 .
What this means @ @ @ @ @ @ @ the government is making the difficult decision to control public sector pay the majority of public sector workers will see their pay increase next year .
And we want to do more for the lowest paid .
We are accepting in full the recommendations of the Low Pay Commission to increase the National Living Wage by 2.2 % to £8.91 an hour ; to extend this rate to those aged 23 and over ; and to increase the National Minimum Wage rates as well .
Taken together , these minimum wage increases will @ @ @ @ @ @ @ A full-time worker on the National Living Wage will see their annual earnings increase by £345 next year .
And compared to 2016 when the policy was first introduced , that ’ s a pay rise of over £4,000 .
These are difficult and uncertain economic times – so it is right that our immediate priority is to protect people ’ s health and their jobs .
But we need to look beyond .
Before I turn to the details , let me thank the whole Treasury team , and especially My Right @ @ @ @ @ @ @ dedication and hard work in preparing today ’ s Spending Review .
Next year , total departmental spending will be £540 billion .
Over this year and next , day-to-day departmental spending will rise , in real terms , by 3.8 % – the fastest growth rate in 15 years .
In cash terms , day-to-day departmental budgets will increase next year by £14.8 billion .
And Mr Speaker , this is a Spending Review for the whole United Kingdom .
Through the Barnett formula , today ’ s decisions increase Scottish Government @ @ @ @ @ @ @ funding by £1.3 billion , and £0.9 billion for the Northern Ireland Executive .
The whole of the United Kingdom will benefit from the UK Shared Prosperity Fund , and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts , on average reaching around £1.5 billion a year .
To help local areas prepare for the introduction of the UKSPF , next year we will provide funding for communities to pilot programmes and new approaches .
And we will accelerate four City and @ @ @ @ @ @ @ Cities , Borderlands , Moray , and the Scottish Islands create jobs and prosperity in their areas .
Our public spending plans deliver on the priorities of the British people .
Today ’ s Spending Review honours our historic , multi-year commitment to the NHS .
Next year , the core health budget will grow by £6.6 billion , allowing us to deliver 50,000 more nurses and 50 million more general practice appointments .
To invest in new technologies to improve patient and staff experience .
And fund the biggest hospital building programme @ @ @ @ @ @ @ hospitals and upgrading 70 more .
Today ’ s settlement allows Local Authorities to increase their core spending power by 4.5 % .
Local authorities will have extra flexibility for Council Tax and Adult Social Care precept which together with £300 million of new grant funding gives them access to an extra billions pounds to fund social care .
And this is on top of the extra billion pound social care grant we provided this year , which I can confirm will be maintained into next year .
To provide a better education @ @ @ @ @ @ @ also getting on with our three-year investment plan for schools .
We ’ ll increase the schools ’ budget next year by £2.2 billion , well on the way to delivering our commitment of an extra £7.1 billion by 2022-23 .
Every pupil in the country will see a year-on-year funding increase of at least 2 % .
And we ’ re funding the Prime Minister ’ s commitment to rebuild 500 schools over the next decade .
And we ’ re also committed to boosting skills .
With £291 million to pay @ @ @ @ @ @ @ further education .
And extend traineeships , sector-based work academies , and the national careers service .
As well as improving the way the apprenticeships system works for businesses .
And we ’ re also making our streets safer .
Next year , funding for the criminal justice system will increase by over a billion pounds .
We ’ re providing more than £400 million to recruit 6,000 new police officers – well on track to recruit 20,000 .
And £4 billion over four years to provide 18,000 new prison places .
New @ @ @ @ @ @ @ – the British people ’ s priorities are this government ’ s priorities .
Today ’ s Spending Review strengthens the United Kingdom ’ s place in the world .
This country has always and will always be open and outward-looking , leading in solving the world ’ s toughest problems .
But during a domestic fiscal emergency , when we need to prioritise our limited resources on jobs and public services sticking rigidly to spending 0.7 % of our national income on overseas aid , is difficult to justify to the British @ @ @ @ @ @ @ the highest peacetime levels of borrowing on record .
I have listened with great respect to those who have argued passionately to retain this target .
But at a time of unprecedented crisis government must make tough choices .
I want to reassure the House that we will continue to protect the world ’ s poorest : Spending the equivalent of 0.5 % of our national income on overseas aid in 2021 , allocating £10 billion at this Spending Review .
And our intention is to return to 0.7 % when the fiscal @ @ @ @ @ @ @ OECD data , the UK would remain the second highest aid donor in the G7 .
Higher than France , Italy , Japan , Canada and the United States .
And 0.5 % is also considerably more than the 29 countries on the OECD ’ s development assistance committee – who average just 0.38 % .
And overseas aid is of course only one of the ways we play our role in the world .
The Prime Minister has announced over £24 billion investment in defence over the next four years , the @ @ @ @ @ @ @ Allowing us to provide security not just for our country but around the world .
We ’ re investing more in our extensive diplomatic network , already one of the largest in the world .
And providing more funding for new trade deals .
We should , however , judge our standing in the world not just by the money we spend but by the causes we advance and the values we defend .
If this Spending Review ’ s first priority was getting the country through coronavirus .
And its second was @ @ @ @ @ @ @ priority is to deliver our record investment plans in infrastructure .
Capital spending next year will total £100 billion – £27 billion more in real terms than last year .
Our plans deliver the highest sustained level of public investment in more than 40 years .
Once-in-a-generation plans to deliver once-in-a-generation returns for our country .
On top of our £12.2 billion Affordable Homes Programme .
We ’ ll deliver faster broadband for over 5 million premises across the UK .
Better mobile connectivity with 4G coverage across 95 % of the country @ @ @ @ @ @ @ in new roads .
Upgraded railways , new cycle lanes and over 800 zero emission buses .
Our capital plans will invest in the greener future we promised .
With almost £15 billion of funding for research and development .
To help finance our plans , I can also announce we will establish a new UK infrastructure bank .
Headquartered in the north of England , the Bank will work with the private sector to finance major new investment projects across the UK – starting this spring .
I have one further announcement @ @ @ @ @ @ @ the most powerful barometer of economic success is the change they see and the pride they feel in the places they call home .
People want to be able to look around their towns and villages and say , yes : our community – this place – is better off than it was five years ago .
For too long , our funding approach has been complex and ineffective .
And I want to change that .
Any local area will be able to bid directly to fund local projects .
The fund @ @ @ @ @ @ @ , the Department for Transport and the Ministry of Housing , Communities and Local Government – taking a new , holistic , place-based approach to the needs of local areas .
They must be delivered within this Parliament .
And they must command local support , including from their Member of Parliament .
This is about funding the infrastructure of everyday life : This government is funding the things people want and places need .
Today I have announced huge investment in jobs , public services and infrastructure .
And yet… I can @ @ @ @ @ @ @ hollow .
They stand testament to our commitment to create a better nation , but on their own they are not enough to create one .
When asked what our vision for the future of this country is , we can not point to a shopping list of announcements and feel the job is done .
So , as we invest billions in research and development , we ’ re also introducing a new immigration system ensuring the best and brightest from around the world come here to learn , innovate and create @ @ @ @ @ @ @ building of new homes , we ’ re also simplifying our planning system to ensure beautiful homes are built where they are needed most .
As we invest billions in the security of this country , we ’ re also defending free speech and democratic rule , proving our values are more than just words .
And as we invest billions in public services , we ’ re also protecting the wages of those on the lowest incomes and supporting jobs because good work remains the most rewarding and sustainable path to prosperity @ @ @ @ @ @ @ us on a path to deal with the material matters of government and it is a clear statement of our priorities but encouraging the individual and community brilliance on which a thriving society depends , remains , as ever , a work unfinished .
We in government can set the direction , better schools , more homes , stronger defence , safer streets green energy , technological development , improved rail , enhanced roads all investments that will create jobs and give every person in this country the chance to meet their potential @ @ @ @ @ @ @ the family , and the community that must become stronger , healthier and happier as a result .
This is the true measure of our success .
The spending announced today is secondary to the courage , wisdom , kindness and creativity it unleashes .
These are the incalculable but essential parts of our future , and they can not be mandated or distributed by government .
These things must come from each of us , and be shared freely , because the future , this better country , is a common endeavour @ @ @ @ @ @ @ of the British people , and now the job of delivering them , begins .
Mr Speaker , I commend this statement to the House .
”

“On Monday, the Prime Minister set out the action we need to take between now and the start of December to control the spread of coronavirus.
Mr Speaker,
Today’s Spending Review delivers on the priorities of the British people.
Our health emergency is not yet over.
And our economic emergency has only just begun.
So our immediate priority is to protect people’s lives and livelihoods.
But today’s Spending Review also delivers stronger public services.
Paying for new hospitals, better schools and safer streets.
And it delivers a once-in-a-generation investment in infrastructure.
Creating jobs, growing the economy, increasing pride in the places we call home.
Mr Speaker,
Our immediate priority is to protect people’s lives and livelihoods.
So let me begin by updating the House on our response to coronavirus.
We’re prioritising jobs, businesses and public services.
The furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals as well as extra funding for schools, councils, the NHS, charities, culture and sport.
Today’s figures confirm that taken together:
This year, we are providing £280 billion to get our country through coronavirus.
Next year, to fund our programmes on testing, PPE, vaccines – we are allocating an initial £18 billion.
To protect the public services most affected by coronavirus, we are also providing:
£3 billion to support NHS recovery, allowing them to carry out up to a million checks, scans and operations.
Over £2 billion to keep our transport arteries open, subsidising rail networks.
Over £3 billion to local councils.
And an extra £250 million to help end rough sleeping.
And while much of our coronavirus response is UK-wide, the government is also providing £2.6 billion to support the devolved administrations in Scotland, Wales and Northern Ireland.
Taken together, next year, public services funding to tackle coronavirus will total £55 billion.
Mr Speaker,
Let me turn to the OBR’s economic forecasts.
And can I thank the new Chair, Richard Hughes, and his whole team, for their work.
The OBR forecast the economy will contract this year by 11.3%, the largest fall in output for more than 300 years.
As the restrictions are eased, they expect the economy to start recovering growing by 5.5% next year, 6.6% in 2022, then 2.3%, 1.7% and 1.8% in the following years.
Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022.
And the economic damage is likely to be lasting.
Long-term scarring means, in 2025, the economy will be around 3% smaller than expected in the March Budget.
Mr Speaker,
The economic impact of coronavirus, and the action we’ve taken in response, means there has been a significant but necessary increase in our borrowing and debt.
The UK is forecast to borrow a total of £394 billion this year, equivalent to 19% of GDP.
The highest recorded level of borrowing in our peacetime history.
Borrowing falls to £164 billion next year, £105 billion in 2022-23, then remains at around £100 billion, 4% of GDP, for the remainder of the forecast.
Underlying debt – after removing the temporary effect of the Bank of England’s asset purchases – is forecast to be 91.9% of GDP this year.
And due to elevated borrowing levels, and a forecast persistent deficit, underlying debt is forecast to continue rising in every year, reaching 97.5% of GDP in 2025-26.
High as these costs are, the costs of inaction would have been far higher.
But this situation is clearly unsustainable over the medium term.
We could only act in the way we have because we came into this crisis with strong public finances.
And we have a responsibility, once the economy recovers, to return to a sustainable fiscal position.
Mr Speaker,
This is an economic emergency.
That’s why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes.
And it is clear those measures are making a difference.
The OBR now state – as the Bank of England and the IMF already have – that our economic response has protected jobs, supported incomes and helped businesses stay afloat.
They’ve said today that business insolvencies have fallen, compared to last year.
And the latest data shows the UK’s unemployment rate is lower than Italy, France, Spain, Canada and the United States.
And we’re doing more to build on our Plan for Jobs.
I’m announcing today nearly £3 billion for My Right Honourable Friend the Work & Pensions Secretary to deliver a new, three-year Restart Programme to help over a million people who’ve been unemployed for over a year, find new work.
But I have always said: we cannot protect every job.
Despite the extraordinary support we’ve provided, the OBR expects unemployment to rise to a peak in the second quarter of next year, of 7.5% – 2.6 million people.
Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.
Mr Speaker,
Today’s statistics remind us of something else: coronavirus has deepened the disparity between public and private sector wages.
In the six months to September, private sector wages fell by nearly 1% compared to last year. Over the same period, public sector wages rose by nearly 4%.
And unlike workers in the private sector, who have lost jobs, been furloughed, seen wages cut, and hours reduced, the public sector has not.
In such a difficult context for the private sector – especially for those people working in sectors like retail, hospitality, and leisure I cannot justify a significant, across-the-board pay increase for all public sector workers.
Instead, we are targeting our resources at those who need it most.
To protect public sector jobs at this time of crisis, and ensure fairness between the public and private sectors, I am taking three steps today.
First, taking account of the pay review bodies advice, we will provide a pay rise to over a million Nurses, Doctors and others working in the NHS.
Second, to protect jobs, pay rises in the rest of the public sector will be paused next year.
But third, we will protect those on lower incomes.
The 2.1 million public sector workers who earn below the median wage of £24,000, will be guaranteed a pay rise of at least £250.
What this means, Mr Speaker, is that while the government is making the difficult decision to control public sector pay the majority of public sector workers will see their pay increase next year.
And we want to do more for the lowest paid.
We are accepting in full the recommendations of the Low Pay Commission to increase the National Living Wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the National Minimum Wage rates as well.
Taken together, these minimum wage increases will likely benefit around two million people.
A full-time worker on the National Living Wage will see their annual earnings increase by £345 next year.
And compared to 2016 when the policy was first introduced, that’s a pay rise of over £4,000.
Mr Speaker,
These are difficult and uncertain economic times – so it is right that our immediate priority is to protect people’s health and their jobs.
But we need to look beyond.
Today’s Spending Review delivers stronger public services – our second priority.
Before I turn to the details, let me thank the whole Treasury team, and especially My Right Honourable Friend the Chief Secretary for their dedication and hard work in preparing today’s Spending Review.
Next year, total departmental spending will be £540 billion.
Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8% – the fastest growth rate in 15 years.
In cash terms, day-to-day departmental budgets will increase next year by £14.8 billion.
And Mr Speaker, this is a Spending Review for the whole United Kingdom.
Through the Barnett formula, today’s decisions increase Scottish Government funding by £2.4 billion, Welsh Government funding by £1.3 billion, and £0.9 billion for the Northern Ireland Executive.
The whole of the United Kingdom will benefit from the UK Shared Prosperity Fund, and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average reaching around £1.5 billion a year.
To help local areas prepare for the introduction of the UKSPF, next year we will provide funding for communities to pilot programmes and new approaches.
And we will accelerate four City and Growth Deals in Scotland, helping Tay Cities, Borderlands, Moray, and the Scottish Islands create jobs and prosperity in their areas.
Mr Speaker,
Our public spending plans deliver on the priorities of the British people.
Today’s Spending Review honours our historic, multi-year commitment to the NHS.
Next year, the core health budget will grow by £6.6 billion, allowing us to deliver 50,000 more nurses and 50 million more general practice appointments.
We’re increasing capital investment by £2.3 billion.
To invest in new technologies to improve patient and staff experience.
Replace ageing diagnostic machines like MRI and CT scanners.
And fund the biggest hospital building programme in a generation – building 40 new hospitals and upgrading 70 more.
We’re investing in social care, too.
Today’s settlement allows Local Authorities to increase their core spending power by 4.5%.
Local authorities will have extra flexibility for Council Tax and Adult Social Care precept which together with £300 million of new grant funding gives them access to an extra billions pounds to fund social care.
And this is on top of the extra billion pound social care grant we provided this year, which I can confirm will be maintained into next year.
To provide a better education for our children, we’re also getting on with our three-year investment plan for schools.
We’ll increase the schools’ budget next year by £2.2 billion, well on the way to delivering our commitment of an extra £7.1 billion by 2022-23.
Every pupil in the country will see a year-on-year funding increase of at least 2%.
And we’re funding the Prime Minister’s commitment to rebuild 500 schools over the next decade.
And we’re also committed to boosting skills.
With £291 million to pay for more young people to go into further education.
£1.5 billion to rebuild colleges.
£375 million to deliver the Prime Minister’s Lifetime Skills Guarantee.
And extend traineeships, sector-based work academies, and the national careers service.
As well as improving the way the apprenticeships system works for businesses.
And we’re also making our streets safer.
Next year, funding for the criminal justice system will increase by over a billion pounds.
We’re providing more than £400 million to recruit 6,000 new police officers – well on track to recruit 20,000.
And £4 billion over four years to provide 18,000 new prison places.
New hospitals, better schools, safer streets – the British people’s priorities are this government’s priorities.
Mr Speaker,
Today’s Spending Review strengthens the United Kingdom’s place in the world.
This country has always and will always be open and outward-looking, leading in solving the world’s toughest problems.
But during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services sticking rigidly to spending 0.7% of our national income on overseas aid, is difficult to justify to the British people especially when we’re seeing the highest peacetime levels of borrowing on record.
I have listened with great respect to those who have argued passionately to retain this target.
But at a time of unprecedented crisis government must make tough choices.
I want to reassure the House that we will continue to protect the world’s poorest:
Spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating £10 billion at this Spending Review.
And our intention is to return to 0.7% when the fiscal situation allows.
Based on the latest OECD data, the UK would remain the second highest aid donor in the G7.
Higher than France, Italy, Japan, Canada and the United States.
And 0.5% is also considerably more than the 29 countries on the OECD’s development assistance committee – who average just 0.38%.
And overseas aid is of course only one of the ways we play our role in the world.
The Prime Minister has announced over £24 billion investment in defence over the next four years, the biggest sustained increase in 30 years.
Allowing us to provide security not just for our country but around the world.
We’re investing more in our extensive diplomatic network, already one of the largest in the world.
And providing more funding for new trade deals.
We should, however, judge our standing in the world not just by the money we spend but by the causes we advance and the values we defend.
Mr Speaker,
If this Spending Review’s first priority was getting the country through coronavirus.
And its second was stronger public services.
Then our final priority is to deliver our record investment plans in infrastructure.
Capital spending next year will total £100 billion – £27 billion more in real terms than last year.
Our plans deliver the highest sustained level of public investment in more than 40 years.
Once-in-a-generation plans to deliver once-in-a-generation returns for our country.
To build housing, we’re introducing a £7.1 billion National Home Building Fund.
On top of our £12.2 billion Affordable Homes Programme.
We’ll deliver faster broadband for over 5 million premises across the UK.
Better mobile connectivity with 4G coverage across 95% of the country by 2025.
The biggest ever investment in new roads.
Upgraded railways, new cycle lanes and over 800 zero emission buses.
Our capital plans will invest in the greener future we promised.
Delivering the Prime Minister’s ten-point plan for climate change.
We’re making this country a scientific superpower.
With almost £15 billion of funding for research and development.
And we’re publishing today a comprehensive new National Infrastructure Strategy.
To help finance our plans, I can also announce we will establish a new UK infrastructure bank.
Headquartered in the north of England, the Bank will work with the private sector to finance major new investment projects across the UK – starting this spring.
Mr Speaker,
I have one further announcement to make.
For many people, the most powerful barometer of economic success is the change they see and the pride they feel in the places they call home.
People want to be able to look around their towns and villages and say, yes: our community – this place – is better off than it was five years ago.
For too long, our funding approach has been complex and ineffective.
And I want to change that.
Today I’m announcing a new Levelling Up Fund worth £4 billion.
Any local area will be able to bid directly to fund local projects.
The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry of Housing, Communities and Local Government – taking a new, holistic, place-based approach to the needs of local areas.
Projects must have real impact.
They must be delivered within this Parliament.
And they must command local support, including from their Member of Parliament.
This is about funding the infrastructure of everyday life:
A new bypass.
Upgraded railway stations.
Less traffic.
More libraries, museums, and galleries.
Better high streets and town centres.
This government is funding the things people want and places need.
Mr Speaker,
Today I have announced huge investment in jobs, public services and infrastructure.
And yet… I cannot deny numbers alone, can ring hollow.
They stand testament to our commitment to create a better nation, but on their own they are not enough to create one.
When asked what our vision for the future of this country is, we cannot point to a shopping list of announcements and feel the job is done.
So, as we invest billions in research and development, we’re also introducing a new immigration system ensuring the best and brightest from around the world come here to learn, innovate and create.
As we invest billions in the building of new homes, we’re also simplifying our planning system to ensure beautiful homes are built where they are needed most.
As we invest billions in the security of this country, we’re also defending free speech and democratic rule, proving our values are more than just words.
And as we invest billions in public services, we’re also protecting the wages of those on the lowest incomes and supporting jobs because good work remains the most rewarding and sustainable path to prosperity.
The spending review announced today sets us on a path to deal with the material matters of government and it is a clear statement of our priorities but encouraging the individual and community brilliance on which a thriving society depends, remains, as ever, a work unfinished.
We in government can set the direction, better schools, more homes, stronger defence, safer streets green energy, technological development, improved rail, enhanced roads all investments that will create jobs and give every person in this country the chance to meet their potential.
But it is the individual, the family, and the community that must become stronger, healthier and happier as a result.
This is the true measure of our success.
The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes.
These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by government.
These things must come from each of us, and be shared freely, because the future, this better country, is a common endeavour.
Today government has funded the priorities of the British people, and now the job of delivering them, begins.
Mr Speaker, I commend this statement to the House.”


conservativehome--2020-11-25--There is more at stake in any push to cut the 0.7 per cent target than the future of aid policy

ConservativeHome is a pro-aid site .
It shares that view with our members ’ panel , at least when we last probed its take in detail .
Like Party members , if the survey was representative of their views , we stand solidly behind the core functions of aid : emergency relief , water provision , sanitation , immunisation .
Like them again , we are dubious about the returns gained from using aid as an instrument for economic reform or better governance .
This is why we opposed the abolition of DfID , believing that it made no sense @ @ @ @ @ @ @ some of the poorest people in the world .
But this site has never been able to see why it makes sense to spend a particular percentage of GNI on overseas aid .
If a government does so , it follows that it may sometimes spend money on aid projects simply to hit the target , rather than because it has schemes to hand which it believes will work .
Our guess is that this position is broadly that of many Conservative MPs .
Nonetheless , we are not sure that the Government @ @ @ @ @ @ @ per cent , even temporarily , if it tries , for two main reasons .
First , the Conservative Manifesto declared that “ we will proudly [ our italics ] maintain our commitment to spend 0.7 per cent of GNI on development ” .
It is sometimes necessary to break manifesto pledges , but there should be a strong presumption against it .
And there is also a great deal more at stake here than the aid budget alone .
For example , consider the topical subject of today ’ s Spending Review @ @ @ @ @ @ @ from the Institute of Fiscal Studies , and many others .
“ We will not raise the rate of income tax , VAT or National Insurance , ” the manifesto also said .
But those three taxes between them account for almost two-thirds of the tax take .
Capital , property and corporation taxes raise about a quarter .
So if the Chancellor judges large-scale tax rises necessary at some point , why should he stick to the former rather than raid the latter , too – using exactly the same arguments about @ @ @ @ @ @ @ to aid ?
Indeed , these could be applied to all other manifeso commitments : tax is merely a timely example .
So some Tory MPs unsupportive of the 0.7 per cent target will view any move to water it down with suspicion .
Next , it may be that a Bill will be required to implement any change .
Why ?
Because MPs from all parties took the virtue-signalling option of putting the target into law .
There is wiggle room in the legislation for governments missing the target , but none @ @ @ @ @ @ @ that it intends to miss it .
So any attempt to drop the target will immediately be taken to the courts .
Do we really need to say again that putting targets into law is a thoroughly bad idea ?
( See here and here . )
If there is to be a target , MPs ought to have maxiumum flexibility in debating and changing it .
They lack this room for manoeuvre over the 2050 zero emissions target , too .
Some future government may find itself striving to unscramble that target @ @ @ @ @ @ @ is doing over the 0.7 per cent .
We will find out today whether Rishi Sunak intends to proceed with a reduction .
If he does , he and Boris Johnson will have a fight on his hands .
For the row over the 0.7 per cent is becoming a proxy for a struggle between resurrected Cameroons , risen from their unquiet graves , with their more consensual conservatism of which the target was an integral part…and a Conservative leadership that swept through the Red Wall last year as the Party of Brexit @ @ @ @ @ @ @ for Boris Johnson , since last December , than the former leader who came between them – Theresa May .
Indeed , he has been a loyal trouper , pretty much .
Watch how carefully he sought to tread a middle way between criticising the Government and supporting it during the row about the proposed potential breaking of international law in the event of a No Deal Brexit .
But the 0.7 per cent is a founding article of Cameroon faith , and he isn ’ t holding back in speaking out .
@ @ @ @ @ @ @ , Andrew Mitchell and Damian Green , who chairs the One Nation Group of Conservative MPs .
We wouldn ’ t be at all surprised if the Chancellor hedges the issue this afternoon , especially if there are few retrenchments elswhere .
A majority of 80 is one of near-landslide proportions – but Covid-19 , Brexit trade , all those Research Groups , all that Whatsapping and long-term changes in Parliamentary culture mean that it isn ’ t what it was .
If Johnson and Sunak decide to press ahead , the 0.7 @ @ @ @ @ @ @ plans , may become a test of whether it can get significant change through this Commons at all .

ConservativeHome is a pro-aid site. It shares that view with our members’ panel, at least when we last probed its take in detail.
Like Party members, if the survey was representative of their views, we stand solidly behind the core functions of aid: emergency relief, water provision, sanitation, immunisation. Like them again, we are dubious about the returns gained from using aid as an instrument for economic reform or better governance.
This is why we opposed the abolition of DfID, believing that it made no sense to scrap a department geared to helping some of the poorest people in the world.
But this site has never been able to see why it makes sense to spend a particular percentage of GNI on overseas aid. If a government does so, it follows that it may sometimes spend money on aid projects simply to hit the target, rather than because it has schemes to hand which it believes will work.
Our guess is that this position is broadly that of many Conservative MPs. Nonetheless, we are not sure that the Government will be able to abandon the 0.7 per cent, even temporarily, if it tries, for two main reasons.
First, the Conservative Manifesto declared that “we will proudly [our italics] maintain our commitment to spend 0.7 per cent of GNI on development”. It is sometimes necessary to break manifesto pledges, but there should be a strong presumption against it.
And there is also a great deal more at stake here than the aid budget alone. For example, consider the topical subject of today’s Spending Review. There is talk of tax rises from the Institute of Fiscal Studies, and many others.
“We will not raise the rate of income tax, VAT or National Insurance,” the manifesto also said. But those three taxes between them account for almost two-thirds of the tax take. Capital, property and corporation taxes raise about a quarter.
So if the Chancellor judges large-scale tax rises necessary at some point, why should he stick to the former rather than raid the latter, too – using exactly the same arguments about necessity as would be deployed in relation to aid?
Indeed, these could be applied to all other manifeso commitments: tax is merely a timely example. So some Tory MPs unsupportive of the 0.7 per cent target will view any move to water it down with suspicion.
Next, it may be that a Bill will be required to implement any change. Why? Because MPs from all parties took the virtue-signalling option of putting the target into law. There is wiggle room in the legislation for governments missing the target, but none that we know of for one declaring that it intends to miss it.
So any attempt to drop the target will immediately be taken to the courts. Do we really need to say again that putting targets into law is a thoroughly bad idea? (See here and here.)
If there is to be a target, MPs ought to have maxiumum flexibility in debating and changing it. They lack this room for manoeuvre over the 2050 zero emissions target, too. Some future government may find itself striving to unscramble that target in the same way that this one is doing over the 0.7 per cent.
We will find out today whether Rishi Sunak intends to proceed with a reduction. If he does, he and Boris Johnson will have a fight on his hands.
For the row over the 0.7 per cent is becoming a proxy for a struggle between resurrected Cameroons, risen from their unquiet graves, with their more consensual conservatism of which the target was an integral part…and a Conservative leadership that swept through the Red Wall last year as the Party of Brexit.
David Cameron has caused less trouble for Boris Johnson, since last December, than the former leader who came between them – Theresa May. Indeed, he has been a loyal trouper, pretty much.
Watch how carefully he sought to tread a middle way between criticising the Government and supporting it during the row about the proposed potential breaking of international law in the event of a No Deal Brexit. But the 0.7 per cent is a founding article of Cameroon faith, and he isn’t holding back in speaking out.
So are Jeremy Hunt, Ruth Davidson, Andrew Mitchell and Damian Green, who chairs the One Nation Group of Conservative MPs.
We wouldn’t be at all surprised if the Chancellor hedges the issue this afternoon, especially if there are few retrenchments elswhere. A majority of 80 is one of near-landslide proportions – but Covid-19, Brexit trade, all those Research Groups, all that Whatsapping and long-term changes in Parliamentary culture mean that it isn’t what it was.
If Johnson and Sunak decide to press ahead, the 0.7, like the Government’s housing plans, may become a test of whether it can get significant change through this Commons at all.