26 Nov 2020
The UK Chancellor on Wednesday laid out in his annual Spending Review what the British government will spend on health, education, transport and other public services next year.
In his statement in the House of Commons, Rishi Sunak also briefed MPs about the condition of the UK economy and the latest projections for the UK's public finances, following the Covid-19 pandemic.
Amongst other matters, he told parliament that an estimated 1.3 million public sector workers will see their pay frozen in 2021-22; the UK economy is expected to shrink by 11.3% this year – the largest drop in 300 years; unemployment is expected to reach 7.5% next spring, with 2.6 million people out of work; overseas aid budget is to be cut by about £4bn, and a new £4bn ‘levelling up’ fund will pay for upgrading local infrastructure across the country.
There was a mixed reaction to the pandemic. British Chamber of Commerce director general Adam Marshall said: “This spending review comes at a critical time as business communities are fighting for survival in the midst of the coronavirus pandemic.
“The launch of the National Infrastructure Strategy is an important step in overcoming the longstanding infrastructure deficit. We’ve spent long enough discussing infrastructure projects - it’s now time to focus on delivery.”
He added: “Measures to help people return to work at this challenging time will help limit long-term unemployment but government must waste no time in putting these plans into action. Government and business will need to work together to re-train and re-skill the UK workforce. Investment in the Kickstart Scheme, in which chambers are playing a leading role, and the launch of the Restart scheme, will be critical in helping to achieve that.”
However, Chief executive of deVere Group Nigel Green said the review “missed an important opportunity.”
He called it a “sobering statement” with “eyewatering” projections. He continued: “Clearly, these are unprecedented times which demand unprecedented sums of money.
“But whilst the Chancellor’s plans to increase spending on important things like infrastructure are welcomed, longer term planning is needed to develop new industries.”