Tory cuts come home to roost
Wealthy escape the net as the country faces a tough long-term crisis
EVERYONE is in the middle of a brutal pandemic which has caused a health and economic crisis.
What a terrible time for Boris Johnson n to be in charge.
Yesterday’s spending review saw the Tory Government freeze pay in the public sector and cut aid amid unemployment figures reminiscent of the bad old days of Margaret Thatcher’s heartless rule.
In a masterclass of presentation, Chancellor Rishi Sunak dressed up all sorts of pain while ignoring years of pressure and a Tory legacy of austerity.
A sledgehammer has been taken to the UK’s welfare state in the past decade.
Pay has been squeezed, benefits cut and the poorest asked to atone for the wild behaviour of the few.
The Record highlighted the impact of that history yesterday in our campaign to stop child poverty. All those political decisions are coming home to roost.
Sunak says the Government has to make tough choices.
Those choices so often fall on the people who need the most help.
No doubt, the wage protection scheme and other financial rescue packages in the pandemic have been a drain.
But for all the talk of this being unavoidable, there was no real mention of Brexit, the one extra self-inflicted wound Britain could so easily have avoided.
The spending review exposed glaring problems today, but sadly the worst is yet to come.
RISHI Sunak has warned that the UK faces the worst economic crisis in 300 years with unemployment surging to 2.6million next year and Government borrowing soaring to combat the coronavirus crisis.
With official forecasts showing the UK economy is expected to shrink by 11.3 per cent this year, the Chancellor said the country faced “long-term scarring” from the corona crisis.
But the Chancellor did not announce tax increases on the wealthy to dig the country out of the economic hole.
Instead he froze public sector pay for millions of workers and reneged on a Tory manifesto pledge by cutting the overseas aid budget.
Sunak said he could not justify an increase in public sector pay when many in the private sector had seen their pay and hours cut in the crisis but he was slammed by the opposition and trade unions.
He also announced that the legal minimum wage will only increase by 19p an hour to £8.91 an hour, with the rate extended to those aged 23 and over.
Alison Thewliss, SNP Treasury spokeswoman, claimed Sunak’s priorities were wrong – after plans to spend millions on a Festival of Brexit were announced.
She said: “Spending £29million for a Festival of Brexit while they let weans go hungry at home and abroad just about sums this tawdry Government up.”
Labour Shadow Chancellor Anneliese Dodds criticised the pay freeze too.
She said: “Earlier this year the Chancellor stood on his doorstep and clapped for key workers. Today, his Government institutes a pay freeze for many of them. This takes a sledgehammer to consumer confidence.”
Dodds was critical of Sunak for not mentioning Brexit in his speech, despite the UK set to leave the transition period at the end of this year.
“In less than 40 days, we’re due to leave the transition period. Yet the Chancellor didn’t even mention that in his speech,” she said. “There’s still no trade deal. So does the Chancellor truly believe that his Government is prepared and that he’s done enough to help those businesses that will be heavily affected?
“Will he take responsible action to help those excluded from Government support?
“Why is he still refusing to make the speedy fixes to Universal Credit Labour has advocated, which would aid the self-employed?”
Trades Union Congress general secretary Frances O’Grady said: “For all the Government’s talk of levelling up, this spending review will level down Britain, hitting key workers’ pay and breaking the Government’s promises to the lowest paid.”
The Institute for Fiscal Studies said £ 9.6bi l lion of the increase in departmental spending will go to just
three areas – health, defence and schools.
“Other areas are facing more of a squeeze and some could even be facing cuts after next year,” the economic think tank said.
Presenting his Spending Review to Parliament at the end of a devastating year Sunak said: “This is an economic emergency and the economic damage is likely to be lasting.”
The Chancellor told the nation he did not expect the economy to return to its pre-crisis levels until the end of 2022 meaning the economy will be around three per cent smaller was expected in the March before the virus struck.
Sunak said the UK will spend £280billion on fighting the coronavirus crisis in the next year.
The Chancellor also announced Scotland will receive £2.4billion of new funding through the Barnett formula, with half the amount from Covidrelated spending.
The review also promised to accelerate multi-year projects under four existing City and Growth Deals in Scotland to drive forward the local economic priorities of Tay Cities,
Borderlands, Moray and the Scottish Islands.
The £1.5billion investment in 12 City and Growth Deals includes £500million for Glasgow, £125million for Aberdeen and £53.1million for Inverness, along with funding to accelerate Tay Cities, Borderlands, Moray and the Scottish Islands Deals from 15 to 10 years.
Although borrowing will fall, the national debt is forecast to reach 97.5 per cent of GDP in 2025.
Sunak admitted: “This situation is clearly unsustainable over the medium term.”
Business leaders questioned whether he had done enough in his statement to stave off economic disaster.
Malcolm Cannon, national director of the Institute of Directors Scotland, said: “With a peak in unemployment to hit nationally in mid-2021, business leaders are by no means out of the woods yet when it comes to the pandemic’s reach. The pain that will be felt will be far reaching and it is now the job of senior teams to continue to buckle down in order to survive.”
“As such, business leaders need policy that gives them the opportunity to look beyond the short-medium term, and that provides long term solutions - especially as a Brexit trade deal is still not on the table. Sadly today’s announcement does not provide that.”
The Scottish Greens called the UK Spending review “cruel and economically illiterate” .