Rishi drive to build a booming Britain
RISHI Sunak has vowed to hit the turbo-boosters to help the nation get back on its feet by “rebuilding, levelling up and investing”.
His plan, the third part of his measures to protect the economy against the impact of coronavirus, is focused on long-term recovery.
The Chancellor, who was launching his spending review for the next five years, said investing in public services, the NHS and major construction and infrastructure schemes, as well as tackling crime, would be top priorities.
Superpower
Meanwhile Whitehall budgets will be bolstered so they deliver Boris Johnson’s “levelling-up” agenda – meaning balancing the economy across the UK.
The Treasury will also support efforts to make the country a “scientific superpower”,
This will include developing technologies to support the Government’s ambition to reach net-zero carbon emissions by 2050. The Comprehensive Spending Review (CSR) sets departmental resource budgets from 2021 to 2024 and capital budgets from 2021 until 2025.
No total sum has been revealed, but departments have been told their budgets will grow above inflation.
The launch comes after the Chancellor confirmed above-inflation rises for 900,000 public sector workers, with teachers and doctors seeing the largest increase, at 3.1 per cent and 2.8 per cent. But data from the Office for National Statistics (ONS) reveals the Government borrowed twice as much in the first quarter of this year as it did in the whole of 2019.
Borrowing soared to £127.9billion between April and June this year, up by more than £103.9 billion on the same period last year, and the highest for the quarter since records began in 1993.
Meanwhile debt soared to its highest level since March 1961, rising to 99.6 per cent of UK gross domestic product (GDP) – an increase of 18.9 per cent compared to the same time last year.
The Government has insisted there will be no return to austerity but Mr Sunak warns the impact of Covid-19 means there has to be tough choices on spending.
Whitehall departments have been asked to identify opportunities to reprioritise spending and deliver savings. They also have to provide evidence they are deliver
ing the Government’s priorities. Mr Sunak said: “The first phase of our economic response to coronavirus was about safeguarding employment as far as possible.
“Our goal in the second phase is to protect, create and support jobs, and we set out our plan to achieve this two weeks ago.
“The Comprehensive Spending Review is our opportunity to deliver on the third phase of our recovery plan – where we will honour the commitments made in the March Budget to rebuild, level up and invest in people and places, spreading opportunities more evenly across the nation.”
Treasury officials said Mr Sunak had stressed that “in the interest of fairness we must exercise restraint in future public sector pay awards, ensuring that, across this year and the spending review period, public sector pay levels retain parity with the private sector”.
The Institute for Fiscal Studies think tank said the announcement means the Government could again cut spending in some departments following 10 years of austerity.
Research economist Ben Zaranko said: “Given the large amounts already promised for priority areas like the NHS, schools and police, and Rishi Sunak’s emphasis on the need for ‘tough choices’, another round of budget cuts for other, lower priority departments is a very real possibility.”
Torsten Bell, chief executive of the Resolution Foundation think tank, said Mr Sunak had given himself “more flexibility to reduce the size of public-spending increases over the coming years, rowing back on significant increases announced as recently as March”.
Meanwhile Cllr James Jamieson, chairman of the Local Government Association, said councils “urgently need certainty” about how local services will be funded from next year and beyond.
He added: “Securing the longterm sustainability of local services must be the top priority.
Emphasis
“It also needs to place emphasis on communities by enshrining long-term, locally-led investment in the economy and infrastructure.
“With the right funding and freedoms, councils can provide local services communities rely on, and grasp the opportunity to address the stark inequalities that the pandemic has exposed.
“They can also develop a green recovery, address skills gaps and rebuild the economy so that it benefits everyone.”