West will gain in Rishi’s plan
THE Government has insisted that Chancellor Rishi Sunak’s Spending Review will benefit the South West and help “level up” the UK.
Mr Sunak, in his Commons speech yesterday, announced significant investment across the South West as part of the Tory Government’s commitment to “level up opportunity” across the nation.
The Chancellor used the Spending Review to boost housing, transport and infrastructure and also announced a new £4billion Levelling Up Fund which will invest in local infrastructure that has a “visible impact” on people and their communities and will support economic recovery.
But there are concerns the measures will not do enough for a UK economy predicted to shrink by 11.3% in 2020, leaving 2.6million people unemployed by next year, and a pay freeze for non-NHS public sector workers will harm the South West.
Announcements specific to the South West included:
More than £600million in housing infrastructure funding across 23 projects, including £250million for key highways improvements. This includes the relocation of Junction 10 of the M5 to unlock nearly 9,000 homes to the west and north-west of Cheltenham.
This is part of the £7.1billion National Home Building Fund which will invest in key infrastructure and provide support for SME housebuilders, to unlock up to 860,000 homes across the country.
West of England Combined Authority will receive a share of £4.2billion for intra-city transport settlements, enabling them to benefit from long-term, locally-led
investment, subject to appropriate governance. The South East will also benefit from major upgrades to the A303 at Stonehenge, dualling the A358 Taunton to Southfields, and improving the A417 missing link.
The South West will also benefit from a share of the £5.2billion sixyear flood and coastal defence programme, including better protection for over 7,000 properties across Bridgwater, Poole and Gloucester.
The Government also announced that the South West will receive almost £3.5billion in per-pupil funding through the schools block – an average per-pupil increase of 3.6% compared to 2020-21.
Furthermore, the Spending Review confirmed that 11 new hospitals will be built in the South West, with the continued growth of medical undergraduate degree places, with an additional 196 places in the South West compared to 2017/18.
Mr Sunak said: “We are committed to spreading opportunity to all regions of the UK and this Spending Review delivers on that promise.
“The investment in housing, transport and infrastructure announced today will support the recovery from coronavirus across the South West.
“We will provide billions of pounds in the fight against coronavirus across the UK, deliver the peoples’ priorities and drive the UK’s recovery.”
But Luke Pollard, Labour MP for Plymouth Sutton and Devonport and Shadow Environment Secretary, criticised the pay freeze for non-NHS public sector workers, and said there was not enough announced that would help the environment.
He said: “The Tory pay freeze is a kick in the teeth for Plymouth’s frontline public sector workers. Police officers, teachers and firefighters all face real-terms pay cuts. It’s all well and good clapping for our key workers, but what they really need is to be paid properly for their dedication.
“This spending review was disappointing for the South West and for Plymouth. The Chancellor’s plans do not match the scale of the crises we face. The scale of the jobs crisis is scary and I am very worried about how many Plymouth families will be out of work very soon.
“There are large gaps in the spending plans especially for funding local services like care services from Plymouth City Council. The Tory plan is not ambitious enough to meaningfully help with our city’s recovery from the deep recession we’re heading into. And there’s no sign of Plymouth getting its fair share in funding yet again.
“The South West seems to have been missed in the Tory levelling up agenda. Tory Ministers are taking the South West for granted. I had high hopes for the new national infrastructure plan but this has just re-announced old projects for the South West. The map for planned investment shows nothing for Plymouth.
“The spending review was almost silent about the climate emergency. Recent green funding announcements unravelled almost as soon as they were made with only £3billion in new money which is barely 10% of what Germany is investing in new green jobs. We need a proper plan for jobs not a wall of Government spin.”
‘This spending review was disappointing for the South West’ LUKE POLLARD, LABOUR MP
THE devastation caused by coronavirus will see the economy shrink by its largest amount for 300 years and Government borrowing reach levels previously unseen in peacetime.
Chancellor Rishi Sunak warned there would be lasting damage, with the economy shrinking by 11.3% in 2020 and not recovering to pre-crisis levels until the end of 2022.
Unemployment is forecast to hit 2.6 million by the middle of 2021, official forecasts from the Office for Budget Responsibility (OBR) said.
The “long-term scarring” from the crisis means that in 2025 the economy will still be around 3% smaller than had been expected in March this year, Mr Sunak told MPs. The Chancellor said yesterday: “Our health emergency is not yet over – and our economic emergency has only just begun.”
The dire state of the public finances mean many public-sector workers will see their pay frozen while the overseas aid budget is being slashed by billions of pounds – prompting the resignation of Foreign Office minister Baroness Sugg in protest.
The OBR forecasts show a recovery is expected over the coming years, with growth of 5.5% forecast next year as coronavirus restrictions are eased, then 6.6% in 2022, 2.3% in 2023, 1.7% in 2024 and 1.8% in 2025.
The Government will borrow an eye-watering £394 billion this year, equivalent to 19% of Gross Domestic Product (GDP), a measure of the size of the economy – which is the highest ever recorded in peacetime. Although borrowing will subsequently fall, the national debt is forecast to reach 97.5% of GDP in 2025-26.
“This situation is clearly unsustainable over the medium term,” Mr Sunak admitted.
The Chancellor said he “cannot justify a significant, across-the-board” pay increase for all public-sector workers, given the difficulties faced in the private sector. Over a million nurses, doctors and others working in the NHS will get a rise but increases for the rest of the public sector will be “paused” – except for 2.1 million workers earning below the median wage of £24,000, who will receive at least £250 extra.
The cut to the aid budget sees the Government reneging on a legal pledge and manifesto commitment to spend 0.7% of national income on development assistance. Mr Sunak said: “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.” Instead of the existing target, he said 0.5% would be spent in 2021, around £10 billion.
Baroness Sugg used her resignation letter to condemn the “fundamentally wrong” move, telling Prime Minister Boris Johnson it would “diminish our power to influence other nations to do what is right”.