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Spending Review 2020 and OBR Forecast

25 November 2020

Lead MP

Rishi Sunak

Debate Type

Ministerial Statement

Tags

Justice & CourtsNHSEconomyEmploymentClimateBrexitForeign AffairsBusiness & TradeChildren & FamiliesLocal Government
Other Contributors: 91

At a Glance

Rishi Sunak raised concerns about spending review 2020 and obr forecast in the House of Commons. A government minister responded. Other MPs also contributed.

How the Debate Unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said:

Government Statement

Justice & CourtsNHSEconomyEmploymentClimateBrexitForeign AffairsBusiness & TradeChildren & FamiliesLocal Government
Government Statement
Mr Speaker, today’s spending review delivers on the priorities of the British people. Our immediate priority is to protect people's lives and livelihoods through a £280 billion support package for jobs, businesses, and public services. Next year, we allocate an initial £18 billion for testing, PPE, and vaccines. We provide £55 billion in total funding to tackle coronavirus impacts on public services. The economy is forecast to contract by 11.3% this year but recover with growth rates of 5.5%, 6.6%, 2.3%, 1.7%, and 1.8% over the next five years, though not reaching pre-crisis levels until Q4 2022. The UK is forecast to borrow £394 billion this year, equivalent to 19% of GDP. Public sector debt will reach 97.5% of GDP in 2025-26. We announce a nearly £3 billion restart programme to help over a million long-term unemployed find work by 2024. We provide a pay rise for NHS workers and pause other public sector pay rises next year while ensuring those on lower incomes receive at least a £250 increase. The national living wage increases by 2.2% to £8.91 per hour, benefitting around 2 million people. Departmental spending will grow by £14.8 billion next year, with health, education, social care, criminal justice system and defence all receiving significant funding boosts. We reduce overseas aid from 0.7% to 0.5% of national income in 2021, but intend to return to the original target when fiscal conditions allow. We invest £100 billion in infrastructure next year, including housing, transport, and climate change initiatives, alongside a new UK infrastructure bank headquartered in the north of England. A £4 billion levelling-up fund is established for local projects.

Shadow Comment

Anneliese Dodds
Shadow Comment
During this crisis, key workers have taken responsibility but are now facing a pay freeze under this Government’s spending review. This hurts consumer confidence and the economy. The Government has wasted public finances on industrial scale during the pandemic, losing £130 million to unsafe testing kits and £12 billion due to poor policy decisions like blocking circuit breakers. Claims about levelling up do not match evidence: hospitals unbuilt, starter homes not built despite spending almost £200 million, Northern Powerhouse Rail still unapproved six years after announcement. The Government needs to deliver on their promises instead of just making photo calls. Labour called for £30 billion in capital spending focused on green initiatives and retraining workers but the Chancellor’s plan is less ambitious. Restart funding announced today must be available soon and involve local actors who know their communities best. We need an emergency programme to support people back into work, yet kick-start has been slow to start. To rebuild business, we called for a national investment bank and more support for businesses affected by leaving the transition period without a trade deal. The Chancellor must boost his new UK infrastructure bank's firepower and deliver on net zero goals. He needs to listen to businesses about supporting them during tough restrictions and provide extra support through the additional restrictions support grant. We have seen record unemployment levels, rising child poverty, and increasing social care crisis under this Government’s leadership over the past decade. Local authorities have lost 240,000 jobs due to cuts over the past ten years.
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