Justin Welby, the archbishop of Canterbury, has described the cut in the aid budget announced by Rishi Sunak as “shameful and wrong”.
Archbishop of Canterbury (@JustinWelby)
The cut in the aid budget – made worse by no set date for restoration – is shameful and wrong. It’s contrary to numerous Government promises and its manifesto.
I join others in urging MPs to reject it for the good of the poorest, and the UK’s own reputation and interest.
Nicola Sturgeon has hinted at ongoing concerns around the four nations’ Christmas relaxation as she stressed repeatedly that allowing up to three households to come together over five days marks the “outer limits” of what people should be doing together and that her “default advice” was for people to stay at home in their own households.
Describing yesterday’s decision, reached at a Cobra meeting between the UK government and devolved administrations, as “not an easy one”, Sturgeon told her daily briefing that she was “very keen to have the definition of household determined nation by nation” in particularly because of concerns with what she believed to be the English plan to allow bubbles of two households to come together with a potential total of six. “I think that would be going too far and it wouldn’t be something I’d be comfortable with in Scotland,” she said.
She said Scottish government guidance on the four nations plan would be published tomorrow, and that one consideration would be whether to allow extended households to count as one or two households for Christmas purposes. She warned Scots to expect that “the guidance will be looking to tighten rather than expand”.
She stressed that she was “not positively encouraging people to meet”. She said:
If you can get through this Christmas staying within your own home within your own household please do so.
Care home providers said Sunak had left a “black hole” in social care budgets with announcements of what he said was £2bn in additional funding.
MPs, peers and the care sector have argued that even before the Covid crisis the government needed to increase spending on adult social care by £7bn to £8bn per year. Councils have estimated that Covid has added a further £6.6bn in costs in just six months with costs soaring and occupancy falling. More than 18,000 people died from Covid in care homes.
Sunak’s offer falls well short of filling the voids, the care industry said. Sunak announced £300m in new central government grant, plus powers for councils to levy a 3% council tax precept to fund social care. Sunak said that adds up to £1bn in new money, but the Kings Fund thinktank said the precept does not guarantee money is raised where needed.
Sunak also announced a continuation of £1bn announced in 2019 for both adult and childrens care, around half of which typically goes to adult care.
Care England which represents the large commercial care providers said the pledges left “a black hole. Vic Rayner, executive director of the National Care Forum, which represents not-for-profit providers said there was “a massive gap”.
According to this chart from the Spectator’s editor Fraser Nelson, the growth figures announced by Rishi Sunak mean the UK is on course for the second largest economic contraction this year in Europe.
Fraser Nelson (@FraserNelson)
Sunak says UK economic decline expected to be 11.3% this year: that’d be the second-sharpest in Europe pic.twitter.com/4W7kG5ee9h
The coronavirus pandemic has delivered the largest peacetime shock to the global economy on record. It has required the imposition of severe restrictions on economic and social life; driven unprecedented falls in national income; fuelled rises in public deficits and debt surpassed only in wartime; and created considerable uncertainty about the future.
The UK economy has been hit relatively hard by the virus and by the public health restrictions required to control it.
The OBR then warns that Covid-19 has also exacted “a heavy and mounting toll on the UK public finances”.
In our central forecast, receipts this year are set to be £57 billion lower, and spending £281 billion higher, than last year. The Government has committed huge sums to treat the infected, control the spread of the virus, and cushion its financial impact on households and businesses.
As support has been expanded and extended, including in the wake of the second wave of infections, its total cost this year has risen from £181 billion at the time of the Summer Economic Update, to £218 billion at the time of the Winter Economy Plan, to £280 billion in this forecast.
As Rishi Sunak outlined, the OBR’s central scenario is that the UK deficit surges to £394bn this year. That’s 19% of GDP, which is the highest level since the end of the second world war.
In comparison, in 2009-10 after the financial crisis the UK borrowed £157.7bn, or 10.1% of GDP.
OBR forecasts, November 2020 Photograph: Office for Budget Responsibility
This would drive the national debt to 105% of GDP, the OBR says, its highest level since 1959-60, adding:
Borrowing falls back to around £102 billion (3.9 per cent of GDP) by 2025-26, but even on the loosest conventional definition of balancing the books, a fiscal adjustment of £27 billion (1 per cent of GDP) would be required to match day-to-day spending to receipts by the end of the five-year forecast period.
Here is the scorecard from the spending review document (pdf). This is the most important table in the whole document because it sets out what everything is going to cost.
Negative sums represent money is effectively having to spend (over and above what is already plannd for); positive sums represent money coming in.
In her speech Anneliese Dodds points out that Rishi Sunak did not even mention Brexit, or the cost of not having a trade deal, in his speech. She says businesses need certainty.
The Treasury has just published all the spending review documents on its website.
Anneliese Dodds, the shadow chancellor, is responding for Labour.
She says earlier this year the chancellor clapped for key workers. But now he is making many of them face a pay freeze.
She says this will take money out of the economy.
In contrast, there has been a bonanaza for firms getting contracts from this governemnt. Firms with government connections have been 10 times as likely to get a contract as others, she says.
She says there has been waste “on an industrial scale”.
And she says the decision to ignore Labour’s call for a short, circuit breaker lockdown, and to have a month-long one instead, has cost the economy £12bn.
Sunak says individuals and communties must become stronger, healthier and happier as a result.
The spending announced today is secondary to the courage, wisdom, kindness, and creativity it unleashes.
He says the government has funded the priorities of the British people. Now the job of delivering them starts, he says.
And that’s it. The statement is over.
Sunak says numbers are not enough on their own to explain the government’s vision for the country.
There will also be a new immigration system, and a new planning system, with an emphasis on beautiful homes. And the government will protect free speech, and value jobs.
Good jobs are the most rewarding and sustaining path to prosperity, he says.
But encouraging the individual and community brilliance, on which a thriving society depends remains as ever, a work unfinished.
Sunak says people want to be proud of the places they call home.
For too long funding for development has been complex and ineffective.
A new “levelling up” fund worth £4bn is being set up. It will be managed by the Treasury, the transport department and the communities department.
It will take a holistic approach, he says. Projects must command local support, including from MPs.
This will fund what people and places need, he says.
Sunak reminds MPs that the government has announced an extra £24bn for defence.
Capital spending next yer will be £100bn, he says.
He says a new infrastructure strategy is being published today.
And a new infrastructure bank will be set up.
Sunak says spending so much on international aid is difficult to justify with borrowing so high.
But at a time of unprecedented crisis, the government must make tough decisions, he says.
He says it will spend 0.5% of national income on aid in 2021 – not 0.7% This will amount to £10bn.
He says it will be the government’s intention to return to 0.7%.
Even with this target, the UK will still be the second biggest aid spender in the G7, he says.
It means 2020 will see the biggest contraction since 1709, when the Great Frost ravaged Europe’s economies, creating food shortages as livestock froze.
#Sunak reports #OBR now sees #UK#GDP contracting 11.3% in 2020 then growing 5.5% in 2021, 6.6% in 2022, 2.3% in 2023, 1.7% in 2024 & 1.8% in 2025. #Economy not seen back to its Q4 2019 level until Q4 2022. Economy in 2025 will be around 3% smaller than expected in March