November 25, 2020
Today’s Spending Review was set in a difficult and challenging context. The economic impact of coronavirus and the action we have taken in response has significantly affected the British economy.
The OBR have forecast that the economy will contract this year by 11.3% – the largest fall in output for more than 300 years. Even with growth returning, our economic output is not expected to return to pre-pandemic levels until the fourth quarter of 2022. The economy, by 2025, is forecast to be around 3% smaller than previously expected.
Additionally, despite the extraordinary support we have provided, unemployment is expected to rise to 2.6 million people in the second quarter of next year.
Our number one priority is to protect jobs and livelihoods across the UK during the coronavirus pandemic and beyond. Our Spending Review sets out exactly how we’ll do that.
This year, the government will spend over £280 billion on its response. Through the furlough scheme, support for the self-employed, loans, grants, tax cuts and tax deferrals, as well as extra funding for schools, local authorities, the NHS, charities, culture and sport, we are ensuring that we prioritise jobs, businesses and public services.
We are accepting in full the recommendations of the Low Pay Commission to increase the National Living Wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the National Minimum Wage as well.
These minimum wage increases will likely benefit around 2 million people. A full time worker on the National Living Wage will see their pay increase by £345 next year thanks to our policy.
We are also doing more to build on our Plan for Jobs. Latest data shows the UK’s unemployment is lower than Italy, France, Spain, Canada and the United States.
But there is always more we can do, which is why we are today announcing nearly £3 billion for a new, three-year programme to help nearly 1 million people who have been unemployed for over a year, find work.
We are also investing in our country’s infrastructure.
A new £4bn UK ‘Levelling Up’ Fund will take a new holistic approach to providing for our local areas. This is about funding the infrastructure of everyday life – railway stations, bypasses, libraries, town centres, and more.
This fund will replace previously disparate funding streams, enabling the Government to take a more effective, joined-up, place-based approach to local needs. That way, we can provide for people the things that they want and need.
We want every parent to be confident that their children are getting the best start in life, receive a world-class education, and That’s why we pledged that we would deliver an extra £7.1bn to our schools by 2022-3.
Now, to help deliver on that promise, we are getting on with our three-year investment plan for schools. That’s the biggest school funding boost in a decade and includes an uplift of £2.2 billion for next year.
And we are committing £291 million to pay for more young people to go into further education, £1.5 billion to rebuild our colleges, and £375 million to deliver the Prime Minister’s Lifetime Skills Guarantee. We are also delivering funding to extend traineeships, sector-based work academies and the national careers service, as well as improving the way the apprenticeship system works for businesses.
Thanks to these policies, every pupil in the country will see a year on-year funding increase of at least 2%. We are also funding our commitment to rebuild 500 schools over the next decade.
The best way to level up and to expand opportunity is to give every child in the country a superb education. Our 2020 Spending Review helps deliver on that goal.
While the coronavirus continues to impact our country, we are delivering on our promise to give the NHS its biggest ever cash boost - a £156.4 billion day to day budget.
Our 2020 Spending Review confirmed a further £3 billion next year to support the NHS’s recovery from the impact of coronavirus, including £500m to improve access to mental health services, alongside investing £15 billion in NHS Test and Trace and £2.1 billion in PPE next year.
We will spend £260 million to educate and train our vital NHS workforce as part of our commitment to deliver 50,000 more nurses and create an additional 50 million GP appointments a year.
And we are providing £9.4 billion of capital funding for projects such as the 40 new hospital building programme, over 70 hospital upgrades and replacing the vast majority of ageing diagnostic equipment.
Our fantastic NHS and public services was at the heart of our manifesto commitments. And as we continue to tackle coronavirus, we are making sure our NHS has the resources and support it needs.
It is our Government’s priority to make our streets safer, so that the law abiding majority can live their lives free from fear.
Our 2020 Spending Review will make our streets safer by cracking down on crime. Next year, funding for the criminal justice system will increase by over £1 billion.
We are providing more than £400 million to recruit 6,000 new police officers. That means we are on track to meet our manifesto pledge to recruit 20,000 more police officers by 2023.
We are also delivering £275 million for the criminal justice system to bring more offenders to justice, along with a four-year, £4 billion prison building programme to provide 18,000 new prison places across England and Wales. This extra funding is vital to keep our country safe and ensure criminals are kept off our streets.
While our health emergency is not yet over, the economic emergency has only just begun.
So, today’s Spending Review delivers on the priorities of the British people:
This is a shared project – a common endeavour to build a better nation to which every person and business in our country has a contribution to make. That unfinished work – irrespective of coronavirus – continues at pace as we emerge stronger and more united from this pandemic.
Commenting, Therese Coffey, Secretary of State for the Department of Work and Pensions, said:
“Corbyn’s Pension Tax will see ten million savers facing a huge bill forcing them to delay their retirement for almost three and a half years.
“This is just one of the ways a Corbyn government would hammer hardworking people on top of his plans to hike up taxes by £2,400 a year, as well as the cost of his plan for unlimited immigration and the chaos of 2020 being dominated by two more referendums – one on Brexit and another on Scottish independence.
“Only Boris Johnson and the Conservative Party can get Brexit done with a deal, get parliament working again and turbocharge our economy to unleash Britain’s potential.”
Read more about how this Pension Tax will impact millions of savers (PDF)
