No return to austerity in new spending plan — UK’s Sunak

Marco Green
November 25, 2020

Rishi Sunak arrives at Downing Street 10 in London, Britain February 13, 2020.

Finance minister Rishi Sunak will make the announcement as part of a set of spending plans on Wednesday, which will come alongside new official forecasts that are likely to show a sharp rise in unemployment ahead.

Sunak will announce extra investment to ease a backlog in the health system, counter a surge in unemployment and build new infrastructure in a one-year Spending Review that he is due to deliver to parliament at around 1230 GMT.

Sunak will announce the heaviest public borrowing since World War Two after Britain suffered the biggest economic crash in over 300 years.

It would be almost double the hit from the global financial crisis, which took a decade to work down, and some lawmakers in Prime Minister Boris Johnson's Conservative Party want more fiscal restraint now.

Sunak told Sky that economic forecasts are set to be published to accompany his spending outline, which would demonstrate the "enormous strain" that coronavirus has had on the economy and how his plan would prioritise tackling the pandemic.

"Once we get through this crisis we need to think more about returning to a more normal path", he told Times Radio.

But Sunak is expected to signal his first moves to offset at least some of his spending by announcing a freeze on public sector pay and a reduction in Britain's foreign aid budget.

"When we think about public pay settlements, I think it would be entirely reasonable to think about those in the context of the wider economic climate", Sunak said.

The finance ministry said 2.9 billion pounds would be spent over the next three years to get more than 1 million people who had been unemployed for more than a year back to work, with 400 million pounds being spent in the 12 months from April.

With Britain's full exit from the European Union approaching on December 31 - and no new trade agreement yet secured - Sunak is likely to announce more spending on customs operations and possibly replacement subsidies for farmers.

Other reports by Click Lancashire

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