COVID-19: United Kingdom to borrow £394bn to increase doctors' pay, tackle recession

Elias Hubbard
Ноября 26, 2020

"This attempt to divide and rule will put him on a direct collision course with public service workers, and he should know that we fought the public sector pay cap before and we busted it", she said.

"At a time of unprecedented crisis, government must make tough choices", he said.

"During a domestic fiscal emergency, when we need to prioritize our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is hard to justify", Reuters quotes Sunak.

He said 2.1 million public sector workers earning below the median wage of £24,000 were "guaranteed a pay rise of at least £250".

On Monday, UK Chancellor of the Exchequer Rishi Sunak underscored that he "cannot justify a significant, across-the-board pay increase for all public sector workers" amid the ongoing COVID-19 pandemic.

The UK government set out a new economic plan meant to tackle the financial consequences of the pandemic - including a freeze on pay rises for some public sector employees and a decrease in foreign aid.

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.

According to the country's Office for Budget Responsibility (OBR), the UK's economy contracted by 11.3 percent this year, the largest drop in 300 years. The agency is predicting growth of 5.5% in 2021 and 6.6% the following year and that as a result the output lost during the pandemic won't have been recovered until the final quarter of 2022.

Record-low interest rates made the high level of debt affordable, and spending on debt interest is due to fall to a record low share of public spending, despite the surge in borrowing, the OBR forecast.

"Once we get through this and have more certainty over the outlook we should look to restore our public finances to a strong position", he said.

"I want to make sure that when the next hard thing comes along the government can respond".

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.

He said "sticking rigidly" to the target "is hard to justify" to people at a time when the economy has been so battered by the coronavirus pandemic. "So our priority is to protect people's lives and livelihoods". With renewed lockdowns threatening further economic damage, the chancellor focused on support for jobs and the unemployed, plowing tens of billions of pounds into infrastructure spending, and ensuring the health care system can cope with a resurgent wave of infections.

Richard Hughes, the chairman of the OBR, told the Today programme that this was "a very serious moment" for the economy and "the biggest shock we've faced in three centuries and the biggest shock the global economy has faced in peacetime".

One of the longer-lasting effects on the economy is that people are out of work and aren't building their skills, a loss "we don't get back when this crisis is over", Mr Hughes said.

Britain's government would need to find 29 billion pounds - just over 1% of GDP - to balance day-to-day spending with tax revenues by the end of the forecast period, it said.

But Mr Murphy said the review did not offer enough.

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