Rishi Sunak says the spending review comes as the coronavirus health emergency is not over and the economic emergency has only just begun. Saying he will prioritise jobs, businesses and public services, the chancellor says the government is spending £280bn to get the country through Covid-19.
Next year, the government will allocate an initial £18bn in response. There will be £3bn for the NHS, £2bn for keeping transport running, £3bn to local councils, and extra £250m to end rough sleeping. Total funding to tackle coronavirus will be £55bn, he says.
Peter Walker, political correspondent: An inevitably downbeat opening by the chancellor, who says that while the Covid-19 health emergency continues, “our economic emergency has only just begun”. Yes, he says, there is spending coming, but the immediate message is clear: it’s time for the tough chancellor.
PW: There’s no easy way to deliver this news, and Sunak doesn’t sugar-coat it. There will be “long-term scarring” as late as 2025, he says. No chancellor would relish handing out forecasts like this – but it does give Sunak significant political cover for any tough spending decisions to come.
PW: It’s not exactly natural ground for a Conservative chancellor to defend this level of borrowing and Sunak takes a politely defensive tone, stressing that this was “an economic emergency”, and that to not act would have caused significantly more damage.
PW: A public sector pay freeze for all but medical NHS staff had been long trailed, and critics will inevitably contrast this with the lockdown applause for key workers. Sunak couches this as an issue of fairness against the private sector – and pulls out the surprise of some possible pay rises for the lowest-paid. A hurdle dodged? The details will be crucial.
PW: Sunak, usually a fairly pithy chancellor, spends quite some time labouring the point that overall spending will rise. Why? To try to see off accusations of a return to austerity, an idea the government has promised to banish, and which is now seen as politically toxic. Again, not natural Conservative territory, but coronavirus (among other factors) means the usual party rules don’t apply.
PW: Sunak’s announcement on aid sees Dominic Raab, the foreign secretary, nod furiously on the benches next to Suak, but is heard in virtual silence by the Commons. This is a very politically tricky moment, as shown by the amount of time Sunak uses justifying it. A lot of Tory MPs are angry. The change potentially requires a Commons vote, and there is no guarantee the government will win. This one, as they say, could run and run.
PW: Sunak’s “levelling-up fund” is clearly intended as the good news at the end of a difficult statement and is likely to prove popular – as well as very on-message. But councils might say that in the context of a decade-plus of underspending on local government, £4bn might prove to be not that much. Expect Labour to keep an eye on whether, as with the earlier towns fund, a mysteriously high proportion of the money ends up going to marginal Conservative seats.