UK politics live: minister resigns over aid spending cut; Rishi Sunak freezes public sector pay except for NHS

And here is an analysis from our colleague Larry Elliott.

That’s all from us for tonight. But our coverage continues on our global coronavirus live blog. It’s here.

Here is a selection of what some major thinktanks are saying about the spending review.

From the National Institute of Economic And Social Research

From Caryl Roberts, executive director of the IPPR

From Torsten Bell, chief executive of the Resolution Foundation

From Robert Colvile, director of the Centre for Policy Studies

The UK government has updated its coronavirus dashboard. Here are the key figures.

The Association of Directors of Public Health have heavily criticised the government for not raising the public health grant – funding to local authorities to improve community health.

They point out that local public health teams have a key role to play in managing the Covid-19 pandemic, and preparing for future ones – and tackle socio-economic causes of health problems.

Rob Booth reported earlier that care home providers said Sunak had left a “black hole” in social care budgets.

Alex Chapman, from the New Economics Foundation thinktank, has got a useful Twitter thread on the spending review policies for employment. It starts here.

And it includes this.

The latest edition of the Guardian’s Politics Weekly podcast is out. Heather Stewart, Richard Partington and Rafael Behr discuss the chancellor’s spending review, and England’s move from lockdown back to a tiered system. Plus, Peter Walker, Polly Toynbee, and Tim Bale look back through the history of civil wars in the Labour party.

Capital Economics, the respected City consultancy, reckons the OBR’s forecasts are too gloomy, and underestimate the impact that vaccines will have next year.

Their senior UK economist, Ruth Gregory, says the fiscal outlook isn’t as bad as it looks, so it would be counterproductive to withdraw government stimulus too early.

OBR chair Richard Hughes has confirmed that the watchdog has the Pfizer and Moderna vaccine trial results when it finalised its report, but not AstraZeneca’s (as we flagged earlier).

The AstraZeneca/Oxford University results are “certainly good news”, Hughes told the OBR’s press conference. But the ‘full fan’ of scenarios (from a rapid vaccine rollout, to no effective vaccine) are equally possible.

Hughes says:

But huge uncertainly remains, these are all trials, we have yet to see how any of these vaccines perform in the field, he adds.

The spending review included an announcement about inflation rates which will be welcome in the short term by investors and pensioners, but a blow to students and those who use rail services.

Currently the government issues bonds with returns linked to RPI, an old method of measuring inflation which is now considered to overstate price rises. Since March, it has been consulting on replacing the measure with a new one which is calculated differently and includes housing costs, and it had been thought a change could come as early as 2025.

Rishi Sunak instead delayed it until 2030, giving investors an extra five years at the higher rate. But when it comes, the change will have an impact on pension schemes and other investors who hold index-linked gilts. “While the average difference between RPI and CPIH might look small at 0.8 percentage points, over time that could lead to a retirement income worth thousands of pounds less,” says Tom Selby, senior analyst at investment firm AJ Bell.

However, for students, whose loan interest is linked to RPI, and commuters whose rail fares rise in line with it each year, switching to a measure that is typically lower will be good news. They may have hoped for a 2025 change.

From our colleague Heather Stewart

The NHS in England has been given £3bn extra next year to tackle the huge backlog of operations cancelled because of Covid and the spike in mental illness caused by the pandemic.

Hospitals will spend around £1bn of the money trying to reduce the number of people who are waiting for non-urgent surgery, such as a hip or knee replacement or cataract removal, and the long waits that are becoming increasingly common. The number of people forced to wait at least a year for elective care has rocketed from 1,500 in February to almost 140,000 in September.

“Our world-class NHS has played a critical role in the response to Coronavirus but we know how desperately difficult and distressing it has been for patients that are waiting to have operations and medical treatment during the pandemic”, said Rishi Sunakin his statement.

The £3bn is much less than the £10bn a year more that the British Medical Association and Health Foundation thinktank has said the service needed to cope with the rising demand for care.

The £1bn will fund the NHS to carry out up to one million more checks, scans and operations on people who could not get treatment in the spring when many non-Covid services were suspended.

Around £500m of the £3bn will go into expanding mental health care for people who could not access help when the pandemic struck. That money will be used to tackle both the backlog of adults referred for mental health care and to create new specialist services for under-18s. It should also help ensure faster access to “talking therapy” for people with anxiety and depression.

The £3bn will boost the depatment of health and social care’s budget by £6.6bn and mean that the NHS’s revenue budget in England in 2021/22 will be £136.1bn.

The Unite union has accused the government of adopting a “divide and rule” approach to public sector pay. Gail Cartmail, its assistant general secretary, said:

Andy Burnham, the mayor of Greater Manchester, said it was “more likely than not” that the region of 2.8 million people would be placed in Tier 3 restrictions from next Wednesday.

Extending the strictest measures will mean most of Greater Manchester has been under some strict curbs on social contact for 18 weeks, since 31 July, enjoying only a few weeks of freedom after England’s first national lockdown was lifted in June.

Burnham said that although infection numbers in Greater Manchester were still high, cases rates had fallen from 556 cases per 100,000 people four weeks ago to 291 cases last week. However, this and other key metrics – including the infection rate in the over 60s – remain higher than the national position. He said:

Ministers have previously said they do not expect to make significant changes to the tier arrangements when they are first reviewed in mid-December.

Burnham said he did not agree with the tier 3 measures which had been put forward by the government, which he said would be “too punishing on hospitality and will be too hard on city centres, particularly as we go through Christmas and the New Year period.”

Yvette Cooper, the Labour former work and pensions secretary, says the pay rise for public sector workers on less than the average wage will actually represent a pay cut for many people, because it is a flat-rate £250 payment that may not compensate for inflation.

The OBR was also asked today whether the 10pm curfew at hospitality venues led to an increase in cases, as people were traveling home at the same time.

[There were many reports of large crowds on the streets after 10pm, and even an impromptu game of late night cricket in Peckham]

Richard Hughes, who chairs the fiscal watchdog, replied that its data modelling isn’t granular enough to tell such detail.

But he makes a wider point too – it’s not just public health restrictions that matter for the economic impact of coronavirus. It’s also the number of cases, rates of transmission and infection rates.

So while public health restrictions force parts of the economy to close, rising infections also hurt the economy by dampening people’s willingness to go out to restaurants, pubs or the shops.

Hughes adds that we saw this in recent months — consumption and economic activity started to fall even before new tiered restrictions were introduced, as infections picked up again. That’s why public health interventions, such as test and trace, as so important.

OBR board member Charlie Bean added that the government has recognised that it made sense to allow people more time to finish up their drinks by redesigning the tiering restrictions (last orders at 10pm but closure extended until 11pm, for pubs and restaurants in lower tiers).

Bean says: