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Good Morning. Rishi Sunak, the chancellor, will deliver his spending review this afternoon and will expect it to be stronger than most of the other big financial announcements he has made this year. On March 11, when he presented his budget, he announced a £ 12bn worth of spending to help businesses cope with the coronavirus. Less than a week later, those plans were in shambles and he was back announcing a £ 350bn loan and grant support package. That pattern has been repeated several times this year. Ensuring that economic policy stays ahead of events has proven nearly impossible.
That is why the spending review has already been reduced. Originally, it was intended to determine government spending over the next three years (which is normal for a spending review). Instead, it will largely be a one-year review because, with so much uncertainty about what the economy will look like next year, making long-term plans would be rash.
As is normal for a great financial statement like this, the key items have already been reported. Here’s a nice summary from my colleague. Richard Partington.
But much of the interest this afternoon will not be in what is in the spending review document (the government’s plans) but in what is in the Office of Budget Responsibility assessment of the state of the economy. According to Sunak’s full, fair and very useful new biography of Lord Ashcroft, Going for Broke, the chancellor is a huge fan of statistics and likes to quote a maxim from his businessman father-in-law, Narayana Murthy. The book quotes Sunak as saying:
One of my favorite quotes from him. [Murthy’s] is: “In God we trust, but everyone else must provide data.” It’s something I try to live for too. You know, I’m always interested in getting the data; get the facts.
Well, we are all going to get the data this afternoon, and it is expected to be very discouraging.
Normally it is difficult for the opposition to draw attention to the day of a big Treasury statement like this one, but Labor has launched an overnight preventive strike accusing the government of creating a “jobs crisis.” In a sentence Anneliese dodds, the shadow chancellor, said:
The irresponsible decisions of the Conservatives have wasted and mismanaged billions, have led our country to experience the worst recession of the G7 and have created a jobs crisis.
Whether it’s building starter houses or garden bridges, this prime minister and his government speak highly. But they have not kept their promises and regional inequality has worsened under their watch.
They applauded key workers, but are now freezing their pay and seeking to eliminate the planned minimum wage increases for the private sector. That will hit people’s pockets and take spending out of our small businesses and High Streets when many are already on their knees.
Instead, we need a relentless focus on jobs and growth to get the economy back on its feet. Government must act to restore jobs, train workers, and rebuild businesses, as part of a longer-term plan to make our country the best place in the world to grow and age.
Here is the agenda for the day.
9.30 am: HMRC publishes statistics for the Eat Out to Help Out scheme.
12:00 h: Boris Johnson confronts Sir Keir Starmer at PMQ.
12.30 pm: Rishi Sunak, the Chancellor, delivers his spending review.
1.30 pm: The Office of Budget Responsibility publishes its latest forecasts.
2.30 pm: The OBR holds a press conference.
Politics Live has doubled as the UK’s coronavirus live blog for most of this year, but today, while I will be covering the latest Covid developments, I will focus primarily on spending review.
Here’s our global coronavirus live blog.
I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, put “Andrew” somewhere and you’re more likely to find it. I try to answer questions and if they are of general interest I will post the question and answer it above the line (ATL), although I cannot promise to do this for everyone.
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