MP comments on Spending Review

Updated: Nov 29, 2020

Mohammad Yasin MP writes:

The Pandemic was always going to be costly for the economy, but in his Spending Review today, the Chancellor confirmed the UK has been hit harder than other big economies.

We’re going through the worst downturn for 300 years, the worst performance in the G7 with sadly one of the highest Covid death tolls.

Billions spent on track and trace that was not fit for purpose and PPE contracts that did not deliver, locking down in both waves too late (to name but a few) but it’s the public who will have to pick up the bill for all of the Government's pandemic mistakes.

Buried in the small print of today’s statement is a one-billion-pound council tax bombshell that will hit people up and down the country.

And the Chancellor took a sledgehammer to consumer confidence by freezing pay for police officers, firefighters and many other key workers.

On top of that he ploughed on with plans to cut Universal Credit in April just as millions will be out of work and the increase in the minimum wage does not meet the Real Living Wage.

These irresponsible choices will hit people in their pockets and pull spending out of our high streets and small businesses – it’s totally irresponsible when the economy is so fragile.

Unemployment is expected to rise to at least 7.5 per cent, that’s 2.6m people unemployed!

Growth will bounce back when we get the health emergency under control with the vaccine, but the pandemic is not the only economic shock we will be dealing with.

We've just 37 days until Britain leaves the single market and the customs union - the biggest single change in the country's trading status we've seen in 40 years. And yet the Chancellor did not once mention Brexit during his spending review statement.

The Office for Budget Responsibility, which produces independent forecasts alongside the Chancellor’s statement, said current projections assumed an “orderly transition” to a trade deal between the UK and the EU. It warned that if the UK came out of the transition period on December 31 without a new deal with Brussels, GDP would take a further 2 per cent hit in the second quarter of 2021 and continue to be 1.5 per cent lower until 2024.

And this week, The governor of the Bank of England warned that the economic cost of a no-deal Brexit would be bigger in the long term than the damage caused by Covid-19. Perhaps this double hit is why the DWP has been planning for up to 4m jobless as a worse-case scenario.

Today we needed some honesty on the cost of Brexit - deal or no deal and action to recover jobs, retrain workers and rebuild business, with a relentless focus on jobs and growth to get the economy back on its feet. I’m afraid Rishi Sunak's Spending Review fell well short.

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