Spending review dropped amid Covid uncertainty

Publishedduration10 minutes ago

image copyrightReuters

image captionRishi Sunak said the immediate focus was on saving jobs

The government has abandoned its long-term Comprehensive Spending Review amid economic uncertainty caused by the Covid-19 pandemic.

Chancellor Rishi Sunak will instead set out a one-year review in late November.

The Treasury said it was “the right thing” at the moment to “focus entirely” on protecting jobs and responding to the crisis.

Economists had warned that the pandemic meant setting longer-term spending targets would prove difficult.

In its latest figures, the Office for National Statistics said the UK economy was still 9.2% smaller than in February, before lockdown began.

And the government’s net borrowing estimate for September was £36.1bn – the third-highest figure since records began in 1993.

Mr Sunak said: “In the current environment it’s essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs.

“Long-term investment in our country’s future is the right thing to do, especially in areas which are the cornerstone of our society, like the NHS, schools and infrastructure.”

Last month, Mr Sunak scrapped plans for an autumn Budget in favour of the review, which sets out how much each government department can spend and does not include changes to taxation.

The review had been due to set departments’ resource budgets for 2021-2 to 2023-4 and their capital budgets for 2021-2 to 2024-5.

The devolved administrations’ block grants were also due to be set for 2021-2 to 2024-5.

Another delay?

The government has also confirmed it is reconsidering the timetable for its Integrated Review of Foreign, Development, Security and Defence Policy, which was expected to be published next month.

It is looking at issues including the equipment procurement by the armed forces, methods for tackling serious and organised crime, and the use of technology and data to deal with threats the UK faces.

Former US Secretary of State Dean Acheson famously said in 1962: “Great Britain has lost an empire but not yet found a role.”

For many years, the UK sought to answer that challenge by acting as a bridge between the EU and the US. But both these relationships are changing. The government’s integrated review of foreign and defence policy was supposed to answer the question: what’s next for the UK?

Any delay would have consequences. The defence chiefs would be dismayed at having no certainty over their plans to modernise the armed forces.

Allies around the world would be dismayed that, four years after the Brexit referendum, there was still no clarity over the UK’s post-EU role in the world.

So there is talk as well of th

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