Today Chancellor Rishi Sunak announced details of the spending review for the COVID period and also looking forward into the new year.
He said that while the medical emergency was still ongoing but with an end in sight, the ‘economic emergency’ has only just begun.
Pay freeze.
The UK’s borrowing is forecast to reach £394 billion this year, which is 19% of GDP and the highest recorded level in the country’s peacetime history. With this in mind Mr Sunak announced a pay freeze for public sector workers outside of the NHS.
There was an 11.3% contraction in the UK economy this year and this would not be recovered until the fourth quarter of 2022. This will be the largest fall in output for 300 years. The long-term forecast is that in 2025 the economy will be around 3% smaller than expected in the March budget.
£280 billion had been used to battle the Covid emergency with another £18 billion earmarked for PPE equipment next year.
There will be £4.3 billion to support people in finding employment.
He said that the situation would be much worse had they not acted in the way they did.
There were three priorities for the spending review:
1) Protecting people’s lives and livelihoods.
2) Investing in public services.
3) Delivering infrastructure funding to spread opportunity across the UK.
Shopping list.
There was a breakdown of all these astronomically high figures, along with predicted economic impact:
£18 billion allocated to testing, PPE and vaccines.
£3 billion for the NHS.
£2 billion to keep transport arteries open.
£3 billion to local authorities.
£250 million to help end rough sleeping.
£55 billion for public services funding to tackle coronavirus next year.
£280 billion to get the country through the pandemic including furlough payments to protect jobs and business support.
GDP expected to grow by 5.5% in 2021.
Borrowing to reach £394 billion. (19% of GDP).
£3 billion for a three year ‘Restart’ programme to help a million people who have been unemployed for over a year to find work.
Unemployment is expected to peak in the second quarter of next year at 7.5%. (2.6 million people).
Pay rises for over a million nurses, doctors and others in the NHS.
2.1 million public sector workers earning less than £24,000 will receive a rise of at least £250.
The national living wage will rise by 2.2% to £8.91 per hour and now include those over 23 and over.
Overseas aid is being cut next year from 0.7% to 0.5% (£10 billion) in 2021 with the intention of returning to 0.7% the following year when the fiscal situation allows.
£24 billion investment in Defence over 4 years.
Increase in funding for the Scottish government of £2.4 billion, Welsh government £1.3 billion, and £900 million for Northern Ireland.
Daily news.
Christmas under the microscope.
Controversy reigns this morning on the suggested relaxation of the restrictions for a full five days over Christmas. Three families allowed to mix in a closed-up room in winter, sprinkled with a little alcohol and excitement, maybe up to fifteen or twenty people, does not seem like ‘following the science.’
At the same time such activity will be banned in pubs and restaurants. Dr Chaand Nagpaul of the BMA said,
‘This virus does not discriminate against certain days of the year. Relaxing the rules on indoor mixing for a five-day period will almost certainly carry the risk of a rise in infection rate and possibly more hospitalisation and deaths, adding further pressure on the health service doctors and NHS staff.’
No dice.
He said it was vital for people mixing in such a manner to ventilate rooms, limit physical contact and wear masks if this is not possible. Subsequent advice stretched to not sharing cutlery, serving spoons and not playing games like Monopoly where there is communal touching of the dice.
Festive recipe.
Professor Andrew Hayward a member of SAGE spoke more succinctly to the BBC saying that the easing of restrictions was ‘throwing fuel on the COVID fire.’ He explained his feeling about the proposed measures.
‘We are still in a country where we have got high levels of infection with COVID, particularly in young people. Bringing them together for hours, let alone days, with elderly relatives, I think, is a recipe for regret for many families. With the vaccine on the way, if we are not very careful over Christmas, we are really in danger of snatching defeat from the jaws of victory on this one.’
Author’s note. I must say, for what it is worth, I tend to agree with him. A snap poll on GMB television this morning showed 80% of the population were of a similar mind as well.
And relax.
Ursula von der Leyen, the EU Commission President, has called on EU leaders not to relax coronavirus lockdown measures too quickly. She said we must learn from previous mistakes and not re-open bars and restaurants too early.
‘Relaxing too fast and too much is a risk for a third wave after Christmas.’
Eat out to conk out.
HMRC has published the cost of the ‘Eat out to help out’ initiative in the summer. Businesses claimed £849 million for discounts on over 160 million meals.
The Chancellor championed the initiative to help kick start the hospitality sector when the virus lulled and around 50,000 restaurants pubs and cafes took part in it. The government vowed to pay half of the price of meals purchased on Mondays, Tuesdays and Wednesdays to tempt customers back into the city centres and to help the wider economy in August.
According to research by the University of Warwick a sharp increase in COVID-19 infection clusters emerged a week after the initiative began, with 8-17% of newly detected infections linked to the Eat out scheme.
A real contribution.
Areas where there was a high uptake on the discounted meals saw a decline in new infections a week after the scheme ended. Dr Thiemo Fetzer said the scheme,
‘contributed to community transmission’ and ‘the acceleration of the second wave.’
Chancellor Rishi Sunak told Sky News in October that the second wave was,
‘pretty much in sync with what’s happening around the world in second waves.’
One singer one song.
There is guidance being issued by the government tomorrow on Christmas Carol singing rules. Can you believe it? What an extraordinary period we are in.
Family life.
Putting my spoke in.
The last few days I have been trying to motivate myself to do some exercises to raise the heartbeat. As a writer, it is such a sedentary occupation, it is really important to do this, but has been difficult within the confines of our apartment during lockdown when the weather precludes my using my mountain bike. I will try to keep it going, I promise!
Juices flowing.
It is still a little tricky to do creative writing with my beloved on furlough. I tend to have complete quiet or some gentle music playing and I am struggling to get the juices flowing. It’s not a major problem as I am in construction mode for my next novel, but this requires really hard thinking and concentration to plug gaps and pace the novel as well as develop the stories and characters. Still, it beats working down the pit.
Quote of the day.
‘One of the most glorious messes in the world is the mess created in the living room on Christmas Day. Don’t clean it up too quickly.’ - Andy Rooney.
