Spending Review 2020

Lord Hain Excerpts

Thursday 3rd December 2020 Grand Committee

[Lord Hain (Lab) [V]]

My Lords, fully three-quarters of the fiscal boost being provided this year is to be withdrawn next year, and over 90% by 2022, according to the OBR’s central forecast. Indeed, if the small print in the spending review is to be believed, Rishi Sunak is already planning in the next two years to withdraw fiscal support for the economy at a rate five times faster than George Osborne did so savagely in his first two years at the Treasury.

There will be a £10 billion cut in departmental day-to-day spending in 2021, compared to the levels planned in March 2020, rising to nearly £13 billion in 2024; cuts to public investment plans in the four years from 2021 averaging over £3 billion per year; nothing about raising statutory sick pay to help people testing positive for the virus who have to self-isolate at home; and no extension of the £20 a week temporary increase in universal credit beyond April 2021, even though the Chancellor expects unemployment to soar next year.

The pernicious overseas aid cut of some £4 billion is out of total public spending of over £1,100 billion, equivalent to one-fifth of one per cent of GDP, and a vanishingly small rounding error compared to total public spending. It is a disgraceful and unnecessary cut that is as repugnant as it is right-wing symbolic.

Then there is the public sector pay freeze dressed up as a “pay pause”. There is a £700 million cut in the BBC’s budget buried away in the OBR report. This is indeed a punitive spending review that will even further damage Britain’s growth prospects.