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Sticking plaster solutions

Denis Tunnicliffe on the Chancellor’s failure to provide a post-Brexit, post-Covid vision for the UK economy

In days gone by, a comprehensive spending review (CSR) was an important event that shed light on a government’s strategic economic priorities for the years ahead. CSRs are designed to provide certainty to Whitehall, the devolved nations, and in the country’s town halls. However, last week’s exercise was the second in a row to ditch the traditional multi-year approach, focusing solely on the next financial year.

Given how often Conservative ministers used to talk up their long-term economic plan, it is rather ironic that they now have nothing meaningful to say about the biggest challenges to the UK in a generation: Brexit and Covid19. Not only did our economy contract the most out of the G7 group during the pandemic but we are predicted to face the slowest recovery. What we needed was a clear strategy from the Chancellor, Rishi Sunak last week to explain how we would return to strong growth. What we got was a sticking plaster and shiny social media graphics.

The post-Brexit transition period with the EU ends in four weeks. And you would expect any government – not least one which champions its supposed economic credentials – to have done everything possible secure a free trade agreement with our biggest trading partner, and with time to prepare. But rather than provide some certainty to help set businesses off on the right footing, the risk of no agreement still looms large. It is a failure of statesmanship.

The last-minute nature of the negotiations could perhaps be excused if the government was doing a convincing job of responding to the pandemic. Yet each day seems to bring a new story of ignored scientific advice, policy U-turns, or lucrative contracts being awarded to ministers’ neighbours or party donors. Long-running problems with coronavirus economic support schemes have not been fixed and an opportunity to repair the social security safety net has been missed. Of course, the latest news on vaccines is positive but it’s going to be some time before things get back to any sort of normal and business and people alike will need support until then.

After a tough 2020, this Spending Review was a chance to instil confidence in our economy and provide hope for the post-Covid era, for all regions and nations of the UK. Mr Sunak, however, failed to offer such a vision, focusing instead on a series of damaging and unnecessary reforms. 

So, the Chancellor chose to freeze the pay of a substantial percentage of key workers, despite their heroism during the past nine months. Councils, desperately in need of additional funds, are being given one-off grants and the opportunity to hike Council Tax bills. And despite the furore over the government being prepared to breach the UK-EU withdrawal agreement, our statutory obligation on overseas aid is being brushed away.

Although we live in challenging times, there was no need for Mr Sunak to take any of these decisions. This Spending Review could and should have put jobs, businesses and strong economic growth front and centre. It could have taken meaningful steps to address the climate crisis, which would create millions of new jobs. It should have confronted head-on the structural challenges we face – not kick them into the long grass.

This should have been an occasion to bring our country together and boost confidence in the economy. Instead, the government is taking money out of the pockets of the very workers the Prime Minister and Chancellor have applauded for the TV cameras; and diluted help the world’s poorest people. So much for compassionate conservatism.

Lord Denis Tunnicliffe is Shadow Treasury Minister in the House of Lords 

Published 3rd December 2020

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published this page in Blog 2020-12-03 09:57:16 +0000

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