Britain’s government, seeking to support the pandemic-ravaged economy and the nation’s post-Brexit future, on Wednesday unveils its eagerly-awaited spending plans.
Finance minister Rishi Sunak will deliver his spending review to parliament, one week before England ends a month of restrictions aimed at cutting a second wave of infections.
The chancellor of the exchequer will reveal the outcome of his review that will set state departmental resource and capital budgets for 2021/2022.
Britain’s rightwing government has already spent billions so far this year on battling economic fallout from the virus, subsidising private-sector jobs, and boosting the state-run National Health Service (NHS).
His speech comes amid a global race for vaccines that is strengthening hopes for a return to normality, particularly in Britain which has the highest coronavirus death toll in Europe.
This week’s key review has attracted more attention than usual because the government decided in September to axe Sunak’s planned autumn budget due to chronic virus turmoil.
– ‘Economic shock laid bare’ –
Sunak warned last weekend that the British economy was under “enormous strain” because of Covid-19 — and ruled out cuts to public services amid soaring borrowing.
But he has refused to say whether he will impose a public sector pay freeze, angering unions and the main opposition Labour party.
Alongside the statement, the Office for Budget Responsibility (OBR) watchdog will publish its latest economic growth forecasts, detailing the fallout from the pandemic.
“People will see the scale of the economic shock laid bare,” Sunak told the Sunday Times newspaper.
“We can see the data every month, and obviously the shock that our economy is facing at the moment is significant.”
The watchdog will also examine the impact of England’s latest virus restrictions that have sparked widespread concerns of a so-called double dip recession before an expected recovery in 2021.
Britain has been one of the worst-affected countries in the world in the outbreak, registering more than 54,000 deaths from 1.4 million cases.
– Borrowing set to rocket –
The OBR is also widely expected to reveal an explosion in public borrowing which could reach almost £400 billion for the current financial year, as public debt exceeds £2.0 trillion.
On Saturday, ahead of the spending review, the Treasury unveiled another £3 billion to support the NHS in tackling the impact of coronavirus.
As part of the package, £1 billion will be spent on addressing backlogs in the health service -– paying for up to one million extra checks, scans and additional operations for those who have had their treatment delayed since the outbreak began.
Sunak is also expected Wednesday to flesh out details of a vast £100-billion infrastructure investment plan to modernise the UK transport network and help combat climate change.
In November, Prime Minister Boris Johnson’s government imposed four weeks of tough restrictions in an attempt to stop surging virus infections.
Schools, colleges and universities have remained open to avoid disruption to education but shops and services deemed non-essential have been forced to close.
Office workers have also been told to work from home wherever possible.
The restrictions are due to be partially lifted on December 2, giving some relief to businesses.
But there could still be disruption, as Johnson said the country would revert to three tiers of restrictions according to infection rates.
The worst-affected areas could see businesses and services closed or restricted.
“We’re not going to release national measures with a free-for-all, a status quo ante covid,” he told parliament on Monday.