Spending review

Johnson vs Sunak: The political battle of the autumn?

As ministers grow increasingly confident that they will be able to unlock by 19 July, Boris Johnson is facing a series of other political problems coming up the track. After the party lost the Chesham and Amersham by-election to the Liberal Democrats, Tory MPs with seats in the south are particularly restive. CCHQ has spent the weekend reaching out to these MPs in a bid to offer reassurance that the party has not forgotten about them. Yet the biggest problem Johnson faces is on spending. The spending review in the autumn will see all these various debates playing out Over the weekend, there have been a series of reports of

The foreign aid cut marks a change of priorities

The proposed reduction in international aid from 0.7 to 0.5 per cent of GDP has elicited a furious reaction from some quarters. It has been condemned by five former prime ministers, three of whom never met the target when they were in office. What is missing from this debate is the historical context. The rise in development spending was part of the peace dividend that followed the end of the cold war. But the just-concluded defence spending settlement marks a UK recognition that this peace dividend is over — great power competition is back and this country’s military spending now needs to increase. Over the next decade or so, military

Stephen Daisley

The Tory case for overseas aid

There may be worse times to slash international development spending than the middle of a pandemic but it’s got to at least be in the top five. The reduction from 0.7 per cent of GDP to 0.5 represents a drop of £4 billion in investment. As Katy Balls notes, the current level was not only a manifesto commitment in 2019 but is enshrined in law, so ministers will have to ask parliament to legislate to allow them to break their own manifesto promise. International development is like foreign policy: there are no votes to be gained from it. In fact, abolishing it altogether would make the Tories more popular with their target

Kate Andrews

Sunak’s Spending Review and the devastating impact of Covid

It’s been no secret that Covid-19 has sent the UK’s finances into disarray — but today we received a further insight into just how bad the books are looking. Alongside Rishi Sunak’s Spending Review came updated forecasts and scenarios published by the Office for Budget Responsibility, which confirm the UK economy is set to shrink by 11.3 per cent this year — the largest economic fall in 300 years. The road to recovery is forecast to be a long one: economic output is not expected to return to pre-Covid levels for another two years: Q4 in 2022. There is still no sign of a sharp, V-shaped recovery, but rather another

Robert Peston

The true cost of the coronavirus debt

There is a view that we don’t have to worry about the record debt the government has accumulated since coronavirus laid waste to our way of life and our economy. And in two senses I would half agree – though the other half of me is wracked with anxiety.  First, this is not a uniquely British problem; it is a problem of all developed economies. However, you should not underestimate the geopolitical significance of the explosion of debt in the rich West, because it represents by implication the fastest transfer of wealth and power to China and Asia in our lifetimes.  Second, there is the important counterfactual – namely what

Isabel Hardman

Does Rishi Sunak understand the scale of the mental health crisis?

Unsurprisingly, health spending will be a key part of Rishi Sunak’s spending review announcements this afternoon, with the Chancellor expected to pledge £3 billion for the NHS as it recovers from the pandemic. Part of that will be a £500 million boost for mental health, which accompanies a ‘winter care plan’ that was published earlier this week. Ministers are very keen to say they recognise the pressure that the pandemic has put on services and people who may be developing mental health problems for the first time, as a result of the strain they have found themselves under this year. But this money won’t go very far. The Strategy Unit