This Spending Review was an opportunity to set the direction for post-Brexit, post-Covid Britain. The Chancellor talked about the highest level of peacetime debt but failed to match the ambition of the postwar period which led to the creation of the welfare state.
Key points from our press release include:
- Covid spending aside, this Spending Review was a de facto return to austerity for many government departments and local authorities. As in 2010, these are political not economic choices, which will impact on women and many minority groups worst.
- The partial public sector pay freeze, increases to local taxes and cuts to the foreign aid budget are counter to the Government’s commitment to end austerity, level up and recover from the coronavirus pandemic.
- The government justifies these cuts as needed to reduce high levels of debt; however, economists agree that with interest rates low and the economy contracting, this is not the time to focus on reducing debt. Rather the Government should invest to stimulate economic recovery, as in post-war Britain when debt was high, but investment was poured into jobs, homes and the National Health Service. Instead, a return to austerity will decrease confidence and private sector spending.
- Spending has increased on health, education and defence and the Chancellor announced an increase in infrastructure investment. Once again, this was limited to physical infrastructure controlled by central government.
- There was some additional spending on childcare and social care, but neither received the investment and reform so desperately needed after ten years of austerity, exacerbated by the pandemic.
- The increase to the living wage is a welcome step, especially for women, who are the majority of low earners. However, without additional investment, this will put more strain on the care sector. At the same time the public sector pay freeze means a real term cut in pay for public sector workers, who have been on the front line in tackling Covid 19.
- The deafening silence on social security will cause unnecessary uncertainty to people across the UK as the unemployment crisis continues.
- More police and prisons do little to refinance specialist women’s services, especially those run by and for BAME women, suffering from decreased funding and increased demand.
- The Treasury has failed to fulfil the EHRC’s guidance on meaningful equality impact assessments. At a time when the disproportionate impact of the pandemic on different groups with protected characteristics is clear, Treasury should set an example across government.