I have to make tough choices on public pay — Rishi Sunak

U.K. cuts overseas aid amid worst recession in over 300 years

U.K. slashes foreign aid spending commitment

The U.K.'s coronavirus "economic emergency has only just begun", Chancellor Rishi Sunak said as he unveiled a one-year government spending review with a stark warning of the need to balance the books in years to come. "Long-term scarring means in 2025, the economy will be around 3 percent smaller than expected in the March [2020] budget". As the restrictions are eased, we expect the economy to start recovering growing by 5.5 percent next year, 6.6 percent in 2022, then 2.3, 1.7 and 1.8 percent in the following years.

"This situation is clearly unsustainable over the medium term", Sunak said.

"Reports of pay restraints for all but front-line NHS staff would a cruel body blow to other health, care and public service employees working tirelessly to get us through the pandemic".

The cut to the aid budget sees the Government reneging on a legal pledge and manifesto commitment to spend 0.7% of national income on development assistance.

"The UK is forcast to borrow a total of £394 billion this year equivalent to 19 percent of GDP, the highest recorded level of borrowing in our peacetime history", he said.

"Reviving the economy will take a gargantuan effort from everyone", said Mr Prentis.

The Government faced condemnation from charities and a potential Tory revolt when legislation for the move comes before Parliament.

Baroness Sugg used her resignation letter to condemn the "fundamentally wrong" move, telling Boris Johnson it would "diminish our power to influence other nations to do what is right".

Speaking to BBC Breakfast, Mr Sunak said: "I've had to make some tough choices and what I couldn't do is justify an across-the-board rise in public sector pay".

To help cope with rising unemployment, the Chancellor set out a almost £3 billion Restart programme to help get people back into work.

Despite the grim forecasts, Sunak set out significant additional spending to help public services in the final months of the pandemic crisis: £18 billion will be allocated for spending on testing, personal protective equipment and vaccines in the coming year, while the NHS will receive an additional £3 billion, transport £2 billion and local councils £3 billion.

There will be £27 billion spent on economic infrastructure in 2021-22. He added the funding was to "help Northern Ireland fight coronavirus and build back better".

"However, with an uncertain winter ahead, the Government will need to maintain an open mind on providing further support to businesses struggling to survive", she said.

For capital, there would be £1.6bn, compared to £1.5bn the year before.

Scotland's finance secretary has said the chancellor's plan to freeze some public pay "absolutely misjudges the value of frontline services".

Confederation of British Industry chief economist Rain Newton-Smith said the Spending Review "lays the foundations for a brighter economic future" but "ambition must be matched by action on the ground".

Rishi Sunak, the UK's finance minister, laid out the country's spending review - which is meant to outline the government's spending in the upcoming year.

"Other areas are facing more of a squeeze and some could even be facing cuts after next year", the economic think tank said.

The country's cut to foreign aid has also been criticized, some claiming that it could negatively impact millions.

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