Chancellor's Spending Review Statement Approaching

A reminder, as if one were needed, that Chancellor of the Exchequer Rishi Sunak is set to deliver his statement on the Spending Review this afternoon.

• Sunak should be on his feet at just after 1230GMT (0730ET, 1330CET), just after the conclusion of Prime Minister's Questions.
• The event is not as wide-ranging as a full Budget statement (and will cover Apr 2021-Apr 2022), but there will be several areas of significant focus:
  • Forecasts from the OBR on the outlook for GDP, gov't debt and deficit, and unemployment all being closely watched to show just how bad the impact of COVID-19 could be on the economy.
  • A potential public sector pay freeze. Not confirmed by the Treasury, but there has been notable speculation that public sector workers, excluding medical professionals in the healthcare sector, could be subject to a pay freeze to try to reduce expenditure. Would likely cause some difficult headlines for the gov't in the short term.
  • A new job creation scheme and additional welfare support. GBP2.9bn for a 'restart' scheme for 1mn jobless individuals, while GBP1.4bn is set to go into revamping the Job Centre network.
  • Another political grenade for the gov't is the trailed cut to the international aid budget. It was a manifesto pledge in Dec 2019 to keep the law maintaining aid spending at 0.7% of GNI, but to reduce expenditure wherever possible it has been mooted this could be cut to 0.5%. This has provoked outrage among some, stating that any cut would break a manifesto pledge, be morally unacceptable, and reduce the UK's soft-power capabilities. However, a cut to international aid is very popular with the public according to polls, and there is a get-out clause to the law in the event of a substantial drop in national income, as experienced this year.