Spending Review – Comment from our Managing Partner, Andrew Moorby

Andrew Moorby, our Managing Partner and Head of the Teesside office, shares his comments following the Chancellor’s Spending Review.

Rishi Sunak delivered the 2020 Spending Review today.

As ever there was a cascade of figures and announcements all portrayed with a positive spin. The Chancellor reaffirmed his desire to fight the impacts of Covid-19, protecting people’s health, jobs and the economy.

He also highlighted the need to protect public services and to continue the Government’s commitment to invest in infrastructure.

Much of the detail is to follow in the Governments comprehensive infrastructure plan, but he did announce a North based Infrastructure Bank. There was also a new fund where local communities can seek funding for local infrastructure plans.

Behind the positive announcements, however, there was a clear message that we are moving to the next stage in our recovery from the pandemic.

In this phase there will be difficult decisions to make and costs need to be controlled. Public sector pay and overseas aide were the first victims of this. At some point the Chancellor will have to decide how it will be paid for. He will start to address this in next March’s Budget, although most economic commentators feel the economy will still be too fragile for major tax rises.

However, there have been reports the Treasury could raise money from changes to Capital Gains Tax, pensions relief or self-employment taxes.

Only time will tell.