Rishi Sunak has been setting out the Government's comprehensive spending review this afternoon.

Here are the key announcements he has made.

  • A new UK infrastructure bank will be established in the North to back major infrastructure projects.
  • Unemployment is predicted to rise to a peak of 7.5% - or 2.6 million people - in the second quarter of 2021.

Nearly £3 billion will be provided to Work and Pensions Secretary Therese Coffey to deliver a new three-year "restart programme" to help more than one million people who have been unemployed for more than 12 months to find new work.

  • Mr Sunak said the Government would increase the National Living Wage by 2.2% to £8.91 an hour.
  • He also announced a £4 billion "Levelling Up Fund" to allow communities to bid for cash for projects such as a new bypass, railway station upgrades and more.

Mr Sunak told MPs: "Projects must have real impact, they must be delivered within this Parliament, and they must command local support, including from their Member of Parliament."

This hasbeen criticised by Labour because the projects will be controlled by central Government, rather than giving power over key projects to the regions.

  • The chancellor says the economy will contract this year by 11.3% - "the largest fall in output for more than 300 years".
  • Total spending on Covid has been £280 billion.
  • The Chancellor said £3 billion would be provided to support NHS recovery - allowing them to carry out up to one million checks, scans, and operations - while more than £2 billion will be spent on transport, with funding to subsidise rail networks.
  • The Chancellor reiterated the UK is facing an "economic emergency", but insisted business insolvencies have fallen compared to last year, adding: "The latest data shows the UK's unemployment rate is lower than Italy, France, Spain, Canada and the United States."
  • The Chancellor said the "majority" of public sector workers will see their pay increase next year. Rishi Sunak said the minimum wage will increase by 2.2% to £8.91 an hour, with this rate extended to those aged 23 and over.
  • The UK's foreign aid budget is to be cut from 0.7% of national income to 0.5%. 

On this, Mr Sunak said: "I have listened with great respect to those who have argued passionately to retain this target. But at a time of unprecedented crisis, government must make tough choices."

What did Labour say?

Responding to the spending review statement, Anneliese Dodds told the Commons: "Earlier this year the Chancellor stood on his doorstep and clapped for key workers.
"Today his Government institutes a pay freeze for many of them. This takes a sledgehammer to consumer confidence."
Anneliese Dodds said the Conservative Government has "wasted and mismanaged public finances on an industrial scale" during the pandemic.