the extent of the economic and financial
crisis facing the uk
has been spelled out by the chancellor
rishi sunak who set out his spending
review today
the cost of fighting the pandemic has
led to record government borrowing
and the worst recession in more than
three centuries
next year more than two and a half
million people could be out of work
and this year alone the government will
be borrowing nearly 400 billion pounds
that's the highest
ever in peacetime some public sector
workers can expect to pay freeze
though nhs staff and those earning less
than twenty four thousand pounds a year
will be exempt but the chancellor is
spending three billion pounds
on the restart program to help the
unemployed find work
under further four billion pounds uh to
target investment in those areas
that have lost out in the past we start
tonight with our political editor
laura koonsberg on the day's events a
warning there is some flash photography
in the
it looking report the straight answer is
looking very bad
the chancellor's smooth political style
can't hide what's been lurking in number
11 spreadsheets
part one of the pandemic was the
profound risk to our health
part two the cost of covid a nightmare
starting to unfold
our economic emergency has only just
begun so a blizzard of serious
predictions
about how the country's income will hurt
the
largest fall in output for more than 300
years
not expected to return to pre-crisis
levels
until the fourth quarter of 2022.
underlying debt is forecast to continue
rising in
every year in other words the economy
has been hammered by coronavirus
and the most direct cost many many of us
will pay with our jobs
the obr expects unemployment to rise to
a peak in the second quarter
of next year of seven and a half percent
2.6 million people unemployment won't
have reached that level for a decade
and around 1.3 million public sector
staff
outside the nhs will have their wages
frozen i cannot justify
a significant across-the-board pay
increase
for all public sector workers instead
we are targeting our resources at those
who need it most but how to justify
breaking the government's promise on the
aid budget for the world's poorest
sticking rigidly to spending 0.7
of our national income on overseas aid
is difficult to justify
to the british people awkward for some
ministers
who had stood by the targets won't even
quit but there are big promises
we in government can set the direction
better schools
more homes stronger defense safer
streets but it is the individual
the family and the community that must
become
stronger healthier and happier
as a result vows on infrastructure will
be kept
there's four billion pounds for a pot
that mps can bid from for local projects
cash to help people find work too
there's three billion more for the
health service to catch up after covert
money for the additional police promised
last year but there's no getting away
from the shadows of the shutdown
coronavirus closed down much of the
economy massive
borrowing to get it through is
manageable for now because of rock
bottom interest rates
that may not last forever there could be
a lot of pain ahead
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
we need a comprehensive spending review
which takes responsible choices
to build a future for our country is the
best place in the world to grow up in
and the best place to grow old in do you
want to try with a bigger one
yeah okay he certainly doesn't want a
bigger hole in the economy
just like chancellors in other countries
rishi sunax borrowed and spent vast sums
because of the pandemic
today's predictions though are based on
a vaccine being rolled out
and that there'll be a brexit deal too
the chancellor does need to do a whole
lot more to plan for the future and to
make sure that he can
anticipate what might come in the coming
year and what is missing altogether from
this
spending review is the impact of brexit
the democrats had called for
a policy to save jobs and create jobs to
create a fairer greener economy
and to ensure that no one was left
behind and the chancellor hasn't
delivered that
certainly no one in parliament will push
ministers to pay her back right now
with so much uncertain the disease so
hard to predict
even the mighty treasury may have to
watch and wait
laura kunsberg bbc news westminster
looking at the figures in more detail
the office for budget responsibility
has calculated that the uk economy will
shrink by more than 11
this year alone and this is happening
while the government is spending
hundreds of billions of pounds of
borrowed money
to deal with the pandemic and its
effects as our economics editor faisal
islam explains
there's been very little progress so far
in the task of repaying the debt
grim economic numbers are of no surprise
to anyone
looking out on a high street here in
wakefield in yorkshire
lockdown means no shoppers or staff but
as elsewhere
months of pandemic uncertainty have seen
the spread of the telltale
to let's sign here in one of the
so-called blue wall seats
locals have mixed feelings about the
government's public pay squeeze
well he's got to do what he thinks is
best what country at the moment
because state we're in the people that's
done the hard work during covered
that should get the pay rises to public
sector workers
today's forecasts show that the economy
is set to shrink by over 11
this year a three century record before
recovering more slowly from next year
that means an annual increase in
borrowing only seen during world
wars nearly 400 billion pounds 19
of the size of the national economy a
staggering figure yet the interest bill
to pay for it
is also tumbling as historic and frankly
unimaginable
as some of these numbers are both the
hits to the economy
and the huge rise in borrowing they are
in the past
it's just that they're so big that
they're going to have an impact
for years to come but there is this
other record
a record low in just how cheap it will
be to actually pay for this
massive debt that buys time for the
chancellor
and means relatively small down payments
on shrinking the borrowing
is all that was required but where the
economy goes does just depend
unemployment is expected to go up about
a million to seven and a half percent
as a result of the crisis but the
forecast assumes progress on a vaccine
and functioning testing systems
without that the economy and jobs
picture gets much worse
peaking at 11 on the other hand with
better than expected health progress
unemployment barely goes up at all the
government's official forecaster
acknowledges the uncertainty
the economy at the mercy of medical
developments and an imminent decision on
a post-brexit trade deal
if no vaccine proves effective and also
we end up leaving the eu without a deal
and trading on wto terms that would
combine a six percent hit to the economy
from the fact that we're living with the
disease with a two percent hit to the
economy from the fact that we're trading
with our single artist trading partner
on wto terms
the chancellor is earmarking huge
amounts to health to deal with the
pandemic
to get the economy back to normal but
other areas of spending
on pay for example for teachers earning
above average wages
for police officers and prison officers
have been frozen
alongside cuts to aid if you take out
the
spending on uh kovid actually he's
reduced his planned spending
compared with what he was suggesting
back in march by about 10 billion pounds
a year
going forward and he's also actually
allocated nothing at all to deal with
kovid
after next year so these numbers look to
me pretty tight
back in wakefield this council worker
union rep
married to a teacher certainly feels the
return of austerity
uh it's a bit of a kick in the teeth
really i've worked like many of my
fellow colleagues throughout
the pandemic as a key worker it feels
like public sector workers have been
punished again by the government
for a crisis that was not of our making
the lowest paid were protected
but the economic shadow of covert 19
will last not just past this christmas
but many future festive seasons fazil
islam bbc news