Chancellor Rishi Sunak has given his one-year spending statement to the House of Commons.
Here are the key points from his 25-minute speech on Wednesday:
– Mr Sunak said the government provided £ 280 billion this year to help the country through the coronavirus crisis.
– The Office for Budget Responsibility (OBR) predicts that the economy will contract by 11.3% this year – the largest decline in manufacturing in more than 300 years.
– The OBR expects the economy to recover once the Covid restrictions are lifted and by 5.5%, 6.6% in 2022 next year and then 2.3%, 1.7% and 1.8% in the subsequent years grow.
– The pandemic has likely caused “long lasting scars,” meaning the economy will be about 3% smaller by 2025 than projected in the March budget.
– The UK is expected to borrow a total of £ 394 billion this year, equivalent to 19% of GDP – the highest level of credit drawn in peacetime history, according to Mr Sunak.
– Underlying debt is estimated at 91.9% of GDP this year and is expected to continue to rise to 97.5% of GDP in 2025/26.
– The OBR expects unemployment to peak at 7.5% – 2.6 million people in the second quarter of 2021.
– The Chancellor announced that NHS doctors and nurses will receive a pay increase, but that pay increases in the rest of the public sector will be “interrupted” next year.
– However, the 2.1 million public sector workers earning below the average wage of £ 24,000 will be guaranteed a pay rise of at least £ 250 next year.
– The national living wage will be increased by 2.2% to £ 8.91 per hour.
Total spending by government departments will reach £ 540 billion next year, with daily spending by departments increasing by 3.8% in real terms.
– The foreign aid budget will be reduced to 0.5% of gross national income by 2021, but Mr Sunak said it was the government’s intention to return to 0.7% if the tax situation permits .
– A new UK infrastructure bank will be established – headquartered in the North of England – to fund major new projects.
– A £ 4 billion fund will also be created to fund local infrastructure improvement projects, Mr Sunak said.
– The Chancellor said that through the Barnett formula, funding for the Scottish Government will increase by £ 2.4 billion and funding for the Welsh government by £ 1.3 billion, of which £ 0.9 billion for the Northern Ireland .