Rishi Sunak, the Chancellor of the Exchequer, has told government departments to expect changes in an effort to rescue the economy. This week, the Treasury announced there will be a government spending review to take place in order to analyse how the country uses funds going forward. The review will be published in the autumn, and is expected to set out the government’s spending plans for Parliament over the next three years.
The spending review is to focus on several areas of the UK economy.
These include strengthening economic recovery, making the UK a “scientific superpower” while strengthening its position in the world, and investing in infrastructure, innovation and people.
However, it is clear Britons are likely to be affected by this spending review.
Amongst other decisions, higher taxes and other changes have been speculated recently, and these could hit households in the pocket for the greater economic good of the country.
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“Our goal in the second phase is to protect, create and support jobs and we set out our plan to achieve this two weeks ago.
“The Comprehensive Spending Review is our opportunity to deliver on the third phase of our recovery plan – where we will honour the commitments made in the March Budget to rebuild, level up, and invest in people and places spreading opportunities more evenly across the nation.”
Yesterday, the Chancellor announced close to 900,000 people would be receiving a pay rise in surprise yet welcome news for large sections of the workforce.
Thousands of public sector workers will receive a pay rise as recognition of the vital work they have carried out during the COVID-19 crisis.
However, the government has also said further pay rises will have to be carefully considered, signalling potential cutbacks in future.
The government statement read: “We are conscious that public sector pay awards must deliver value for money for the taxpayer.
“The Coronavirus is having a very significant impact on the economy, labour market and the fiscal position, and the government will need to continue to take this into account in agreeing future public sector pay awards.”
This is something which the Treasury re-emphasised through the announcement of a spending review.
The government spoke of “exercising restraint” when it comes to future public sector pay awards.
However, it has assured public sector pay levels will retain parity with the private sector.
Mr Sunak has not fixed a set spending “envelope” according to the government, but has said spending will grow in real terms.
This, the government says, is to invest in the priorities of the British people.