A major Government spending review is coming against the backdrop of the most challenging peacetime economic circumstances in living memory because of the coronavirus outbreak, the Chief Secretary to the Treasury has said.
Stephen Barclay made the comments as he insisted the job furlough scheme introduced because of the Covid-19 pandemic would not be extended beyond the autumn.
Mr Barclay said that the upcoming Government spending review could be a moment for “national renewal”.
He said: “A spending review is a significant moment in the life-cycle of a government.
“We must not only conduct this review against the backdrop of the most challenging peacetime economic circumstances in living memory, we must do so as a Government re-elected a little over seven months ago with a strengthened majority and an emboldened mandate.
“Now, these two factors are not mutually exclusive.”
The Comprehensive Spending Review, which Mr Barclay said will be the first of its scale since 2015, will set departmental resource budgets from 2021/22 to 2023/24 and capital budgets from 2021/22 until 2024/25.
Mr Barclay said the Government would proceed with plans to end the furlough initiative in the autumn.
The Government’s job retention scheme is being wound down from August, with the Government moving from paying 80% of wages up to a cap of £2,500, to 60% up to a cap of £1,875, by October.
Employers will be expected to top up wages and pay other contributions as part of the changes.
About 9.5 million roles have been supported by the furlough scheme which is set to end in the autumn, despite opposition calls for the Government to think again.
During a question and answer session with the centre-right think tank Onward, Mr Barclay said Chancellor Rishi Sunak had made it plain the scheme would not be continued further.
Mr Barclay said: “The Chancellor has been very clear that the furlough scheme won’t be extended.
“Now, that doesn’t mean, as he showed with support… for the arts, for the £1.57 billion sport package, that targeted measures won’t be taken where there is a strong business case for doing so.
“But, that is just distinct from extending the furlough scheme.”
