Rishi Sunak calls for 'collective endeavour' to repair damaged economy

21 November 2020, 15:54

The Chancellor said the UK Government had given an additional £8.2 billion of funding to the Scottish Government
The Chancellor said the UK Government had given an additional £8.2 billion of funding to the Scottish Government. Picture: PA

By Matt Drake

Rishi Sunak has called for the same "collective endeavour" as defeating the virus for rebuilding the economy as the UK has the worst recession in 300 years.

Rishi Sunak insisted that this same "spirit" would be needed when the health threat of Covid-19 is passed.

He told the Scottish Conservative conference that "tough" sacrifices would be necessary for some time to come.

But he also stressed that in the midst of the global pandemic, the Scottish people should "know that they have the strength and security of the whole of the United Kingdom behind them".

Speaking at the online event, the Chancellor said: "The restrictions that we are facing, the sacrifices that we have had to make. They are tough now and they will remain tough for some time.

"But the threat of this pandemic will pass.

"And when it does we will then need to take that spirit of collective endeavour onto the task of rebuilding Scotland and the rest of our country together."

Read more: Vaccine hope: Covid jabs for all of UK by Spring

The Chancellor said the UK Government had given an additional £8.2 billion of funding to the Scottish Government "at this vital time", to help fund the response to Covid-19

"That is what pooling and sharing our resources across our four nations means.

"Controlling this virus and supporting those who have been affected by it is a collective endeavour, one that we all have a role in.

"The enduring principle that when we come together as one United Kingdom we can achieve far more than we do as four separate nations, is as relevant today, in the most difficult time in many of our lives, as it has ever been.

"If we come together then we can beat this virus."

Spending on lockdown measures is on track to exceed £200billion this year after the extension of furlough.

Read more: Boris Johnson jokes about being 'under house arrest' as he continues to self-isolate

Mr Sunak is set to announce the heaviest public borrowing since the Second World War when he sets out spending plans next week with the biggest economic crash in over 300 years.

He told the conference about the impact the UK Government's actions had had north of the border when coronavirus restrictions forced businesses to close.

But the "overwhelming might of the UK Treasury" meant Westminster had been able to take "unprecedented action to support all of Scotland through this pandemic".

The Chancellor said more than a million Scottish jobs had been protected by furlough and the self-employment income support schemes, adding that 79,000 businesses across Scotland had also benefited from Bounce Back Loans.

But Scotland's Finance Secretary Kate Forbes has urged the Chancellor to inject another £98 billion into the UK economy to help mitigate the impact of the coronavirus pandemic.

In a letter to Rishi Sunak ahead of his spending review on Wednesday, Ms Forbes warned against returning to the austerity policies put in place by his Conservative predecessors during the 2008 financial crash, instead lobbying for him to "invest for recovery, rather than balance the books".

A £98 billion financial stimulus, the Scottish Government has said, would bring the UK in line with France, Germany and New Zealand where similar packages amounting to 5% of GDP have been announced.

It comes as it was announced the UK may reduce its foreign aid budget from 0.7% of GDP to 0.5%.

Only the armed forces are expected to receive a multi-year increase in funding as Boris Johnson claims it will bosst Britain's world profile post-Brexit.

The Bank of England has predicted an 11% fall in GDP for 2020 which has not been seen since 1709.

Government borrowing this financial year is likely to be around the equivalent of 17% and 20% of GDP, well above its 10% peak at the height of the last global financial crisis.

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