I remind colleagues that a deferred Division will take place today. Members should be aware that the timings have reverted to being between 11.30 am and 2 pm, although deferred Divisions will continue to take place in the Members’ Library. Members will cast their votes by placing a completed Division slip in one of the ballot boxes provided. If a Member has a proxy vote in operation, they must not vote in person in the deferred Division. The nominated proxy should vote on their behalf. I remind colleagues of the importance of social distancing during the deferred Division and ask them to pick up a Division slip from the Vote Office and fill it in before they reach the Library, if possible. The result will be announced in the Chamber at a convenient moment after the Division is over.

Before the Chancellor of the Exchequer addresses the Chamber, I would like to point out that British Sign Language interpretation of the statement is available to watch on parliamentlive.tv.

Mr Speaker, today’s spending review delivers on the priorities of the British people. Our health emergency is not yet over and our economic emergency has only just begun, so our immediate priority is to protect people’s lives and livelihoods. But today’s spending review also delivers stronger public services, paying for new hospitals, better schools and safer streets, and it delivers a once-in-a-generation investment in infrastructure, creating jobs, growing the economy and increasing pride in the places we call home.

Our immediate priority is to protect people’s lives and livelihoods, so let me begin by updating the House on our response to coronavirus. We are prioritising jobs, businesses and public services through the furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals, as well as extra funding for schools, councils, the NHS, charities, culture and sport. Today’s figures taken together, confirm that we are providing £280 billion to get our country through coronavirus. Next year, to fund our programmes on testing, personal protective equipment and vaccines, we are allocating an initial £18 billion. To protect the public services most affected by coronavirus, we are also providing £3 billion to support NHS recovery, allowing it to carry out up to a million checks, scans and operations; over £2 billion to keep our transport arteries open, subsidising our rail network; more than £3 billion for local councils; and an extra £250 million to help end rough sleeping. Although much of our coronavirus response is UK-wide, the Government are also providing £2.6 billion to support the devolved Administrations in Scotland, Wales and Northern Ireland. Taken together, next year, public services funding to tackle coronavirus will total £55 billion.

Let me turn to the Office for Budget Responsibility’s economic forecasts. I thank the new chair, Richard Hughes, and his whole team for their work. The OBR forecasts that the economy will contract this year by 11.3%, the largest fall in output for more than 300 years. As the restrictions are eased, it expects the economy to start recovering and growing by 5.5% next year, 6.6% in 2022 and then 2.3%, 1.7% and 1.8% in the following years. Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. The economic damage is likely to be lasting. Long-term scarring means in 2025, the economy will be about 3% smaller than expected in the March Budget.

The economic impact of coronavirus and the action we have taken in response means that there has been a significant but necessary increase in our borrowing and debt. The UK is forecast to borrow a total of £394 billion this year, equivalent to 19% of GDP—the highest recorded level of borrowing in our peacetime history. Borrowing falls to £164 billion next year and to £105 billion in 2022-23, then remains at around £100 billion, or 4% of GDP, for the remainder of the forecast. Underlying debt, after removing the temporary effect of the Bank of England’s asset purchases, is forecast to be 91.9% of GDP this year. Owing to elevated borrowing levels and a forecast persistent current deficit, underlying debt is forecast to continue rising in every year, reaching 97.5% of GDP in 2025-26.

High as these costs are, the costs of inaction would have been far higher. But this situation is clearly unsustainable over the medium term. We could only act in the way we have because we came into this crisis with strong public finances. We have a responsibility, once the economy recovers, to return to a sustainable fiscal position.

This is an economic emergency. That is why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes. It is clear that those measures are making a difference. The OBR now states, as the Bank of England and the International Monetary Fund already have, that our economic response has protected jobs, supported incomes and helped businesses to stay afloat. It has said today that business insolvencies have fallen compared with last year, and the latest data shows that the UK’s unemployment rate is lower than those of Italy, France, Spain, Canada and the United States.

We are doing more to build on our plan for jobs. I am announcing today nearly £3 billion for my right hon. Friend the Secretary of State for Work and Pensions to deliver a new three-year restart programme to help more than a million people who have been unemployed for over a year to find new work. But I have always said that we cannot protect every job. Despite the extraordinary support we have provided, the OBR expects unemployment to rise to a peak, in the second quarter of next year, of 7.5%— 2.6 million people. Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.

Today’s statistics remind us of something else. Coronavirus has deepened the disparity between public and private sector wages. In the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Unlike workers in the private sector, who have lost jobs, been furloughed, and seen wages cut and hours reduced, those in the public sector have not. In such a difficult context for the private sector, especially for people working in sectors such as retail, hospitality and leisure, 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. To protect public sector jobs at this time of crisis, and to ensure fairness between the public and private sectors, I am taking three steps today. First, taking account of the pay review bodies’ advice, we will give a pay rise to over a million nurses, doctors and others working in the NHS. Secondly, to protect jobs, pay rises in the rest of the public sector will be paused next year. But, thirdly, we will protect those on lower incomes; the 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least £250. What this means is that while the Government are making the difficult decision to control public sector pay, the majority of public sector workers will see their pay increase next year.

And we want to do more for the lowest-paid. We are accepting in full the recommendations of the Low Pay Commission to increase the national living wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the national minimum wage rates as well. Taken together, these minimum wage increases are likely to benefit around 2 million people. A full-time worker on the national living wage will see their annual earnings increase by £345 next year; compared with the position in 2016, when the policy was first introduced, that is a pay rise of over £4,000. 

These are difficult and uncertain economic times, so it is right that our immediate priority is to protect people’s health and their jobs, but we need to look beyond. Today’s spending review delivers stronger public services—our second priority. Before I turn to the details, let me thank the whole Treasury team, and especially my right hon. Friend the Chief Secretary, for their dedication and hard work in preparing today’s spending review. Next year, total departmental spending will be £540 billion. Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8%—that is the fastest growth rate in 15 years. In cash terms, day-to-day departmental budgets will increase next year by £14.8 billion.

This is a spending review for the whole United Kingdom. Through the Barnett formula, today’s decisions increase Scottish Government funding by £2.4 billion, Welsh Government funding by £1.3 billion and Northern Ireland Executive funding by £0.9 billion. The whole of the United Kingdom will benefit from the UK shared prosperity fund, and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average, reaching around £1.5 billion a year. To help local areas prepare for the introduction of the UKSPF, next year we will provide funding for communities to pilot programmes and new approaches. We will also accelerate four city and growth deals in Scotland, helping Tay Cities, Borderlands, Moray and the Scottish islands to create jobs and prosperity in their areas. 

          Our public spending plans deliver on the priorities of the British people. Today’s spending review honours our historic, multi-year commitment to the NHS. Next year, the core health budget will grow by £6.6 billion, allowing us to deliver 50,000 more nurses and 50 million more general practice appointments. We are increasing capital investment by £2.3 billion: to invest in new technologies; to improve the patient and staff experience; to replace ageing diagnostic machines such as MRI and CT scanners; and to fund the biggest hospital building programme in a generation, building 40 new hospitals and upgrading 70 more. We are investing in social care, too. Today’s settlement allows local authorities to increase their core spending power by 4.5%. Local authorities will have extra flexibility on council tax and the adult social care precept, which, together with £300 million of new grant funding, gives them access to an extra £1 billion to fund social care—and this is on top of the extra £1 billion social care grant we provided this year, which I can confirm will be maintained. 

          To provide a better education for our children, we are also getting on with our three-year investment plan for schools. We will increase the schools budget next year by £2.2 billion, so we are well on the way to delivering our commitment of an extra £7.1 billion by 2022-23.

Every pupil in the country will see a year-on-year funding increase of at least 2%, and we are funding the Prime Minister’s commitment to rebuild 500 schools over the next decade. We are also committed to boosting skills—with £291 million to pay for more young people to go into further education, £1.5 billion to rebuild colleges, £375 million to deliver the Prime Minister’s lifetime skills guarantee and extend traineeships, sector-based work academies and the National Careers Service— as well as improving the way the apprenticeships system works for businesses.

We are making our streets safer. Next year, funding for the criminal justice system will increase by over £1 billion. We are providing more than £400 million to recruit 6,000 new police officers—we are well on track to recruit 20,000—and £4 billion over four years to provide 18,000 new prison places. New hospitals, better schools, safer streets: the British people’s priorities are this Government’s priorities.

Today’s spending review strengthens the United Kingdom’s place in the world. This country has always been and always will be open and outward-looking, leading in solving the world’s toughest problems. But during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people, especially when we are seeing the highest peacetime levels of borrowing on record. I have listened with great respect to those who have argued passionately for reetaining this target, but at a time of unprecedented crisis, Government must make tough choices. I want to reassure the House that we will continue to protect the world’s poorest, spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating £10 billion at this spending review. Our intention is to return to 0.7% when the fiscal situation allows. On the basis of latest OECD data, the UK would remain the second highest aid donor in the G7—higher than France, Italy, Japan, Canada and the United States,—and 0.5% is also considerably more than is spent by the 29 countries on the OECD’s Development Assistance Committee, which average just 0.38%.

Overseas aid is, of course, only one of the ways we play our role in the world. The Prime Minister has announced over £24 billion of investment in defence over the next four years—the biggest sustained increase in 30 years—allowing us to provide security not just for our country, but around the world. We are investing more in our extensive diplomatic network, already one of the largest in the world, and providing more funding for new trade deals. We should, however, judge our standing in the world not just by the money we spend, but by the causes we advance and the values we defend.

If this spending review’s first priority was getting the country through coronavirus and its second was stronger public services, then our final priority is to deliver our record investment plans in infrastructure. Capital spending next year will total £100 billion— £27 billion more in real terms than last year. Our plans deliver the highest sustained level of public investment in more than 40 years —once-in-a-generation plans to deliver once-in-a-generation returns for our country.

To build housing, we are introducing a £7.1 billion national home building fund, on top of our £12.2 billion affordable homes programme. We will deliver faster broadband for over 5 million premises across the UK, better mobile connectivity with 4G coverage across 95% of the country by 2025, the biggest ever investment in new roads, upgraded railways, new cycle lanes and more than 800 zero-emission buses. Our capital plans will invest in the greener future we promised, delivering the Prime Minister’s 10-point plan for climate change. We are making this country a scientific superpower, with almost £15 billion of funding for research and development, and we are publishing today a comprehensive new national infrastructure strategy. To help finance our plans, we will establish a new UK infrastructure bank. Headquartered in the north of England, the bank will work with the private sector to finance major new investment projects across the United Kingdom, starting this spring.

I have one further announcement to make. For many people, the most powerful barometer of economic success is the change they see and the pride they feel in the places we call home. People want to be able to look around their towns and villages, and say, “Yes, our community—this place—is better off than it was five years ago.” For too long our funding approach has been complex and ineffective, and I want to change that. Today I am announcing a new levelling-up fund worth £4 billion. Any local area will be able to bid directly to fund local projects.

The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry for Housing, Communities and Local Government, taking a new, holistic, place-based approach to the needs of local areas. Projects must have real impact, they must be delivered within this Parliament and they must command local support, including from their Member of Parliament. This is about funding the infrastructure of everyday life: a new bypass; upgraded railway stations; less traffic; more libraries, museums and galleries; better high streets and town centres. This Government are funding the things that people want and places need.

Today I have announced huge investment in jobs, public services and infrastructure, yet I cannot deny that numbers alone can ring hollow. They bear testimony to to our commitment to create a better nation, but on their own they are not enough to create one. When asked what our vision for the future of this country is, we cannot point to a shopping list of announcements and feel that the job is done. So as we invest billions in research and development, we are also introducing a new immigration system, ensuring that the best and brightest from around the world come here to learn, innovate and create. As we invest billions in the building of new homes, we are also simplifying our planning system to ensure that beautiful homes are built where they are needed most. As we invest billions in the security of this country, we are also defending free speech and democratic rule, proving that our values are more than just words. And as we invest billions in public services, we are also protecting the wages of those on the lowest incomes and supporting jobs, because good work remains the most rewarding and sustainable path to prosperity.

The spending review announced today sets us on a path to deal with the material matters of Government and it is a clear statement of our priorities, but encouraging the individual and community brilliance on which a thriving society depends remains, as ever, a work unfinished. We in government can set the direction. Better schools, more homes, stronger defence, safer streets, green energy, technological development, improved rail and enhanced roads: all investments that will create jobs and give every person in this country the chance to meet their potential. But it is the individual, the family and the community that must become stronger, healthier and happier as a result. This is the true measure of our success. The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by Government. These things must come from each of us, and be shared freely, because the future—this better country—is a common endeavour.

Today, the Government have funded the priorities of the British people, and now the job of delivering them begins. Mr Speaker, I commend this statement to the House.

Order. This is an important statement, which is why it has run much longer than usual, but that was agreed with the Chancellor. Obviously, I have divided up the time to give an increase to the other parties as well. I call the shadow Chancellor of the Exchequer.

Thank you, Mr Speaker.

This spending review was a moment for the Chancellor to make the responsible choices that our country needs. It was an opportunity to protect key workers, secure the economy and recover jobs in every part of our country.

During this crisis, we have seen who has taken responsibility: community health workers working round the clock to keep us all safe; the teachers who kept working so that key workers could too; the delivery drivers and shop staff who made sure that we had critical food supplies. Earlier this year, the Chancellor stood on his doorstep and clapped for key workers. Today, his Government institute a pay freeze for many of them. This takes a sledgehammer to consumer confidence. Firefighters, police officers and teachers will know that their spending power is going down, so they will spend less in our small businesses and on our high streets; they will spend less in our private sector. Many key workers, who willingly took on so much responsibility during this crisis, are now being forced to tighten their belts now; not in the medium term to which the Chancellor refers, but now.

In contrast, there has been a bonanza for those who have won contracts from this Government. Companies with political connections have been 10 times more likely to win Government contracts. So many businesses have worked tirelessly through the pandemic to support local communities, to keep critical supplies going and to produce drugs and vaccines—at cost price in AstraZeneca’s case—working with some of our country’s best scientists. But in their response to this pandemic, the Conservative Government have wasted and mismanaged public finances on an industrial scale: £130 million to a Conservative donor for testing kits that were unsafe; £150 million for face masks and £700 million on coveralls that could not be used; a £12 billion hit to our economy because the more effective, shorter circuit breaker was blocked and a lengthier, more expensive lockdown put in place instead; £12 billion so far spent on a test and trace system that is still not working; and, today, news of £10 billion in additional costs for personal protective equipment, which was at least partly down to the Conservatives’ lack of pre-pandemic planning.

This waste and mismanagement is part of a longer-term pattern, showing that claims today about levelling up simply do not match the evidence: hospitals in Liverpool and Sandwell left unbuilt, over deadline by years and over budget by hundreds of millions of pounds; not a single starter home built, despite almost £200 million being spent; Northern Powerhouse Rail still not even approved six years after being announced; the courts modernisation programme three years behind schedule, letting victims down up and down the country; and people in the north more likely to have been made redundant during this crisis holding everything else equal.

Photo calls are not enough. We need delivery like the promotion of green manufacturing in the west midlands by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), and the work of Labour Mayors and councils across the country. We need a Government in Westminster who take their responsibility towards all four nations seriously. That means informing the Finance Minister of Northern Ireland about the shorter timescale for this spending review ahead of time and fulfilling the “New Decade, New Approach” commitments. It means doing the right thing by the people of Wales to repair flood damage and make safe legacy coal tips. It means ending the barney between Westminster and Holyrood, and instead working together in partnership to protect jobs and livelihoods.

It also means a shared prosperity fund that is effective because it is delivered not on the whim of Conservative Ministers but from our devolved Governments and our regions. The levelling-up fund that the Chancellor just announced—his rabbit out of the hat—yet again, just as with the Beeching reopening programme, involves MPs going to Ministers and begging for support for their areas, rather than that change being driven from local communities. So much for taking back control! This is about the centre handing over support in a very top-down manner.

Labour has been clear about the responsible choices that we wanted the Chancellor to make today to recover jobs, retrain workers and rebuild businesses. To recover jobs, Labour called for £30 billion of capital spending accelerated over the next 18 months, focused on green initiatives, supporting 400,000 jobs and bringing us in line with countries such as France and Germany. This Government’s ambition is for half that number of new jobs. To retrain workers, we needed an emergency programme to support people back into work, but kick- start has been slow to get started, and the skills offer for those over 25 will not start until April. The Chancellor said at the beginning of his speech that our economic emergency “has only just begun”—try telling that to people who have been out of work since March.

Restart, announced today, must meet three key tests to be effective. It should help people who need it most, not cherry-pick. It should be up and running as soon as possible, yet it appears that only a fraction of Restart funding will be available next year. And it must involve local actors who know their communities, not be imposed from Whitehall. Of course, job search support ultimately only works if sufficient new jobs actually exist. That is why we needed ambitious action to boost our economy and to support our businesses.

To rebuild business, we called for a national investment bank. I welcome the announcement of a new UK infrastructure bank, given that valuable years have been lost since the Green Investment Bank was sold off. Now the Chancellor must boost its firepower, and he must deliver on his Department’s responsibility for the drive to net zero. We have known since the Stern report that the climate crisis is the biggest long-term threat to our economy, yet far too often, this spending review locks us into a path that will make the transition to net zero harder, not easier, locking our economy out of the green jobs of the future.

To rebuild business, the Chancellor also needs to listen to business. We are less than a week from the end of the lockdown, yet we have heard nothing about whether extra support will be provided through the additional restrictions support grant for areas subject once again to tough restrictions. The Chancellor is still threatening employers with an increased contribution to furlough in January, at the worst possible time for increasing and building confidence.

In fewer than 40 days, we are due to leave the transition period, yet the Chancellor did not even mention that in his speech. There is still no trade deal, so does the Chancellor truly believe that his Government are prepared and that he has done enough to help those businesses that will be heavily affected? Will he take responsible action to help those excluded from Government support? Why is he still refusing to make the speedy fixes to universal credit that Labour has advocated, which would aid the self-employed, and why will he not provide families with certainty by ensuring that the increase in universal credit continues beyond April?

The IMF has made it clear time and again that now would be the worst time to slam on the brakes and put the car into reverse. It has called for a “meaningful additional push” from our Government to maintain fiscal support until the recovery is on a sound footing. The UK’s GDP is 10% smaller now than it was at the end of last year. We have seen the worst downturn in the G7. We needed ambitious action today to stimulate growth and maintain demand, and we needed the Government to take responsibility for the real reasons why people and communities up and down our country are being held back.

Over the past 10 years, child poverty has risen by 600,000. We have had the worst decade for pay growth in eight generations. The cost of childcare has risen twice as fast as wages. The number of young apprentices has plummeted. In the last quarter, we saw the highest level of redundancies on record. Social care is in increasing crisis and, although the Conservative party’s manifesto promised a long-term solution, we are still waiting.

It was trailed in the press that the Chancellor would be moving 20,000 jobs out of London, cuts to local authorities over the past 10 years have seen 240,000 jobs lost—12 times that figure of 20,000—with the hardest-hit communities often those in the north, midlands and south-west. Today, the Chancellor could have matched his Government’s promise to do whatever is necessary to support local authorities through this crisis; he did not. And yet again he showed his Government’s lack of confidence in their own measures by failing to provide an equality impact assessment.

The measure of this Government will not be the number of press releases issued during this crisis or the number of pictures published on Instagram; it will be the responsible action that they took, or did not take, for the sake of our country.

Next year, the eyes of the world will be on the UK as we assume the presidencies of the G7 and the UN Security Council and host the COP26 summit, yet now is the time that the Chancellor has turned his back on the world’s poorest by cutting international aid. It is in Britain’s national interest to lay the foundations for economic growth around the world—no wonder many British businesses have condemned his move.

Businesses have been more and more vocal about the problems with this Government’s last-minute approach, always one step behind when we need to plan responsibly for the future. We must learn the lessons from previous failures and ensure that the next challenge—the roll-out of the vaccine—is dealt with as efficiently, effectively and speedily as possible.

Next time, we need a comprehensive spending review that takes responsible choices—to build a future for our country as the best place in the world to grow up in and the best place to grow old in. People should have opportunities on their doorstep, not at the other end of the country. Everywhere in the UK should feel like a good place to set up home. That is what the Chancellor must deliver.

I will address all the points made by the hon. Lady in turn, but it is important to note, up front, that despite her criticisms, there is actually a lot that she and her Opposition colleagues should welcome: more funding for public services; a pay increase for NHS workers; support for those on the lowest incomes; a once-in-a-generation investment in infrastructure; a multi-billion pound commitment to support those looking for work; a new schools building programme; and the Prime Minister’s 10- point plan. I could go on, Mr Speaker.

It is right that the hon. Lady should provide challenge, but I think, even if she does not, that the British people will judge this spending review as a reflection of their priorities: protecting jobs, defeating coronavirus, strengthening our public services and upgrading our infrastructure. If there is any politics here at all, surely it is unifying, and I think that, deep down, she will recognise that.

Let me address the specific points. The hon. Lady asked about pay and the importance of consumption, and I agree that of course there is an impact on consumption from pay. She will know that the marginal propensity to consume is obviously greater the lower down the income spectrum you go, which is why, in particular, we have protected the incomes of those on lower incomes.

Anyone in the public sector earning less than the UK median salary of £24,000 will receive a pay rise of £250 or more. Taken together with all the other things we have done, including giving a pay rise for those who work in the NHS, this will mean that the majority of public sector workers will see an increase in their pay next year. Also, pay progression and promotions—all of that—will carry on. We have increased wages for those on the national living wage: an extra £345 a year, as the wage rate goes up to £8.91. That, again, will help to drive consumption.

The hon. Lady rightly talked about delivery. We believe very firmly in making sure we can deliver the change we promised the British people. The Chief Secretary to the Treasury, my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), and I chair something called Project Speed, which is already delivering benefits, with plans for the landmark A66 upgrade shortened in time and reduced in cost, so we can get on with delivering what the people want on time and on budget, making a difference in their communities.

The hon. Lady asked about the levelling-up fund and, I thought rather bizarrely, seemed to suggest that local Members of Parliament were not a good reflection on their local communities and able to articulate the local needs of their communities. I say to colleagues on the Opposition Benches that I am more than happy to hear from them and their local areas about the needs that they want to be met, because this Government will meet the needs of local communities up and down the country.

The hon. Lady talked about support for businesses during coronavirus. We have already put in place support through this winter period. The local restrictions grants we announced a while ago are paid monthly and they work. If your business has been closed, you will receive a grant of up to £3,000 per month depending on your rateable value. If you are a hospitality, leisure or accommodation business in a tier 2 area, where obviously the restrictions have an impact on your ability, you will receive a grant of 70% of that value up to £2,100. Those amounts mean that the businesses can help to cover the fixed costs of rent. They, of course, have access to the furlough scheme throughout the winter.

That comes on top of the other recent support announced for businesses. Today, I announced major reforms of the way the apprenticeship system works, giving businesses what they have long asked for: the flexibility to spend unused apprenticeship levy funds down the supply chain with small and medium-sized enterprises, and the ability to front-load payments for training. We are looking at ways to introduce even more flexibility for some professions. We also recently announced an extension of the annual investment allowance for a further year up to £1 million, giving 98% of small and medium-sized businesses the ability to write off investments in full next year, which will help to drive their recovery.

The hon. Lady talked about welfare. Again, I stand here proud of this Government’s and previous Conservative Governments’ record on this issue since 2010: hundreds of thousands fewer people in absolute poverty; several hundred thousand fewer children living in workless households; and income inequality lower coming into this crisis than when we first came into office.

This Government care greatly about those who are most vulnerable. We have demonstrated that during this crisis by the support we have put in place. The evidence shows that those on the lowest incomes have been protected the most by this Conservative Government. And that does not stop. The temporary uplift in universal credit runs all the way through to next spring, providing security for those families. Of course we will look, when we come to next spring, at the best way to support people and their families when we have a better sense of where the economy is and where we are with the virus, but we are providing extra support for next year: £670 million to help struggling families meet their council tax bills, worth about £150 each for families up and down the country. We have said we will maintain the £1 billion increase in the local housing allowance that we instituted this year into next year, providing support for many millions of families. We are also making available further funds, as the House knows, to provide extra support for food and meals for children throughout the holidays next year.

The hon. Lady talked about support for local authorities. Perhaps she has not seen it yet in the document—that is fair enough—but we announced over £3.5 billion of extra support for local authorities next year specifically to deal with coronavirus. That comes on top of their core spending power increasing at decade-level highs of 4.5%. The £3.5 billion is there to help to meet the shortfall in sales fees and charges, and the unrecoverable losses in business rates and council tax that they have experienced this year, as well as £1.5 billion for general pressures. Let no one say that we are not standing behind our local authorities at this difficult time.

Finally, the hon. Lady asked about green issues. I think she compared us with France and Germany and questioned this Government’s and the Prime Minister’s ambition. Let me say this about our plans. They are, I believe, among the most comprehensive and ambitious of any developed economy. She talked about France and Germany, but in this country we are phasing out certain vehicles in 2030; in France, it is 2040. In this country, we are phasing out coal in 2025; in Germany, it is 2038. She talked about the billions of pounds being spent by our friends, but it is important when we make these international comparisons that we understand the detail of what the other countries promise. The German numbers include the subsidies for renewables; ours do not. That happens separately outside our plan and is worth £44 billion, supporting renewable energy in this country through the tariff system, which is what Germany alluded to. The German numbers also include support for public transport, which ours of course do not, because that is something we do just in the ordinary course of business. I am proud of this Conservative Government’s record. We are the first major economy in the world to legislate for net zero, and our economy has decarbonised faster than any other in the last 20 years. This Conservative Government will deliver the Prime Minister’s plans to get us to net zero, and that is something that I hope the whole House can welcome and support.

This spending review puts the full force of the Government behind the priorities of the British people, and while we may have many disagreements with the Opposition, I am confident that, in private at least, they will recognise the significant investment we are making to protect jobs, strengthen our public services and improve our infrastructure. We in this House are all answerable to the people we represent, and it is in their interests that we serve. Today, we have made some difficult choices to fulfil that responsibility, but with the positive news about the development of vaccines, the winter covid plan being announced by the Prime Minister and the very real hope that we are finally entering the final stages of our fight against coronavirus, now is the time for us to come together. The British people have been through so much this year, as have right hon. and hon. Members, and it is my belief that, with this spending review and the fresh hope given by medical advances, we can finally begin our recovery. Now, difficult decisions and all, we must deliver on the priorities of the British people.

I very much welcome many of the positive measures that my right hon. Friend has just announced. However, he has inevitably revealed some of the more difficult decisions that he has to make around a reduction in overseas development aid and the freezing of public sector pay next year—not across the board but on a selective basis—and there will be many difficult decisions of that type around spending and taxation in the future. Does he agree that, in terms of dealing with the deficit, it is not just about spending and taxation but also very much about growth? Does he also agree that we should look to private sector businesses and entrepreneurs to provide that growth? Can he set out how he is going to ensure that, as we come out on the other side of the crisis, businesses and entrepreneurs are given every possible support and freedom to power our economy forward over the years ahead?

I completely agree with my right hon. Friend that we will build our recovery through the dynamism of the private sector, and he is right about the power of entrepreneurship. Probably the most important thing we can do in that regard is make it as easy as possible for businesses to take on new people. He will have heard about the unemployment numbers. We want to get as many of those people as possible back into work as quickly as possible, so we will be looking at how we can make that as easy as possible for those dynamic businesses that are growing. At a very micro level in this spending review, we have also announced more funding for our start-up loan scheme, which provides discounted Government-backed loans of up to £50,000 for budding entrepreneurs to start their new businesses at the smallest level. I hope that that is something that he will support.

This spending review was an important opportunity and an important test, and instead of posing for photographs in his favourite hoodie, the Chancellor should have been listening to those who are struggling. Spending £29 million on a festival of Brexit while they let weans go hungry at home and abroad just about sums up this tawdry Government. Reneging on the 0.7% aid commitment while the world struggles with a covid pandemic is just cruel. He says he has come to talk about jobs, but how many jobs has this Chancellor cost? Last month, the Office for National Statistics reported that since March 2020 the number of payroll employees had fallen by 782,000, and how many job losses could have been avoided if the Chancellor had not wound back furlough and threatened to cut it short? With a reported £1.4 billion for Jobcentre Plus, will he restore the job centres in Scotland that were closed by his Government?

What about those who have been ignored, patched, and blanked by the Chancellor at every turn—those excluded from his support schemes altogether, many of them limited company directors, freelancers, short-term PAYE workers, new starters and those on maternity leave, who have had absolutely nothing at all from this UK Government? He knows this and it is unjustifiable. He might have had some excuse back in March and April, but we are now in November, so I ask him: what does he expect these 3 million people to live on this winter? Will he look at the proposals for the directors income support scheme and the Equity creatives support scheme? Many of those excluded are in jobs in sectors that cannot safely restart owing to the public health restrictions, so he must apologise and he must take action to put it right.

The Chancellor has spoken of the importance of getting young people into jobs, but he has utterly failed to address the reality of low-paid, part-time, precarious work. The Young Women’s Trust says that a staggering 1.5 million young women have lost income since the start of the pandemic. Many of them are in sectors such as retail and hospitality that have been clobbered by covid. What he should be announcing today is a real living wage: £9.50 an hour, as set by the Living Wage Foundation, not his pretendy living wage. I am glad to see that over-23s are eligible, but he said nothing about those in the 21-to-24 bracket, who are on £8.20 an hour, the 18-to-20s, on £6.45 an hour, the under-18s, on £4.55 an hour, and apprentices, on merely £4.15 an hour. What about them? Young people do not get a discount on their rent or their bills because of their age, but this Chancellor continues to short-change them in wages. A fair wage for a day’s work is the very least young people should expect from their Government. In not acknowledging the injustice, the Chancellor fails to protect the rest of our young people.

We need fair wages, too, for public sector workers. It feels as though the Government are punishing people for working in the public sector. The absolute heroes who saw us through this pandemic have more than earned their pay. A public sector pay freeze takes £4 billion out of the economy, squeezes living standards, and starves the economy of investment at the very worst possible time. These are the hospital porters, the teachers, the jannies, the police officers and the firefighters: those who kept our streets clean and our public services going. All of them—all of them—deserve better than applause on the Chancellor’s doorstep in the summer and a pay freeze in the depths of winter.

Not content with short-changing young people and public sector workers, the Chancellor wants to change RPI in a move that will impact in about 10 million pension incomes and will cost retirees over £100 billion. SNP Members urge him to see sense and not to pick the pockets of our pensioners. He must also use this spending review to make the £20 uplift to universal credit permanent, scrap the benefit cap, and extend the £20 uplift to legacy benefits and those with disabilities—who, for unfathomable reasons, he seems to have forgotten even exist—and to increase the pitiful level of statutory sick pay.

Businesses across the country have been racking up debt while their incomes have not been there. Businesses are terrified by business rates relief coming to an end next year. Will the Chancellor look at this issue so that we can also act in Scotland? Will he make the VAT cut for the hospitality sector permanent to see it through this crisis?

We still await proper details of the shared prosperity fund and what it will mean for Scotland. The Scottish Government have done their part in preparation, and the Chancellor needs to bring forward proposals as a matter of urgency so that we can spend this money properly in Scotland rather than having it hived off to Tories in key seats in England.

The spending review is only for one year, and I appreciate why that is, but this failure to plan effectively for the future is why the UK is doing worst in the G7. What are the Chancellor’s plans for next year if things do not go as he expects? There is nothing in his statement about Brexit and the cost that that will bring, when we see lorries queuing all the way through Kent. We call on him also for a £98 billion stimulus to invest in a greener, better future for us all. None of this really has anything to do with the strength of the Union; it is merely a reflection of the powers that he has as Chancellor that the Scottish Government do not. So if he will not do these things—if he will not act—he must devolve the full financial powers and let the Scottish Government get on with the job.

Let me run through the hon. Lady’s questions in turn. She asked about my favourite hoodie. I can tell her that it is not the one in the picture, but actually the kickstart hoodie that was given to me by the Secretary of State for Work and Pensions, which I wear with pride.

The hon. Lady asked about the self-employed. and again mentioned this number of 3 million people. I would like to address that point properly. It is not a number that I recognise, and I do not think that it is right to describe those people as excluded, as 1.5 million of those people are not majority self-employed; they are people who earn the majority of their income from being employed. That decision was taken to help target the support at those who really needed it. We have heard a lot from Opposition Members about support being targeted, especially regarding the self-employment scheme. That decision was made because if someone earns the majority of their income from employment, it is reasonable to assume that they will benefit from the furlough scheme, and that is how the majority of their earnings come in. That principle was supported at the time by every trade association that I spoke to when designing the scheme. In fact, those conversations were supportive of a much higher threshold than the one that we adopted, which was just “a majority”; others said that 60% or two thirds would be reasonable.

I hope that it is also of comfort to the House to know that the median amount of self-employment income that those 1.5 million people who are not majority self-employed have in their returns is somewhere between £2,000 and £3,000, so it is not the overwhelming part of their earnings. At that level, the universal credit system and other support that we provide will be significant in making up the difference.

The hon. Lady asked about welfare and again mentioned universal credit. I guess it is worth reminding the House that the Scottish Government have plenty of powers over tax policy and welfare policy—and, indeed, have used them in the past. I hear that there is to be a Scottish budget. We look forward to seeing what the Scottish Government decide to do with the powers that they have over both tax and welfare decisions.

The hon. Lady asked about jobs and talked about the OBR. I am glad that the OBR has today joined the IMF and the Bank of England in commending the Government’s economic response and recognising and stating explicitly that the interventions that we have put in place have reduced the level of unemployment and saved people’s jobs. I think that the OBR actually quantified that in its report today, putting the number at hundreds of thousands and confirming what the IMF said—that our response has held down unemployment.

The hon. Lady asked about young people. We are determined to help young people. They have borne the brunt economically of this crisis, which is in part why we created the kickstart scheme—an ambitious programme under which, I think, 19,000 fully funded placements have now been created for those under the age of 24 who are at risk of unemployment. We also provide a cash bonus to businesses to take on new young apprentices. All those things will make a difference to our young people at what is, without question, a very difficult time.

The House will be glad that the Chancellor has met the needs of the poorest, that he is going to maintain the increase in the state pension and that he is ensuring that people have opportunities to get back into work if they have been out of it. He talks about the £250 minimum for the lowest-paid people in the public sector. May I ask him whether that includes people working in local government, or just those working in national Government? It would be useful to know that.

There will be a welcome for the increase in spending for schools. There are also many other things that people will think are sensible and that could—or should—have been done as the Labour Government went through the crisis in 2008, when they also implemented a public sector pay freeze. May I put it to the Chancellor that it would be incredible if the Independent Parliamentary Standards Authority were to force a pay increase on Members of Parliament when others do not get it? One way or another, will the Government—and perhaps you, Mr Speaker —talk to IPSA and ensure that that does not happen? I have the view that MPs’ pay should only be adjusted after a general election; that may be a minority view, but I think it would be wrong for us to have pay forced on us when others cannot get a pay increase.

Let me turn to overseas aid. When the Departments were merged, the Foreign Secretary said that the 0.7% figure would be maintained. My right hon. Friend the Chancellor was elected in 2015, as I was, under a commitment to meet 0.7%. We were re-elected in 2017, and the only difference in 2019 was that the word “proudly” was put in front of that commitment. I am proud of that commitment. I will work with anyone across the House to make sure that a change of percentage does not happen. Obviously, with our GNP coming down by 10%, the amount that goes on aid will come down automatically. I fight to maintain the pledge that the Prime Minister, the Chancellor, the Foreign Secretary and I made at the last general election.

Order. I do not like being brought into the situation on pay. What I would say is that there is no decision on pay; there is no award to MPs. There is a big mistake out there somehow that there is an amount that has been given. Let me reassure the Father of the House that that is not the case. It will not even be looked at until next year—probably later, towards Easter.

I am grateful to my hon. Friend for his thoughtful and powerful contribution. I respect what he has to say on aid. He is right about the language that was used. He will know the extraordinary circumstances that this country and this Government are grappling with. In order for us to meet our many other commitments and deliver on the British people’s priorities, we have had to make difficult decisions. Of course, it is something that I regret that we have to do, but I believe it is the right decision so that we can keep delivering on the priorities of the people at what is an enormously challenging time.

I turn briefly to my hon. Friend’s other questions. On local government employees, he will know that those pay levels are not mandated by central Government, and local government will typically make its own decisions. With regard to the social care workforce, which I know he also cares about, he will know that many of those workers are on the national living wage and will benefit from the 2.2% uplift—£345—that we have accepted.

On my hon. Friend’s last point, I can tell him that the Chancellor of the Duchy of Lancaster wrote on behalf of the Government to IPSA in advance of this statement to inform it of the Government’s approach to public sector pay and to ask it to take that into consideration when it decides what it would like to do. Obviously, it is an independent body, but we have expressed our views in the light of the pay policy that we have announced today.

I listened intently to the Chancellor, but what I did not hear was enough—enough to protect jobs by extending furlough to the summer, enough for those in the public sector who have endured so much in this crisis and now will have a pay freeze, or enough for those millions of families facing enormous financial hardship because they are excluded. I point out to the Chancellor that they do exist; I can give him plenty of examples of people who phone my office every day in deep distress. Will he, for a minute, pause and put himself in the shoes of those 3 million excluded people, and then tell us why he still finds it acceptable to turn his back on them?

I very much hope that the hon. Lady will welcome the £2.4 billion in additional funding that has been provided for the Scottish Government to use as they see fit. Of course, they can use that to support many of the causes that she articulates. In the interests of time, I will not go over the answer I gave to the hon. Member for Glasgow Central (Alison Thewliss), but we have provided comprehensive support to those who are self-employed; between 2.5 million and 3 million people have received £14 billion of support, with more to come. It remains one of the most generous ways to treat the self-employed that I have found anywhere in the world.

I welcome this statement and the fact that the Chancellor recognises that debt has to be paid back. May I ask him about the changes in public sector pay? According to the ONS, private sector pay has fallen of late, whereas public sector pay has gone up by about 4%. The Chancellor’s announcement today that the 2 million lowest-paid public sector workers will receive £250 shows, does it not, that they are our priority? They are the people who need this most and they are the people we will give attention to.

My hon. Friend is absolutely right. It would be wrong to describe a situation in which a majority of those working in the public sector next year will see an increase in their pay as a blanket pay freeze. We have done exactly as he suggests: we have targeted our resources at those who need them most, which means that over 2.1 million people who earn less than £24,000 in the public sector, who comprise 38% of all those in the public sector, will see that increase of £250 or more in their pay packets.

We welcome the additional £900 million for the Northern Ireland Executive—yet again, a benefit of Northern Ireland being part of this United Kingdom. I think we all believe that nurses, doctors and healthcare workers should receive a decent pay rise, but will the Chancellor acknowledge that there are other public sector workers who have been on the frontline on covid, such as our armed forces and our police officers, and look again at including them in the public sector pay rise? Of course, I agree with the Father of the House that that should not include Members of Parliament.

I am grateful to the right hon. Gentleman for welcoming the £900 million in Barnett funding for Northern Ireland. He will be pleased to know that we have had productive conversations about fixing some technical baseline issues for the budgeting as well, which I know will be welcomed by the Executive.

With regard to pay, we are protecting those who earn less than the UK median salary. Whichever part of the public sector they work in, someone who earns less than £24,000, will receive the £250. It is the right approach to provide that support for those with lower-than-average earnings.

I lend my support to everything said by the Father of the House. Covid-19 means that the Chancellor’s strategy is broken into three phases: first, as we are doing now, spending everything necessary to stop the economy collapsing, which he is doing successfully; secondly, essentially from next spring, doing everything possible to maximise growth and recovery in the economy; and thirdly, after that, when things get on to an even keel, returning to conventional economics. Does he agree that the enormous deficit inevitably created in the first and second phases of the strategy needs to be financed in a similar way to major incidents such as wars, with very long-term bonds, not destructive short-term taxes?

I am grateful to my right hon. Friend for his comments. I would distinguish between two things. The borrowing that we are carrying out this year, which is, as he knows, at a peacetime high, is financed through the gilt markets. He will be pleased to know that we push as much as we can to the long end of the curve relative to our international peers; the average maturity of our debt stock is about 14 or 15 years, which is almost double the average of the G7. He is right to suggest that we should do that. I would differentiate that from an ongoing structural deficit, which is with us for many years. As he said, our first priority coming out of this will be to get growth going again.

On average, Wales received £400 million a year from EU structural and investment funds, sadly well above the UK per capita average owing to our greater relative need. Promises have been made that Wales will receive not a penny less from the UK shared prosperity fund. The Chancellor has stated that he will match total UK funding, but will he also confirm that Wales’s share will not be diminished, that it will represent additional investment, and that the fund will be allocated according to need?

We have said that as the EU funding that we are currently financing runs off, we will step in and replace it up to the tune of about £1.5 billion, which is the UK amount. Obviously there are conversations to be had about how best to allocate that, to what kinds of projects, and how it should be done. Some initial thoughts on that are published today, alongside the annoucement of more than £200 million of funding to start piloting the approach and working with communities to see what works best. I know that people in Wales will welcome that, and I look forward to seeing the proposals that they come up with.

The Chancellor was right to say that people want to look back and see that their community is better off than before. I want to pick up the point about the shared prosperity fund. Cornwall also received European funding and has been promised the shared prosperity fund, but it is often difficult in areas where the population is not so large to demonstrate value for money to the Treasury, and as a result we miss out. As he sets out more on the levelling-up fund and the shared prosperity fund, wages in Cornwall remain stubbornly low. Can he reassure me that those funds will address low wages, provide good jobs, improve skills, and provide the pathway to the skills and opportunities that people in Cornwall need?

I commend my hon. Friend, because he consistently comes to the House to champion his constituents and talk about increasing the opportunities available to them. He is right: that we want to make sure that we target our resources at the places where they can make the most difference. I look forward to hearing from him what projects he thinks will be able to transform the lives of his constituents and the communities that they are proud to call home.

The Chancellor speaks of a fiscal emergency, but said not a word today about the climate and nature emergencies. There is a real risk that any green steps will be fatally undermined by the reckless pursuit of business-as-usual, environmentally destructive spending, such as the £27 billion road-building programme. He has said that there can be no lasting prosperity for people if we do not protect the planet, so will he adopt a new economic rule—a net zero test—and assess all spending and fiscal measures against the UK’s climate and nature goals, so that the whole package is properly green?

The Government firmly believe in making sure that the recovery is green. I urge the hon. Lady to have a look at the national infrastructure strategy that we have published today, entitled, “Fairer, faster, greener”, which outlines the funding for all the green measures contained in the Prime Minister’s 10-point plan. I think it represents a comprehensive and ambitious path to deliver our net zero commitments.

I thank my right hon. Friend for his courtesy over the weekend, and I assure him of my very strong support for virtually all of his package today. As a result of the pandemic here in the UK, 50,000 people have died and we are rightly moving heaven and earth to prevent more deaths here at home. Is he aware that his proposed breaking of the 0.7% promise and the 30% further reduction in cash will be the cause of 100,000 preventable deaths, mainly among children? This is a choice that I for one am not prepared to make. None of us in this House will be able to look our children in the eye and claim that we did not know what we were voting for.

I am enormously grateful to my right hon. Friend for the conversations I have been able to have with him, and I fully respect his passion on this subject. He brings an enormous amount of experience to this House on this topic, and obviously he will have heard the reasons that I set out for doing what we are doing. I believe we can still make a difference to the world’s poorest countries with the measures that we have put in place. The most pressing issue that the developing world faces at the moment is the ability to deliver and deploy a coronavirus vaccine. He will know that we are the largest donor globally to the COVAX advance market commitment, the global initiative that is supporting developing countries’ access to vaccines. Right now, that is probably the most important thing we could be doing. We are doing it. We are leading the world in helping to tackle coronavirus. I know that my right hon. Friend and I will carry on this conversation.

The covid pandemic has exposed structural weaknesses in our economy and society, but it is also likely to accelerate change in how people work, live and interact. May I also point out to the Chancellor that the excluded are a genuine problem? One of the difficulties is that the Government are not counting those who are sole directors of limited companies as part of the self-employed, which is how the figures are coming across as confusing. Does the Chancellor accept that public spending should not necessarily assume a restoration of the status quo ante but must be based on a transformation of our society and economy involving social justice, inclusion, reskilling and investment in a green new deal?

We want our recovery to be green, and the national infrastructure strategy sets out an ambitious way to do that. Skills are at the heart of what we believe, giving people the tools they need to improve their lives and go on to better things. We are providing £375 million today to deliver our commitments on the Prime Minister’s lifetime skills guarantee and other matters. The hon. Gentleman can rest assured that that remains an area of enormous focus for this Government.

In the light of the difficulties the country faces with its finances, I was pleased to see the commitment to infrastructure. Is the Chancellor aware of Hinckley bridge on the A5, which has been awarded the status of “most bashed” bridge in Britain? It has been hit 25 times and causes a delay of six hours every time. It is a prime example of the pinch points littered up and down the A5, which strangle productivity. Will he commit to providing funds for the likes of the A5 to bring prosperity to the midlands and grow our economy out of the covid situation?

My hon. Friend articulates well an example of local pinch points being a blight on communities, preventing people from improving the quality of their lives and driving growth. It seems from a very good example of the type of project that those running our new levelling-up fund would be interested in, and I look forward to discussing it with him further.

Throughout the corona crisis, public sector workers in all areas have delivered brilliantly and helped to save lives and look after all our communities. Civil servants have lost 19% in wages over the past 10 years owing to austerity, and there is a 12% gender pay gap that affects them. Will the Chancellor recognise the importance of their work and their participation and give an increase of 10% to begin to make up the ground that they have lost over the past 10 years? Instead of saying to them that, as thanks for all their work, they will get a maximum of £5 a week for the lowest paid, will he return to proper national pay bargaining for all civil servants, so that those people who deliver for us are seen to be treated properly and fairly as we come out of the corona crisis?

I am glad the right hon. Gentleman gives me an opportunity to thank my fantastic team of civil servants in the Treasury, who have been extraordinary in their hard work and creativity throughout this crisis, and have remained so over the past few weeks in concluding the spending review. I put on record my thanks to them.

Unsurprisingly, my numbers are slightly different to those of the right hon. Gentleman. According to the ONS, before this crisis even started in 2019, there existed at least a 7% pay premium between the public and private sectors after accounting for characteristics and pensions. That gap has no doubt been exacerbated and widened over the past six to 12 months as a result of widening inequality between public and private sector pay. That is why I believe it is fair to take the approach we have, but I share with the right hon. Gentleman a desire to protect those on lower incomes, which is why those 2.1 million people who earn less than £24,000 will receive a pay rise of £250.

I commend the Chancellor for having to make some very difficult decisions, but as President-elect Biden commits himself to a new era of western leadership, here we are about to mark the start of our G7 presidency by cutting our overseas aid budget. Downgrading our soft power programmes will leave vacuums in some of the poorest parts of the world which will further poverty and instability. It is likely to see China and Russia extending their authoritarian influence by taking our place. Will my right hon. Friend concede that we cannot genuinely claim to be global Britain, or claim to be serious about creating post-conflict strategies for countries such as Libya and Yemen—strategies that could lead to greater UK prosperity —when our hard power is not matched by our soft power? Will he meet me to discuss how these dated rules governing overseas aid should be updated?

My right hon. Friend will, I am sure welcome the very significant increase in our defence budget, for which he has campaigned to fix many of the issues of the past. He also alluded to our ability to help lots of different parts of the world in lots of different ways; Libya was one example that he gave. He will know that we are the fifth largest contributor to the UN’s peacekeeping operations. He makes a good point about aid rules. For example, we spend about half a billion pounds every year on peacekeeping and security operations in countries such as Libya, Mali, Somalia, Sudan and the Democratic Republic of Congo. That spending, that difference we make on the ground and that security that we bring to some of the world’s poorest places is not currently counted as overseas development aid.

The Chancellor has spoken well today of the scars that are felt by so many in society owing to the triple whammy of covid, climate change and Brexit. Will he outline how he will manage to ring-fence money for mental health within the health spend? Mind, the charity, has said that phone calls have doubled, with many young people experiencing debilitating anxiety, depression and self-harm. Will he urgently look at mental health and ring-fence money for workforce changes, which are desperately needed, and for a decent revenue spend to bring mental health up into line with physical health?

The hon. Lady makes a good point, and I am pleased to tell her that of the £3 billion of extra money for the NHS that we have announced for next year to help recovery from coronavirus, half a billion is specifically earmarked to address waiting times in mental health services, to give people the support they need and to invest in the workforce that she rightly identified. I hope that gives her some reassurance. It is incremental to the existing NHS plans.

I congratulate the Chancellor on how he has handled the financial pressures that the pandemic has thrown at the Government, by thinking outside the box with brilliant, innovative solutions. However, I cannot support the new tiering system, because it is totally illogical and will force too many people to stay holed up at home. Hospitality businesses will fold in their tens of thousands, and I cannot condone that when they have spent tens of thousands on becoming covid-safe.

I will also not support the reduction in the aid budget. This country has made an amazing difference to the lives of millions, but with the reduction of GNI and the proposed cut, the aid budget will be decimated. No longer will girls have 12 years of quality education—resulting in more child marriages, more instances of early childbirth, more female genital mutilation and more domestic violence. We will not be vaccinating millions, preventing polio and TB, providing medication for HIV or preventing malaria. We will be reduced to spending on humanitarian crises in emergencies only—

Order. Please could we just have a question?

So many things will be damaged, and our relations with the developing world will lose the soft influence that we have today. I cannot condone this, and therefore I will not be supporting the statement.

My hon. Friend makes a passionate case, and a right case, for our ability to help provide immunisation to the world’s poorest children. It is something that I proudly support, and I am happy to tell the House that we are the largest donor to the Gavi consortium globally, of any country in the world. That is the multilateral body that provides immunisation against infectious diseases for 75 million children, and as I have said, we are proudly the largest donor to that effort.

Order. I just remind Members that we must not have a speech and eventually a question. Can we get quickly to the questions so that we can get everybody in?

In this covid crisis, the Government have presided over an horrific double whammy of one of the largest per capita death rates in the world and the deepest recession in the G7, and that is before the Brexit disruption due at the end of the year. Is the Chancellor really proud of his record?

My priority throughout this crisis has been protecting jobs. I am pleased to see that that is something the OBR, the Bank of England and the IMF all acknowledge has happened as a result of our interventions. We currently have an unemployment rate that is lower than those of Italy, France, Spain, Canada and the United States. So, yes, I do think what we are doing is making a difference to millions of people up and down the country.

May I commend all the work that the Chancellor has done this year? Many constituents I speak to credit him personally with keeping them in a job.

I am pleased to see that, despite the financial pressures, the Chancellor is investing in transport. We see multi-year settlements for road, rail and active travel, and changes in the way infrastructure projects are appraised to increase the number of transport projects in deprived parts of the country, as well as a green book, a national infrastructure strategy, a red book and a £4 billion levelling up fund—and I am also pleased to see that the Department for Transport is a sponsor. May I ask the Chancellor to keep a watchful eye on how all that is spent? Will he continue to place transport investment at the heart of our recovery and his long-term vision for this country?

I am very grateful for my hon. Friend’s intervention. He is absolutely right, and he has championed tirelessly for his constituents and the country the importance of transport in our levelling-up agenda and in helping to drive growth and spread opportunity. He is also right to say that we should be careful about how this money is spent and make sure that it is delivered. I talked about Project Speed earlier, and I would welcome his involvement in and advice on that. He will notice in the spending review document a new focus on outcomes across public services with a new public value framework. That will deliver what he is asking for.

Could I raise with the Chancellor the issue of statutory sick pay? Even before the crisis hit earlier this year, statutory sick pay in the United Kingdom was not comparable with that in similar advanced economies. Sitting at only £95, is not enough for those who need it for self-isolation, and it is estimated to make up only about a fifth of workers’ wages. Will the Chancellor look at building up the statutory sick pay mechanisms in this country so that they are fit not just for the present times but for the hard times people are going to face in future, and give workers the proper financial security they deserve and are lacking right now?

At the beginning of this crisis, we made changes to the way in which statutory sick pay operates, ensuring that it was payable from day one rather than day four, and payable to those who are self-employed, and we made changes to the way in which universal credit, employment and support allowance and the minimum income floor work—all to enable some of the things that the hon. Gentleman mentioned. It is worth bearing in mind that, according to the last survey evidence we have, a majority of people—something north of 60%—receive more than statutory sick pay as a result of the treatment of their employers.

I recognise that the Chancellor will have made the decision on 0.7% with an extremely heavy heart, but does he recognise that the respect felt for this country around the world is because we have championed causes throughout our history that matter to people everywhere, such as democracy, human rights and the rule of law? One of those causes is tackling extreme poverty. To cut our aid budget by a third in a year when millions more will fall into extreme poverty will make not just them poorer but us poorer in the eyes of the world, because people will worry that we are abandoning a noble ideal that we in this country have done more to champion than anyone else.

I am enormously grateful to my right hon. Friend for the approach that he has taken, and I appreciate our conversations on this topic. Of course he rightly feels passionately about it. As he knows better than anyone, there are many ways in which we exert our influence and our values across the world—aid is just one part. Even at 0.5%, we will still be more generous in terms of a percentage of GDP than almost all our major economy peers—France, Japan, Canada, Italy, the United States—and than the average of the OECD. The values that he cares deeply about I also care deeply about, and I look forward to talking with him further about how best we can express those values and make a difference to those who need our help everywhere we find them.

Charities up and down the land will wonder why the Chancellor has abandoned them today. Charities have already accumulated £10 billion-worth of debt, and 20% of them could fold, despite the extraordinary work they have done for our nation during the pandemic. His statement says that there will be further rationing in the Office for Civil Society. Will he reflect on that and come back to the Dispatch Box with real money to support our valuable charities?

Almost uniquely among other countries during this crisis, we have provided enormous financial support for our charity sector. The Department for Digital, Culture, Media and Sport has distributed £750 million to small and large charities up and down the country. They do fantastic work, and it has been a difficult time for them. That is why this Government stood behind them at a time of acute crisis.

On 26 February, I asked the Prime Minister to offer additional support to Wales over and above the devolved settlement in the face of unprecedented flooding caused by Storm Dennis. The Prime Minister gave an assurance that funding would be “passported” to Wales. Nine months later, with winter approaching, that funding has still not been delivered. What discussions has the Chancellor had about that, and when does he think the Government will be able to deliver on the Prime Minister’s promises to Welsh communities?

I believe we have, with £1.3 billion of extra funding next year for the Welsh Government to spend as they see fit on their devolved competences, of which flood management is one. I am sure that the hon. Gentleman can raise that with the Welsh Government. We in England are doubling investment in flood defences over the next few years to more than £5 billion, protecting more than 300,000 homes, and the £1.3 billion of Barnett funding for Wales will enable that funding to go to where it is needed.

I thank the Chancellor for his statement. Over the last 10 years, we have spent over £100 billion on overseas aid, much of it borrowed. Most of my constituents will understand the difficult decision that the Government have had to make. At 0.5%, our aid spending will be higher than that of most of our neighbours, and probably higher than that the Major Government and many other Governments in the past. The Chancellor has set out the recovery in GDP and growth over the next three or four years, and no doubt the budget will go up again.

I thank my hon. Friend for his comment. He is right—I think the average aid spending of the last Labour Government was 0.36%, so it will be sufficiently ahead of that. As I said, we intend to return to this over time when the fiscal situation allows. My hon. Friend will appreciate better than others the unbelievable uncertainty at the moment, but that is our intention.

May I declare an interest in this question, as I suffer from myeloma, a form of blood cancer?

We all recognise and applaud the incredible work that the NHS and its staff have done for us all in the past few months. In terms of the future, however, does the Chancellor recognise that much research for cancer is funded by charitable donations, which have fallen significantly during recent months for reasons that everyone can understand? To ensure that treatments continue to improve in the future, will he agree to fully fund cancer research to make up the difference in charitable donations, at least for the next few years?

I am grateful to the hon. Gentleman for his question. I know that it is a topic on which he speaks passionately. He will be pleased to know more generally about our record spending on R&D next year of just shy of £15 billion; the exact allocation is for the Department for Business, Energy and Industrial Strategy, but there is a significant increase for basic research. Also, within the Department of Health and Social Care budget settlement, there is about £1.3 billion to fund research for the National Institute for Health Research and Genomics England—both of which do a fantastic job, and I am sure will be working on treatments for us all for many years to come.

I welcome the Chancellor’s continuing commitment to sound money. It is particularly easy to forget, in a year when we have just seen an 11.3% cut in the size of the economy, that ultimately, all the money that we are borrowing must eventually be paid back by us as taxpayers. So I urge him not to lose that focus, and as soon as possible to get back to a sustainable basis. In that context, could he say more about the Restart programme, which he mentioned earlier—a crucial measure to get members of the long-term unemployed back into work? How many people does he expect it to help, and what benefit does he expect that to have for our long-term, sustainable economy?

As ever, my right hon. Friend speaks fantastically good sense. He is right; we will need to return to a sustainable fiscal position, not least to build resilience for the next crisis or shock that comes along. We want to be able to react in the same comprehensive and generous way as we did this time, and that requires us to have a strong set of public finances going into it.

My right hon. Friend is right about the Restart programme, which will help, we hope, around 1 million of those who are long-term unemployed; it will be an exciting and ambitious programme. The Institute for Employment Studies has spoken very well about the evidence in favour of that type of high-quality, individual work-focused approach making an enormous difference in getting people back into work. If we can do that, we can reduce some of the long-term scarring that they will face. So I have high hopes for what that programme can achieve.

I first welcome the £900 million that will be available to the Northern Ireland Executive, which is a reminder to the people of Northern Ireland of the economic security that we have as a result of being part of the United Kingdom. The Barnett consequentials for Wales and Scotland should also be a reminder to the people there of the benefits of the Union.

May I ask the Chancellor one question about the levelling— up fund, the infrastructure bank and the shared prosperity fund? When will he have the details of access to those, and can he assure us that the access to all those funds will be equally available to different parts of the United Kingdom?

I can give the right hon. Gentleman that assurance. Those are UK-wide programmes and we hope to have more details about the infrastructure bank in the spring, so that we can get it up and running, at least in shadow form, as quickly as possible and make a difference to communities all around the United Kingdom.

May I first join my hon. Friends in expressing concern about the proposal to reduce overseas aid, but welcome today’s announcements on, in particular, infrastructure, apprenticeships and research and development, which will create wealth and jobs? I also welcome the substantial support that the Chancellor has provided to help businesses and people get through coronavirus. However, my constituents know that those measures will all have to be paid for, so can he assure them that when this economic emergency is over, he will return to a policy of balancing the books?

My hon. Friend is absolutely right. Although it is right to act in this way during the crisis, it would not be a sustainable way to operate. The important thing to know is that right now the focus should be on supporting businesses and jobs; but once our economic recovery is secure, we can turn our task to making sure that we have a strong set of public finances.

Today the Chancellor has announced a pay freeze for hundreds of thousands of public sector workers who do not deserve it. Firefighters, care assistants and teaching assistants will all suffer a pay freeze. What is the assessment of the economic impact of that pay freeze? There must be one in the Treasury somewhere. What is it?