Blake Morgan comments on the Chancellor’s spending review

Amidst the COVID-19 pandemic, at 12:30 pm on Wednesday, the Chancellor of the Exchequer delivered his Spending Review – setting out the UK Government priorities for spending over the 12 months.

Here’s what our experts had to say on his announcements:

Bruce Potter, Chairman at Blake Morgan said: “The Chancellor’s warning that the ‘economic emergency’ we’re suffering as a result of COVID-19 has only just begun will have raised eyebrows across the business community today, but not because of what was said – rather what went unsaid. Not once were Government preparations for Brexit mentioned during the Chancellor’s Spending Review speech, a surprise given we’re less than 50 days from the end of the transition period.

“The reality is that we’re potentially heading into a period where several major issues converge and businesses need to be able to prepare for significant change. The good news is that government guidance on how to prepare for Brexit has improved – particularly on issues such as data, custom, trade and compliance – but the lack of news on a deal is still a concern; and there’s a big difference between securing a deal, and leaving without one. We’re hopeful what happens next will become clearer as we head into the Christmas period, but time is getting tight.”

Richard Wade, Partner and head of the Construction Planning & Environmental Team at Blake Morgan, added: “It’s easy to get lost in the sea of numbers presented by the Chancellor today. The figures associated with COVID-related borrowing and debt are so significant, they’re likely incomprehensible by much of the population even if the impacts are much more stark – fewer jobs, less pay, higher unemployment – in the short-term. But the Government does at least continue to recognise the need to stimulate economic recovery through spending, not cutting costs – or, at least not right now. However, the challenge is how today’s big pledges will really drive change.

“While it’s good news on the surface, the new National Infrastructure Bank may do little more than plug the gap left by the absence of assistance from the European Investment Bank post-Brexit. This alone is important, but it’ll introduce new issues too, particularly as there will inevitably be many competing calls for the provision of funds, meaning this may be the first true test of the UK’s spending priorities.  In light of recent announcements, much hope is likely to be pinned on the funding of new, clean technology being at the front of the queue. Will this remain the case?

“Many of us will also breathe a sigh of relief at the publication of the long-awaited National Infrastructure Strategy today too, and it represents an important step towards efforts to rebalance the country, rebalance the economy, and ensure that the UK’s infrastructure contributes positively towards enabling us to meet our net-zero and climate change commitments. While the devil will be in the detail – especially when it comes to policy changes and new funding mechanisms for major projects – we should view these announcements as being part of a wider package of measures that is needed to enable us to build back better.”