Control over spending poses new questions

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“You can please some people all the time, you can please all people some of the time, but you can’t please all people all the time.”You can please everyone all the time, you can please everyone all the time, but you can’t please everybody all the time.

I would say that the section in the middle that says you should satisfy everybody no longer applies since Covid-19 was released on the planet.

The term came to mind when I thought of last week’s speech by Chancellor Rishi Sunak on the spending examination. Somewhere, there must have been a few people who were content, but for the most part, it was textbook evidence that you can’t please everybody.

By painting a grim scenario, he set standards low. According to the Office for Budget Accountability, the coronavirus and steps to tackle it have caused the economy to contract faster than it has in 300 years (OBR). The economy can be expected to recover once we return to more usual (or even less crazy) days, but it will still be subject to “long-term scars,” as the chancellor so eloquently put it. In human terms, the statistics mean that next spring, unemployment is predicted to hit 7.5 percent. That’s 2.6 million people out of jobs and all the pain that their families are suffering from.

There were some welcome mitigation steps. This year, the Government will have an additional £38 billion for public services to combat the pandemic, and another £55 billion next year, including £2.6 billion for the administrations that have been devolved. This is a start, although it will require versatility. The allocation of resources suggests that next year the pandemic will be less difficult to manage, which we must hope is true. It is promising that options for more tax relief for companies impacted by Covid-19 are being considered by the government, but this should be verified sooner rather than later. When it comes to offering more assistance to companies struggling to thrive, the government needs to keep an open mind.

Another useful first step in addressing the long-standing shortage of infrastructure spending by the UK is the implementation of a UK Infrastructure Plan. In order to transform our transport, energy and digital networks, the UK and Scotland are committed to transforming the economy to generate net-zero emissions, which requires aggressive and sustainable action. The proposed Infrastructure Bank of the United Kingdom should be the vehicle providing critical funding for the transition, which should operate alongside the Scottish National Investment Bank of £2 billion. It is time to put money in place to ensure that these vehicles have the requisite capital base to mobilize the funds required by the private sector to make these infrastructure investments that are necessarily transformative. We have definitely spoken long enough about infrastructure initiatives – now it is time to concentrate on implementation.

The creation of a UK Joint Prosperity Fund to replace the structural funds of the European Union is long overdue, but many questions remain. Companies now need more information about how the program will run and how the new fund will avoid undermining cliffs in current initiatives for economic growth and business support.

In order to identify the core features of the new fund, the government must work closely with industry, including a commitment to maximizing local autonomy, the voice of business and economic development. The Scottish Chambers network across the UK is prepared to face these challenges.

In the Spending Review, there are still some troubling holes that mean that the generosity of the Chancellor might not be adequate to avoid permanent harm to the economy or provide funding for better reconstruction. Businesses need strong incentives to invest in people, growth and the world as we strive to restore and renew local and national economies.

Liz Cameron is the chief executive of the Chambers of Commerce of Scotland.

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