Chancellor Rishi Sunak’s spending review included a rise in the National Living Wage to £8.91 per hour
Rishi Sunak has delivered a spending review to Government as the UK economy faces the largest fall in output for 300 years due to the Covid-19 pandemic.
In his review, Mr Sunak told MPs unemployment will rise to 2.6 million by the second quarter of 2021 and the economy is predicted to contract by 11.3 per cent this year.
Amongst the announcements was a rise in the minimum wage of 2.2 per cent to £8.91 per hour, extended to those aged 23 and over.
He also announced a new UK infrastructure bank, to be headquartered in the north of England, which he says will finance infrastructure projects from next spring, alongside the private sector.
Reacting to the announcements, the SNP’s Treasury spokeswoman Alison Thewliss told Mr Sunak the minimum wage should go up to £9.50, as recommended by the National Living Wage Foundation.
There was also a partial pay freeze for public sector workers but promised to protect the wages of NHS staff and low earners.
NFU President Minette Batters said the announcement was a mixed picture but it was good news for farmers in England that the government has confirmed its manifesto pledge to maintain existing levels of farm support.
“There is still more detail needed on how we transition to a new domestic agricultural policy and it is crucial we hear more detail on this as soon as possible,” she said.
She said the infrastructure investment could be an important source of funding for farmers to ‘drive green economic recovery’.
“For this to happen, it is crucial that these funding schemes, such as the Shared Prosperity Fund, are easily accessible for farm businesses.”
She added she was pleased the commitment to infrastructure included doubling spending on flood and coastal defences, with many farmers still suffering from flooding earlier in the year.
“It is also encouraging to see the government further invest in the rollout of rural broadband and it is absolutely imperative this happens as quickly as possible to ensure the digital divide between rural and urban areas doesn’t continue to widen.”
The Farmers’ Union of Wales (FUW) has branded the UK Government’s decision to slash Wales’ agricultural budget as a ‘Brexit betrayal’, after chancellor Rishi Sunak revealed in Wednesday’s spending review that the budget would be cut by at least £95 million for the coming financial year.
Following a 2019 Conservative Manifesto promise, the Wales’ agricultural and rural development budget was expected to have been £337 million, but the 2021-2022 budget will now be £242 million - a cut of around 28% - while the full loss when projected RDP spend and the 15% pillar transfer is taken into account is £137m.
FUW President Glyn Roberts said the Conservative manifesto said it would guarantee the current annual budget to farmers in every year of the next parliament which he said had secured the votes of many farmers.
Mr Roberts said: “The decision to slash the budget is therefore a complete betrayal of the farmers who have kept producing food and feeding the nation throughout the coronavirus pandemic, and adds to the extreme anger already felt following the UK government’s decision to oppose a legislative ’red line’ in the Agriculture Bill that would have prevented the importation of low quality food in future trade deals."
Direct Payments make up around 80 per cent of average Welsh farm incomes.
“The significant impacts such a cut in funding will have on Welsh farms, agricultural businesses and rural communities are clear, and these will come at a time when the industry is already anticipating major problems due to non-tariff barriers, unfair competition from sub-standard imports and the possibility of massive EU tariff barriers in the event of a ’no-deal Brexit’,” he added.
NFU Cymru said the funding shortfall was a ‘bitter blow at a critical and extremely uncertain time’.
NFU Cymru President John Davies said they had consistently been told funding would be maintained and protected.
“Now we appear to be in a position where Welsh agriculture looks like it will lose £95million of funding that it can ill afford to lose at any time, never mind with widescale and unprecedented changes and uncertainty lying ahead for the sector,” he said,
He added it put the ‘unparalleled contribution’ Welsh farming makes to Welsh society at risk.
“The prospect of such a funding cut is a severe blow to the industry’s future ambitions.
“Regardless of the eventual outcome, Welsh Government must now make a clear commitment that the £242 million announced in today’s Spending Review must be fully committed to the 2021 Basic Payment Scheme in Wales,” he added.
“In addition, we fully expect Welsh Government to spend in full the EU 2014-2020 Rural Development Programme before the end of the 2023 cut-off for drawing down funds.”
He added they were seeking urgent clarification on how the funding shortfall would be resolved.
“If our fears around future funding are realised, I am afraid it will be bleak news for everyone associated with Welsh agriculture and is clearly not consistent with the government’s levelling up agenda. It is simply not acceptable that Welsh farmers will be the ones left to suffer.”
Mark Bridgeman, CLA president, said: “We understand the Chancellor continues to firefight the economic fallout of Covid-19. But this Spending Review did little to show the Government’s mantra of ‘building back better’ will apply to the rural economy.
“Rural productivity is 16 per cent less productive than the national average. If Government takes steps to close that productivity gap, then £43bn will be unlocked into the economy, creating jobs and strengthening communities. This week’s spending review will do nothing to boost economic growth in the countryside.
“The truth is that for the rural economy to achieve its vast potential, Government will need to do a great deal more.
"We need to see Ministers from the Treasury, DEFRA, the Ministry of Housing, Communities and Local Government and other key departments to work together, and with the industry, to identify and deliver new policies specifically designed to create jobs and grow businesses in the countryside.”