Spending

UK’s Hunt says government spending will grow slower than the economy

© Reuters. FILE PHOTO: Britain’s Chancellor of the Exchequer Jeremy Hunt walks in Downing Street in London, Britain November 17, 2022. REUTERS/Peter Nicholls

LONDON (Reuters) – Britain’s Finance Minister Jeremy Hunt said on Thursday government spending would grow more slowly than the economy, but overall spending on public services would rise in real terms over the next five years. Hunt said just over half of the £55 billion ($65.21 billion) needed for fiscal consolidation would come from spending cuts. “We will increase public spending – but we will increase it more slowly than the economy,” Hunt said in a speech to parliament. Hunt said that for the remaining two years of the government’s spending review, it would protect departmental budget increases he had already planned in terms of cash. “And then we will increase resource spending by 1% per year in real terms, over the next three years,” Hunt said. Hunt said it would not be possible to restore the aid budget to 0.7% of gross national income from its current level of 0.5% due to the “significant shock to public finances”. He delayed a decision on increased defense spending, saying a new comprehensive review of security policy was needed and would update again in the next budget.
But he announced a £3.3billion boost to the National Health Service budget this year and next, and increased spending on social care and schools over the next two years. ($1 = 0.8434 pounds)