Rishi Sunak warns ‘economic emergency has just begun’ as he unveils last Covid splurge to save jobs and ‘level up’

RISHI Sunak last night took an axe to the bloated Foreign Aid budget and handed £4billion of it to the left- behind parts of Britain.

The Chancellor’s levelling-up surprise delighted Red Wall Tories — yet enraged former PMs, the Church and charities who accused him of abandoning the world’s needy.

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But a poll for The Sun shows he has massive support from the public.

Mr Sunak announced the funds to be spent on projects including upgrading roads and rail in an otherwise gloomy Spending Review as he began to grapple with the worst economic hit in three centuries.

Warning the Covid pain had only just begun, he revealed this year’s virus bill has hit £280billion and a sluggish U-shaped recovery will take another four years.

He earmarked another £55billion for the Covid battle next year, with lockdown and job support set to last until April. And he deferred punishing tax rises until next year.

ECONOMIC EMERGENCY

But in a stark update to MPs, he revealed public debt hit a peacetime record as borrowing topped £394billion this year.

Mr Sunak faces a huge struggle to balance the books after an 11.3 per cent hit to GDP in 2020.

The Chancellor said: “Our health emergency is not yet over. And our economic emergency has only just begun. This situation is clearly unsustainable over the medium term.”

And he began cutting the cloth by freezing the pay of 1.3 million public sector workers for next year.

Nurses, doctors and other NHS workers will be exempt from the freeze.

And 2.1million public sector workers who earn below the average wage of £24,000 will get a guaranteed £250 pay rise next year.

But it was Mr Sunak’s decision to slash the overseas aid budget by billions of pounds that prompted a massive row last night.

The cut sees the Government tearing up a legal pledge and manifesto promise to spend 0.7 per cent of national income on overseas projects.

Mr Sunak told MPs: “Sticking rigidly to spending 0.7 per cent of our national income on overseas aid is difficult to justify to the British people, especially when we’re seeing the highest peacetime levels of borrowing on record.”

Instead of the existing target, 0.5 per cent — about £10billion — would be spent in 2021.

But one minister walked out of the Government in protest and ex-PM David Cameron lashed out publicly at the decision to lower the 0.7 target, which was a flagship policy of his.

'TOUGH CHOICES'

He tweeted: “We share this planet with millions who are starving, with mothers who die needlessly in childbirth and with children who die of preventable diseases and with countries that are broken by conflict, corruption and poverty.

“The questions are: do we care, do we act and do we lead? The promise of 0.7 meant that we — Global Britain — answered ‘yes’ to all three. And that’s a promise worth keeping.”

Archbishop of Canterbury Justin Welby called the decision “shameful and wrong”.

And Foreign Office minister Baroness Sugg quit the Government, telling PM Boris Johnson it was “fundamentally wrong” to go back on the manifesto pledge.

But Mr Sunak insisted that “at a time of unprecedented crisis, the Government must make tough choices”.

As the Chancellor outlined the temporary reduction to the aid promise, 57 per cent of voters backed him compared with just one in seven opposed.

And there is support in every age group, social grade, region, and political party, according to a poll by JL Partners for The Sun.

James Johnson, co-founder of JL Partners and former pollster at No10, said: “This poll is a wake-up call for Westminster.

"Voters are overwhelmingly supportive of a temporary cut in foreign aid: almost six in ten voters support it, with 15 per cent opposed.

“More than that, it has the backing of every age group, region, social class and political party in Britain — including Labour voters and the most affluent.”

The £4billion recovery fund to “level up” the UK will be unleashed across the Red Wall region so pivotal to the Conservatives’ 2019 election success.

Tory MPs in the Northern Research Group welcomed the cash, saying in a statement: “In building back better, we cannot just hope our way out of this crisis, and we cannot just hope for a better economic future, we need to plan for one.

“The Chancellor has shown that he, the Prime Minister and the Government is committed to levelling up the North and delivering on the compelling vision of prosperity as set out at the General Election last year.”

The JL Partners poll also revealed strong support for the announced ban on the sale of new petrol and diesel cars by 2030 — plus the increase in defence spending worth £16.5billion over four years.