Darling issues warning over cost of pay rise

Philip Hammond should order a spending review to work out how the government will pay for increased spending if it gives in to demands to ease austerity, the former Chancellor Alistair Darling has said.

Lord Darling warned that axing the 1 per cent public sector pay cap could lead to knock-on cuts to public services unless it was clear how it would be paid for.

“What I think Philip Hammond has to do is have a spending review or something like that, because the government has got to set out what its priorities are going to be,” he said.

“Like so much with this government, it’s a pretty shambolic thing when you’ve got cabinet ministers saying what they think and clearly contradicting the Chancellor of the Exchequer. It’s no way to run a government.”

Lord Darling, who dealt with the impact of the 2008 crisis, added: “At the moment, the government isn’t expecting to break even and see the end of austerity until 2025, which is 17 years after the financial crisis. Politically, you can’t run austerity year after year... the government has a real problem at the moment and it needs to sort it out.”