Sunak hints at public sector pay freeze but says no return to austerity
Chancellor Rishi Sunak has suggested he could impose a public sector pay freeze in his spending review, but insisted the nation will not see a return to austerity next week.
He is due to announce a multi billion pound plan to invest in long-term infrastructure projects and fund the fight against the coronavirus pandemic on Wednesday.
Mr Sunak insisted it is not the time to impose tax hikes "in the fog of enormous eco - nomic uncertainty", but he did not rule out capping the salaries of millions of public sector workers.
Unions have reacted angrily to the prospect and there is a chance of industrial action if the freeze is confirmed, with Labour saying it would be an "absolute kick in the teeth" for frontline workers.
Mr Sunak told Sky's S ophy Ridge On Sunday: "You will not see austerity next week, what you will see is an increase in Government spending, on day-to-day public services, quite a significant one coming on the increase we had last year."
But, while he said that he "cannot comment on future pay policy ", Mr Sunak added: "When we launched the spending review I did say to departments that when we
think about public pay settlements I think it would be entirely reasonable to think of those in the context of the wider economic climate.
"I think it would be fair to also think about what is happening with wages, with jobs, with hours, across the economy, when we think about what the right thing to do in the public sector is."
The Chancellor also declined to commit to an extension of the increase to Universal Credit that was introduced because of the pandemic but is due to end in April.
Mr Sun akin sis ted he has concerns about the need to tackle the soaring scale of borrowing, but said "there's an appropriate time" to address it.
"Right now the righ te conomic response is to focus on tackling the virus," he told Times Radio. "It wouldn't be right to try and make them now in the fog of enormous economic uncertainty."
Frances O'grady, the head of the TUC confederation of trade unions, appealed to a "sense of fairness" in urging ministers not to impose a public sector pay freeze, which is expected to exempt frontline NHS workers.
"We saw ministers join millions of us clapping fire fighters, refuse collectors, social care workers - I don't think this would be the time to reward them with a real pay cut," she told Ridge.
"If you want to motivate a workforce when we are still facing a second wave of a pandemic, and we're going to have a tough winter - we all know that - the last thing you do is threaten to cut their pay."
Shadow chancellor Anne - liese Dodds said a freeze on public-sector pay would knock confidence out of the economy and would "be pitting different groups of workers against each other".
"To be clear, I do not think there should be that freeze right now. I thinks that's economically very damaging, it's an irresponsible choice," the Labour MP said.
In a speech today, Ms Dodds is expected to say public sector workers must not cover for Mr Sunak's "irresponsible choices and unacceptable delays" with a pay freeze that could jeop - ardise the economic recovery. She is expected to lay the blame for a "jobs crisis" squarely with Mr Sunak as she urges him not to go ahead with a widely-expected freeze on the salaries of millions of workers. The shadow chancellor will use the speech today to call for Mr Sun aktou se his spending review on Wednesday to treat frontline workers "decently, rather than grinding them down". Ms Dodds is expected to say a freeze for workers including fire fighters, hospital porter sand teaching assistants will" make them worried about making ends meet ahead of Christmas ". She should say that a freeze will mean" they' ll cut back on spending and our economy won't recover as quickly". "The British people shouldn't have to pay the price for a government that doesn' t know the value of public money, splurging it on outsourced contracts to Tory-linked firms that don't deliver," she should add, in a speech to Reuters. "And they shouldn't have to pay for a Chancellor who's had to come back week in week out to change his plans, blocked a circuit-breaker leading to a longer, more painful lockdown, and still hasn't acted to fix Britain's broken safety net. "The Chancellor's irresponsible choices and unacceptable delays are damaging the economy. That's why we're in the grip of a jobs crisis - and it's got Rishi Sunak's name all over it." In the spending review, Mr Sunak will unveil a £3 billion package to support the NHS in recovering from the pandemic, with the Treasury saying the NHS will get £1 billion to address backlogs by catching up on checks, scans and operations that were delayed by Covid-19.
About £1.5 billion will be used to ease existing pressures in the health service and £500 million will help support mental health services.
Mr Sunak will also detail the much-delayed National Infrastructure Strategy for £100 billion of long-term spending to help tackle the climate crisis and invest in transport.
The Chancellor will also alter the Treasury's "green book", a set of rules to determine the value of Government schemes which is thought to favour London and the south east of England as he seeks to deliver on the Government's "levelling up" agenda.