Chancellor considering a pay freeze
THE Chancellor is considering a freeze on benefits and public sector pay as he tries to deal with the spiralling cost of the coronavirus pandemic.
A senior ministerial ally of Rishi Sunak told The Mail on Sunday that Chancellor Sunak has discussed scrapping inflation-linked increases to welfare payments and public sector salaries.
The potential move is seen as a bold bid to get back the millions he has paid out in economic bailouts since the crisis began.
Mr Sunak initially proved somewhat of a saviour to the masses with his furlough scheme. The Secretary of State has said ending the monetary support scheme to protect millions of jobs had been the hardest decision he has ever had to make.
But it’s clear more tough decisions will need to be taken.
A senior ministerial ally of Mr Sunak told The Mail on Sunday: “Rishi has been absolutely adamant in private that he will have to be able to balance the books after this is all finally over.
‘Hospitals and schools will be protected, but something has to give somewhere.’
The freeze on benefits was lifted before the coronavirus pandemic took hold, as Mr Johnson vowed that there would be no return to the austerity of David Cameron’s Government.
But with unemployment set to rise as high as 4.5 million, the Department for Work and Pensions’ £176 billion budget is under intense pressure.
The public sector pay bill is also likely to be hit with a freeze – although with a possible exemption for NHS workers.
The source claims that the Chancellor is also asking the PM to get rid of the ‘triple lock’ which protects the income of pensioners. Mr Sunak has argued that the ‘triple lock’ – which decrees that the basic state pension has to rise each year in line with the highest of either the growth in prices, the growth in earnings, as measured by the average earnings index in the year to July, or 2.5 per cent – is unaffordable.
But Mr Johnson has resisted moves to abandon it as it was part of his election pledge.
The insider added that the Chancellor feels he needs to ensure his long-term Tory reputation.
His popularity over the furlough scheme and ‘Rishi’s Dishes’ – Eat Out to Help Out initiative – helping business and individuals keep their jobs with taxpayers money – has been described as more socialist in ethos than Conservative.
The news comes as Mr Sunak – whose public poll ratings are higher then the Prime Minister – has been making increasing efforts to consolidate his position with all members of parliament.
According to Mail Online, Mr Johnson in comparison, has been subject to ridicule by Treasury staff for his Operation Moonshot’ plan to mass test 10 million people a day by 2021 referred to in the department as a ‘Moonf***’ moneypit .
ome MPs believe Mr Johnson might step down by 2023 – if not sooner – to give his successor time to settle in at No 10 before the 2024 Election.
And Mr Sunak looks a highly likely leadership candidate.
In response to the possibility of benefit freezes, a Treasury source told the newspaper the Government would not be returning to the era of austerity.