POLITICS
22/11/2020 10:58 PM AEDT | Updated 22/11/2020 11:05 PM AEDT

Rishi Sunak Hints At Public Sector Pay Freeze While Ruling Out Spending Review 'Austerity'

"A pay freeze would be an outrageous attack on some of the workers who sacrificed the most during the pandemic", the GMB union said.

Rishi Sunak has suggested he could freeze public sector pay in this week’s spending review, which he insisted would not be a return to austerity.

The chancellor will set out a multibillion pound plan to invest in long-term infrastructure projects and fund the fight against the coronavirus pandemic on Wednesday.

But despite the fury of unions – who branded the plan “morally obscene” – Sunak suggested he could cap the salaries of millions of public sector workers outside the NHS, pointing out that he stressed the need to “exercise restraint” in pay awards earlier this year.

The freezing of public sector pay was one of the totemic policies of the austerity era presided over by David Cameron and George Osborne as Tory PM and chancellor.

But Sunak told Sky’s Sophy 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”, 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.”

Sunak revealed his concerns about the ballooning scale of borrowing to pay for pandemic-related measures such as the furlough scheme, and a pay freeze would save the Treasury billions of pounds.

But the chancellor insisted now “in the fog of enormous economic uncertainty”, is not the time to impose tax hikes that are opposed by many Tory MPs.

Trades Union Congress chief Frances O’Grady appealed to a “sense of fairness” as she urged Sunak not to introduce a pay freeze.

“We saw ministers join millions of us clapping firefighters, 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.”

The GMB union meanwhile warned that public sector workers outnumber the majorities of new MPs in 43 out of the 54 seats the Tories won from Labour in December’s election. 

Despite the loss of almost a million public sector jobs since 2010, on average public sector workers outstrip the incumbent MP’s majority by 3,400 in seats won by the Conservatives from Labour in the Midlands and the north, the union said.

Rehana Azam, GMB national secretary, said: “A new pay freeze would be an outrageous attack on some of the workers who sacrificed the most during the Covid pandemic. 

“Eight months ago, Boris Johnson and Rishi Sunak promised to put their ‘arms around every single worker’ - now they are coming for the wages of teaching assistants who earn under £14,000 a year, and are already finding it difficult to make ends meet.”

In the spending review, Sunak will unveil a £3bn package to support the NHS in recovering from the pandemic, with the Treasury saying the NHS will get £1bn to address backlogs by catching up on checks, scans and operations that were delayed by Covid-19.

About £1.5bn will be used to ease existing pressures in the health service and £500m will help support mental health services.

Sunak will also detail the much-delayed national infrastructure strategy for £100bn of long-term spending to help tackle the climate crisis and invest in transport.

He 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 so-called “levelling up” agenda.