Chancellor Rishi Sunak has been warned against imposing a public sector pay freeze on millions of workers to cover for his “irresponsible choices and unacceptable delays” in a move that could jeopardise the UK’s economic recovery.
His Labour shadow Anneliese Dodds is expected to lay the blame for a coronavirus “jobs crisis” squarely with Mr Sunak as she urges him not to go ahead with a widely-expected cap on the salaries of millions of workers.
The shadow chancellor will use a speech on Monday to call for Mr Sunak to use his spending review this week to treat frontline workers “decently, rather than grinding them down”.
Mr Sunak hinted on Sunday that he could impose the freeze by arguing it would be “entirely reasonable” to consider pay policy in an economy ravaged by the coronavirus pandemic, though it is said to exempt NHS nurses and doctors.
He is due to announce a multibillion-pound plan to invest in long-term infrastructure projects on Wednesday and fund the fight against the coronavirus pandemic.
And he is understood to be preparing to announce £1.25 billion of new funding for prisons, extra money for police recruitment and that the Government’s 10-year schools programme will approve 50 new schools a year.
The Treasury also said nearly £220 million of funding will also go towards the post-Brexit points-based immigration system.
The shadow chancellor is expected to say in a speech to Reuters that a freeze for frontline workers including firefighters, hospital porters and teaching assistants will “make them worried about making ends meet ahead of Christmas”.
The result, Ms Dodds will argue, is “they’ll cut back on spending and our economy won’t recover as quickly”.
“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,” she is expected to say.
“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.”
On Sunday, Mr Sunak insisted it is not the time to impose tax hikes “in the fog of enormous economic uncertainty”, but he did not rule out capping the salaries of millions of public sector workers.
Mr 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”, 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.
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.
“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.