COVID-19: Chancellor Rishi Sunak says there’ll be ‘no return to austerity’ in next week’s spending review

Rishi Sunak has told Sky News there will be no return to austerity in his upcoming spending review, but hinted at a future public pay freeze.

Speaking to the Sophy Ridge on Sunday programme, the chancellor said any wage settlements needed to be considered “in the context of the wider economic climate”.

However, Labour has warned a cap on public sector pay would be “a kick in the teeth” for frontline workers who provided support through the pandemic, while unions have argued it would be “morally obscene”.

The growing row comes as Mr Sunak is due to unveil a £100bn plan for long-term infrastructure investment and a £3bn package of new funding to support the NHS in recovering from the COVID-19 crisis.

However, ahead of his spending review, he has also warned over the state of the nation’s finances and the need to get them back on a sustainable footing.

The chancellor told Ridge: “You will not see austerity next week.

“What you will see is an increase in the government spending on day-to-day public services and quite a significant one, coming on the increase that we had last year.”

Failing to rule out a pay cap on millions of public sector workers, he said decisions had to be takenin the context of the wider economic climate”.

“I think it would be fair to also think about what’s 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,” he added.

But Labour’s shadow business minister Lucy Powell told Ridge: “Of course it would be morally absolutely a kick in the teeth, wouldn’t it, for all those frontline workers who helped support us through this pandemic from the bin collectors to those working in public health, in the mortuaries, the fire fighters and so on.

“It would be an absolute kick in the teeth for them after what has been an horrendous few months and might still be a difficult few months to come.”

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