Government sources have already raised the prospect of a wage freeze during Wednesday’s spending review, which will only cover one year given the uncertain state of the economy amid the coronavirus.
Doctors and nurses at NHS England are expected to be exempt.
Asked to confirm the pay freeze, the chancellor told Sky’s Sophy Ridge on Sunday: “I can’t comment on future compensation policy before the spending review, but what I would say is that When we launched the expenditure review, I told the departments that when we think of the settlements, it would be quite reasonable to think of them in the context of the larger economic climate. It is a reasonable thing to do.
“Second, I think it would be fair to also think about what’s going on with wages, jobs, hours across the economy, when we think about what to do in the public sector. . ”
When asked if he is therefore not ruling out a wage freeze, Sunak said, “You can ask me any question and tell me, do you rule it out or do you decide it?” ? When we launched the expenditure review, we said when we sector compensation that should be done in the context of the general economic climate. I think it’s a very reasonable thing to do.
“And we also talked about fairness – we have to see what’s going on with wages, jobs, jobs, hours, across the economy, when we calibrate and determine what’s the best thing to do to the public sector. as well as. ”
The chancellor denied that this amounted to a return to austerity, which the government said was over.
“You won’t see austerity next week,” Sunak said. “What you will see is a fairly significant increase in government spending on day-to-day utilities that comes with the increase we had last year.
“So there is absolutely no way for anyone to say this is austerity. We will be spending more money on utilities than we were.
Sunak also declined to confirm a longer-term extension of an increase in universal credit payments, introduced due to the coronavirus pandemic, which is expected to end in April.
The Chancellor said the change was made as part of the “acute phase of this crisis,” adding: “We are keeping everything under review and will make the decisions that suit the economy.”
O’Grady said she was “very concerned” about the likelihood of another public sector wage freeze.
She said: “Millions of key workers looked after us during the crisis and continue to take care of us, and I think it’s time we took care of them. We have seen ministers join millions of us at the door, applauding firefighters, garbage pickers, social workers. I don’t think this would be the time to reward them with a real pay cut. ”
“The Prime Minister only in June promised that it was the end of austerity, there would be no more austerity. The government certainly does not think it can reintroduce austerity for the very people who put their health and, in some cases, their lives, on the line to help us.
She added: “There is still time for the government to take a step back, and I would encourage them to think again. It is not smart policy, it is morally obscene, and it is also a bad economy. “