Conservatives dampen talk of public sector pay freeze post-coronavirus and say workers ‘won’t be forgotten’
The Conservatives hinted the Government would seek to protect those on the frontline against Covid-19 (PA)
The Government will “not forget” the sacrifices of frontline staff battling coronavirus amid reports of a fresh public sector pay freeze to tackle ballooning borrowing.
A proposed Treasury “policy package” drawn up for the Chancellor - and obtained by The Telegraph - warns it could soar as high as £516billion in the current financial year under its worst case scenario.
Options laid out for Rishi Sunak in a bid to reassure investors the UK has its public finances under control reportedly include a two-year freeze on public sector pay and fresh tax hikes, including a 1% increase in income tax and “new carbon/green taxes”.
The move to freeze public sector pay could, the document says, raise £6.5billion by 2023-24.
Mr Sunak has said it is “completely premature to speculate about future public finances, budgets and the economy” and has declined to comment on the specifics of the leak.
But a Conservative source on Wednesday gave a strong hint that the Government would seek to protect those on the frontline against Covid-19.
“We acknowledge that those on the frontline are doing an incredible job at the moment and we’re determined to support them,” they said.
“Public sector pay decisions are made through the usual annual process and recommendations from the review bodies will be considered before awards are announced this summer.
“We obviously recognise the work of the frontline staff in the current crisis and we’re not going to forget that after we’re through this crisis.”
Labour has already urged both Mr Sunak and Prime Minister Boris Johnson to give a statement distancing themselves from the Treasury document.
Shadow Chancellor Anneliese Dodds said: “A lack of resilience in our public services, caused by ten years of underfunding, has made it harder to deal with the challenge of coronavirus.
"After all our public services and key workers have done to save lives during this pandemic, there must be no return to a society where we lack that resilience.“
Meanwhile the SNP’s finance spokesperson Alison Thewliss said: "Reports that the Tory government is considering imposing more damaging cuts, including freezing public sector pay, will be deeply concerning for millions of people who are already struggling.”
Public sector pay was frozen for two years in 2010, with rises capped at the below-inflation 1% until 2017.
Since then Government departments have been able to pitch for higher increases, with NHS staff getting a 1.7% increase in April.