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Rishi Sunak Has Defended Scrapping The Overseas Aid Pledge And Won't Rule Out Breaking More Tory Manifesto Commitments By Raising Taxes

Rishi Sunak Has Defended Scrapping The Overseas Aid Pledge And Won't Rule Out Breaking More Tory Manifesto Commitments By Raising Taxes

Rishi Sunak defended cutting the foreign aid budget in yesterday's spending review (PA)

3 min read

The Chancellor Rishi Sunak has refused to rule out breaking more Tory manifesto commitments after going back on his party’s pledge to spend 0.7% of GDP on overseas aid.

He would not comment on suggestions the Treasury would look to raise taxes next year to help pay for the extra outlay due to the coronavirus pandemic.

And Mr Sunak defended the decision to freeze the pay of more than a million public sector workers as outlined in his spending review yesterday.

Speaking to BBC Radio 4's Today programme about the potential for future tax rises he said: "I'm not going to get drawn on future fiscal policy.”

Earlier he had told BBC Breakfast: "It wouldn't be appropriate for chancellors - any chancellor - to speculate about future tax policy because that has real-world implications.

"As you would find from any chancellor, they would talk about fiscal policy at a Budget, and obviously we will have one in the spring - we normally have them in the autumn."

Mr Sunak said the scale of borrowing the government had undertaken this year to help deal with the fallout from Covid-19 is "not sustainable”.

He said "now is not the time to address that”, but added: "But once we get through this and we have more certainty about the economic outlook we will need to look at how we can make sure we have a strong set of public finances." 

Speaking to Sky News the Chancellor also insisted Britain is not turning its back on the world's poorest people after announcing a temporary cut to the foreign aid budget.

"Is it a difficult decision? Of course it is a difficult decision - no one wants to be having to make these difficult decisions,” he said.

"But this is about an economic emergency that I described yesterday and we're going to have record-level peacetime borrowing and debt...

"I don't think anyone could characterise our level of support for the poorest countries as turning our back.

"We'll be spending more as a percentage of GDP than France, Canada, the US, Japan."

And he told Radio 4 the government intends to return the aid budget to the longstanding commitment of 0.7% of GDP in the future, suggesting the decision to break the pledge this year “is a choice that the British people will support”.

Mr Sunak also defended the decision to freeze the pay of an estimated 1.3 million workers by saying “there was at least a 7% pay premium” for public sector workers over those employed in the private sector.

He told Sky News: "That pay premium has certainly widened in the last six months, because what we've seen over the last six months is private sector wages have fallen by a percent and public sector wages have risen by around 4%.

"On top of that, people in the private sector are losing their jobs, their hours are being cut, they are being furloughed - none of that is happening in the public sector.

"So given the context, I couldn't justify an across the board, universal pay increase for the public sector."

In response Labour’s shadow chancellor Anneliese Dodds said cutting overseas aid was another example of poor decision making.

"This is part of a series of, sadly, failures to take the right responsible decisions to get our economy on the right path,” she told Good Morning Britain.

She added: "Yesterday was a chance for the Chancellor to right that, to make sure that he was putting confidence back in to our economy.

"What did he choose to do instead? Well he hit people's pockets, he decided to, yes, focus that pay freeze on police and on teachers.

"Now that means they're not going to be spending in our high streets."

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