Chancellor Rishi Sunak yet again failed to offer the level of ambition necessary to rebuild a shattered economy, while also targeting the lowest paid to bear the brunt of the crisis despite their heroic efforts in keeping the country going amid the pandemic.
A public sector pay freeze, heavily trialled in the media last week, was confirmed in his spending review speech on Wednesday (November 25), with most non-NHS public sector staff set to be denied a pay rise.
Pitting the private sector against the public sector, Sunak said,” In such a difficult context for the private sector – especially for those people working in sectors like retail, hospitality, and leisure I cannot justify a significant, across-the-board pay increase for all public sector workers.”
He added that the government “will provide a pay rise to over a million nurses, doctors and others working in the NHS….[but] pay rises in the rest of the public sector will be paused next year”.
He noted that for those public sector workers earning less than £24,000, they will receive a pay rise next year of just £250 – which amounts to little more than a 1 per cent pay rise, and in real-terms, still a pay cut.
Meanwhile, for those private sector workers he purportedly said he wanted to “ensure fairness” for, the lowest paid among them – many of them key workers such as carers, cleaners, supermarket workers and others – were also badly let down in Sunak’s minimum wage announcement.
He noted that while the government’s National Living Wage would rise to £8.91 an hour in April – a mere 50p up from the current rate, he failed to mention that a bigger planned increase to over £9 an hour has now been scrapped.
In another blow for struggling families, Sunak also failed to listen to growing calls from unions including Unite and anti-poverty campaigners to maintain the £20-a-week uplift in Universal Credit payments long-term. Instead, he only pledged to maintain the extra payment until April – and only after he was questioned by shadow chancellor Anneliese Dodds, with no mention of the extra cash lifeline made in his actual speech.
In her response, Dodds lambasted the chancellor for the government’s refusal to help those who needed it most, many of whom were also those who took the greatest risks to keep the country going in crisis.
She noted, too, the impact this will have on the wider economy.
“Earlier this year the Chancellor stood on his doorstep and clapped for key workers,” she said. “Today, his government institutes a pay freeze for many of them.
“This takes a sledgehammer to consumer confidence,” she added. “Firefighters, police officers and teachers will know their spending power is going down, so they will spend less in our small businesses and on our High Streets. They will spend less in our private sector.
“Many key workers who willingly took on so much responsibility during this crisis, are now being forced to tighten their belts. Now, not in the medium term to which the Chancellor refers, now.
“In contrast there’s been a bonanza for those who have won contracts from this government. Companies with political connections have been ten times more likely to win government contracts.
Indeed, as UniteLIVE highlighted last week, a government spending watchdog uncovered a special ‘lane’ for firms with direct connections to Tory politicians and officials, whose pitches for contracts were automatically considered.
More than £10bn in Covid-related contracts were handed out by the government without any competitive tender, while nearly £1bn – a conservative estimate — was wasted on PPE and testing kits that couldn’t be used because they were unsafe or not fit for purpose.
While the government has said it cannot afford a pay rise for key workers, more than 10,000 shipping containers of PPE still sit idle at Felixstowe port, incurring the government £1m a day in fees because they cannot find anywhere to store it. Much of this PPE is destined to be unused because it will exceed its sell-by date.
Unite assistant general secretary Gail Cartmail slammed the government for failing to step up and reward the workers they so enthusiastically praised earlier on in the pandemic.
“The chancellor Rishi Sunak has delivered a body blow to the public sector workers he has targeted to bear the brunt of the costs of the pandemic with a pay freeze – his so-called ‘pause’,” she said.
“It is doubly disappointing that the chancellor has adopted ‘divide and rule’ tactics over public sector pay with an award for NHS staff, but a freeze on pay for millions of others, such as teaching assistants, who are already low paid.
“The sop of £250 to the two million public sector workers earning under £24,000-a-year is insulting and compares badly with the inflated sums that the government has wasted on PPE contracts for those with links to the Tory establishment,” Cartmail added.
“This mainly female workforce already juggle work commitments, childcare responsibilities and care for elderly relatives, yet kept vital services running throughout the pandemic, at times due to government failures in PPE provision, risking their own health in the service of others.
“It is also a blow to local economies and high streets where public sector workers spend a large proportion of their wages,” she continued.
“The prime minister’s ‘levelling up’ agenda is in tatters as a result of the chancellor’s divisive pay announcement which does nothing to restore the ‘lost’ pay in real terms from a decade of austerity.”
By Hajera Blagg