Anneliese Dodds has criticised the Chancellor and argued that he is “choking off any chance of recovery” from the pandemic following reports that he is preparing to cancel the planned rise in the national living wage in the spending review.
Commenting ahead of the statement to be delivered by Rishi Sunak on Wednesday, Dodds condemned the decision not to award the 5.6% increase to those on the lowest wages over fears it could force companies hit by Covid out of business.
The Shadow Chancellor argued: “It’s astonishing that the government can clap for our key workers one day and then U-turn on a promised pay rise for the lowest paid the next – especially during a second national lockdown.
“It’s another irresponsible choice by a Chancellor who’s choking off any chance of recovery by hitting workers in their pockets.”
The remarks from Dodds follow her speech to Reuters, during which she stressed that the public deserves a “responsible approach from their Chancellor” and told attendees that Labour “would make responsible choices”.
It also comes amid a growing backlash over plans for a public sector pay freeze, which Angela Rayner has slammed as a “disgrace” and reiterated the party’s 2019 general election call for a £10 minimum wage for all workers.
The deputy Labour leader said: “The Chancellor says that a pay freeze for millions of the key workers who have put their lives on the line through this crisis is not a return to austerity. He is wrong.
“Tell that to the care worker trying to feed their family on £8 an hour. Tell that to the hospital porter or the teaching assistant struggling to pay the bills and put food on the table.
“Tory Ministers fell over themselves to clap our key workers when the cameras were rolling and now they want to sell them out.
“Under this government our key workers are getting their pay frozen whilst ministers are handing out contracts to their mates. It’s a disgrace and the Chancellor must think again before the spending review on Wednesday.”
Concern over a pay freeze have been mounting in recent weeks and were last week heightened by a report from the right-wing think tank Centre for Policy Studies, which Sunak favours, arguing the policy could save £23bn over three years.
The concerns voiced by trade unions and Labour also follow Treasury documents leaked in May this year that provided the Chancellor with a “blueprint” to pay for the crisis – including a pay freeze for public sector employees and raised taxes.
Shadow business minister Lucy Powell criticised the proposals in an interview on Sunday as not only bad economic policy, but also described the move as a “kick in the teeth” for frontline workers in the coronavirus pandemic.
TUC general secretary Frances O’Grady told Sophy Ridge on Sunday: “Millions of key workers cared for us during the crisis, and continue to care for us… I don’t think this would be the time to reward them with a real pay cut.”
Amid the growing backlash over the public sector pay freeze, Downing Street’s spokesperson has insisted that “both the Prime Minister and the Chancellor have been clear that we will not return to the austerity of the past”.
The claims from Johnson and the Chancellor follow an interview given by the Prime Minister in June this year, in which he said the government will “not go back to the austerity of ten years ago”.
Reports around the decision not to award the lowest paid workers with the planned pay rise emerged on Monday evening, after the Low Pay Commission previously advised that the minimum pay rate should increase from £8.72 to £9.21 per hour.
The commission has now concluded that the proposed increase is unaffordable for struggling companies. It has been reported that Sunak has accepted the recommendation from the organisation.