Trade unions criticise Chancellor’s “levelling down” spending review

Trade unions have reacted to the spending review delivered by Rishi Sunak in parliament this afternoon and argued that “for all the government’s talk of levelling up, this spending review will level down Britain”.

Responding after the Chancellor made his statement to the House of Commons today, trade unions including UNISON, the FBU, Usdaw, Unite, TSSA, Prospect, NEU and GMB joined the TUC, Labour and others in condemning the review.

Commenting on the public sector pay ‘pause’, the TUC’s Frances O’Grady said: “After a decade of standstill pay, yet another pay freeze is a kick in the teeth for the key workers in the public sector who kept the country going in this crisis.”

Sunak announced this afternoon a public sector pay freeze, with NHS nurse and doctors exempt from the cap on wages, and that the national living wage would increase to £8.91 instead of the planned rise to £9.21.

The general secretary added: “Workers expecting a national minimum wage increase – not least the two million who are key workers – have been let down by the government’s decision to row back on the full rise they were promised.

“If the Chancellor wants to stop mass unemployment, the test will be how quickly today’s infrastructure announcements deliver enough good jobs in the parts of the country that need them most.

“The TUC has shown that investing £85bn in green transport and infrastructure could create more than 1.2 million jobs in two years. And the chancellor should have acted to unlock the 600,000 existing gaps and vacancies in the public sector.”

The number of workers on payrolls has fallen by 782,000 between March and October this year. Unemployment is expected to rise to a peak of 7.5% in 2021, or 2.6 million people, according to the Office for Budget Responsibility.

UNISON general secretary Dave Prentis slammed the economic plan outlined by the Chancellor as “austerity plain and simple” and said a “decade of spending cuts left public services exposed when Covid came calling”.

He argued : “The government is making the same disastrous mistake again. Going after the pay of millions will be a bitter pill for key workers getting the UK through the pandemic and out the other side.

“The Chancellor wants to pause the pay of care, school, council and other public service workers who’ve been on fast forward all year.

“Extra money in pockets gets spent locally. Less than a pound more a week for some won’t save the thousands of ailing shops and leisure, arts and hospitality venues across the country.

“Health staff have already shown they and the NHS more than deserve a rise this year. This can’t wait on a lengthy pay review body process. The government should deliver the goods now.

“Reviving the economy will take a gargantuan effort from everyone. That means investing in the entire economy, not seeking to divide and rule between the sectors. Key workers mustn’t be taken for granted and left to carry the Covid can.”

In the run-up to the statement delivered by Sunak in the Commons today, Downing Street’s spokesperson insisted that “both the Prime Minister and the Chancellor have been clear that we will not return to the austerity of the past”.

These claims from Boris 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”.

Unite the Union assistant general secretary Gail Cartmail described the pay freeze unveiled by the Chancellor today as a “body blow to the public sector workers he has targeted to bear the brunt of the costs of the pandemic”.

She remarked: “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.”

Sunak said 2.1 million public sector staff who earn below the median wage of £24,000 would be guaranteed a £250 pay rise. Cartmail slammed this as a “sop” and argued it “compares badly” with the money wasted on public contracts recently.

Cartmail added: “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.”

Acting GMB general secretary Warren Kenny argued that “punishing public sector workers doesn’t help those in the private sector and it doesn’t help the economy” and accused Sunak of “trying to divide and conquer”.

Prospect’s Mike Clancy branded Sunak’s comparison between private and public sector wages “insulting” and also called for him to “address the millions of workers still unfairly excluded from his economic support schemes”.

FBU general secretary Matt Wrack called the review a “cold, hard, slap in the face” for key workers and highlighted that the Chancellor has announced today’s measures despite clapping for them earlier in the pandemic.

He said: “We’ve spent the last few weeks lobbying to show how urgently the fire and rescue service needs investment to respond to threats like climate change, pandemics, and the building safety crisis exposed by Grenfell.

“But rather than fund the frontline responders to these emergencies, the Chancellor has decided to try and give them a real-terms pay cut. We won’t stand by and let the government attack key workers like this.”

Also responding this afternoon, Usdaw general secretary Paddy Lillis called for a “new deal for workers”, which includes demands for a £10 minimum wage, minimum contracts of 16 hours per week and improved sick pay.

Commenting on low-paid workers in the pandemic, Lillis said: “Millions of low-paid workers have provided essential services to help ensure the country is fed, healthy and safe through the lockdown and will continue to do so…

“There needs to be lasting and fundamental changes to the way society views our lowest paid workers. We need a new deal for the workers: a minimum wage of at least £10 per hour, an end to insecure employment, respect for shopworkers and action to ensure that retail jobs are no longer underpaid and undervalued.”

He added: “Many low-paid workers have to rely on Universal Credit to get by, and the temporary £20 uplift in Universal Credit has been really important in these difficult times. Today was a missed opportunity for the Chancellor to make that increase permanent and give some assurance to millions of low income families.”

The government increased Universal Credit by £20 for a year in April. Sunak was silent on whether this would be extended again next year. Removing the uplift would reduce annual incomes for 16 million households by £1,040.

The Chancellor’s “rabbit in the hat” spending review announcement was a ‘levelling up’ fund worth £4bn, which will be managed jointly by the Treasury, Department for Transport and Ministry of Housing, Communities and Local Government.

MPs will be able to lobby the government for investment in their area. The Local Government Information Unit said the proposal cut out local government and warned “local areas will bid against each other and Whitehall will pick the winners”.

NEU joint general secretary Dr Mary Bousted declared: “Education workers are key workers who have kept the country going during the pandemic, but pay cuts are their only reward from this government…

“It is not enough for government ministers to thank teachers for their vital contribution during Covid. Such sentiments ring hollow when they are then subject to a pay freeze which follows previous pay freezes and years of below-inflation pay increases which have eaten into the real value of their pay since 2010.”

She added: “True levelling up means investing more in education and other public services, not levelling down by further attacks on pay.”

TSSA general secretary Manuel Cortes criticised Sunak for failing to mention the climate crisis during his statement to MPs this afternoon and accused him of “abandoning all pretence of ambition over decarbonisation”.

He said: “With debt repayments going down as a result of low interest rates – even when we have increased borrowing – now was the time to borrow more in order to kick start a green new deal. This would in turn secure the future growth we need to significantly bring borrowing down over the medium-term.

“That is the only route to an economy which can endure in the decades to come without catastrophic damage to our planet. The lack of leadership from the Tories on this amounts to a tragic missed opportunity.”

Shadow BEIS Secretary Ed Miliband pointed out that only £3bn of new money was allocated to a green stimulus to tackle the unemployment crisis and argued the “climate crisis was almost invisible in today’s statement”.

Shadow Chancellor Anneliese Dodds accused Sunak of taking a “sledgehammer” to consumer confidence and warned that public sector employees will now “spend less in our small businesses and on our high streets, less in our private sector”.

Other organisations joined the Labour Party and trade unions in slamming the statement from Sunak this afternoon. The Institute for Public Policy and Research reiterated its call for a £164bn “ambitious cash injection” in 2020-21.

The Fabian Society’s Andrew Harrop accused the government of pushing more than a million people into poverty with the measures announced by Sunak today, stressing in particular the negative impact of the inaction on extending the UC uplift.

He said: “Sunak is pressing on with his plan to slash £1,000 a year from Universal Credit for people out of work. Children will go hungry and families will lose their homes. This is ‘levelling down’ not ‘levelling up’.”

Sunak told MPs that borrowing would reach £394bn this year, and that the OBR has estimated the UK economy will shrink by 11.3%, with output not expected to return to pre-crisis levels until the fourth quarter of 2022.