Following the Spending Review announcement by the Chancellor Rishi Sunak, I joined Sheffield’s other Labour MPs in writing to highlight our frustration that the announcements did not go far enough to support our city. We highlighted that the Government have hit families incomes with a triple blow of key worker pay freezes, Universal Credit cuts and a hidden council tax bombshell – all damaging chances of an economic recovery at a time when that can not be afforded.
Read the full letter below.
Plain text version of the letter:
Last month’s Spending Review was an important opportunity for the Government to take action to support businesses, protect jobs, and provide our region with the investment it needs.
Instead, the Government has hit families’ incomes with a triple hammer blow of key worker pay freezes, Universal Credit cuts, and a hidden council tax bombshell. You are preventing any chance of recovery by hitting workers in their pockets when the economy is at its weakest.
Your pay freeze will mean a real-terms pay cut for:
- At least 90% of Police officers (sergeant and below) – that’s 189,000 junior police officers on the frontline
- At least 80% of Fire Service officers (watch manager and below) – that’s 50,400 people who work tirelessly to save lives
- At least 80% of secondary teachers and at least 75% of primary teachers – that’s 708,000 teachers who have supported our children through these difficult times.
These are the very same key workers who have been on the frontline throughout the pandemic to keep vital services and our society running. Along with the Prime Minister, you were happy to clap these workers when the cameras were rolling, but you are now forcing those very same people to worry about money just before Christmas. That is callous even by this Government’s standards.
Buried in the small print of your announcement was the news that the Government is also planning to put up council tax by over a billion pounds a year. At the same time, you are going to make it easier for councils to hike taxes without first getting public support – by raising the threshold to 5% for large council tax rises having to be put to a local referendum.
If that was not bad enough, you are pressing ahead with plans to cut Universal Credit for 6 million families across Britain at time when livelihoods are still being hit by the pandemic and many families are struggling to make ends meet. The Government’s own prediction is that 2.6 million people will be unemployed next spring and, yet, your response is to take £20 a week, or £1000 a year, from families at the peak of this unemployment crisis.
Taken together, these measures are not only deeply unjust they are economically reckless. To give the economy a boost, the Government should be enabling people to spend and support local businesses. Instead, you are actively taking money away from people and, in response, families will naturally tighten their belts and spend less. As a result, more businesses will see their incomes reduce and may well be forced to lay off staff. This will deepen the recession and could lead to a spiral of unemployment as firms continue to struggle.
In contrast, the TUC has found that public sector pay increases could boost GDP significantly, with over half of the cost coming back in a stronger economy and higher tax take. But, rather than rewarding key workers for their vital work, the Government has spent billions of pounds outsourcing vital services through crony coronavirus contracts with companies that have failed to deliver.
Over £130 million has been spent on 23 different communications consultancies since January, some of whom are being paid £7,000 a day. The public do not want to see huge sums of public money dolled out to spin doctors and management consultants. There are serious questions about how taxpayer money is being spent during the pandemic and how the government is being run.
Incredibly, during a pandemic, your statement announced no new money for public health. Even where the Spending Review did promise new investment, the Conservative party’s track record over the last ten years casts real doubt over your ability to deliver. For years the Conservatives have been failing to deliver the infrastructure the North so desperately needs – for example, the delayed Northern Powerhouse Rail. This high-speed rail link was announced by then Chancellor George Osborne in June 2014 to allow cities across the north to “take on the world”. Six years on, work on the line has not yet been approved, let alone started.
In sharp contrast to the Government’s approach, Labour has set out proposals for an ambitious green recovery that would create good jobs, provide investment in the economy, and tackle the climate crisis. We are calling on the Government to:
- Bring forward £30billion of capital spending to the next 18 months to support 400,000 new jobs
- Implement an emergency retraining programme that starts right now – not next April, when many people will have been out of work for a year already
- Provide clarity about support for businesses under tiered restrictions and the furlough scheme after Christmas. The Government must stop the damaging chopping and changing of wage support, which has led to record redundancies.
The British people cannot afford more irresponsible decision-making. They need a Government that will make take action to recover jobs, retrain workers, get the economy back on its feet.
Clive Betts MP
Olivia Blake MP
Paul Blomfield MP
Gill Furniss MP
Louise Haigh MP