Coronavirus: Freezing public sector pay would be ‘damaging betrayal’, leading police officer says

Unions say plan mooted in Treasury paper would be ‘slap in face’ of NHS heroes

A police leader has warned that freezing public sector pay to help meet the cost of the coronavirus crisis would be “morally bankrupt” and “a deep and damaging betrayal”.

The comments from the chair of the Police Federation of England and Wales came after a leaked Treasury document set out a range of options to rein in the massive spending deficit caused by the epidemic, including a two-year pay freeze for public sector workers.

Labour urged Boris Johnson and chancellor Rishi Sunak to publicly disavow such a move, warning that it would undermine the UK’s resilience to future crises.

And unions warned that a pay freeze would be a slap in the face of the NHS and care workers the country is applauding each week.

But Mr Sunak said only that his focus was on the immediate challenge of preserving jobs and keeping businesses going through lockdown and it was “premature” to speculate on how the resulting debt would be paid down.

The document obtained by the Daily Telegraph estimates a £337bn deficit this year, but warns that in a worst-case scenario it could reach £516bn. Either outcome would dwarf the £55bn forecast in March’s Budget.

The assessment, drawn up for the chancellor and dated 5 May, warned that filling the resulting gap in public finances would be “very challenging” without breaking the so-called triple tax lock in Mr Johnson’s election manifesto, which promised no rise in rates of income tax, VAT or national insurance over the coming five years.

The paper said measures including income tax hikes, a two-year public sector pay freeze and the end of the triple lock on pensions may be required to fund the debt.

It is understood that the document also discussed a range of other options for dealing with the debt, expected to reach a scale not seen since the Second World War.

But it made no recommendations on the best course of action and no policy decisions have been made by ministers.

In a series of tweets, Police Federation chair John Apter said: “If there is any consideration in financially punishing our public sector workers then I urge a rethink.

“The chancellor, Rishi Sunak, and thousands of others have clapped for our key workers every Thursday.

“To even consider freezing the pay of our essential public sector workers to help the financial recovery would be morally bankrupt and would be a deep and damaging betrayal.”

Dave Prentis, the general secretary of public sector union Unison, said he was “absolutely appalled” by the report, adding: “To even contemplate pay freezes for those currently putting their lives on the line is disgraceful, and Unison will fight these plans every step of the way​​.

“NHS workers, care workers and other key workers don’t need their pay freezing – they need proper pay rises, especially after the heroism of recent months. Anything less would be a slap in the face to those we applaud each week.”

The general secretary of the Prospect union, Mike Clancy, said: “Responding to an economic shock on this scale with more austerity and pay cuts for public servants would be like throwing water on a chip-pan fire.

“Slashing the wages of the public servants who have helped us through this crisis would not only be immoral, it would only make the situation worse, leading to a spiral of cuts and unemployment that will hamstring Britain for a decade. Ministers must ignore these proposals and focus government attention on saving jobs, supporting incomes and getting the economy firing on all cylinders once it is safe to do so.”

Labour also urged Boris Johnson and Rishi Sunak to reject public sector spending cuts as a way of paying off the cost of the pandemic.

Anneliese Dodds, the shadow chancellor, said: “A lack of resilience in our public services, caused by 10 years of underfunding, has made it harder to deal with the challenge of coronavirus.

“After all our public services and key workers have done to save lives during this pandemic, there must be no return to a society where we lack that resilience.

“Both the chancellor and the prime minister must urgently make a statement rejecting these plans.”

But asked on Sky News whether he was considering the options set out in the paper, Mr Sunak said only: “I think it is premature right now to speculate about that far in the future. We are living in a time of unprecedented economic uncertainty.

“It is my job to think about everything, but what we are thinking about foremost at the moment is protecting people’s health – which is why it is still important that we have a plan in place for social distancing – but also to protect people’s jobs and support businesses at this time, to make sure we can preserve as much of that a possible for the time when restrictions are lifted and we can get our lives back to normal.

“That’s what’s occupying all our time at the moment.”

The Treasury document states that filling the expected gap in the public finances through tax revenue rises “would be very challenging without breaking the tax lock”.

Referring to the four main revenue-raising taxes – income tax, national insurance contributions, VAT and corporation tax – it adds: “To raise fiscally significant amounts, we would either have to increase rates/thresholds in one of the broad-based taxes or reform one of the biggest tax reliefs (eg pensions tax).”

The Treasury declined to comment on the report, but it is understood that the document is one of many put together by different teams to discuss ideas about future policy.

A source said the document “does not reflect government policy”.