Anneliese Dodds MP, Labour’s Shadow Chancellor, has today called on the Chancellor of the Exchequer to publish the instructions he has issued to government departments in preparation for the 2020 Comprehensive Spending Review (CSR) announced yesterday.
In a letter to Rishi Sunak, Dodds raises concerns that the Chancellor appears to be asking government departments to make yet further cuts, despite the Prime Minister’s previous commitment that “we are absolutely not going back to the austerity of ten years ago”. Dodds also asks the Chancellor to clarify his plans on public sector pay after he spoke of exercising “restraint” for future pay awards less than a day after the government introduced a pay rise for some public sector workers.
Citing the extraordinary economic circumstances in which the CSR will take place, Dodds appeals to the government to learn the lessons of the 2008 financial crisis to ensure that the current health emergency is not compounded by political choices around public spending that further weaken demand.
In that context, she cautions the Chancellor against returning to an ideological approach to spending that resulted in the slowest economic recovery in eight generations.
Anneliese Dodds MP said “This has been the toughest of times for Britain’s workers, wherever they work. Even before Covid-19 hit, real terms wages were flatlining for many and even falling for others compared with a decade ago.
“Yesterday there seemed to be light at the end of the tunnel for some frontline workers. But the language in the Chancellor’s announcement on the Comprehensive Spending Review suggests he might be giving with one hand only to take away with the other.
“This is not the time to fall back on policies that delivered the slowest economic recovery in eight generations. And it’s not the time for the government to keep the public in the dark about its fiscal plans.
“It’s time for the Chancellor to come clean and explain how he plans to delivers growth across the country and rebuild the vital public services we all rely on.”
Full text of the letter:
The Comprehensive Spending Review (CSR) that you announced today takes place in extraordinary circumstances. The outlook for our economy, and our public finances, looks completely different today to how it looked even six months ago.
The CSR needs to reflect that. This is a moment to think boldly and strategically about the kind of country we want to be, and the public services we need, as we emerge from this crisis and prepare ourselves for the future. In particular, we need to ensure that a health emergency which has done so much to restrict economic activity is not compounded by political choices around public spending that weaken demand further. We must learn the lessons of the last crisis.
As things stand, however, it is not clear whether the instructions you have given to departments are more in line with the Prime Minister’s promise that “we are absolutely not going back to the austerity of ten years ago” or the intimations in your statement today that further – and potentially significant – cuts are on the way.
The messages are similarly mixed when it comes to paying the public workers who have done so much for us all throughout the crisis. Last night you announced that some would be receiving a pay rise and yet this morning you spoke of “restraint” and the prospect of cuts to come. That is not the right way to treat those who have contributed so significantly to tackling the coronavirus, often at great personal risk.
The CSR – and the context in which it is taking place – raises big public policy questions. They deserve to be discussed openly and publicly so that voters know whether this is genuinely an exercise in designing public services fit for the 21st century or if it just presages a return to an ideological approach to spending that gave us the slowest economic recovery in eight generations.
As such, I am calling on you today to publish the directions you have given to government departments so that everyone can see the context in which those departments will begin making critical choices about their spending plans and operations.
I look forward to hearing from you and engaging with this process, which comes at such a critical time for our country.