Carmichael blasts lack of ambition in spending review and demands more investment

Chancellor Rishi Sunak’s spending review amounts to a retreat in ambition masked by warm words, according to MP Alistair Carmichael.

Mr Sunak set out the government’s response to the coronavirus pandemic in parliament on Wednesday, telling MPs  the economy was likely to shrink by 11.3 per cent before growing by 5.5 per cent next year and 6.6 per cent in 2022.

An extra £55 billion will be made available to support the economic recovery.

Mr Sunak’s speech signalled that there would be a pay freeze for many in the public sector – affecting hundreds of workers in Shetland. Although, medics including doctors and nurses will get a pay rise.

Changes will also be made to the minimum wage and the national living wage, with those earning under £24,000 in line for higher pay.

He said: “This is an economic emergency. That’s why we have taken, and continue to take extraordinary measures to protect people’s jobs and incomes.”

Freezing public sector pay, even with mitigations for the low-paid, is not right at this time. We need to invest in people, not vanity projects, in order to recover strongly in the coming months.

However, Mr Carmichael criticised the lack of reference to either those who he said had been excluded from pandemic economic support or to the impact of the end of the EU transition period at the end of the year.

The Orkney and Shetland MP said: “The pandemic is an unprecedented challenge for our finances and so we needed an unprecedented response. Instead in too many areas we are seeing a retreat in ambition from the government disguised by warm words.

“Freezing public sector pay, even with mitigations for the low-paid, is not right at this time. We need to invest in people, not vanity projects, in order to recover strongly in the coming months.

“What we did not hear was as significant as what we did. There was no mention of support for businesses to mitigate the impact of new trade barriers as we leave the EU transition in January – just 37 days away now.

“Once again the chancellor missed the opportunity to give any scrap of support for the three million people left out from economic support to date. Their continuing exclusion is a national scandal that has never been addressed even while the Tories have handed out waves of cash to politically connected companies and consultants.”