Public sector wages, tax increases and living standards – key points Chancellor Rishi Sunak raised this morning ahead of Wednesday’s budget

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Chancellor Rishi Sunak said this week’s budget will focus on “looking to the future and building a stronger economy for the people of Britain”.

He told the Andrew Marr Show: “It means a big investment in public services, driving economic growth by investing in infrastructure, innovation and skills, giving business confidence and then supporting working families. These are the ingredients of what makes a stronger budget and this is what we will deliver next week ”,

When asked if there would be a return to austerity, the Chancellor said: “As I said, one of the elements of building a stronger economy is having solid utilities and you’ll see it next week. “

Mr Sunak said he wanted to be a chancellor who cut taxes, despite the government increasing national insurance to pay for social care.

“Of course my instinct is to do that, that’s what I believe, I want people to keep their money better, I want to reward people for their work.

“I think it’s a good thing and I think it will help stimulate economic growth. But as we discussed, I also had to deal with an economic shock, the biggest in 300 years, borrowing (it’s) the highest since WWII, and things like elective arrears in the NHS being at record levels we want to move forward. These are some of the challenges. “

Here are the key points for a broad look at Wednesday’s budget from this morning’s TV interviews …

Rising wages in the public sector

Public sector workers will find out if they get a pay rise on Wednesday, the Chancellor said.

“That will be one of the things we will be talking about next week in the expenditure review. Obviously, over the past year, we made the decision to have a more targeted approach to public sector compensation given that the previous year there had been large increases and the private sector had obviously seen pay cuts last year and people were on leave.

“We thought it was reasonable and fair. Going forward, we’ll have to define a new compensation policy and that will be a topic for next week’s spending review. “

No more tax hikes

The Chancellor referred to the pandemic, telling Sky News’ Trevor Phillips on Sunday: “These are the things that I am grappling with and I have to take the world as it comes. I wish I hadn’t had to deal with the coronavirus and a once-in-a-lifetime economic shock in 300 years and all the damage that has done to our economy and an NHS backlog that spanned millions that we thought was it was really important and rightly so to get the funds to fix it.

“But these are the challenges that I am grappling with and I have to face these challenges and find the right way to do it and we have made decisions which I believe, although difficult, are the right decisions, this are responsible decisions and, ultimately, we will achieve the goals that people want us to achieve and, in fact, build this strong economy for the future that will drive growth and raise our standard of living.

Asked to rule out tax hikes before the next election, Mr. Sunak joked: “You are asking me to do my budget live on your show… I will do it in Parliament on Wednesday.

Inflation cannot be controlled

Mr Sunak told the BBC’s Andrew Marr Show: ‘If you take the latest inflation figure, which was just over 3%, which is obviously higher than what we normally aim for, and that you look at what is causing it, most of that increase is reduced to two things.

One of them is the fact that, as economies reopened quite quickly after the coronavirus, it put pressure on global supply chains, and the other part of the increase is largely due to at energy prices.

“These two factors are global factors. We’re not the only ones who know about these issues, I don’t have a magic wand that can make either of these things go away.

No more leave

“We don’t envision having to impose significant economic restrictions like we had to last year, and the reason is that while we’ve always said the winter is going to be tough, the big change is the vaccine rollout which is our first line of defense and the best way to protect ourselves during the winter is to get the booster campaign, making sure it’s working at full speed, everyone gets their booster when asked.

“It’s the best line of defense against having to move around to put in place restrictions.”

Transport

Chancellor Rishi Sunak said £ 4.2bn of the £ 7bn announced ahead of the five-year transport budget had already been allocated, but the pot was topped with £ 1.5bn additional.

He told Sky’s Trevor Phillips on Sunday: “This is a great example of upgrading in practice, and it will ultimately only create growth in all of these places.”

Rashford rejected

Mr Sunak appeared to reject calls from England and Manchester United footballer Marcus Rashford to expand the free school lunch program.

In a letter to the Sunday Times, Mr Rashford and supermarket bosses called on ministers to postpone the program during school holidays.

But Mr Sunak told the Andrew Marr Show: ‘So we put measures in place to help families during the coronavirus, it was the right thing to do, and in common with the other things that have now come to an end, whether it’s a vacation or other things, it’s true that we’ve moved to a more normal way of doing things.

“But we replaced… but we actually already acted, that’s what I would say to Marcus and everyone else. We have put in place what is called the Holiday Activity Program, which not only offers meals but also activities for children during holiday periods for families who need extra help.

“It’s a new program, it was announced earlier this year, it’s being rolled out across the country, and I think it can make a huge difference to people.”

Business rate

“Over the past year and a half, thanks to the coronavirus, we’ve given around £ 16bn in corporate rate tax cuts to help hospitality and retail businesses get through it all.

“In terms of review and reform… there are people who say you should just abolish trade tariffs, which I think is the position of the Labor Party. Corporate rates are obviously raising £ 25 billion.

“We have provided short-term relief over the past 18 months thanks to the coronavirus, that support extends until next year and we will talk a little more about the future and some things we can do about business rates next week in the budget. “

Quality of life

“We are seeing employers wanting to hire, we are seeing the intentions of companies to invest increase, again, in part aided by measures we have taken like the super deduction, which is a huge tax incentive for companies to invest in. increasing their productivity.

“And we are seeing people’s wages go up, real wages are now 3.5% higher than they were before the crisis.

“So actually all the things that we’ve put in place, the jobs plan that I’ve talked about a lot on this show over the last year and a half, this jobs plan is working, people are seeing the benefits and I am convinced that if we continue to invest in infrastructure, innovation, skills, we will see our growth accelerate.

“And next week’s budget will demonstrate this plan in action, we will build this stronger economy, we will increase our economic growth and our productivity and people are going to feel that way with a higher standard of living and a better quality of life.”

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