COVID-19: Tricky week ahead for Rishi Sunak that may yield tax rise hints

Monday 23rd November 2020 09:15 GMT

Ahead of Wednesday's spending review, the chancellor has been managing expectations, suggesting that what he is setting out this week will be government departmental plans rather than a full budget.

That said, we do expect to hear some sense of how damaging the coronavirus pandemic has been to the national economy.

And, as a result, we might get some sense of when the inevitable tax rises will come.

They might not be introduced until early next year and the most difficult decision for the chancellor is undoubtedly on the question of public sector pay restraint.

Labour have described the idea of a public sector pay freeze as a "a kick in the teeth" to frontline workers.

The battle lines have already been drawn, and Mr Sunak told Sky News' Sophy Ridge On Sunday that "you will not see austerity next week" - clearly keen to see off suggestions that Cameron-era spending cuts are back.

But on public sector pay, he did indicate that departments should consider settlements "in the context of the wider economic climate", and that may well be the sting in the tail.

That would set the government on a direct collision course not only with Labour but with the unions too.

Frances O'Grady supported the government measures when furlough was being replaced, but today told the Ridge programme there could even be strike action if the government were to go ahead with such a move.

A tricky period ahead for all of us - not least Number 11 Downing Street.

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