Nicola Sturgeon warns Rishi Sunak spending review could bring 'new age of austerity'

The Chancellor's Spending Review could bring in a "new age of austerity", Nicola Sturgeon has warned.

Chancellor of the Exchequer Rishi Sunak

Scotland's First Minister revealed her dismay after Rishi Sunak's flagship statement failed to increase public-sector pay for many workers.

Mr Sunak defended the announcement of an effective pay freeze for an estimated 1.3 million staff as he said there was "disparity" between the public and private sectors going into the coronavirus crisis.

The Chancellor claimed the "pay premium" enjoyed by those working in the public sector had "certainly widened" in the past six months.

Emergency measures brought in to deal with the impact of the coronavirus crisis mean the UK Government will borrow £394 billion this year - which amounts to 19 per cent of gross domestic product (GDP) - a measure of the size of the economy - the highest recorded in peacetime.

Ms Sturgeon, speaking at First Minister's Questions in the Scottish Parliament on Thursday, said she welcomed many of the measures introduced by the Chancellor as part of the response to Covid-19.

She said she also understood "how difficult it is for the UK Government to balance the financial challenges and fiscal challenges right now, as it is for all governments".

But she raised concerns about measures in the Spending Review, saying: "As we come out of this pandemic and start to rebuild we cannot have the natural Tory instinct of allowing the burden of that financially to fall on those who can least afford it.

"I think many aspects of the Chancellor's statement yesterday seem to herald a new age of austerity for public-sector workers, for low-income people and for those already living in poverty."

In that situation she said the Scottish Parliament "has to stand up firmly against that and on the side of those who need us most".

SNP MSP and former Scottish Government minister Shona Robison complained that scrapping the proposed increase in the national minimum wage and the failure to extend the £20 increase in Universal Credit payments will "leave many Scottish families struggling to feed and clothe their children".

The UK's annual aid spend from 2021 is expected to be £10bn once the temporary cut is imposed - compared to the previous figure of £15bn.