UK Prime Minister Boris Johnson has denied reports that the government will be freezing public sector workers pay as part of a string of measures to foot the coronavirus bill.
He reportedly told around 125 backbench Conservative MPs on a conference call on Friday that there would be no return to austerity to cover the 300 billion pound cost of the crisis, the Metro newspaper reported.
Johnson promised to “double down” on transport projects in the north, amid concerns his election promises to level-up the economy would be ditched as the UK heads towards a recession.
He said the government was looking at spending heavily on infrastructure as Britain exits the restrictions and believes the pandemic could be a “springboard for ambitions”.
A Treasury document leaked earlier this week said the UK’s deficit could reach 337 billion pounds this year because of the pandemic, compared to the forecast 55 billion pounds in March’s Budget, report the Metro newspaper.
It said the assessment, dated May 5, warned that filling such a gap in the public finances through tax revenue rises would be “very challenging without breaking the tax lock”.
The leaked doscument said measures including income tax hikes, a two-year public sector pay freeze and the end of the triple lock on pensions may be required to fund the debt.
The Treasury has not commented on the report.