NEWS
03/07/2017 14:48 BST

Downing Street Sticks To Public Sector Pay Policy Despite Dissent

Downing Street has insisted there is no change in the Government's policy on the public sector pay cap, after Boris Johnson added to mounting Cabinet pressure on Theresa May and Chancellor Philip Hammond to ease the 1% limit on annual rises.

A Government source said the Foreign Secretary wants a wage boost for public sector workers and believes the recommendations of independent pay review bodies which back increases should be followed.

Mr Johnson “strongly believes” a public sector pay rise can be done in a “responsible way” which will not put undue pressure on the public finances, the source said, with the Chancellor still aiming to wipe out the deficit by the middle of the next decade.

Pressure is mounting on the Prime Minister and Mr Hammond to relax austerity, with several Tory MPs calling for an end to the pay cap after the party disastrously lost its majority in the General Election to anti-austerity Labour, which has pledged to scrap the 1% ceiling.

Mr Johnson’s views go further than those stated by his old adversary and Cabinet colleague Michael Gove, who said the Government has “got to listen” to the pay review bodies, one of which has already recommended a pay rise for NHS workers this year.

The Government source said: “The Foreign Secretary supports the idea of public sector workers getting a better pay deal and believes the pay review recommendations are right.

“He also strongly believes the rises can be done in a responsible way and without causing fiscal pressures.”

Mrs May's official spokesman told reporters: "The position is exactly as it was set out last week, in that there are pay review bodies reporting.

"We have responded to some, and we will respond to others in due course, as is normal later this year."

Recommendations for 1% pay rises for 2017/18 for nurses, doctors, dentists and members of the armed forces have already been accepted by ministers, but further recommendations are still to come from review bodies dealing with teachers, police, senior civil servants and prison officers, potentially allowing Mr Hammond to be more generous to these groups in his autumn Budget.

Asked whether it would be open to the Chancellor retrospectively to reopen decisions taken earlier this year, the PM's spokesman replied: "These are the settlements for 2017/18."

Increasing public sector pay would boost the earnings of 5.1 million workers, including 1.6 million in the NHS and 1.5 million in public education, according to the Institute For Fiscal Studies (IFS). It is likely to cost billions of pounds.

In a Sunday broadcast interview, Mr Gove said it is the Government's "collective view" to "respect the integrity" of pay review bodies and suggested he was “suppressing” his own opinion on austerity.

In March, the NHS pay review body highlighted "widespread concerns" about recruitment, retention and motivation among employers and staff and said "we are approaching the point when the current pay policy will require some modification, and greater flexibility, within the NHS".

Health Secretary Jeremy Hunt will reportedly cite the report while demanding the pay cap is scrapped for NHS workers.

Conservative MP Maria Caulfield, a former nurse, said she had found the pay cap "extremely difficult" and most nurses worked extra shifts to make ends meet.

She told BBC Radio 4's Today programme: "It's a difficult, stressful, responsible job and if people aren't paid enough so they can make ends meet they will go and do something else.

"I think there is resentment building and not just in nursing, but across the public sector, that frontline staff have carried these services for the last seven years and if there is no recognition of that and no pay coming forward to recognise that then that's when the resentment builds," she added.

Tory former work and pensions secretary Stephen Crabb said Ms Caulfield had made a "compelling" case for a pay hike.

But Conservative former chancellor Lord Lamont said it was wrong for Cabinet ministers to "gang up" on Mr Hammond.

He told Today: "I think it is making his position, which is always very difficult, very very awkward indeed."

The Tory peer said austerity was "just another word for living within ones means".

"It's not really austerity," he added.

"People are talking about austerity as though it were an issue of too many repeats on television or they had got tired of watching Poldark and wanted a better programme

"This is not a choice. It is unavoidable that we have restraint on public spending."

Mr Crabb said ministers who disagreed with the official policy should not be in the Cabinet.

He told BBC Radio Four's World At One: "I don't think it's a great sight seeing different Cabinet members giving slightly different messages to the media.

"My own personal preference is that people should be direct and upfront.

"If they want to take a position that is different from that of the Government, the official Government line, then they shouldn't be in the Cabinet.

"I'm saying that discipline on the part of all Cabinet members is really, really important."

Liberal Democrat Treasury spokesman and leadership candidate Sir Vince Cable said: "The staff who keep our vital public services running deserve a long-overdue pay rise.

"The situation has changed since the public-sector pay cap was first introduced, at a time when there was a real budget emergency and fear of large-scale public-sector unemployment.

"The issue we face now is very different. We are struggling to recruit and retain public-sector staff.

"We have an unsustainable situation where teachers and nurses are having to leave their jobs because they can't afford to live in the area they work.

"If the Government can find billions for corporation tax cuts, it is time they found a little bit extra for those working so hard to deliver our public services."