LONDON – Prime Minister Theresa May has reportedly promised to scrap the 1% cap on public sector pay rises following increasing pressure from a number of senior Conservative MPs.
Tory MPs including former party chairman Grant Shapps visited the prime minister in Downing Street this week to demand an end to the public sector pay freeze, according to multiple reports on Friday morning.
This followed chaos over the government’s position on Wednesday, when the policy appeared to change to scrapping the cap, before the prime minister appeared to perform a U-turn on the U-turn, denying the pay cap was to be removed.
The cap was introduced by former prime minister David Cameron in 2010 and has resulted in public sector pay being frozen at one percent rises for the last seven years. May and her chancellor Philip Hammond have both insisted that the cap will remain until at least 2019, but it appears significant pressure from Conservative MPs has forced the prime minister to change the government’s policy.
One MP who was at this week’s meeting in Downing Street, which included May’s chief of staff Gavin Barwell, told the Sun newspaper: “Gavin told us that the PM completely accepts there needs to be some big changes of style and tone, but she can’t be seen to be pushed around by Comrade Corbyn.
“Instead, she and Philip Hammond will invite the pay review bodies to come back with bigger settlements in due course. We all came away very happy with what we heard.”
A number of senior Tories have publicly backed calls to scrap the pay cap this week. Former cabinet minister Robert Halfon the told Radio 4’s Today programme on Friday: “I think we need to remove the public sector cap.”
Asked how ending the public sector pay freeze would be funded, Halfon suggested it ought to come from cutting the amount of money Britain sends overseas as part of its foreign aid budget.
“We need to look at ways of using the existing budget,” he told Today.
“We have to look potentially at sacred cows, so what I’m suggesting is that we look at some of the overseas aid budget which is going to be roughly over £13 billion in the coming year.
“I’m very passionate about overseas aid,” he added. “but we have to recognise that we haven’t got unlimited money pots.”
On Wednesday Defence Secretary Sir Michael Fallon said that above-inflation wage increases for the public sector is something that government must think about enacting.
“This is something we have to consider, not just for the army, but right across the public sector as a whole,” he said.
The Conservative minority government defeated a Labour amendment on Wednesday which called for an end to the public sector pay cap plus a reversal of cuts to public services. The Tories defeated the amendment with the aid of the Democratic Unionist Party by 323 votes to 309.