Chancellor Philip Hammond under pressure to find £4billion to give public sector workers a pay rise
PHILIP Hammond is under pressure to find £4billion to give public sector workers a pay rise AND keep Theresa May in power.
Cabinet colleagues are urging the Chancellor to end the seven-year wage squeeze on doctors, nurses, teachers, armed forces and care staff.
They want him to make the first move now – before he is pushed into it by pay review bodies or a damaging strike.
Health supremo Jeremy Hunt and Education Secretary Justine Greening, who control the biggest public sector workforces, are leading the charge.
One ally said: “They are feeling the pinch and both want to see something done sooner rather than later.”
About 50 Tory MPs confronted chief whip Gavin Williamson to drive home the message.
Many told him pay erosion of five million public sector workers was a big issue raised on the doorstep during the general election campaign.
Some even blamed public anger at continued austerity on their poor result.
But Mr Hammond fears he is in danger of becoming “a cash machine for disgruntled MPs”.
He has warned that taking the brakes off austerity risks leaving a huge black hole in the public finances.
Lifting the one per cent cap on public sector pay and linking the next rise to inflation will cost the Treasury £1.4billion next year.
That comes on top of the £1billion price of securing DUP support for last week’s Queen’s Speech vote.
Mr Hammond has also ditched plans to raise £1billion by ending winter fuel payments for all pensioners – and a further £600 million by ending free school meals for infants.
A Cabinet source said: “There was a lot of vocal support for Jeremy and Justine who want to see something finally done about pay.
“There are very good arguments for continuing to bear down on the deficit, but the case for easing the squeeze on public sector pay is becoming irresistible for many colleagues.
“Tax rises would be difficult at this stage so it suggests economies may have to be found somewhere else.”
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Mr Hammond is holding firm and fears promises already made by the weakened PM – and new mood music on pay – could see him boxed in when he delivers his autumn Budget.
He also fears to cave in now could lead to Tory rebels demanding sweeteners for their support in future knife-edge votes.
But one minister said: “If he keeps the pay cap at the same level, then he may find the review bodies recommend paying above that.
"And the last thing we need is a dispute, particularly with the NHS unions.
"It may end up with an ugly dispute that could have been avoided if we had settled in the first place.”