Teachers and police could get a pay rise in weeks – but tax rises may be on the way to fund it
The PM must decide by the end of the month whether to stick with the wage freeze
TEACHERS and cops could get a pay rise within weeks as ministers wrestle over whether to rip up a 1% cap on rises.
It emerged last night that Theresa May and her Chancellor must decide by the end of this month whether to stick to the hated wage freeze.
Pay review bodies for police, teachers, prison officers and civil servants have already submitted their formal recommendations, officials admitted.
A Treasury edict last year ordered the bodies to stick to the strict limit on hikes for all state workers.
But Mrs May and Philip Hammond now face huge pressure to relent and backdate the rise for the sectors from April, as demands from Tory MPs as well as seven different Cabinet ministers continue to pour in.
In another attack on the PM’s dwindling authority, Police minister Nick Hurd was the latest senior government figure to signal a major policy shift is under way after seven years of austerity.
Mr Hurd told MPs yesterday that a pay rise for the nation’s 125,000 cops is “under active discussion”, saying: “We want to make sure front line police officers are paid fairly for their work, not least because of the contribution they have made over the years to reducing the deficit we inherited”.
As The Sun revealed last week, the PM’s chief of staff Gavin Barwell promised an angry delegation of Tory MPs that the cap would be lifted at the Budget in the Autumn.
But the spiralling demands for a U-turn after the Tories’ election disaster may force the PM to act much sooner.
It also emerged yesterday that Mrs May faces fresh uproar if she gives more cash to cops and teachers but not NHS workers or troops.
MOST READ IN POLITICS
Pay reviews for nurses, doctors, dentists and the Armed Forces were agreed in March, leaving them still subject to the 1% cap.
Tory MP and former nurse Maria Caulfield insisted that many are struggling in her former occupation as they are no longer “paid enough to make ends meet”.
Government backbenchers also crossed swords on how to pay for the rise, with warnings that hiking state pay in line with inflation currently at 2.9% would cost £6bn a year.
Former soldier-turned-Tory MP Johnny Mercer argued: “The public sector pay cap was vital and saved jobs - but austerity is a necessary journey, not an end state”.
But former Tory Treasury minister Stephen Hammond said: “It’s fine you say that, but let’s have a discussion on how pay for this”.
While insisting the policy had not changed, Downing Street left the door open for a U-turn for all state workers when the Chancellor delivers his annual economic blueprint in the Autumn.
The PM’s official spokesman said: “There is a Budget in the Autumn. Let’s wait to see what happens”.
CHANCELLOR Philip Hammond last night signalled he was willing to up public sector pay - but only if Brits can stomach tax rises.Speaking to the CBI, the defiant Tory veteran launched a fierce defence of the economic plan of his predecessor George Osborne.And he insisted it would be reckless to abandon the good work through higher spending and higher borrowing. He said: "It would be easy to take our foot off the pedal but instead we must hold our nerve."He conceded he was aware of the "frustration" over stagnating pay growth.
And he told the CBI: "We, of course, recognise that the British people are weary after seven years hard slog repairing the damage of the Great Recession."But he insisted a balance had to be struck between "being fair to our public servants" and "fair to those who pay for them". And he said there needed to be a "grown up debate".The blast will be seen as another slap down for Boris Johnson and others in the Cabinet pushing for the Tories to respond to the frustrations of nurses, police and squaddies living under a 1 per cent pay cap.Last night sources claimed Ministers want the Chancellor to delay or abandon a series of tax cuts to fund afford an inflation linked public sector pay hike.A cut in corporation tax from 19 to 17 per cent is due to take effect in 2020-2021.Mr Hammond didn't talk about how a pay hike may be funded.But he said Britain had to acknowledge that borrowing to fund spending was "merely passing the bill to the next generation".And he said:
"The serious question to the electorate cannot be 'would you like us to tax someone who isn't you to pay for you to consume more'."But, 'would you be willing to pay more tax to consume more public services'."The Chancellor was credited with triggering the huge u-turn last week by No.10 when Downing Street signalled the 1 per cent public sector pay cap was all-but dead- only to later insist the current policy remained the same.
Insiders even claimed a furious Mr Hammond had told Theresa May she had to find the £3 billion a year to pay for higher public salaries.Mr Hammond last night told the CBI Britain was within sight of the "high wage, high growth economy". But he insisted the country had to maintain its focus on the "prizes within reach". "It would be easy to take our foot off the pedal, but instead we must hold our nerve."