Theresa May warns Britain could end up bankrupt like the Greeks if we abandon austerity
PM firmly sides with Chancellor Philip Hammond saying an end to cap on state wages will have to wait
THERESA May has warned Britain could end up bankrupt like Greece if ausertity is abandoned - as teachers and cops’ hopes of a pay rise within weeks were dashed.
The PM firmly sided with Chancellor Philip Hammond yesterday to signal an end to the long-runnning cap on state wages will have to wait.
The duo have until the end of this month to announce whether it will still apply for teachers, police, prison officers and civil servants’ cash this year.
During bitter exchanges at PMQs, Labour leader Jeremy Corbyn accused Mrs May of presiding over “a low-pay epidemic”.
And ugly public clashes between her Cabinet ministers on what to do about the 1% cap had created “a week of lip flopping and floundering”, the Opposition boss claimed.
Hitting back to defend austerity, the PM insisted: “I understand it has been hard for people who have been making sacrifices over the years as we’ve been dealing with Labour’s mismanagement of the economy.
“In Greece, what did we see with failure to deal with the deficit?
“Spending on the health service cut by 36% - that doesn’t help nurses or patients.”
But fresh hope emerged yesterday of bigger public sector pay rises next year, after Downing Street refused to rule out scrapping the 1% cap on rises in a few months time.
No10 refused to say whether it would form a part of fresh instructions for pay review bodies to be issued by Treasury Chief Secretary Liz Truss in September.
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If Ms Truss tells the bodies pay rises that public sector pay no longer has the limit, decent wage hikes for all state employees could kick in from April 2018.
Earlier, Transport Secretary Chris Grayling said any government decision on whether to relax the cap – due to last until 2019 - won’t come until the Budget in the Autumn.
Mr Grayling also admitted there are major splits in the Cabinet over the issue, saying the PM’s top table are “not all clones”.
But he insisted it was “a matter to be addressed at future budgets”.
It emerged yesterday that the government paid out a total of £172billion in wages to its workers last year – which added up to 22.8% of all government spending.