Hammond under pressure to abandon public sector pay cap

Hammond under pressure to abandon public sector pay cap

• Theresa May faces increased pressure to boost spending on public services 
• Polls suggest that support for so-called 'austerity' policies are quickly fading
• Tory MPs threaten to challenge him when he reveals his post-Election Budget  

By Simon Walter And Glen Owen For The Mail On Sunday

Published: 01:44 BST, 2 July 2017 | Updated: 01:44 BST, 2 July 2017

Chancellor Philip Hammond faces being forced to abandon his fight to keep a lid on public sector pay after rebel Conservative MPs last night threatened to vote down his Budget.

The threat came as Theresa May faced growing pressure from her party’s MPs to boost spending on schools and hospitals after polls suggested fading support for so-called ‘austerity’ policies.

Until now, the Chancellor has resisted moves by fellow Ministers to persuade the Prime Minister to end the five-year, one per cent annual pay cap on public sector workers. Last week he forced Downing Street to deny that a decision had been made.

The Chancellor has up until now resisted moves to end the five-year annual pay cap on public sector workers 

But Mr Hammond’s hopes of winning the latest in a series of rifts with No 10 appeared to be scuppered after Tory MPs threatened to challenge him when he unveils his post-Election Budget in November. Lifting the pay cap, and linking it to inflation instead, would cost the Treasury an extra £1.4 billion a year alone.

Conservative MP Johnny Mercer said that up to 40 Tory MPs were in favour of lifting the cap â€" and ‘most’ of them would be prepared to ‘flex their muscles’ in the debate on the Budget. A Commons defeat could bring down the Government but Mr Mercer vehemently denied this was the aim of the rebels. He said: ‘I don’t think anyone is in the mood to bring down the Government, but we have to work together on this. The Chancellor is listening and the P rime Minister is listening.’

Polls suggest fading support for the Tory's austerity politics 

In a separate move, another outspoken Tory MP, Sarah Wollaston, joined forces with Labour MP Liz Kendall and Liberal Democrat Norman Lamb in an attempt to win more health spending. A joint statement savaged Mrs May’s manifesto pledge on social care, the so called ‘dementia tax’, as a ‘flawed proposal that delivered a hammer blow to her popularity’.

Dr Wollaston effectively pledged to exploit Mrs May’s political weakness by saying her failure to win an overall majority provided a ‘welcome’ chance to drop plans for a hard Brexit.

Tory MPs were also demanding a U-turn on cuts in school budgets. The rebels claim they are supported by Education Secretary Justine Greening.

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