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Liz Truss’ Public Sector Pay U-Turn Criticised As “Laughable” By Former Treasury Minister


3 min read

A Conservative former treasury minister has called Liz Truss’ U-turn on public sector pay boards “laughable” and accused her of producing “one crazy idea after another”.

Lord Jim O’Neill — who served as commercial secretary to the Treasury between 2015 and 2016 — said the proposal had been “disappointing” and was “a sign of our commitment to levelling up”.

Leadership hopeful Liz Truss was forced to backtrack on Tuesday on her proposal to link civil servants' pay to the living standards of the place they work. Under the policy, civil servants outside of London and the South East could expect lower pay to reflect their lower living costs.

Following the criticism, a Truss campaign spokesperson said there had been a "wilful misrepresentation" of her campaign and insisted that “current levels of public sector pay will absolutely be maintained”.

Speaking to BBC Radio 4’s Today programme on Wednesday, Lord O’Neill was scathing of Truss’ U-turn, suggesting it did not align with the levelling up agenda championed by Boris Johnson’s government, of which Truss was a part. 

"[It's] laughable really — given that the guy she’s still quite happy to align herself with's signature policy was supposedly levelling up — the optics of that: dear, dear dear,” he said.

He added: “That is a sign of our commitment to levelling up. I'm sorry, it's very disappointing.”

Lord O’Neill also dismissed the justification initially put forward by the Truss campaign claiming that the proposal could save over £8.8bn a year.

“If you're going to come up with endless crazy tax cuts to keep yourself popular for the small number of people that vote for the new leader, then that's the sort of thing that follows. One crazy idea results in another one.”

He continued: “The country needs a leader that wants to do something seriously about our productivity performance and cutting taxes to support domestic demand when we have significant challenges with inflation shouldn't be at the forefront of them.”

The criticism was echoed by Labour, with party campaign coordinator Shabana Mahmood suggesting the U-turn exposed the “absolute joke” that levelling up had become for the Conservative party.

“It's not really featured in any of the proposals that the candidates are putting forward,” she told LBC.

“Liz Truss’ proposals from yesterday would have resulted in an absolute levelling down of pay conditions for workers everywhere outside of London.”

She added that Truss had raised “big questions to answer about her political instincts” following yesterday’s backtrack, highlighting that the foreign secretary had made similar proposals when she was chief secretary to the Treasury in 2018.

“This proposal that she was pitching is a basket of bad ideas that occasionally get a hearing in politics when people are scrambling around for something to say,” Mahmood continued.

“It's a terrible idea… because it would level down everywhere in the country outside of London. It would decimate public sector pay and conditions for nurses, for teachers and for other workers as well."

A source also suggested on Tuesday the plans would be a “gift” to Labour as they would punish workers in the key Red Wall territories that helped propel the Conservatives to victory in 2019.

The policy was also heavily criticised by Tees Valley Mayor Ben Houchen, who said he was left “actually speechless” by the announcement.

“There is simply no way you can do this without a massive pay cut for 5.5 million people including nurses, police officers and our armed forces outside London,” the Tory rising star, who is backing Rishi Sunak for leader, said on Twitter.

“Liz Truss’s campaign is explicit that their savings target is only possible ‘if the system were to be adopted for all public sector workers’.” 

“This is a ticking time bomb set by team Truss that will explode ahead of the next general election.”

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