Public sector pay cap facing axe in Budget as government signals climbdown

Posted On: 
28th June 2017

The cap on public sector pay is set to be axed in the autumn after Downing Street admitted the public is "weary" of austerity.

Ministers are set to ditch the 1% cap on paublic sector pay rises.
PA Images

In a major climbdown, Number 10 hinted that the controversial policy will be scrapped in the next Budget.

The U-turn is also a huge win for Jeremy Corbyn, who demanded that the 1% cap - which has been in place since 2010 and had been expected to run for another two years - be lifted during the general election campaign.

Michael Fallon: Tories must consider ending 1% public sector pay cap

Senior Conservative MP backs higher taxes to boost public services

Labour to force Queen’s Speech vote in bid to end cuts to emergency services

MPs will also vote on lifting the cap this evening after Labour tabled an amendment to the Queen's Speech

Defence Secretary Michael Fallon said earlier today overturning the policy "is obviously something we have to consider not just for the army but right across the public sector as a whole".

A spokesman for Theresa May said the Government would analyse the recommendations of the public sector pay review bodies due over the summer before making a final decision.

But he added: "Ministers, including the Prime Minister and the Chancellor, have been clear that they are going to listen to the messages that were sent at the election.

"We understand that people are weary after years of hard work to rebuild the economy, and it is vitally important that we balance the books and live within our means.

"Public sector pay restraint is one of the tough choices we've had to make to balance the books after Labour's crash. We're looking at the recommendations from the pay review bodies that are coming in."

A source close to Jeremy Corbyn welcomed the apparent climbdown.

He said: "It's clear that one of the results of the election is that the very sharp increased Labour vote and number of seats, and the fact that this is now a minority government, means that they have had to make a number of important concessions to the public.

"They've retreated on the winter fuel allowance, they've abandoned their attempts to scrap the triple lock on pensions and now they've appeared to indicate they they are going to review the public sector pay cap, which we were calling for during the election campaign.

"It's very encouraging that they've conceded to the public view. It's quite clear they no longer have a mandate for many of the policies they stood by."