Public sector pay cap is matter for future budgets, says Grayling

Transport secretary says decision will be taken in the autumn, despite senior Tories’ calls for quicker easing of controls

Chris Grayling, the transport secretary, has dampened hopes of an imminent lifting of the 1% public sector pay cap for teachers, police and prison officers, saying the issue was a matter for future budgets.

He said a decision on the future of the cap would be taken collectively by the cabinet at the next budget in the autumn, despite signals from some senior Tories – including Michael Gove, Boris Johnson, Justine Greening and Jeremy Hunt – that they would like to see a quicker easing of the controls.

Speaking to BBC Radio 4’s Today programme, Grayling acknowledged there had been divisions within the cabinet over the issue, as they were “not all clones”. But he insisted it was “a matter to be addressed at future budgets”.

Firefighters became the first public sector workers to get a pay rise of more than 1% on Tuesday, but their salaries are not set by the government on the advice of independent review bodies like a number of occupations – teaching, nursing, doctors, prison officers, the armed forces and police.

The pay rise for the 2017/18 year has been kept at 1% for NHS workers and the armed forces, continuing seven years of public pay restraint. But there had been hope that the controls could be eased for those sectors whose deals are set to be announced in the next couple of weeks – police, teachers and prison officers.

Theresa May and the chancellor, Philip Hammond, have faced demands from dozens of their own MPs to ease the pain for families by raising pay and blocking school cuts after Jeremy Corbyn’s radical, anti-austerity Labour party stance secured gains in the general election.

Many feel action is urgent after a government-commissioned report suggested the average pay of teachers had fallen by £3 an hour in real terms, police officers by £2, while the wages of nurses have stagnated.

However, David Cameron, the former prime minister, used a speech in Seoul, South Korea, to come to his successor’s defence by saying it was too soon “to let spending and borrowing rip” because of the danger of future economic shocks.

“The opponents of so-called austerity couch their arguments in a way that make them sound generous and compassionate,” he told the Asia Leadership Conference. “They seek to paint the supporters of sound finances as selfish, or uncaring. The exact reverse is true.

“Giving up on sound finances isn’t being generous, it’s being selfish: spending money today that you may need tomorrow.”

Hammond has also challenged those who want the pay cap lifted to consider how they would make the argument for higher taxes or spending cuts to pay for an easing of the cap. On Monday, he urged his party to “hold its nerve”, arguing that borrowing piles debt on to the next generation.

He has said growth was the only sustainable way to boost public spending in the long run, although sources suggest he is ready to talk about ways to raise money to loosen the ties of austerity over the coming months.

One senior Treasury figure said despite that, things would continue to be financially constrained in the run-up to Brexit. Raising public sector pay in line with inflation at 2.9% would cost about £6bn a year.

Contributors

Rowena Mason and Anushka Asthana

The GuardianTramp

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