Double defeat for May as she faces war on public pay deals

‘Deficit is not under control’

THERESA May’s Unionist allies signalled last night they could veto any further pay restraint in the public sector after joining forces with Labour to defeat the Government.

In an embarrassing setback, the Prime Minister lost two Commons votes yesterday after the DUP sided with Labour over the issue and university tuition fees.

The move came despite the £1billion deal Mrs May struck with the party in order to guarantee support on key issues after losing her majority. The defeats came during debates called by Labour and do not have a binding effect on official policy.

But last night the DUP indicated it could dig in its heels over public sector pay in the Budget when ministers set the framework for next year’s pay awards for five million-plus workers. Senior MP Ian Paisley Jr said the party’s move sent out a ‘clarion call’ on the need to end the salary cap.

Deputy leader Nigel Dodds suggested yesterday’s vote may be just the start of DUP efforts to persuade the Government to open the purse strings for state workers.

Asked if the DUP would support public sector pay restraint in the November Budget, Mr Dodds said: ‘ We will wait and see what the Budget is. The Government know our position on some of these issues. We will work our way through this.’

Downing Street last night played down the significance of losing the votes and said this did not herald a rupture in the DUP deal. ‘We are pretty relaxed,’ a source said. ‘It is very clear that we have a confidence and supply arrangement – it is not a coalition – and they do not have an obligation to vote in any particular way outside of that.’ This week Downing Street signalled the one per cent pay cap will be lifted in the Budget.

But Chancellor Philip Hammond is warning ministers that the Government cannot afford to tear up pay restraint altogether across all sectors.

Any move by the DUP to unpick Tory plans to balance the books is likely to ring alarm bells in the Treasury.

Former Tory Cabinet minister Francis Maude warned that ministers could not afford to open the spending taps while the Government is still borrowing £1billion a week.

Mr Maude said: ‘The deficit is clearly not under control. We are in quite a sustained period of economic growth and yet we still have a budget deficit that is too big.

‘ We should be getting towards a surplus. We’re not. So the idea there is lots of money around is fantasy… I’m not happy we are giving the impression we can suddenly spend money to alleviate a political pressure point.’

Tory whips abandoned any hope of defeating the Labour motions after the DUP indicated it would switch sides. Instead Conservative MPs boycotted the vote.

nJeremy Corbyn’s spokesman has refused five times to say if he backed calls for illegal strikes made by Unite boss Len McCluskey.

The Labour leader supports scrapping the public sector pay cap and repealing antistrike laws, said the spokesman. But he would not comment on stoppages which defied the legal need for 50 per cent support in a ballot.