Senior Tories in revolt against May over public sector wages
Consensus grows that Downing Street must signal change of direction
Theresa May is facing a chorus of Tory demands for a radical overhaul of state funding for public services as cabinet ministers and senior Conservative MPs back higher pay for millions of NHS workers, more cash for schools and a “national debate” on student debt.
The prime minister’s waning authority was highlighted as Jeremy Hunt, the health secretary, and Justine Greening, the education secretary, who has demanded £1bn in extra schools funding, lobbied for an easing of austerity and senior Conservative MPs insisted public services would be in growing peril without an urgent loosening of the purse strings.
Philip Hammond, the chancellor, has come under increasing pressure to ease spending constraints in several areas since the general election deprived May of her majority.
On Monday Boris Johnson, the foreign secretary, waded into the escalating cabinet row, throwing his weight behind calls for the 1% ceiling on wage increases to be lifted for public sector workers, including nurses and teachers. Johnson’s intervention follows a similar call from Michael Gove, the environment secretary.
“The foreign secretary supports the idea of public sector workers getting a better pay deal and believes the findings of the pay review bodies should be respected,” a senior government source said.
Separately, Damian Green, the de facto deputy prime minister and a May loyalist, hinted at a wider rethink when he said there might need to be a national debate about the level of student fees, in order to appeal to younger voters.
The level of internal pressure for the abandonment of austerity puts Hammond under pressure to consider raising taxes to fund any extra public spending. It came as the Nursing and Midwifery Council, the official body that regulates nurses and midwives, revealed evidence of a growing crisis in the recruitment of nurses.
Government sources made it clear that Hunt was prepared to take on Hammond and call for the lifting of the 1% pay cap for nurses and other NHS workers, citing as evidence a hard-hitting report published in March by the government’s own NHS pay review body. In the report, the government’s advisers warned that the cap would “not be sustainable for much longer” and said the costs of plugging gaps caused by staff shortages could soon become greater than the savings. It also highlighted the effects of Brexit, saying “changes in the UK’s relationship with the EU may reduce the ability to fill shortfalls in staff numbers from overseas”.
A poll for the Observer by Opinium shows the extraordinary extent to which May has lost the trust of voters since the height of her popularity in April and, equally striking, since the June general election. Over the same period, Jeremy Corbyn, the Labour leader, who has called for an end to austerity and the public sector pay cap, has risen in public esteem.
On 19 April, May’s net approval was +21% (when the number who disapprove is subtracted from those who approve) while Corbyn’s was -35%. Now May is on -20% and Corbyn on +4%. Since the general election on 8 June, 61% of voters say their opinion of May has become more negative.
While the Conservatives do not want to be seen to be responding to Labour pressure, behind the scenes there is a growing view that May and Hammond have to give a clear signal that the government will change direction before parliament breaks for the summer on 20 July. MPs and ministers then expect a change of policy to be confirmed in Hammond’s autumn budget.
Many Tories say the party’s deal with the Democratic Unionist party, in which £1bn in spending was secured for Northern Ireland in exchange for the party’s support for the Conservatives in the Commons, has made the case for the public sector pay cap impossible to defend.
Irked, and not afraid to say so … anti-austerity marchers in London