PM: Dropping austerity could leave us like Greece

May promises she won’t flinch from tough choices on pay

THERESA May backed Philip Hammond in the Cabinet row over public sector pay yesterday

The Prime Minister told MPs it was ‘not fair to refuse to take tough decisions and to load debts on to our children and grandchildren’.

She rounded on Jeremy Corbyn, warning that Labour’s profligate agenda risked turning Britain into an economic basket case like Greece. She said this nation had to live within its means.

Mrs May has come under pressure from some ministers to axe the 1 per cent cap on public sector pay as a sign that the Government is listening to public concern about austerity.

Jeremy Hunt, Boris Johnson and Michael Gove are among the senior figures to suggest the cap, which is due to run until 2020, should now be relaxed.

But the move has been resisted by Chancellor Mr Hammond, who has warned against ‘knee jerk’ action on public sector pay in response to the election result.

Mrs May yesterday told MPs that ministers would ‘very carefully consider’ the advice of the pay review bodies that gov- ern the pay of teachers, police officers and prison officers in the coming weeks.

But these bodies have been given a remit to limit increases to an average of 1 per cent. Ministers are discussing next year’s pay reviews, which cover more than five million public sector workers.

Downing Street refused to be drawn on their likely response, which will be published by the Treasury this summer. A climbdown over public sector pay remains possible later this year, although increasing pay by just 1 per cent would cost around £5billion.

Mrs May yesterday indicated she was not willing to abandon pay restraint in the face of pressure from Labour, the unions and even her own ministers.

Addressing Mr Corbyn directly, she said she valued public sector workers as much as him, adding: ‘The difference is that I know we have to pay for them.’

The Prime Minister said it was time to remind Mr Corbyn ‘what happens when you do not deal with the deficit’.

She added: ‘ This is not a theoretical issue. Let us look at those countries that failed to deal with it. In Greece, where they have not dealt with the deficit, what did we see with that failure to deal with the deficit? Spending on the health service cut by 36 per cent. That does not help nurses or patients.’

Labour described the comparison as ‘preposterous’.

And in the Commons, Mr Corbyn accused the PM of ‘recklessly exploiting the goodwill of public servants’ by refusing to lift the pay cap at a time when inflation is running at almost 3 per cent. The Labour leader said there was an ‘epidemic of low pay’, particularly affecting younger people.

He will step up his attack today, accusing the Tories of presiding over a lost decade.

Speaking at the British Chambers of Commerce, he will say the UK has suffered an explosion of low-paid, insecure jobs.

Downing Street yesterday played down the significance of firemen being offered a 2 per cent rise, saying the Government did not have a direct role in setting their pay.

‘Won’t help nurses or patients’