U.K. Austerity Tested as Ministers Take on Public-Sector Pay Cap

  • Gove tells Sunday Times pay bodies’ advice should be heeded
  • May’s office says recommendations taken on case-by-case basis

Prime Minister Theresa May and Chancellor of the Exchequer Philip Hammond are coming under mounting pressure to ease U.K. austerity policies and abandon a cap on public-sector pay, as May’s office said recommendations are being considered on a case-by-case basis.

Environment Secretary Michael Gove said in the Sunday Times the government should heed advice from public-sector pay bodies, which are expected to recommend increases breaching the current 1 percent ceiling. Gove spoke days after Defence Secretary Michael Fallon and Transport Secretary Chris Grayling suggested the wage situation is under review.

Michael Gove on July 2.

Photographer: Jeff Overs/BBC

“You’ve got to listen to the public sector pay review bodies,” Gove told the Times. “When they made recommendations on school teachers’ pay I think I always accepted them. My colleagues who deal with these pay review bodies would want to respect the integrity of that process.”

Calls to ease austerity from within May’s cabinet reflect a new political reality. The snap election last month left her with only a minority administration rather than the broader majority she had expected, spooking many Conservative lawmakers who partly blame the result on the government’s austerity policies. Even Hammond admitted he accepts that voters were “weary” of spending restraint, and its effects on services.

Shifting Policy

The government’s position on salaries is mired in confusion. While Parliament rejected Labour’s attempt to force May to list dropping the cap in her Queen’s Speech on Wednesday, her office suggested before the vote that the ceiling may be lifted, before backtracking three hours later. The same day, the Treasury said such a move wasn’t being considered.

Speaking on the BBC’s “Andrew Marr Show,” Gove wouldn’t confirm he was calling for the limits to be removed, saying instead the government “should respect the integrity of that process” by which pay bodies make recommendations.

“Tough decisions have helped get our deficit down by three quarters, and public sector pay restraint has helped us protect jobs,” May’s office said Sunday. “Independent public sector pay review bodies are currently reporting to government and we are responding to them on a case-by-case basis. While we understand the sacrifice that has been made, we must also ensure we continue to protect jobs and deal with our debts.”

The prime minister’s office also said that comments by her deputy, Damian Green, who on Saturday said a national debate may have to take place on university tuition fees, didn’t amount to a rethink of government policy, and that a change wasn’t being considered.

Separately, the Treasury confirmed Jane Ellison, who was formerly financial secretary, had been appointed as Hammond’s Parliament and legislative adviser.

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