The white-anting of Theresa May by the more ambitious members of her Cabinet has taken a significant step forward with Boris Johnson letting it be know that he does not agree with the increasingly unpopular 1% pay cap on public sector wage rises. The Foreign Secretary has let reporters know through “sources close to him” that he thinks it is time to ease the pay cap, casting the Prime Minister and Chancellor Philip Hammond as the stubborn defenders of the pay cap at a time when many Tory MPs are calling for an easing of austerity.
The Environment Secretary Michael Gove said on the weekend that he believed the government should listen to independent wage reviews, which may recommend higher wage rises, ending the pay cap.
Supporters of Brexit Secretary David Davis have already begun to chip at the PM over her handling of Brexit, and the pay cut is not far behind Brexit as a politically vulnerable issue for Downing Street.
Tory MPs are restless in the face of Labour leader Jeremy Corbyn’s relentless focus on austerity, which is a simpler and more unifying issue for Labour than Brexit. Corbyn addressed a rally against austerity on the weekend and has argued in Parliament that the Grenfell Tower fire was the result of local authorities being poorly funded.
Corbyn tried unsuccessfully to force an amendment to the Queen’s Speech ending the 1% public sector pay cap. Chris Hopson, the chief executive of NHS Providers, which represents hospitals and other health service providers, has said that lower paid staff are leaving the service to stack shelves in supermarkets rather than carry on working in the NHS.
Dr Mark Porter, the chairman of the British Medical Association, has also warned that the NHS was running on “fumes” as the result of critical underfunding. He said that if the UK merely matched the average GDP share spent on healthcare in other leading European economies we would see an extra £15 billion invested in NHS England over five years.
Tired of Austerity
Austerity is the government’s strategy of cutting spending in order to reduce its annual budget deficit to rein in national debt. As a result we have had 20,000 police jobs cut in the past seven years, with plans for a further 4,000 job to go.
While the NHS and police were hailed after recent terrorist attacks in London and Manchester, the austerity-beacon of Grenfell drew public attention to the 10,000 frontline firefighting jobs that have been lost since 2010.
A new British Social Attitudes survey has found that 48% of respondents think the Government should raise taxes and increase spending, which is the highest proportion since 2004. A considerably lower 44% wanted tax rates to stay the same while just 4% wanted lower taxes.
Even the Chancellor, who has consistently upheld the Conservative principle of keeping taxes low, has said that the election result showed that the UK public was “weary after years of hard work to rebuild the economy after the great crash of 2008-09”.
But with a deficit at 2.5% of GDP “we have to live within our means,” he said. “More borrowing which seems to be Jeremy Corbyn’s answer is not the solution.”
There has clearly been a change of tone on austerity from some influential Conservatives since the election. Sir Oliver Letwin, who served as the Tory policy chief under David Cameron, said it may be time to abandon the Conservatives’ commitment to avoiding significant tax rises.
The Conservatives went to the last election pledging to hold down taxes, while Labour’s manifesto said it would lift taxes on the highest 5% of income earners but Letwin said tax rises reaching well beyond the rich could be the answer to the two-fold problem of controlling national debt and improving public services.
“It may well be, in one way or another, a large number of people will have to pay a little more tax if we are going to maintain the trend towards reduced deficits and yet spend a little more on the crucial public services that do need more spent on them,” Letwin said.
By Stewart Vickers @VickHellfire
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