One of the consequences of Theresa May’s disastrous election campaign is that the balance of power has swung firmly away from the PM towards her Cabinet. This change of fortunes means that ministers can now speak their minds freely in a way that would have been foolhardy just a few weeks ago. Boris Johnson is the latest to make the most of this new found freedom, saying it is time to end the cap on public sector pay. The Foreign Secretary is said to support a pay rise for such workers, and thinks this could be done in a ‘a responsible way’ without raising taxes.
Philip Hammond does not agree, with the Daily Telegraph reporting the Chancellor telling his cabinet colleagues that such a move could only be made at the expense of a number of unpopular tax hikes (including a tax hit on the self-employed, which went down badly when the Chancellor last tried it at his Budget).
Theres’s nothing unusual about cabinet ministers taking different approaches, but what is worrying for the Tories is the way in which this is all now blowing up in public. Jeremy Hunt, Justine Greening and Michael Gove are all leaning towards favouring a public sector pay rise; while Philip Hammond’s defenders are few and far between (although Norman Lamont did use an appearance on the Today programme this morning to suggest other ministers were wrong to ‘gang up’ on the Chancellor).
The Tories need to tread carefully here. This new found Cabinet confidence is good news for the profiles of the ministers involved, but it is bad news for a government which is struggling for unity and trying desperately to face down the threat of a resurgent Labour party. What does seem clear is that the mood is changing and it would be a safe bet to assume that a pay rise for the public sector is now on the cards. Theresa May’s chief of staff, Gavin Barwell, who said before he was given a job in Downing Street that part of Corbyn’s success could be attributed to his ability to tap into voters’ concerns about austerity, reportedly promised Tory MPs that the cap will be lifted. And in the wake of the Government’s £1bn deal with the DUP, defending the pay cap – which was never easy in the first place – has now become considerably more difficult.
But timing is crucial. Jeremy Corbyn will try – and probably succeed – in claiming credit for any pay rise when it is announced. Yet if the Tories really are prepared to ditch a manifesto pledge and signal an end to the cap, they must do so in a way that makes it clear they are not merely folding to another demand from the Labour party. What’s more, they must also balance any loosening of the purse strings with the message that they are still the party to trust on economic competence. For a Prime Minister already under pressure, the day job is showing few signs of getting any easier.
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