Ministers have been accused of using “divide and rule” tactics on public sector pay as it emerged that NHS staff and the armed forces won’t get a wage rise until next year at the earliest.
No.10 signalled that it would not budge on the 1% pay cap for nurses, doctors and servicemen and women this year - and Chancellor Philip Hammond told business that Government should not “take our foot off the pedal” and “must hold our nerve” on salaries.
But a Home Office minister said that “fair” pay was “under active discussion” for police officers and others.
Policing minister Nick Hurd also suggested that only “frontline” public sector workers may merit a pay hike beyond the cap, a remark seized on by trade unions who want equal treatment for behind-the-scenes staff such as cleaners and support workers.
Millions of public sector staff have suffered real terms pay cuts since the pay freeze was ordered by George Osborne in 2010, followed by a cap in 2012.
No.10 ruled out any change to pay for NHS and military staff until April next year.
But teachers and police, whose pay rates are due to kick in this September, could see their own independent review bodies – due to report this month - calling for future increases above 1%.
Hurd told MPs: “We want to make sure that frontline public service workers, including the police, are paid fairly for their work...How we do that, in a way that is sustainable and affordable, is under active discussion.”
Mark Serwotka, general secretary of the PCS union, seized on the hint that only “frontline” staff would be rewarded and called for much greater collective bargaining for civil service staff.
Serwotka told HuffPost UK: “These are classic divide and rule tactics that we’ve seen before and are all too familiar with in the civil service, where pay is notionally decided by scores of different departments but to strict rules set by the Treasury.
“The pay cap must be lifted and it must be lifted for all public sector workers. The majority of public sector workers are not covered by a review.”
Labour seized on fresh confusion in the Government’s position, as Downing Street stuck to its 1% cap - despite a string of Cabinet ministers hinting it was time to let independent pay review bodies get on with their own recommendations.
And Hammond told the CBI business group his “approach has not changed” to pay, and warned he would not take Labour’s “path of higher taxes on business and wealth creators, higher spending, nationalisation, and higher borrowing”.
In an apparent jibe at Brexit-supporting fellow ministers Boris Johnson and Michael Gove, Hammond even seemed to blame Brexit for the public sector pay squeeze.
“There is frustration over the stagnation in real pay growth...driven by the current spike in inflation which itself is due mostly to currency depreciation [the fall in sterling since the EU referendum].”
Theresa May’s official spokesman said that Hurd was merely confirming current policy: “We are in the process of working through recommendations. And that’s what the minister was referring to.”
The spokesman earlier made plain that it was too late to give the NHS and armed forces a pay rise this year.
Asked whether No 10 was ruling out looking again the deals for 2017/18 in light of public disquiet at the general election, the spokesman said: “These were the recommendations that were made for 17/18 and we’ve accepted them... These are the settlements for 17/18.”
“For 17/18 nurses, doctors, dentists and all armed forces have had and agreed 1% uplifts. Still to come are teachers, police, senior civil servants and police officers,” he said.
Jeremy Corbyn ridiculed Boris Johnson as he became the latest senior Tory figure to call for a lifting of the seven-year ceiling wage rises.
Sources close to Johnson said on Sunday night that he “strongly believes” the Government can offer an increase in a “responsible way”.
Some Whitehall insiders suspect that the 1% cap will stay in place or all workers this year and that Chancellor Philip Hammond will use his coming autumn Budget to signal pay hikes from 2018 instead.
With Hammond struggling to find the billions needed for any relaxation on pay, some Tories are privately talking about ending pension tax relief for higher earners or even delaying planned corporation tax cuts.
However, Johnson and fellow Brexiteer Michael Gove suggested they don’t want tax hikes to foot the bill for higher pay.
TUC General Secretary Frances O’Grady told HuffPost UK: “The government must not hide behind the public sector pay review bodies. There is nothing stopping ministers recommending real-terms pay increases for public sector workers.”
Meanwhile, there was fresh embarrassment for May when yet another police chief attacked ministers for suggesting police budgets and staffing had been “protected”.
West Midlands Chief Constable Dave Thompson told the Birmingham Mail: “We think the Government needs to offer real terms protection for policing because if you don’t, I think policing is quite unstable nationally.
“Our challenge to Government is to say, we are quite fragile at the moment. You need to stabilise us with real terms protection because otherwise I think policing might break.”