Millions of public sector workers may finally get a real terms pay rise after No.10 refused to deny reports that the seven-year wage freeze would end.
The Prime Minister’s spokeswoman said that Theresa May and the Government “recognise the sacrifice” that nurses, teachers and others had made while the 1% cap had been imposed.
A string of ministers this summer claimed they were “not deaf” to public concern over the issue displayed in the general election, with many voters calling for an end to the cap.
Trade unions have argued that many staff have suffered effective pay cuts due to rising inflation and Chancellor Philip Hammond has been urged publicly to change course by Boris Johnson, Michael Gove and Jeremy Hunt.
No.10 and Hammond have insisted that any rise would have to be affordable, but the Sun today reported that a plan had been hammered out to spread the £4bn cost over two years at first.
Downing Street refused to deny the report, which said that nurses would be first in line for rises from next April.
Pay increases of at least the rate of inflation, currently 2.6%, could be authorised by ministers, lifting the pay of the average nurse of £31,600 a year by at least £820.
The PM’s spokeswoman said that the public sector pay review process was “ongoing and I’m not to comment on the speculation”.
But she repeatedly refused to deny the report, and added that the PM’s own view was sympathetic.
“She said on a number of occasions that we know that many people in the public and private sector feel they are just about managing and we recognise the sacrifice they are making,” she said.
The spokeswoman suggested it would be “autumn” before the Government’s remit for independent pay review bodies would be ready.
Amid suggestions the autumn Budget would unveil the detailed plans, Hammond told the BBC today that he “constantly” kept under review the balance between the need to reward workers fairly and the public finances.
Gail Cartmail, assistant general secretary of the Unite union – Britain’s biggest – pointed out that any change in Tory policy would be too little, too late.
“Public sector workers have had to endure seven years of pay misery. Most now only have enough to just about cover the bare essentials and, in some cases, workers have had to resort to food banks to make ends meet,” she said.
“The government’s proposals, which will not even come into effect until 2019 for many workers, are a drop in the ocean and will do nothing, to address the years of pay cuts our public servants have had to endure. Ministers make no mention of compensating workers for their lost wages.”
Former Tory Education Secretary Nicky Morgan welcomed the shift.
“Public sector pay was clearly an issue in the election, and when I was Education Secretary we saw it was having an effect on recruitment,” she said.
“But as a fiscally responsible government it’s got to be done in a way that doesn’t undermine the hard work of balancing the books of the last seven years.”