Government accused of '˜shambles' amid confusion over pay cap

Senior Conservative figures today gave their strongest signal yet that they were preparing to scrap the unpopular policy, with the Prime Minister’s official spokesman suggesting it would be reviewed at the Budget.

An end to the one percent cap has wide support across parties, with a number of Tory MPs joining calls for nurses, teachers and police officers to be given a pay rise.

But within hours of asserting that ministers have “heard the message” sent by the election, Downing Street appeared to backtrack on previous claims as it stressed Government policy “has not changed”.

The U-turn came ahead of a key vote on the Queen’s Speech, as Labour tabled an amendment calling for an end to austerity.

Opening the debate in the Commons, Shadow Home Secretary Diane Abbott warned there was a “human price to pay” for long-running cuts to public services.

Labour has challenged Tory MPs – many of whom blame voter frustration at the austerity agenda for the party’s poor election result – to join them in supporting the motion.

Speaking in the Commons, the Totnes MP and former Health Select Committee chairman Dr Sarah Wollaston seemed to back their calls for an end to the pay cap as she warned it was having a “significant impact” on NHS staff morale.

“I agree with the points that have been made that it’s time for us to think again about the impact of the public sector pay cap,” she said.

“I think that one of the ways that we will address the recruitment, retention and morale is by delivering them a fair pay settlement so I hope that we can make further progress on that.”

Earlier today, Defence Secretary Michael Fallon became the latest minister to indicate that the Government was considering an end to the seven-year wage restriction.

Speaking at a Royal United Services Institute event, he said the idea of a pay increase was “something we have to consider not just for the army, but right across the public sector as a whole”.

He follows Health Secretary Jeremy Hunt, Transport Secretary Chris Grayling and Work and Pensions Secretary David Gauke in hinting at a change in policy.

Downing Street later appeared to lend weight to his comments, with the Prime Minister’s spokesman claiming the Government “will listen to evidence of the pay review bodies” before reaching a decision.

“Ministers, including the Prime Minister and the Chancellor, have been clear that we are going to listen to the messages that were sent at the election,” they added.

However, just hours later a Number 10 source played down suggestions of a review of the cap, insisting that “the policy has not changed”.

This prompted accusations that the Treasury was “at war” with Downing Street, with Shadow Chancellor John McDonnell dismissing it as a “shambles”.