Budget pressure rises over lifting pay cap

Written By: Ian Hernon
Published: November 18, 2017 Last modified: November 18, 2017

A pre-Budget battle is underway as Tribune went to press over moves to loosen the pay cap for teachers and nurses.

Chancellor Philip Hammond insisted at a Cabinet sub-committee that measures to tackle chronic housing shortages and the affordability of homes will be the “big idea” in his November 22 package. But he has come under pressure from worried Conservative MPs who report that public service pay is fast becoming a dominant issue on the doorsteps.

The sub-committee, including Theresa May and Communities Secretary Sajid Javid aimed to end ministerial divisions on the housing issue. They agreed an undisclosed increase in funding together with the easing of planning regulations and fresh incentives for the construction industry to build more homes on both brownfield sites and in the green belt. More cash will be available for apprenticeships for bricklayers and electricians. Such moves are enthusiastically backed by Mrs May’s new chief of staff, the former housing minister Gavin Barwell.

But former Education Secretary Nicky Morgan added her weight to those who say that the cap, in force since 2013 following a three-year freeze, should be lifted. Now the chair of the Treasury select committee, she said that although she did not back a “blanket” lifting of the limit, the case for teachers was a powerful one, adding: “I think we will be talking a lot in the budget about productivity.”

She went on: “One of the ways to increase productivity is to make sure people are getting the best education, they’re getting the best possible access to college and are being helped to be more confident about the skills they have for the jobs they are applying for. So, inevitably, I would argue, yes, as a former education secretary, if I was still doing the job, I’d be having a pretty fierce argument with the Treasury about saying: ‘Look, the public sector pay cap should be lifted, if not for everybody in the schools and education profession, then at least for those who actually we’re finding it hardest to recruit and retain’.”

The latest report by the independent teacher’s pay review body said that “trends in teacher recruitment and retention data show that schools continue to face substantial pressures” nd that “the number of qualified teachers leaving the profession for reasons other than retirement has continued to rise, and teacher retention rates have deteriorated”.

Other powerful voices in Whitehall are also pushing the case for a better deal for nurses, pointing out that under huge pressure following the Grenfell Fire, prison unrest and the terrorist attacks in London and Manchester, Hammond agreed to proposals from the independent pay review bodies to loosen the 1% pay cap for police and prison officers.

Elsewhere, a planned 3.9% rise in business rates due to come into effect in April will be reduced to around 3% in line with the consumer price index. A plan to offer young people lower tax rates has been ditched. And tax rises will be limited to asset-rich older people and those with decent private pensions, according to widespread Treasury briefings.

There will also be more cash for training young people for hi-tech jobs, and for research and development in such areas as robotics and artificial intelligence.

About Ian Hernon

Ian Hernon is Deputy Editor of Tribune