Theresa May survived her first hurdle of the new parliament, defeating an attempt by Labour to force the government to end a 1% cap on public sector pay increases by 14 votes on Wednesday night.
Backed by MPs from Northern Ireland's Democratic Unionist Party, the Conservatives defeated by 323 to 309 a vote that Labour leader Jeremy Corbyn described as a "test case" of MPs' willingness to reverse austerity in the wake of the Grenfell Tower fire.
In an amendment to the Queen's Speech, which set out May's legislative agenda for the next two years, Labour called for the government to reverse spending cuts to the police and fire services, to recruit more police officers and firefighters, and to end the public sector pay cap.
No Tory MPs broke ranks to oppose the government on the first vote of the new parliament, and all 10 DUP MPs also gave their support to the government. Earlier this week, the party agreed to back May's government in a "confidence and supply" arrangement, giving her enough votes to get legislation through the Commons on an ad-hoc basis. To secure the DUP's backing, the government agreed to provide an extra £1.5 billion in spending to Northern Ireland.
Nick Thomas-Symonds, Labour MP for Torfaen in Wales, tweeted: "PM can spend £1.5bn keeping her own job but disregards fair pay for all."
Andrew Gwynne, the shadow communities secretary, told Sky News: "Clearly we weren’t able to win the votes today because the DUP deal that the Conservatives have done have seen them over the line. It’s ironic that there’s not going to be any austerity in Northern Ireland, but in England, Scotland and Wales we have to continue with this austerity and pain.”
The vote came amid confusion over the government's position on the pay cap.
In the hours before, Downing Street officials gave apparently contradictory briefings about the future of the 1% freeze, prompting claims from political opponents that the government had twice U-turned in the space of an afternoon.
Various publications, including BuzzFeed News, reported on Wednesday afternoon that ministers were rethinking the policy, after senior ministers said it needed to be reexamined and one Downing Street aide told journalists that May had "heard the message" from voters at the election.
After prime minister's questions, a Downing Street spokesperson seemed to indicate that a government climbdown was on the way when he answered questions about the future of the cap, saying: “We’re going to listen to the messages that were sent at the election. We understand that people are weary after years of hard work to rebuild the economy.”
The aide added that the government is considering the recommendations of various independent bodies that review the levels of public sector pay and will announce its policy at the next budget in the autumn. That seemed to be a reversal of the Conservatives' policy before the election.
It chimed with comments earlier in the day by senior Conservatives including Michael Fallon, the defence secretary, who told a conference in London that the pay freeze should be looked at “right across the public sector as a whole” to give squeezed workers a wage boost.
By the afternoon, however, Number 10 was rowing back on the story. "The policy has not changed," the prime minister's official spokesperson said at least 15 times at an afternoon meeting with journalists, many of whom had just reported that the cap was set to be axed.
The spokesperson said the government would look at recommendations for public workers' pay increases put forward by various independent review bodies. But he would not say whether any pay rises awarded as a result of those recommendations would be limited to 1%.
Again and again, as journalists pressed for answers, the official responded: "The policy has not changed."
Tim Farron, leader of the Liberal Democrats, said: "The Tories are in utter chaos. They have U-turned on their own U-turn within the space of a few hours."
In 2012 then-chancellor George Osborne introduced a 1% ceiling on public pay, after two years of freezes. Four more years of pay freezes were introduced last year for civil servants, teachers, nurses, police officers, and soldiers.
Challenging the cap, Corbyn said public sector workers, including fire-fighters and police who have been responding to recent tragedies, had gone long enough without seeing their incomes rise.
"We think they need more money to be paid into those services and more staff in them."
This morning Labour MP Peter Dowd, shadow chief secretary to the Treasury, went into detail on what Labour says is a link between cuts to the emergency services and terror attacks.
“I think that in terms of the whole context of the last seven years it is almost inevitable that there will be some impact on public safety,” he told BBC Radio 4’s Today programme.
“What we are trying to send is a message that the public realm, services, has been affected,” he told the BBC, and said opposing the cuts would give the public some “hope” after years and years of reduced funding.
Pushed on the possible connection between emergency service cuts and terrorism, he said cutting police community support officers removes the “first line of intelligence”, and “that will inevitably at some point have an effect”.
Attacking Labour's proposed removal of the public pay cap, Oliver Letwin, Conservative MP and former minister under then-PM David Cameron, called it "plain politics" and told Radio 4 that Corbyn wished to disrupt the government.
However, Letwin admitted that voters were sick of austerity. “People were much more concerned at this election than they had been at the previous two, about spending on health, schools,” he said.
He said that “carefully judged” tax increases on those on higher incomes would allow the government to ease up on austerity measures. “It may well be that in one way or another, a large number of people may have to pay a little bit more tax,” he said, so that spending on public services could be maintained.
Letwin rejected suggestions that his comments signalled an end to austerity as “deeply misleading”.
It came as a new public survey finds the British public want higher taxes and increased spending for the first time since the 2008 financial crash.
Earlier, shadow health secretary Jon Ashworth told The Mirror it was "shameful" that May could "find an extra £1 billion for her coalition deal but can’t find an extra penny for hard-working nurses and NHS staff".
Chesterfield's Labour MP Toby Perkins said ending the pay cap was "well overdue". Plaid Cymru MP Jonathan Edwards also agreed, and appeared to be backing the amendment.
The Fire Brigades Union welcomed the amendment: "Cuts mean that fire engines are increasingly sent out without a full complement of firefighters.
"This under-staffing prevents firefighters from adopting the best professional practices and procedures and will contribute to deaths that are avoidable."
After nurses protested in 30 towns over the UK, Janet Davies, general secretary of the Royal College of Nursing, told Sky News that "MPs will have the first opportunity to show they are listening".
"The protests will have left Theresa May in little doubt over nurses' fears for the safety of their patients and why this cap on pay must go."
Speaking to Sky News after losing the vote, Labour's Andrew Gwynne said the party was nevertheless winning the argument with the public. "People want to see more investment in policing and in fire-fighters."