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The Chancellor Has Urged Tories To "Hold Our Nerve" On The Public Pay Cap, Despite Cabinet Splits

Philip Hammond said although people were "weary" of austerity, now was not the time for the government to take "their foot off the pedal".

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The Chancellor has said that the government must "hold our nerve" as he signaled no lift to the public pay cap, despite growing calls within the Conservative cabinet.

Philip Hammond, speaking in London yesterday at a CBI event, said he understood people were "weary" after years of austerity but that now was not the time to "take the foot off the pedal".

The chancellor did not explicitly deny the government were considering lifting the cap, with a decision expected in the autumn budget, and said ministers must “continually assess the balance” to ensure public pay was fair.

Hammond's comments follow a number of top Tory ministers publicly indicating a desire to lift the public pay cap. Yesterday, Boris Johnson told the BBC and The Guardian, he believes "strongly" that the cap could be ended in a responsible manner.

Johnson joins environment secretary Michael Gove, health secretary Jeremy Hunt, and education secretary Justine Greening, who have all called for the cap to be lifted.

It's the latest development amid confusion over the government's position on the pay cap.

Roughly 5 million public workers have effectively had their pay rises capped at 1% since 2013. Prior to that, there was a two-year pay freeze for all but the lowest earners. Eight public sector review bodies make decisions on pay – but these are shaped by broader government policy.

Speaking on BBC One's The Andrew Marr Show, Gove said public workers' pay should be guided by these bodies. "These pay review bodies have been set up to ensure that we can have authoritative advice on what is required in order to ensure that the public services on which we rely are effectively staffed and that people within them are effectively supported.”

The government has said pay should be decided on a "case-by-case" basis.

Last week Hammond had said if the cap were to be lifted, the shortfall would have to be made up elsewhere, and in the Queen's Speech debate last week made clear his aversion to higher borrowing.

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Speaking on the BBC's Today programme on Monday morning, former chancellor Norman Lamont said the cabinet ministers were "ganging up" on Hammond.

The Labour amendment to the Queen's Speech 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 Tories broke ranks to vote for the amendment, and all 10 DUP MPs backed the government.

The Labour leader Jeremy Corbyn's official Twitter posted on Sunday night, asking Johnson: "If you really think this, why didn't you vote to end the public sector pay cap on Wednesday?"

Meanwhile, over the weekend, shadow health secretary Jon Ashworth criticised the widening gap in the cabinet over the cap.

"They're saying 'Wait for the pay review bodies', even though they're the ones insisting on a 1% cap," he told Andrew Marr.

Outside of the cabinet, other prominent Conservatives have been calling for an end to the cap, including Heidi Allen, MP for South Cambridgeshire; Sarah Wollaston, MP for Totnes and a former GP; and Johnny Mercer, MP for Plymouth Moor View.

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Rose Troup Buchanan is a reporter for BuzzFeed News and is based in London.

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