Downing Street has denied the public sector pay cap is about to be scrapped, after a minister claimed an “active discussion” over frontline workers’ salaries was under way.
“How we do that in a way that is sustainable and affordable is under active discussion.”
Responding to Mr Hurd’s comments, the Prime Minister’s official spokesman said: “There are public sector pay review bodies carrying out their work. We are in the process of working through recommendations. That is what the minister was referring to.”
Pressure has been growing on Prime Minister Theresa May and Chancellor Phillip Hammond to ease the 1% limit on annual rises, not least after Cabinet colleague Boris Johnson backed the move.
A Government source told Sky News the Foreign Secretary “supports the idea of public sector workers getting a better pay deal and believes the pay review recommendations are right”.
“He also strongly believes the rises can be done in a responsible way and without causing fiscal pressures,” the source added.
While not expressly suggesting that the cap be lifted for all 5.1 million public sector workers, he follows the Environment Secretary Michael Gove in supporting the work of pay review bodies.
The groups which advise on how much police officers and teachers should be paid are expected to report to the Government later this month.
It is claimed they are likely to recommend figures higher than the cap, which the Conservatives committed to keeping in place until 2020 in their election manifesto.
The cap has been in place since 2013, when it replaced a two-year pay freeze as part of a wide-ranging austerity package introduced by the coalition government.
It is understood Health Secretary Jeremy Hunt and Education Secretary Justine Greening have also been pushing the Treasury to loosen the fiscal strictures, with wages falling behind inflation.
There is political pressure from Labour too, as Jeremy Corbyn continues to criticise the Government’s commitment to austerity and what he calls the “shambles” of Mrs May’s handling of the cap.
Mr Corbyn has also been linking austerity to cuts in local authority budgets which he argues may have contributed to cost savings which led to the Grenfell Tower fire.
A Number 10 source told Sky News that the issue would be examined on a “case by case basis,” so it is unlikely the Chancellor would agree to a blanket lifting of the cap.
If public sector workers including teachers and NHS workers were to receive a pay award in line with inflation at 2.9%, that would cost the Treasury £5.2bn, according to figures from the Institute for Fiscal Studies.
A number of Conservative backbenchers say the cap should be revisited including Lewes MP Maria Caulfield, who told Sky News the Government “needs to have an end date in sight and sooner rather than later”.