Theresa May set to scrap 1% cap on public sector pay rises

Theresa May has given the "biggest signal yet" that she will end the 1% cap on public sector pay rises. A spokeswoman for No.10 says the Prime Minister recognises the sacrifice made by public sector workers during years of wage restraint.

"No10 aides are drawing up a series of major policies away from Brexit to try to win back the prime minister's authority to stay on in No10," says The Sun. The "jewel" in the package will be ending the cap, adds the paper.

The newspaper reports that the move, which could cost the exchequer as much as £4 billion a year, will be brought in over the course of two years. Priority will be given to areas of the public sector with staff shortages.

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"That means nurses and senior civil servants would be among the first to benefit from rises," says the Daily Mirror. These could take effect as early as April of next year.

The Prime Minister's spokeswoman said she would not pre-empt the ongoing process that's used to set the salaries of nurses, doctors, teachers, armed personnel and others.

But crucially, she "did not deny reports that May was ready to take action to ease the burden felt by workers who have endured a seven-year cap as part of the government's austerity programme," says The Guardian.

"We know a number of people in the public and private sectors feel like they are just about managing, and we recognise the sacrifice they are making. But there is a process in place and I can't pre-empt the process," the spokeswoman said.

Janet Davies, chief executive and general secretary of the Royal College of Nursing, has welcomed the news. She says it shows the government is finally listening to nurses.

"But any offer from the PM or Treasury needs to not only scrap the pay cap for future years but go some way towards making up for lost earnings," she said.

A number of Conservative MPs have said the inability to attract public sector workers hampered their efforts during this year's general election in which the party lost its majority. They say the public sector pay cap provoked heated debate within the cabinet over the summer, according to The Times.

Ministers, including Boris Johnson, Jeremy Hunt and Michael Gove, all indicated that they thought the cap should be reconsidered. The Chancellor, Philip Hammond, "reacted furiously after reports that he had told a cabinet meeting that public sector workers were overpaid in relation to private sector workers because they had more generous pensions," adds the paper.