Theresa May is facing a chorus of Tory demands for a radical overhaul of state funding for public services as cabinet ministers and senior Conservative MPs back higher pay for millions of NHS workers, more cash for schools and a “national debate” on student debt.
The prime minister’s waning authority was highlighted as her health secretary, Jeremy Hunt, and education secretary Justine Greening lobbied for an easing of austerity and senior Conservative MPs insisted public services would be in growing peril without an urgent loosening of the purse strings.
Separately, Damian Green, the de facto deputy prime minister and a May loyalist, hinted at a wider rethink when he said there might need to be a national debate about the level of student fees, in order to appeal to younger voters.
The level of internal pressure for the abandonment of austerity puts chancellor Philip Hammond under huge pressure to consider raising taxes to fund any extra public spending. It comes as the official body that regulates nurses and midwives – the Nursing and Midwifery Council – prepares to reveal new evidence on Monday of a growing crisis in the recruitment of nurses.
Government sources made it clear that Hunt was prepared to take on Hammond and call for the lifting of the maximum 1% pay cap for nurses and other NHS workers, citing as evidence a hard-hitting report by the government’s own NHS pay review body published in March this year.
In the report, the government’s advisers on pay warned that the cap “will not be sustainable for much longer” and said the costs of plugging gaps caused by staff shortages could soon be greater than the savings. It also highlighted the effects of Brexit, saying “changes in the UK’s relationship with the EU may reduce the ability to fill shortfalls in staff numbers from overseas”.
There are also growing worries about a lack of nurses and other NHS staff in areas of the country where the cost of living is highest, notably London.
The Tory MP Dr Sarah Wollaston, a former GP who is seeking to extend her term as chair of the Commons health select committee, said: “We have got to address this and work out at the same time how to pay for a better settlement for public sector workers.” Another Tory MP, Dr Dan Poulter, who works as an NHS psychiatrist, said that while difficult choices had been made to improve public finances, “the time has come to lift the pay cap and reward nurses, midwives, doctors and other health care professionals”.
A poll for the Observer by Opinium shows the extraordinary extent to which May has lost the trust of voters since the height of her popularity in April, and equally strikingly, since the June general election.
Over the same period, Labour leader Jeremy Corbyn, who has called for an end to austerity and the public sector pay cap, has soared in public esteem.