Truss suffers setback as criticism of civil service pay plan brings U-turn
Foreign secretary forced to abandon policy amid
widespread criticism from within Conservative party
Heather
Stewart and Jessica Elgot
Tue 2 Aug
2022 19.18 BST
Liz Truss
suffered a humiliating setback in her bid to become the next prime minister on
Tuesday, as she was forced into a U-turn on civil service pay after a backlash
from within her own party.
The foreign
secretary swiftly abandoned the cornerstone of her plan for a “war on Whitehall
waste” when it was revealed it could lead to pay cuts for millions of teachers,
nurses and police officers.
The foreign
secretary had proposed creating “regional pay boards” to set civil sector pay,
matching it more closely to local labour markets outside London and the south
east.
But it was
scrapped within hours, after analysts pointed out the purported £8.8bn saving
from the policy was only remotely achievable by cutting wages across the public
sector.
With ballot
papers dropping this week, Truss is widely regarded as the frontrunner in the
race to succeed Boris Johnson; but one new poll put her just five points ahead
of Rishi Sunak, while Conservative MPs say many members remain undecided.
The
Teesside mayor, Ben Houchen, a popular figure within the party and a Sunak
backer, said he was “speechless” at the policy, which he said would work
against the flagship Conservative policy of levelling up.
“There is
simply no way you can do this without a massive pay cut for 5.5 million people
– including nurses, police officers and our armed forces outside London. So
much that we’ve worked for in places like Teesside would be undone,” he said.
“Red wall”
MPs including Jacob Young and Richard Holden had also raised alarm at the
policy announced overnight, as well as the former cabinet minister Simon Hart,
who said it would amount to cuts of nearly £3,000 for workers in Wales.
Truss
abruptly withdrew the policy on Tuesday, little more than 12 hours after it had
been floated, claiming in an awkward interview that it had been “misrepresented”.
“There has
never any intention to affect teachers and nurses, but I don’t want to worry
people, I don’t want people to be concerned, so I am being very clear that we
will not be going ahead with the regional pay boards,” she told ITV.
Asked if
the move was a U-turn, she said: “I’m someone who is honest and upfront, and I
do what I say I will do, and I am being clear, I will not be doing that.”
Truss had
previously appeared to be cruising to victory in the race, picking up the
support of cabinet colleagues Ben Wallace and Brandon Lewis, and her former
leadership rivals Penny Mordaunt and Tom Tugendhat, in recent days.
Sunak
meanwhile has announced a series of increasingly hardline promises in a bid to
stay in the race, including capping the number of refugees, doubling the number
of foreign criminals deported and taking on what he called “leftwing agitators”
in a culture war over gender identity.
His
campaign team responded to Truss’s statement with barely disguised glee, with a
spokesperson claiming the misstep showed, “a lack of serious judgment” and “a
worrying lack of grip on detail in what is already a woolly economic plan”.
“If this
was in a general election, it would have been a potentially fatal own goal for
the Conservatives,” they added, suggesting Truss had supported the policy since
2018 when she was chief secretary to the Treasury.
Several
Sunak supporters compared the turn of events to Theresa May’s dementia tax –
the deeply unpopular plan to fund social care that contributed to the Tories
losing their majority in the 2017 general election.
Mark
Harper, the former chief whip who is supporting Sunak, said scrapping the
proposal also meant there was now an £8.8bn hole in Truss’s tax and spending
plans.
“An
economic policy that can’t be paid for isn’t very Conservative. Mrs Thatcher
would be livid,” he said, accusing Truss of “blaming journalists” for
misconstruing her plans.
The Lib Dem
leader, Ed Davey, said: “U-turning on a multibillion-pound policy five weeks
before even taking office must be a new record. We can’t let Liz Truss run the
country with the same incompetence she’s running her leadership campaign. The
British people must have their say in a general election.”
Labour said
the original plan would have meant a £7.1bn hit to local economies across
Yorkshire, the north and the Midlands. Angela Rayner, the deputy leader, said:
“Liz Truss is a liability who has lingered in this Tory cabinet for nearly a
decade in which the Tories have fuelled a cost of living crisis.”
Alex
Thomas, a programme director at the Institute for Government thinktank, pointed
out that the whole annual civil service pay bill was about £9bn.
Tony
Wilson, director of the Institute for Employment Studies, said Truss’s policy
appeared to date back to a time when public sector pay outstripped the private
sector’s – but the latest data showed it was £20 a week lower on average.
The new
leadership poll, including 807 Conservative members, was conducted by Techne
for a private client, and showed just a five-point gap between the two
candidates. Separate polling by YouGov for the Times on Tuesday, before the
U-turn, had the foreign secretary with a huge 34-point lead, and 60% of the
membership saying they would vote for her.
Truss
gained the backing of the Daily Mail on Tuesday, having already won the support
of the Telegraph.
Signs her
public sector pay policy was in difficulty began on Tuesday morning when
Rees-Mogg, a backer of Truss and the minister in charge of civil service
efficiencies, said it was “not the plan at the moment” to cut pay for the wider
public sector to make savings of £8.8bn promised by Truss. “The discussion at
the moment is around civil servants,” he said.
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In the
original release, which proposed regional pay boards, Truss said she would
“tailor pay to the cost of living where civil servants actually work” and this
would save up to £8.8bn.
It said the
policy could be “adopted for all public sector workers in the long term”.
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