Chancellor hints at lifting pay cap in this week’s budget

Chancellor Philip Hammond has signalled ahead of this week's budget that he will find money to lift the public sector pay cap

Chancellor Philip Hammond has signalled ahead of this week's budget that he will find money to lift the public sector pay cap.

Chancellor Philip Hammond speaking at the Conservative Party conference in October.
 Picture: Alamy

'We've got to recognise that people in our public services feel under pressure from a long period of pay restraint,' he told the Sunday Times.

'The public services themselves have strained every muscle, every sinew to deliver within very tight resource envelopes. We've got to do what we can.'

Last month, health secretary Jeremy Hunt announced in parliament that the 1% cap on NHS public pay rises would end, but he did not say when or by how much.

Pressure from cabinet colleagues

The Sunday Telegraph reported that the chancellor will use Wednesday's budget to offer a pay rise to nurses, following pressure from cabinet colleagues and Conservative MPs, and the threat of winter strikes if he fails to issue a positive signal to NHS staff.

Responding to reports that nurses are in line for a pay rise, an RCN spokesperson said: 'We will wait to see details on Wednesday, but nursing staff need a pay rise above inflation and the government must give the NHS the funds to cover it.'

Mr Hammond also said the health service will not face Armageddon if it is not given a £4 billion funding boost demanded by NHS England chief executive Simon Stevens.

Mr Hammond acknowledged that the NHS was under pressure and indicated he would seek to address 'particular pressure points' in his budget.

Addressing issues in measured way

Mr Stevens has repeatedly called for substantially more cash, drawing on an analysis by the Health Foundation, the King's Fund and the Nuffield Trust which calculated it needs £4 billion more next year to prevent patient care from deteriorating.

The chancellor said the government had already met demands Mr Stevens set out in his five-year forward view in 2014 for £10 billion extra by 2020.

Mr Hammond told BBC One's Andrew Marr Show: 'Let me tell you a budget secret – in the run-up to the budget, people running all kinds of services, government departments, come to see us and they always have very large numbers that are absolutely essential, otherwise Armageddon will arrive.

'I don't contest for one moment that the NHS is under pressure. We have been doing some very careful work with the Department of Health, with the NHS, to look at where those pressures are, to look at the capital needs of the NHS, to look at where the particular pressure points around targets are.

'And we will seek to address those in a sensible and measured and balanced way.'

Labour demand £6 billion for NHS

Shadow health secretary Jonathan Ashworth described Mr Hammond as out of touch with his approach to NHS funding.

Speaking on Sunday With Niall Paterson on Sky TV, Mr Ashworth said an extra £6 billion was needed.

He said: 'It's incredibly serious and if I may say so I've seen Philip Hammond doing interviews today, being dismissive of the calls for more money for the NHS saying well you know it's going to be Armageddon.

'This is happening now today in the NHS and if he doesn't realise that he's completely out of touch. We are calling on the chancellor to put aside an extra £6 billion in this budget coming up.'

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