Theresa May and Philip Hammond are facing Cabinet pressure to ease up on austerity, with ministers suggesting the issues of public sector pay, schools funding and university tuition fees should be considered.

Environment Secretary Michael Gove urged the Prime Minister and Chancellor to listen to independent bodies that review public sector pay, after a week in which Labour attacked a government “shambles” for initially raising, then playing down hopes that the cap could be lifted.

Mr Gove’s intervention ties in with reports that Health Secretary Jeremy Hunt is to demand a wage boost for NHS workers.

Michael Gove
Environment Minister Michael Gove says Theresa May and Philip Hammond should listen to independent bodies that review public sector pay (Brian Lawless/PA)

It comes with the Government under pressure after losing its House of Commons majority in the general election as Jeremy Corbyn’s anti-austerity Labour outperformed expectations.

According to the Observer, Mr Hunt is to demand an end to the 1% pay cap for nurses and other health workers, citing evidence from the Government’s own NHS pay review body published in March.

It appears he has the backing of Mr Gove, who told the Sunday Times: “You’ve got to listen to the public sector pay review bodies.

Jeremy Hunt
According to the Observer, Mr Hunt is to demand an end to the 1% pay cap for nurses and other health workers (David Mirzoeff/PA )

“When they made recommendations on school teachers’ pay I think I always accepted them.

“My colleagues who deal with these pay review bodies would want to respect the integrity of that process.”

According to the Sunday Telegraph, a separate front has opened up with Education Secretary Justine Greening demanding an extra £1 billion to protect schools funding per pupil and will demand a statement in weeks.

Justine Greening
Education Secretary Justine Greening wants an extra £1 billion to protect schools funding (David Mirzoeff/PA)

“Because the only other way you can get extra money to go in, if you wanted the same number of people, the same kind of teaching, would be to take it from working people through their taxes.

“Governments have to take money from everyone at work and companies that provide jobs to provide those essential services. And it may well be that this is a national debate that we need to have.”

A Number 10 source said the Government was responding to the recommendations of public sector pay review bodies which are currently reporting to ministers “on a case-by-case basis”.

Attitudes to taxation and spending on health, education and social benefits from 1983 to 2016
Attitudes to taxation and spending on health, education and social benefits from 1983 to 2016 (PA graphic)

The source said the pay cap was brought in to “deal with the mess we inherited from Labour” and acknowledged the “hard work and sacrifice” made by public sector workers, saying jobs had been protected and the deficit reduced by three quarters.

“While we understand the sacrifice that has been made, we must also ensure we continue to protect jobs and deal with our debts,” the source added.

They also made clear there are no moves to change tuition fee policy after Mrs May’s most senior minister, Damian Green, said Britain may need to have a national debate on the issue.

Mr Green was answering questions after a speech calling for Tory modernisation to win over young metropolitan voters who back Labour, which promised to scrap tuition fees in the election and appeared to enjoy high levels support among young voters.

The First Secretary of State said current system, with fees capped at £9,250 a year, allows UK universities to deliver high-quality courses and teaching, and accounts for the country’s disproportionate number of top institutions.

But he acknowledged that student debt was a “huge issue”, telling the Bright Blue liberal conservative think tank’s conference: “If you wanted to say you want to reduce that (fees) then either fewer people go to university or the experience would be less.

“Because the only other way you can get extra money to go in, if you wanted the same number of people, the same kind of teaching, would be to take it from working people through their taxes.

“Governments have to take money from everyone at work and companies that provide jobs to provide those essential services.

“And it may well be that this is a national debate that we need to have.”