Liz Truss has U-turned on her latest leadership policy pitch to “wage war on Whitehall waste” after a Tory backlash over its impact on public sector pay.
On Monday night, the foreign secretary said she would save £8.8m by introducing regional pay boards instead of national ones to set salaries for civil servants, reflecting where they lived.
But this would mean paying government employees in poorer parts of the country less than their counterparts in more affluent areas, such as the South East and London.
And experts warned to reach the sum, the plan would have to branch out further than government departments, with the likes of teachers, nurses and police officers also facing lower wages than workers in the South.
Politics Hub: Sunak allies attack Truss public sector pay plan
The policy sparked outrage from a number of Conservatives, with many of her leadership rival Rishi Sunak’s backers taking to social media to call it “crackers” and “austerity on steroids”.
The influential Tory Mayor of the Tees Valley, Ben Houchen, also told reporters the policy would be “a sure-fire way to lose the next general election”.
But by lunchtime on Tuesday, Ms Truss’ team had released a statement insisting “current levels of public sector pay will absolutely be maintained”, adding: “Our hard-working frontline staff are the bedrock of society and there will be no proposal taken forward on regional pay boards for civil servants or public sector workers.”
A Team Sunak source pointed to comparisons made between Ms Truss and former Prime Minister Margaret Thatcher, twisting her famous phrase for today’s events: “The lady is for turning.”
Former health secretary Matt Hancock said Ms Truss’s statement, only saying “current” pay would be protected, was “not good enough”.
“Public servants outside London would be paid #LessUnderLiz in future too,” he tweeted. “We need to support public servants – including civil servants – who work hard for us all.”
Team Truss also claimed there had been a “wilful misrepresentation” of the policy, but former Tory whip Mark Harper said they should “stop blaming journalists” for reporting on the details in her own press release.
The original announcement from Ms Truss said regional pay boards would “make it easier to adjust officials’ pay, ensuring it accurately reflects where they work” and “stop the crowding out of local businesses that can not compete with public sector pay”.
She said there was “too much bureaucracy and stale groupthink in Whitehall” and that if she won the race for Number 10, she would lead a government “that focuses relentlessly on delivering for the British public, and offers value to hard-working taxpayers”.
One of her backers, Brexit Opportunities Minister Jacob Rees-Mogg also lauded the plans during his appearance on Sky News on Tuesday morning.
But the criticism came thick and fast, with the general secretary of the PCS union, Mark Serwotka, saying Ms Truss “will face opposition every step of the way”, and the general secretary of the Prospect union, Mike Clancy, calling it a “vacuous attempt to garner headlines friendly to her selectorate”.
Reams of Sunak supporting Tory MPs criticised the plan, including Richard Holden, who said the policy would “kill levelling up”, and chair of the Northern Ireland Select Committee, Simon Hoare, who said it was a “totally bad initiative” that would result in “levelling down”.
After the U-turn, Labour’s shadow chancellor Rachel Reeves said the “latest mess” from the Tory leadership campaign “exposed exactly what Liz Truss thinks of public sector workers across Britain”.
She said the episode “revealed her priority would be to slash the pay packets of working people”, adding: “That would suck money out of local economies and send our communities backward.”
Liberal Democrat leader Sir Ed Davey said: “U-turning on a multi-billion-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.”
Ms Truss appears to be standing by the rest of her Whitehall waste plan to cut a further £2.2bn in spending – including removing diversity and inclusion roles from government departments, considering a reduction in holiday from 27 to 25 days and moving more civil service jobs out of London.