PM May defends public sector pay cap after Corbyn attack

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The government's policy is to limit annual public sector pay increases to 1 per cent, although inflation is running closer to 3 per cent. It's not a theoretical issue.

Mrs May sited the case of Greece, which slashed public spending cutting health by 36% in responding, saying the deficit created by Labour's "mismanagement of the economy", had to be addressed. "That does not help nurses or patients", she said.

Mr Osborne, now editor of the London Evening Standard, posted a tweet with a smiley face as the Prime Minister - who sacked him a year ago - now defended his record.

Environment Secretary Michael Gove has insisted the Government must "listen" to the pay review bodies, while Defence Secretary Sir Michael Fallon said pay rates were "obviously something we have to consider not just for the army but right across the public sector as a whole".

Later, a Government source doubled down on the message, claiming a Greek-style collapse was "a very real threat" if Mr Corbyn was allowed to implement his tax and spending policies.

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Tthe Labour leader used all his questions to the prime minister at their weekly head to head to pressure her over issues of pay, accusing her of presiding over "a low-pay epidemic" in the United Kingdom, and claiming she had presided over "a week of flip-flopping and floundering".

Theresa May raised the spectre of a Greek-style economic collapse if Britain fails to press ahead with tackling the deficit on Wednesday, as she was challenged repeatedly by Jeremy Corbyn over the public sector pay cap.

He said Ms May had found £1bn "to keep her own job", alluding to the sum handed to Northern Ireland through the deal for the Democratic Unionist Party to prop her up in power. "Why can't she find the same amount of money to keep nurses and teachers in their own job, who after all serve all of us?"

"The firefighters' award is not a matter that is determined by Government, it is determined by the employers and it is not subject to a pay review body", the Prime Minister said.

The PM added that the United Kingdom needed to "live within our means" and will consider reports from pay review bodies. But she added: "We will always recognise the need to makes those decisions against the need to live within our means".

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