David Cameron has hit out at critics of austerity inside the government, claiming their calls to lift public sector pay were made to sound compassionate but were in fact selfish.
The former Conservative prime minister’s comments could reopen the wounds of the EU referendum as they appeared to be aimed at his two most significant Vote Leave opponents, Boris Johnson and Michael Gove.
The foreign secretary and environment secretary have both broken ranks in recent days to suggest they think that the 1% public sector pay cap should be lifted – and for the recommendations of a series of pay review bodies to be accepted.
The issue has caused tension in government, with other cabinet members – including the education secretary, Justine Greening, and Jeremy Hunt, the health secretary – also pressing for austerity to be loosened after the Tories lost their majority in the general election.
Cameron used a speech in Seoul, South Korea, to say it was too soon “to let spending and borrowing rip” because of the danger of future economic shocks.
“The opponents of so-called austerity couch their arguments in a way that make them sound generous and compassionate,” he told the Asia Leadership Conference. “They seek to paint the supporters of sound finances as selfish, or uncaring. The exact reverse is true.
“Giving up on sound finances isn’t being generous, it’s being selfish: spending money today that you may need tomorrow.”
The comments come after the former work and pensions secretary, Stephen Crabb, suggested it was wrong for cabinet ministers to speak out so publicly against government policy.
The row has piled pressure on Theresa May and Philip Hammond. The chancellor has been trying to defuse the row by calling on his party to “hold its nerve”, claiming that the only way to free up spending was higher taxes, more borrowing or stronger growth.
Like Cameron, the chancellor has argued that borrowing piles debt on to the next generation and has insisted the Tories are a party of low tax.
He has said growth was the only sustainable way to boost public spending in the long run, although sources suggest he is ready to talk about ways to raise money to loosen the ties of austerity over the coming months.
One senior Treasury figure said despite that things would continue to be financially constrained in the run-up to Brexit.
Rises of 1% for dentists, nurses, doctors and the military have already been agreed for this year, and Downing Street said ministers would respond to other pay review recommendations within days. Teachers, police and prison officers are next in line.
Nigel Lawson, a former chancellor under Margaret Thatcher, said it was Hammond’s job to keep control of public spending to avoid “economic disaster”.
“It’s not easy but it is necessary,” he told the BBC “People understand we need to pay our way on the road to economic success.” He argued that the arguments needed to happen in private. “Stop having this debate in public, it’s ludicrous.”