Liz Truss was forced to slam the brakes on a planned public sector pay cut on Tuesday after her proposals for a "war on Whitehall waste" caused an outcry in the Conservative leadership race.
It capped a difficult day for the Foreign Secretary after her swipe at Scottish First Minister Nicola Sturgeon in a Tory leadership hustings led to a backlash north of the border.
A briefing war erupted as rival candidate Rishi Sunak's campaign team leapt on the pay row to say that nurses, police and the military would receive "less under Liz" — forcing Ms Truss to backtrack within 24 hours.
A statement said Ms Truss would abandon plans to reduce pay for civil servants working outside London after she was accused of betraying Tory promises to level Britain's north-south divide.
"Current levels of public sector pay will absolutely be maintained," it said. "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."
The U-turn was the first setback for the Truss campaign after a burst of momentum in which she opened up a healthy poll lead over Mr Sunak and won endorsements from a string of senior Tories, including former leadership rival Penny Mordaunt.
The two remaining candidates set out their economic plans at a hustings in Exeter on Monday as the party's roughly 200,000 members start to receive their ballot papers and decide who should succeed Boris Johnson as prime minister.
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Ms Truss separately announced her plans to trim the civil service, often a bogeyman of Conservative MPs, by reducing annual leave and eliminating some of Whitehall's diversity officers in a push to tackle "left-wing groupthink".
She promised if elected to "run a leaner, more efficient, more focused Whitehall that prioritises the things that really matter to people and is laser-focused on frontline services".
Her proposals delighted Tory MP Jacob Rees-Mogg, a minister responsible for government efficiency, who said they would prevent money being wasted on the "woke indoctrination of civil servants".
But it was her suggestion that national pay scales should be replaced with regional ones, reflecting the cheaper cost of living outside London, that raised objections from Conservative and opposition MPs.
Critics said Ms Truss's promise of £8.8 billion ($10.7bn) in savings was wholly implausible unless she planned to go beyond civil servants and cut the pay of nurses, police officers and other public sector workers.
Ben Houchen, the Conservative mayor of the Tees Valley region and a prominent face of the party in northern England, described the policy as "a ticking time bomb set by team Truss that will explode ahead of the next general election".
"There is simply no way you can do this without a massive pay cut for 5.5 million people, including nurses, police officers and our armed forces outside London," he said.
Sam Freedman, a senior fellow at the Institute for Government, said: "Either someone has accidentally added a zero to the end of a calculation or they mean the entire public sector workforce.
"If it's an error, it's extremely embarrassing. If she's proposing to cut doctor and teacher pay, she's lost her marbles."
Allies of Mr Sunak accused Ms Truss of stale thinking by reviving a regional pay idea previously considered under the Tony Blair and David Cameron governments but ultimately dropped.
The Sunak camp put out its own calculations, suggesting that 5.7 million public sector employees would have their pay cut by an average of £1,500 ($1,830) a year.
Even after the U-turn was announced, some Tories objected to Ms Truss's claim that its policies had been "wilfully misrepresented" when the £8.8bn figure came from its own press material.
The plans also ran into fierce resistance from the opposition and civil service unions, with Labour deputy leader Angela Rayner saying: "This out-of-touch government's commitment to levelling-up is dead."
Sir Ed Davey, the Liberal Democrat leader, said: “U-turning on a multibillion-pound policy five weeks before even taking office must be a new record."
Ms Truss's problems did not end in the North of England, as political rivals in Scotland took umbrage at her remark that First Minister Nicola Sturgeon was "an attention seeker" who should be ignored.
Asked whether she would back a second independence vote advocated by Ms Sturgeon, Ms Truss channelled her political idol Margaret Thatcher by saying: "No, no, no."
Her comments won cheers in the all-Tory audience but led to criticism from Scottish nationalists who said she was belittling Scotland's position.
“Nicola Sturgeon has far more democratic legitimacy than Liz Truss is going to have if she becomes the prime minister," said Scottish Deputy First Minister John Swinney.
He told the BBC's Good Morning Scotland programme that people north of the border, regardless of political opinion, would be “really concerned, and in many cases, insulted” by the remarks.
Nikita Bassi, an aide to Ms Sturgeon, described the Tory candidate's remarks as "ignorant, shameful and out of touch".
But Mr Rees-Mogg defended Ms Truss on Sky News and said of Ms Sturgeon: "I think she’s very often wrong, she’s always moaning and we need to focus on how the union benefits people."
