The UK economy is at “breaking point”, Jeremy Corbyn has claimed as he clashed with Theresa May over pay and jobs during Prime Minister’s Questions.
The Labour leader said public sector pay would see real terms wages fall despite the end of the 1% pay cap.
The “Conservative legacy” would be one of slowing growth, job insecurity, rising child poverty and homelessness.
Mrs May said employment was at record levels and Mr Corbyn had broken pledges on rights, Brexit and student debt.
The end of the public sector pay cap, which has been in place since 2013, was announced on Tuesday – as prison officers were given a 1.7% rise and police officers got a 2% rise, if a 1% one-off bonus was included, this year.
MPs are currently debating pay in the NHS – which has yet to be decided for next year – amid signs the Democratic Unionist Party of Northern Ireland could side with Labour and defeat the government.
The DUP has a parliamentary pact with the Conservatives to support them on Brexit and other issues but has said it wants to see “some relaxation” of pay restraint in public services struggling to recruit and retain staff.
Labour’s opposition day motion on NHS pay – which calls for a “fair pay rise” for health service staff – will not be binding on ministers but a defeat would increase pressure on the government.
Ministers are also facing a potential second non-binding defeat, over the issue of student tuition fee rises, with the DUP also expected to back Labour in a debate later.
Mr Corbyn told MPs that inflation was at 2.9% and that a below-inflation pay increase – to be funded from existing budgets – would not feel like a pay rise to hard-pressed workers.
He asked for a guarantee from the prime minister that no-one working for the prison service or police would lose their jobs in order to pay for the increase.
Widening his attack on the government’s economic record, the Labour leader quoted comments reportedly made by Chancellor Philip Hammond to Tory MPs last week, compared his words with Harold Macmillan’s famous claim that most Britons “have never had it so good”.
Mr Corbyn questioned whether ordinary British families now felt so upbeat about their finances.
“Is it not true that not only is our economy is at breaking point but for many people it is already broken as they face up to the poverty imposed by this government,” he said.
Mrs May responded by noting that Mr Corbyn had not mentioned the new employment figures which showed a 75,000 fall in joblessness in the three months to July to the lowest jobless rate since 1975.
These figures show, Mrs May said, that the Tories were overseeing sound management of the economy, which Labour would destroy if it got into government.
The prime minister also suggested the pay of some police officers was £9,000 higher than in 2010, taking into account increases in basic pay, progression pay and increases in the personal tax allowance.
“We need to ensure that we balance out protecting jobs in the public sector, being fair to public sector workers and being fair to taxpayers who pay for it, many of whom are public sector workers,” she said.
The prime minister took aim at Unite leader Len McCluskey – a close ally of Mr Corbyn – who has compared unions’ fight for fair pay to the struggles of Mahatma Gandhi, among others, and suggested the cause could justify strike action even if legal conditions on strike ballots are not met.
“I was struck this week to see that Len McCluskey, or perhaps Mahatma as his friends call him, had said if they need to act outside the law, so be it.
“On this side of the House, we’re very clear – we condemn illegal strikes, we condemn action outside the law”.
She also claimed Mr Corbyn had let down British workers by opposing the EU Withdrawal Bill – which she said would embed employment protections in British law – and students over whether or not Labour would write-off student debt.
During the session, the prime minister also pledged another £25m in UK financial assistance for British overseas territories battered by Hurricane Irma.
The money will go towards the immediate clean-up operation and longer-term reconstruction.
Mr Corbyn welcomed the aid but urged the government to “look carefully” at the government’s response, which the prime minister insisted had been “speedy”.