Theresa May has been challenged over whether austerity could have contributed to the Grenfell disaster at Prime Minister's Questions.
Jeremy Corbyn demands that planned cuts be scrapped as he launched a furious attack on Government spending policy.
Shortly afterwards, Downing Street signalled that it is ready to review the 1% cap on public sector pay rises and they understood voters were "weary" of austerity.
Mr Corbyn had told Mrs May the tragedy which killed at least 79 people should be a "wake-up call" and called for planned cuts to fire services to be halted.
He told the Commons: "When you cut local authority budgets by 40% we all pay a price in public safety.
Mr Corbyn faced further heckling from Tory MPs, before adding: "This disregard for working-class communities, the terrible consequences of deregulation and cutting corners.
"I urge the Prime Minister to come up with the resources needed to test and remove cladding, retrofit sprinklers, properly fund the fire service and the police so that all our communities can truly feel safe in their own homes.
"This disaster must be a wake-up call."
Mrs May hit back, saying that cladding of tower blocks began under Tony Blair's Labour government and that Parliament should come together to find a solution.
She told the Commons there was a "wider issue" over why safety rules had been ignored.
Mrs May said: “A terrible tragedy took place. People lost their lives who should never have lost their lives.
"We need to look at what has happened over decades in this country that has led to this position and that’s exactly what we’ll do.”
Shortly afterwards, a Downing Street spokesman said that there were going to "listen to the messages from voters" when considering the public sector pay cap.
"We understand that people are weary after years of hard work to rebuild the economy," they said.
"Public sector pay restraint is one of the tough choices we've had to make to balance the books after Labour's crash and what was left behind.
"We are working through and looking at recommendations from pay bodies that are coming."