3% ‘entirely fair’ rise for NHS staff
THE three per cent NHS pay rise is “entirely fair” say ministers – despite threats of strike action.
The Government also said money for the hike will come from the health service’s budget.
The offer, announced on Wednesday, has triggered a backlash from unions demanding a 12.5 per cent rise.
The Royal College of Nursing said it would be consulting members and staff were “angry”.
The Government had offered a one per cent rise – and all other public sector workers on more than £24,000 would have a pay freeze.
The new three per cent offer came after an independent review.
Business Secretary Kwasi Kwarteng told Sky News: “I think three per cent, which, after all, was what the independent review came up with, is a fair number.”
The Government said the average nurse will receive an additional £1,000 a year, with porters and cleaners around £540 more.
HOW MUCH we all wish that the doctors, nurses and paramedics who bore the brunt of the pandemic could be given a pay rise greater than the three per cent they have been offered.
It would be wonderful to be able to say to them: go on, have a holiday on us – you deserve it.
But sadly, the public finances are in no fit state for generous pay awards.
Unions, demanding hikes of between 12 and 15 per cent for health workers – and threatening to strike if they don’t get it – are being deeply irresponsible.
Where do they think all the extra national wealth needed for such awards would come from? The economy shrank by nearly 10 per cent last year.
While tax revenues plummeted, fighting Covid imposed huge extra costs on the taxpayer. The result was a public deficit of nearly £300billion in the last financial year.
We are still a long, long way from closing the gap between revenue and expenditure. In June alone, the Government spent £22.8billion more than it received in revenue.
As a percentage of Gross Domestic Product, the Government is borrowing as much as it was in 1946, when we had just finished six years fighting a world war.
Each month we run at a deficit adds yet more to the huge burden hanging around the nation’s neck. Public debt has reached £2.2trillion, equivalent to 99.7 per cent of GDP.
IT SEEMS to have become deeply unfashionable to worry about government borrowing. The idea that governments should even attempt to balance their books appears to have dropped out of political debate since former Chancellor Philip Hammond declared that “austerity” was over.
Interest rates have been so low for so long that we have forgotten the dangers.
Here is the warning: Of the £84.1billion spent by the Government in June, £8.7billion – more than 10 per cent – went on paying interest on public debt. That is with the Bank of England base rate at 0.1 per cent.
Should interest rates rise – and surely one day they will – public debt could become quickly overwhelming.
Already, the Government can only afford to borrow at ultralow interest rates because the Bank is buying government bonds itself, under a process called “quantitative-easing” – a polite name for printing money.
We know where that leads if it gets out of control as it did in Robert Mugabe’s Zimbabwe: to hyper-inflation.
Quantitative-easing inflated house prices to what for many are unaffordable levels. Now, the Consumer Price Index is galloping upwards, too, reaching 2.4 per cent in June.
Awarding ourselves fat pay rises when the country is not generating more wealth does not really make us richer, even if it feels as if we are better off when we open our pay packet.
We could very easily end up back in the 1970s when workers used to “enjoy” three or four pay rises a year, often in double digits. But the sense of satisfaction soon wore off when people went shopping to find prices of essentials rising by the week. Inflation quickly ate away those pay rises – and more.
The Government has not helped itself in urging pay restraint by lavishing vast sums on consultants to set up the NHS Test and Trace system.
Medical staff are quite right to be angered when they read of some contractors walking off with £7,000 a day.
It wouldn’t be quite so bad if Test and Trace had worked – yet according to the Sage advisory
body, it has made “marginal” difference to case numbers, while threatening to bring the country to a halt because so many are being “pinged”.
AT LEAST these consultants are on shortterm contracts. There are relatively few and they can be cut from the payroll quickly.
It would be disastrous, on the other hand, if the Government handed out fancy pay awards to large numbers of public employees, thus permanently ballooning public spending.
I can understand the frustration of medics and others who have worked so hard at great personal risk. But the unions should recognise their efforts are not going unrewarded.
In the circumstances, a three per cent rise is a good deal. Many other public sector workers will get no pay rise this year.
Hopefully, as society comes out of hibernation, the economy will continue to surprise us with its growth. When tax revenues come flooding back in, that will be the time for healthy pay awards. But for the moment, public finances remain in intensive care. The more we appreciate that, the better they will be able to recover.
‘Medics are right to be angry when contractors are paid £7,000 a day’