The worst thing Rishi could do now is cave in

Yet again, Britain is blighted by strikes. In London, commuters face disruption today caused by striking Prospect and TSSA members over pay and pensions on the newly opened elizabeth Line.

elsewhere in the capital, Unite bus drivers working for Abellio are on strike – one of 11 days this month when they are withdrawing their labour.

And more than 420 staff from the PCS union at the Rural Payments Agency, which oversees rural subsidies (as part of the Department for environment, Food and Rural Affairs), are off today too.

It’s a wave of industrial action that is depressingly reminiscent of the 1970s – and today’s strikes are merely the tip of the iceberg.

Further action is planned for pretty much every day this month.

In the face of such unrest, siren voices are calling for Rishi Sunak to capitulate and settle.

Only yesterday, at Prime Minister’s Questions, Sir Keir Starmer accused him of ‘choosing to prolong the misery rather than end these strikes’.

It was a typically wrong-headed intervention by the Labour leader. the misery is, of course, inflicted by the strikers, not the Government. And the very worst thing the Government could do would be to cave in. Yes, it is right to negotiate and, where prudent, to make concessions. there is talk of Whitehall raising its offer to the RMT from 8 per cent to 10 per cent, for example.

But when unions make insane demands, the Government has no alternative but to face them down in the interests of financial stability. Junior doctors, for instance, are calling for a 26 per cent pay rise.

And they are just one group of healthcare workers striking for more pay. Last month, the NHS was hit by industrial action by some 25,000 paramedics (who were again on strike yesterday), emergency care assistants, ambulance technicians, call handlers and other 999 crew members.

Nurses are due to repeat their walkout of last month next Wednesday and thursday, with the Royal College of Nurses increasing the number of health trusts hit by action from 44 to 55.

If this administration were to give everyone what they ask for, it would deal a devastating blow to the economy over the next few years.

We know this because we have been here before. As inflation soared in the 1970s, so did the demands for pay rises. But a ruinous triumvirate of weak management, unions who were used to having the upper hand and a spineless government was a disaster. Pay kept rising to attempt to match inflation and we entered what economists call a wage-price spiral: as wages rose, companies had to charge more to cover the costs, which led to inflation increasing further, which led to higher wages… and so on. the danger now is that history will repeat itself.

It’s widely said that the Prime Minister has a weak hand. With a parliamentary party that is nigh on uncontrollable and Labour miles ahead in the polls, he is portrayed as a rabbit caught in the headlights.

But that makes it all the more important that he stays the course.

So far, Mr Sunak and the Government have made all the right noises. On Monday, Business Secretary Grant Shapps brought forward legislation to ensure minimum service levels in key sectors.

that is a positive sign that the Government does indeed have a backbone. But it will take months for its provisions to become law and makes no difference to the current situation.

What matters now is how the Government behaves today, tomorrow and in coming weeks – and that throughout it refuses to cave in.

BECAUSE whatever short-term gain there might appear to be with strikers returning to work after the Government yields to their demands it would be obliterated by further me-too strikes and a crippling inflationary spiral as other unions smell weakness.

Already there is frenzied talk of strikes by junior doctors, teachers, academics and others. It sometimes seems as if there are more groups striking or considering striking than not.

the latest inflation figure, for November 2022, is 10.7 per cent – down slightly from 11.1 per cent in October. the good news is that the Bank of england, and most economists, think it will fall this year – some predict to around 5 per cent, and then even lower in 2024

But that is all very much up in the air. If we enter another wage-price spiral, we can wave goodbye to such hopes. Inflation will be even worse. And historians of the future will compare the economic madness of the 1970s with a very similar phenomenon in the 2020s.