Rayner’s fair pay deal ‘to cost £21bn’
would cost taxpayers £21billion over the next parliament.
Last night, Chief Treasury Secretary Laura Trott claimed the “French-style union laws” would lead to yet another raid on pensioners’ pockets.
She declared: “While we are protecting the triple lock and raising the state pension by £900 a year, Labour is willing to take pensioners right back to square one with higher taxes to pay for their unfunded promises.”
Labour last night dismissed claims in the Policy Exchange report as “based on fiction”.
But economists challenged Ms Rayner to reveal whether she would pay for increased staff costs by borrowing more or raising tax.
Last year she promised a Labour government would carry out the most extensive overhaul of workers’ rights in a generation. It included the repeal of anti-strike laws and a legal right for unions to stage recruitment drives in the workplace.
Labour leader Sir Keir Starmer softened some key polices – including removing a proposed outright ban on contacting employees outside work hours – after business leaders warned of the “damaging” impact.
But plans to “boost collective bargaining” will stay, starting with “fair pay agreements in adult social care”.
Under Ms Rayner’s plan, representatives of workers and employers
would negotiate agreements which would be “binding on all employers and workers in the sector”.
Policy Exchange has calculated that if unions secured the TUC’S demand last year for a minimum wage in social care of £15 per hour, this would result in a £9.9billion pay hike.
A wage agreement in the care sector could be just the beginning. Labour’s green paper, A New Deal for Working People, says it would “establish fair pay agreements across the economy”.
Labour condemned the claims in the report, saying it did not reflect its policy. It insists a fair pay agreement would help tackle the recruitment and retention crisis in the sector.
The adult social care sector had 152,000 vacancies in 2022-23, with a staff turnover rate of 28.3 per cent, according to workforce planning body Skills for Care. It claimed the realterm average hourly pay for a carer in the independent sector was just £10.11 in March 2023.
Last year Ms Rayner set out her ambitions for the policy, saying: “As a former social care worker, I cannot overstate the difference this will make, not only for these low paid and fartoo-often overlooked workers, but to our entire health care system weighted down by years of Tory neglect.”
But Iain Mansfield, the study’s author, said: “Labour needs to say how they will pay for their plans to introduce sectoral collective bargaining. Are they planning to raise taxes or to borrow more?
“If growing the economy is their number one priority they cannot afford to introduce such inflationary and economically destructive policies.”
A Labour spokesman said: “These claims are based on fiction and don’t reflect Labour policy.
“The real risk to people’s pockets is the £46billion unfunded Conservative pledge to abolish national insurance.
“After 14 years of Tory failure to fix the broken adult social care sector, Labour’s New Deal for Working People will lay the groundwork for better conditions that end the race to the bottom in care.”