More strikes predicted after below-inflation pay rises

TWO MILLION public sector workers are expected to be given a below-inflation pay rise today, in a move that could trigger a fresh wave of strikes.

Decisions on next year’s pay will be announced for school teachers, soldiers, doctors and nurses, policemen, prison officers and other workers paid by the Government.

Many of the pay rises are expected to be between 4 and 5 per cent, which is roughly in line with private sector pay changes. However, inflation could hit 11 per cent this year.

Nadhim Zahawi, the Chancellor, and other Cabinet ministers are expected to argue that pay restraint is needed to make sure this year’s sharp increase in prices does not become a long-term phenomenon.

But last night, trade unions were threatening more industrial action if the Government went ahead with belowinflation pay rises.

Recommendations by independent pay review bodies and decisions by the Treasury on pay from April next year will be announced today. Ministers have been grappling with how to balance the twin problems of soaring inflation and stuttering economic growth.

In a speech today, Mr Zahawi will stress the need to bring inflation under control. He is expected to say: “That means delivering sound public finances to avoid pushing up demand still further, providing help for households as they deal with the worst price rises in over a generation.”

He will call tackling inflation a “moral imperative”, adding: “We are steadying the ship. We are stabilising the economy. We are getting on with the task at hand.” Mr Zahawi and Boris Johnson have promised there will be no major tax and spending changes before the next Prime Minister is named on Sept 5.

Tory ministers have long been concerned that major public sector pay rises could lock in inflation and trigger a 1970s-style “wage-price spiral”.

Wage increases will be paid from the existing three-year spending settlement signed off by Rishi Sunak, Mr Zahawi’s predecessor, and Mr Johnson, so no overall departmental spending increases are expected.

There were warnings yesterday from unions about the implications of the pay rises. Sara Gorton, Unison’s head of health, said: “With inflation expected to go even higher this week, reports of a 5 per cent wage rise won’t go down well with struggling NHS staff.”

She added: “The Government says it’s committed to the NHS, but a pay increase falling far short of prices won’t take the heat out of the staffing crisis.”