No case for public sector pay strikes
As the Tory leadership race was reduced to three candidates, the eventual winner looks certain to face an autumn of discontent with unions representing some 2.5 million public sector workers set to reject an offer of pay rises averaging 5 per cent.
The increases, recommended by independent review bodies and agreed by the Cabinet yesterday, fall well below the rate of inflation. Official data for the June inflation rate, due today, are expected to show price rises hitting a 40-year high, possibly above 10 per cent.
Figures from the Office for National Statistics also indicate that living standards are dropping at a record rate. Earnings growth increased across the private and public sector by 4.3 per cent in the three months to May, excluding bonuses, but that still left real wages down by 3.7 per cent, the worst annual drop since records began in 2001.
The employees covered by the review bodies include health workers, teachers, senior civil servants, judges, police and prison officers and the Armed Forces. Awards vary from sector to sector but none is likely to be happy with the outcome, except perhaps for the lowest-paid health workers whose rise will be 9.3 per cent.
Since the Budget factored in increases of between 2 and 3 per cent, finding the money even to pay for the recommended rises will mean cuts elsewhere. The NHS will not receive extra cash, so much of the health and care “levy” raised by an increase in National Insurance contributions will go on pay, not treatments or patient backlog clearances.
Unions representing nurses and teachers have signalled that they will ballot members for industrial action in the autumn. But, while the disappointment of staff is understandable, the country is in no position to pay the rises they seek.
There is also a trade-off between pay and jobs though, with staff shortages in the NHS and in schools, the unions evidently consider themselves to be in a strong position to resist cuts and argue that higher pay is an important agent to recruitment.
It is true that the pay of some employees has still not caught up with the post-financial crash decline. However, to strike when a rise of 5 per cent has already been offered would be wrong and not understood by millions who do not have the job security and pensions enjoyed by many public sector workers.