Two million public sector workers are warned NOT to expect huge pay rises today because they will make the rest of Britain ‘permanently poorer’ in showdown that is set to spark a summer of savage strikes
- Sources said that pay review bodies will recommend settlements of 3% to 5%
- The proposed settlements are far below the forecast level of inflation
- The plans put ministers on a collision course with the big public sector unions
- These unions have warned of an autumn of industrial action if it happens
A senior minister warned two million public sector workers not to expect a pay rise today – as unions prepared to unleash a summer of strikes.
Transport Secretary Grant Shapps warned that an inflation-busting increase could leave the UK ‘permanently poorer’, sparking a confrontation across a swathe of vital industries.
Consumer Price Inflation (CPI) is running at a 40-year-high of 9.1 per cent, and could hit 11 per cent this year.
But pay review bodies covering doctors, nurses, soldiers, the police and a string of other professions are expected to recommend settlements of three to five per cent.
Unions are demanding pay rises that at least keep track with inflation, saying that anything less is, in effect, a pay cut.
It comes as official figures showed Britons saw their pay packets continue to lag heavily behind inflation despite a slight rise in earnings.
State employees saw growth of just 1.5 per cent in the quarter to May compared to 7.2 per cent in the private sector.
But speaking to LBC radio today, Mr Shapps said: ‘One thing we don’t want to do is allow inflation to run out of control. When that happens you get into a vicious circle where it erodes people’s incomes, it erodes people’s savings.
‘This is a spike going through the system caused by Putin’s war in Ukraine and the big upset that’s had to, for example, fuel supplies.
‘It’s very important that we don’t chase that inflation, otherwise we’ll be permanently poorer, and that’s why the plan which gets us back on track as quickly as possible is important – and pay rises will need to reflect that.’
Transport Secretary Grant Shapps warned that an inflation-busting increase could leave the UK ‘permanently poorer’, sparking a confrontation across a swathe of vital industries.
Consumer Price Inflation (CPI) is running at a 40-year-high of 9.1 per cent, and could hit 11 per cent this year. But pay review bodies covering doctors, nurses, soldiers, the police and a string of other professions are expected to recommend settlements of three to five per cent.
Today, Nadhim Zahawi, the Chancellor, will argue today to stop pay increases to stop pushing up demand further, spiking a bigger burden on the cost-of-living.
The proposed settlements are far below the forecast level of inflation, which is expected to peak at 11 per cent this autumn.
The plans put ministers on a collision course with the big public sector unions, which have warned of an autumn of industrial action.
Only newly qualified teachers are expected to get a more significant rise as part of Tory manifesto plans to raise starting salaries to £30,000 by the time of the next election.
A Whitehall source acknowledged the pay settlements would be tough for many, but said it was essential the Government gets inflation under control.
‘The pay review bodies are independent, but they have to consider what is affordable,’ the source said.
‘You will see most of the settlements come in at around the range of three to five per cent. It is going to be tough for people. But we have to manage things responsibly, and the alternative – letting inflation get out of control – is even more damaging to people’s incomes in the long term.’
Pay packets are falling at a record pace as inflation runs riot – but the jobs market still appears to be strong.
Official figures show that total earnings were growing at an annual rate of 6.2 per cent in the quarter to May, while regular pay – excluding bonuses – was rising 4.3 per cent.
However, accounting for inflation both measures were falling – with total pay shrinking by 1.9 per cent compared to the headline CPI over the three months and regular pay slumping 3.7 per cent. The latter was the worst since figures started being compiled in 2001.
Using the ONS’ preferred measure of CPI including housing costs, total pay was down 0.9 per cent and regular pay tumbled 2.8 per cent – again the biggest drop on record.
Despite the grim cost-of-living squeeze, the labour market seems to be holding firm with unemployment down 0.1 percentage points compared to the previous quarter, to 3.8 per cent.
The number of staff on payroll crept up 31,000 in June to another high of 29.6million. And vacancies in the three months to June stayed near their peak at just under 1.3million.
Chancellor Nadhim Zahawi welcomed the jobs figures but said he is ‘acutely aware’ of the pressure on household finances.
Today’s pay reviews will cover doctors and dentists, nurses, teachers, prison officers, members of the armed forces, judges and senior civil servants.
Nadhim Zahawi, the Chancellor, will argue today for pay restraint, the Telegraph has said.
The newspaper said Mr Zahawi will 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.
‘And, where we can, easing the supply constraints that are the underlying cause of high inflation. The country should feel confident that we can, and we will, get inflation back under control’.
But Pat Cullen, general secretary of the Royal College of Nursing, which is seeking a 16 per cent rise, said nurses would ‘consider industrial action if ministers do not move’, according to the Daily Mail.
She said: ‘There are tens of thousands of vacant nurse jobs and unfair treatment will push more out of the profession.’
Separately, a three-day strike due to start tomorrow by Royal Mail managers belonging to the Unite union has been called off. The union’s 2,400 Royal Mail members accepted proposals on jobs, pay and conditions in a ballot by almost two to one. However, Unite said that the dispute was not over.
The UK’s largest union with more than 1.3 million members providing public services in education, local government, the NHS, police service and energy has also hinted this could mean staff walking out of their jobs.
UNISON head of health and chair of the NHS group of unions Sara Gorton said: ‘Health workers struggling to pay bills have been waiting months for the increase they should have received back in the spring.
‘The public clearly supports an above-inflation pay rise across the NHS. People say they would also be behind NHS staff should they opt for strike action if a decent increase isn’t forthcoming. Ministers must act now rather than stumble into a dispute no-one wants to see.
‘The government must find the money needed or risk worsening the current staffing crisis and lengthening test and treatment waits for patients.’
Chartered Society of Physiotherapy assistant director and secretary of the NHS group of unions Elaine Sparkes said: ‘The NHS has a workforce crisis, and it is unthinkable that the government could be considering making this worse through a pay rise that falls far below inflation.
‘That would cause further staff to leave and place ever-greater strain on those who remain, while increasing waiting times for patients.
‘The government must step up with an above-inflation pay rise that helps recruit, and most importantly retain, the workforce patients desperately need.’
Whitehall sources said that pay review bodies covering doctors, nurses, soldiers, the police and a string of other professions will recommend settlements of three to five per cent
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