Boris Johnson will next week offer an average wage increase of around 5% for millions of public sector workers, but ministers fear that under-inflationary trades across the economy could cause months of stagnation. labour.
The salary offer will be higher than the government’s original proposal; Ministers will argue it will help nurses, teachers and others deal with the cost of living crisis when inflation is expected to hit 11% by the fall.
But ministers are bracing for months of uncertainty in the public and private sectors. Sharon Graham, general secretary of the union Unite, said there could be hundreds of disputes if workers had to “pay the price for inflation”.
BT, the former telecommunications monopoly, is facing industrial action for 35 years, as the Communications Workers Union announced Friday that 40,000 employees will go on strike on July 29 and August 1.
This action will lead to delays in households’ internet and phone line repairs, making working from home more difficult. The CWU is also voting for 115,000 Royal Mail workers on possible strike action in August.
In the public sector, teachers, nurses, police, prison staff, civil servants and the armed forces are waiting for Johnson’s cabinet to decide this year’s pay deals – one of the key decisions for the government takes care of him.
The public sector pay review covers around 2.5 million people, about 45 per cent of public sector workers with a total taxpayer cost of £220 billion between 2021-21.
A cabinet minister said the government would accept recommendations made by independent salary review bodies, which make pay proposals based on guidelines set forth by ministers.
Former prime minister Rishi Sunak had hoped to keep the pay rise to 2% in most cases. However, another minister said settlements averaging around 5% were now expected, given the recent spike in inflation.
But Sara Gorton, the head of health for Unison – the largest public sector union – told the FT that this is not enough: “Wage increases that are less than inflation will not be enough to convince medical workers disillusioned economy to stay in the NHS.”
Payroll review agencies take into account hiring and retention pressures but must also consider the affordability of their recommendations.
If pay review bodies recommend a typical 5% increase – which will vary across sectors – and it applies across the public sector, the increase of nearly £7bn would be higher. 2%. The Treasury stressed that this must come from the existing budget for 2022-23, set last fall.
“If you do below their recommendation, you’ll save some money, but what’s the net savings?” asked the Cabinet Minister. “You will end up with a lot of strikes and huge economic impact. You will have strikes in any event, but that will make things much worse.”
The minister said the government would not introduce an “inflation” increase beyond the payer’s recommendation.
A spokesman for Johnson said a decision on public sector pay would be made next week before MPs depart for summer break on July 21, but declined to comment on details.
Last month, the rail network came to a virtual standstill when RMT union organizes a wave of strikes. Now the government is preparing for further rail industry activities during the summer break from both RMT and Aslef.
Next week, a third rail union – TSSA – will set dates for further national strikes, which can be coordinated with other unions.
Network Rail has offered a 4% pay raise, followed by another conditional 4% next year – plus some bonuses – as well as the promise of no mandated redundancies.
Meanwhile, the new head of the British Medical Association, Philip Banfield, warned that doctors’ Strikes are “inevitable” in the spring of next year. Last month, the BMA voted for a 30 percent increase in doctors’ salaries over five years to restore real earnings cuts since 2008.
Additional reporting by Philip Georgiadis
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