Thursday, August 11 2022

Boris Johnson will offer pay rises of around 5% on average to millions of public sector workers next week, but ministers fear deals below inflation across the economy could trigger months of strikes.

The salary offer will be higher than that initially proposed by the government; ministers will say it will help nurses, teachers and others cope with the cost of living crisis as inflation is expected to hit 11% in the autumn.

But ministers are prepared for months of unrest in the public and private sectors. Sharon Graham, general secretary of the Unite union, said there could be hundreds of disputes if workers had to “pay the price of inflation”.

BT, the former telecoms monopoly, faces its first strike in 35 years as the Communications Workers’ Union announced on Friday that 40,000 staff would strike on July 29 and August 1.

The action will cause delays in repairs to household internet and phone lines, making it more difficult to work from home. The CWU is also voting with 115,000 Royal Mail workers on a possible strike 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 on this year’s pay deals – one of the big decisions pending for his caretaker government. .

The Public Sector Pay Review covers around 2.5million people, or around 45% of public sector workers, with total pay costing taxpayers £220billion in 2021-21.

A cabinet minister has said the government will accept recommendations made by independent pay review bodies, which make pay proposals based on guidelines set by ministers.

Former Chancellor Rishi Sunak had hoped to keep wage increases at 2% in most cases. But another minister said settlements of around 5% on average were now expected, given the recent spike in inflation.

But Sara Gorton, health manager for Unison – the biggest public sector union – told the FT that was insufficient: ‘A pay rise below inflation will not be enough to persuade disillusioned health workers to stay. in the NHS.”

Compensation review bodies consider recruitment and retention pressures, but must also consider the affordability of their recommendations.

If the pay review bodies recommended a typical 5% increase – this will vary from sector to sector – and were implemented across the public sector, it would cost nearly £7bn of more than a 2% increase. The Treasury insists this must come from existing budgets for 2022-23, drawn up last fall.

“If you went below their recommendations, you would save some money, but what would the net savings be? asked the minister. “You would end up with a lot of strikes and a big economic hit. You’re going to have strikes anyway, but that would make things much worse.

The minister said the government would not grant “inflationary” increases above the recommendations of compensation bodies.

Johnson’s spokesman said a decision on public sector wages would be made next week before MPs depart for their summer holidays on July 21, but declined to comment on specifics.

Last month, the rail network came to a virtual standstill when the RMT union staged a wave of strikes. Now, the government is preparing for new rail industrial actions during the summer holidays of both the RMT and Aslef.

Next week a third rail union – the TSSA – will set dates for further national strikes, which could be coordinated with the other unions.

Network Rail has offered a 4% pay rise followed by another 4% condition next year – plus some bonuses – as well as a promise of no mandatory redundancy.

Meanwhile, the new head of the British Medical Association, Philip Banfield, has warned that a doctor the strike was “inevitable” next spring. The BMA voted last month for a 30% pay rise for doctors over five years to restore their decline in income in real terms since 2008.

Additional reporting by Philip Georgiadis

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