Boris Johnson will offer wage increases averaging about 5 percent to millions of public sector workers next week, but ministers fear deals below inflation could spark months of strikes across the economy.
The wage supply will be higher than originally proposed by the government; Ministers will claim it will help nurses, teachers and others cope with the cost of living crisis as inflation is expected to hit 11 percent in the fall.
But ministers are bracing for months of unrest in the public and private sectors. Sharon Graham, general secretary of the Unite union, said hundreds of disputes could arise if workers “had to pay the price of inflation”.
BT, the former telecom monopoly, faces its first industrial action in 35 years as the Communication Workers Union announced Friday that 40,000 employees would go on strike on July 29 and August 1.
The move will lead to delays in repairs to household internet and telephone lines, making working from home more difficult. The CWU also agrees 115,000 Royal Mail workers to 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 make a decision on this year’s wage deals — one of the big outstanding decisions for his caretaker government.
The public sector wage review affects about 2.5 million people, about 45 percent of public sector workers, with total wages costing taxpayers £220 billion in 2021-21.
A minister said the government would accept the recommendations of independent pay review bodies, which propose pay based on guidelines set by ministers.
Former Chancellor Rishi Sunak had hoped to keep wage increases at 2 percent in most cases. But another minister said settlements averaging around 5 percent are now expected given the recent spike in inflation.
But Sara Gorton, head of the health department at Unison – the largest union in the public sector – told the FT this was insufficient: “A pay rise below inflation will not be enough to persuade disillusioned health workers to join the NHS. to stay.”
Wage review bodies take into account recruitment and retention pressures, but also need to consider the affordability of their recommendations.
If wage review bodies were to recommend a typical 5 per cent increase – this will vary from sector to sector – and it were applied in the public sector, it would cost almost £7bn more than a 2 per cent increase. The Treasury insists this should come from the existing 2022-23 budgets, which were enacted last fall.
“If you went under their recommendations, you’d save some money, but what would be the net savings?” the minister asked. “You would end up with a lot of strikes and a big economic blow. You will get strikes anyway, but that would make it much worse.”
The minister said the government would not give “inflationary” increases beyond the recommendations of the wage bodies.
Johnson’s spokesman said a decision on public sector wages would be made next week before MPs leave for their summer break on July 21, but declined to comment on details.
Recommended
Last month the rail network came to a virtual standstill when the RMT union launched a strike wave. Now the government is bracing for further industrial action on the track during the summer break from both the RMT and Aslef.
Next week, a third railway union – the TSSA – will set dates for further nationwide strikes, which can be coordinated with the other unions.
Network Rail has offered a 4 percent pay rise, followed by another conditional 4 percent next year – plus some bonuses – and a pledge that there will be no redundancies.
Meanwhile, the new head of the British Medical Association, Philip Banfield, warned that a doctor strike was “inevitable” by next spring. The BMA voted last month for a 30 percent increase in physician salaries over a five-year period to restore their real income cut since 2008.
Additional reporting by Philip Georgiadis