The government prepared today for a torrid summer and autumn battle with unions as they offered two million public sector workers, including doctors and nurses, below-inflation pay rises.
More than a million NHS Staff, including nurses, midwives and paramedics, have been offered a top-up, with the lowest paid receiving an extra £1,400 – up to 9.3 per cent – ministers said.
But doctors and dentists are gearing up for industrial action after being offered a 4.5 percent raise. NHS doctors and GPs are pushing for a whopping 30 per cent pay rise over five years.
Unions are demanding wage increases that at least keep pace with inflation, saying anything else means a pay cut.
But they have been warned that massive increases could exacerbate economic problems and make Britain “permanently poorer”.
It comes as official figures showed Brits saw their wage packages continue to lag far behind inflation despite a modest increase in revenue.
Government employees grew just 1.5 percent in the quarter to May, compared to 7.2 percent in the private sector.
Peter Crooks, vice-president of the British Dental Association, said: “For a decade we have seen euphemisms like ‘salary restraint’ and ‘efficiency savings’ equate to the deepest pay cuts in the public sector.
“This ridiculous offer will only give dentists more reason to reconsider their future in the NHS and millions of patients will pay the price.”
But Health and Human Services Secretary Steve Barclay said: “We want a fair deal for staff.
“Very large inflation-driven severance payments would have a worse long-term impact on pay packages than proportionate and balanced increases now, and it is to be welcomed that pay review bodies are concurring with this approach.”
Transport Secretary Grant Shapps warned that an inflation-busting hike could make the UK “permanently poorer”, triggering a confrontation in a number of vital industries.
Consumer price inflation (CPI) is 9.1 percent at a 40-year high and could reach 11 percent this year. However, salary review bodies, which include doctors, nurses, soldiers, the police and a range of other professions, are expected to recommend comparisons of three to five percent.
Speaking to LBC Radio today, Transport Secretary Grant Shapps said: “We don’t want to allow inflation to get out of control. When that happens, you get caught in a vicious circle where people’s income is eroded, it erodes people’s savings.
“This is a spike going through the system caused by Putin’s war in Ukraine and the big fuss that fuel supplies, for example, have had.
“It’s very important that we don’t chase this inflation or we’ll be permanently poorer, and so the plan to get us back on track as quickly as possible is important – and wage increases need to reflect that.”
Today, Chancellor Nadhim Zahawi will advocate halting wage increases to stop fueling demand and putting a greater strain on the cost of living.
The proposed settlements are well below projected inflation levels, which are expected to peak at 11 percent this fall.
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 boost as part of the Tory manifesto, which aims to raise starting salaries to £30,000 by the next election.
A Whitehall source admitted wage deals would be difficult for many but said it was important for the government to get inflation under control.
“Wage review bodies are independent, but they have to consider what is affordable,” the source said.
“You will see that most settlements are in the three to five percent range. It’s going to be tough for people. But we have to do things responsibly, and the alternative – letting inflation get out of control – hurts people’s incomes even more in the long run.”
Public sector workers and members of Unison gather outside the Houses of Parliament in central London back in 2014
Pay packages suffer a RECORD 2.8% drop as inflation is rampant
Salary packages are falling at a record pace like inflation is raging – but the job market still seems strong.
Official figures show that total earnings grew 6.2 percent annually for the quarter through May, while regular salaries – excluding bonuses – rose 4.3 percent.
Adjusted for inflation, however, both metrics declined — with total compensation versus CPI shrinking 1.9 percent over the three months and regular compensation falling 3.7 percent. The latter was the worst since the figures began being collected in 2001.
Using the ONS’s preferred CPI measure including housing costs, total wages fell 0.9 per cent and regular wages fell 2.8 per cent – again the largest drop on record.
Despite grim pressures on the cost of living, the job market appears to be holding up, with the unemployment rate down 0.1 percentage point from the previous quarter to 3.8 percent.
The number of people employed rose by 31,000 in June to another high of 29.6 million. And job vacancies remained near their peak in the three months to June at just under 1.3 million.
Chancellor Nadhim Zahawi welcomed the job numbers but said he was “very aware” of the pressure on budget finances.
Today’s salary reviews are for doctors and dentists, nurses, teachers, prison officials, members of the armed forces, judges and senior civil servants.
Chancellor Nadhim Zahawi will today advocate wage moderation, The Telegraph has said.
The newspaper said Mr Zahawi would say: “That means providing sound public finances to avoid spiking demand even further and helping households coping with the worst price hikes in over a generation.
“And where we can, to ease the supply constraints that are at the root of high inflation. The country should be confident that we can and will bring inflation under control again.”
But Pat Cullen, general secretary of the Royal College of Nursing, which is seeking a 16 per cent increase, said nurses would “consider industrial action if ministers don’t budge”, according to the Daily Mail.
She said: “There are tens of thousands of vacancies in the nursing profession and unfair treatment will push more out of the profession.”
Separately, a three-day strike due to start tomorrow has been called off by Royal Mail managers, who are affiliated with the Unite union. The union’s 2,400 Royal Mail members accepted proposals on jobs, pay and conditions in a vote almost two to one. However, Unite said the dispute is not over.
The UK’s largest union, with more than 1.3 million members covering public services in education, local government, the NHS, police and energy, has also suggested it could result in staff losing their jobs.
UNISON health chief and NHS union group leader Sara Gorton said: “Health workers struggling to pay bills have been waiting months for the boost they should have received in the spring.
“The public clearly supports a above-inflation pay rise across the NHS. People say they would also stand behind NHS workers should they decide to strike unless a decent raise is forthcoming. Ministers must act now rather than get caught up in a row no one wants to see.
“The government must come up with the money it needs or risk exacerbating the current staffing crisis and increasing wait times for patients to be tested and treated.”
Elaine Sparkes, deputy director of the Chartered Society of Physiotherapy and secretary of the NHS union group, said: “The NHS is facing a staffing crisis and it is unthinkable that the Government could consider making it worse by offering a pay rise well below inflation .
“That would lead to the departure of more employees, increasing the burden on those who remain and increasing waiting times for patients.
“The government must move forward with a wage increase above inflation that will help recruit and, importantly, retain the workforce that patients desperately need.”
Whitehall sources said salary review bodies, which include doctors, nurses, soldiers, the police and a range of other professions, would recommend comparisons of three to five percent