Collision course as Budget priorities clash with workers’ pay demands

Workers at the plant in Aintree have been offered a pay rise of 4.25 per cent, well short of their initial demand for a 10% increase to keep pace with the rate of inflation. The GMB union, which is backing the strike, said workers have eased their demand to a raise of £1,750 each which equates to an increase of about 9% for those on the lowest pay grade and less than 7% for more senior staff.

They join what is turning into the biggest wave of industrial action seen in the UK in more than four decades, though the precise scale seems destined to go largely unrecorded as the Office for National Statistics (ONS) suspended publication of data on labour disputes three years ago.

Regardless, the evidence of unrest is there for all to see. What began in earnest with walkouts this past summer by airport staff and refuse collectors has rolled into the autumn with continuing strikes across the rail industry and the spread of industrial action throughout much of the public sector.

BT and Openreach on strike in Glasgow (Image: Newsquest)

Teachers and associated professionals across Scotland have voted overwhelmingly for strike action over pay, while NHS nurses are set to strike for the first time in history during the run-up to Christmas. Other frontline healthcare workers such as those in blood and transplant services are also being balloted.

“Make to mistake: our NHS is under siege,” Unite general secretary Sharon Graham said at the weekend.

“Rishi Sunak has to wake up and smell the coffee because our NHS is being brought to ruin under his watch. This Thursday, in the Budget, he has one last chance to do good by the NHS and its workers.”

The turmoil doesn’t end there. The Public and Commercial Services (PCS) union confirmed last week that tens of thousands of UK government workers have voted in favour of striking in what PCS general secretary Mark Serwotka said could be a prolonged programme of industrial action “reaching into every corner of public life”.

Royal Mail workers are due to stage two 48-hour strikes timed to disrupt deliveries around Black Friday and Cyber Monday, two of the biggest online shopping days of the year. More than 500 workers at housing charity Shelter, which provides advice and practical assistance to those who are homeless, will begin a two-week walkout on December 5.

Student Malachy Harris joined staff at Glasgow University earlier this year during a strike by the UCU (Image: Newsquest)

“At the very base level, absolute bare minimum, those working for a housing charity shouldn’t be experiencing housing insecurity as a result of being unable to pay rent,” said one unnamed Shelter employee in a quote provided by the Unite union.

The backdrop to all of this isn’t particularly complicated. Recent analysis by the National Institute of Economic and Social Research (NIESR) indicates that household bills now exceed income in 60% of UK homes, but even before the inflationary surge earlier this year, the link between employment and economic security was breaking.

In-work poverty – defined as when an individual’s income, after housing costs, is less than 60% of the national average – was rising incrementally from the 1980s onwards. The New Labour government tried to alleviate this with tax credits and other wage subsidies after 1997, but the Conservative-led coalition government substantially scaled back on that with its austerity programme in the wake of the global banking crisis of 2008.

Living standards for many, and particularly those in the public sector, have fallen since 2010 leaving little if any scope to absorb yet another decade of declines in real wages. Put simply, workers feel they are at breaking point.

But in the wake of September’s disastrous “mini-Budget” under the short-lived tenure of Liz Truss, the newly-installed Prime Minister Mr Sunak and his Chancellor Jeremy Hunt face an uphill battle to convince financial markets that the UK can live within its means. Both have explicitly said that taxes will go up as “everyone will have to pay more”, and are also reportedly considering a 2% cap on public sector pay rises to be implemented from next year.

Bins were left overflowing in cities across Scotland earlier this year during disputes over pay (Image: Newsquest)

If so, Thursday’s Autumn Statement looks set to trigger a showdown the likes of which has not been seen since the Winter of Discontent in the late 1970s.

As Chancellor to former Prime Minister Boris Johnson, Mr Sunak was for a spell the UK’s most popular politician as he unleashed colossal spending programmes to support the economy through the Covid pandemic. He has shown a commendable ability to overcome his natural political instincts, but at heart he is a small-state, balance-the-books Conservative.

He tried but ultimately failed to prematurely curtail the furlough programme in a bid to save money, and was slow to offer support earlier this year for surging energy bills. He is loathe to either raise taxes or increase spending; it was only the urgency of the pandemic and his alliance with the populist Mr Johnson that forced him to bust open the piggy bank shortly after his promotion to Chancellor in February 2020.

In the wake of the ill-fated foray into Trussanomics, the Prime Minister and his Chancellor have sufficient ammo to fight their corner for financial discipline and wage restraint. But then again, extreme labour shortages caused to a large extent by Brexit – which Mr Sunak supported – plays to the hand of striking workers.

The irony is that Brexit was sold in large part as a way of “saving UK jobs for UK workers” and pushing up living standards through the elimination of cheap foreign labour. Squaring that circle with today's disgruntled and despondent population will be a neat trick indeed.