We started the year with the build-up to an illegal invasion of Ukraine. We finish it with public sector strikes.
The strikes have been pretty relentless and designed to cause maximum disruption for the wider community. And why would it be any other way? If you want to make a point, make it in a way that everyone hears. The unions, of course, blame the government; the government blames the unions.
Claims by public sector workers that they are worth a 17% increase in wages are very hard to justify. The government has always stuck by the recommendations of the independent public sector pay review boards. These were set up years ago to be independent arbiters of what should be a fair pay rise. We as MPs, for example, have our pay and terms set independently and have done for as long as I have been an MP. For the government to reject the recommendation would be to set the whole system at odds with itself. Why, the argument would go, should one group of public sector workers get a better than recommended pay rise when others don’t?
But at a time of inflation, pay restraint is vital.
Pay rises are clearly inflationary when, for example, car workers get inflation-busting rises. That extra cost is added onto car prices and so the inflationary spiral goes on. But for public sector workers, that argument doesn’t apparently follow, their services offered for free.
The reason lies in why Liz Truss’s idiotic mini budget was so bad.
The Bank of England is tackling inflation through tightening money supply by raising interest rates. That reduces the amount of money in circulation and so inflation comes down. Liz Truss wanted to increase money supply though tax cuts, supposedly to stimulate growth. But another way to achieve increased money supply is raise public sector wages. So, in exactly the same way that Liz Truss’s action led to a direct increase in all our mortgage rates, pushing up public sector wages at an inflation busting rate would result in risking all of our bowing costs going up – including those who got the pay rise. So, we are back at square one.
That, and consistency, is why the government is resisting the pressure of the unions. There are offers of talks between ministers and unions over working conditions, but the government is adamant that it will not risk people’s cost of borrowing to keep a few unions happy.