We are deep in a cost-of-living emergency 12 years in the making, an emergency that is about to be made even worse by this Conservative government. Public sector pay has been eroded in real terms for more than a decade through this government’s austerity measures, driving down living standards in the UK. The public sector pay settlement now proposed is the worst so far and will further reduce living standards. Reports in today’s Times and Telegraph that a real pay settlement will be even worse next year will only add insult to injury.
When David Cameron came to power in 2010, his first speech on the steps of Downing Street included the phrase “difficult decisions”. Rishi Sunak said the same thing last week. In between those speeches, we’ve had what the TUC has called “a decade of lost pay“. That is why the government now faces more than a million public sector workers being balloted for strike action.
This summer was the summer of solidarity – with major strike action in the postal and telecoms sectors and on the railways. We are now seeing a huge escalation of that, with widespread balloting for industrial action in response to meagre public sector pay offers: 150,000 PCS union civil servants; 300,000 RCN nurses; 400,000-plus members of UNISON, the GMB and Unite union in the NHS; 700,000 NEU, NASUWT and NAHT members in schools; 70,000 UCU members in higher education; and 32,000 FBU members.
The timing of those ballots means that early in the new year there could be significant coordinated strike action. The TUC general council statement from their recent Congress said: “We will coordinate industrial action by our member unions, amplifying the impact of our action and making our demands impossible to ignore.” And they are absolutely right to.
Trade unionists in the public sector have little choice but to consider industrial action when they are being offered huge pay cuts in the middle of the worst cost-of-living crisis in living memory. The TUC says nurses will see their real pay shrink by £1,100 this year, while paramedics will lose £1,500. Workers don’t want to take industrial action. It is always a last resort. The TUC published findings on Sunday that one in three public sector workers – perhaps up to two million people – are close to quitting over pay. If we are to give workers the inflation-proofed pay rise that they deserve and need, then we must find a pay settlement that can match 10.1%. Instead, Sunak is looking to further squeeze public sector pay next year to ‘balance the books’.
There is an alternative to more austerity and pay restraint, which is to use a fairer tax system to fund a fair and inflation-proofed pay rise. Our key workers have kept the country going through successive crises. The least they deserve is not to be driven into poverty in return for their efforts. This is not an unreasonable expectation. This is people saying they don’t wish to be made poorer because they are a key worker.
The IFS green Budget estimates that offering an inflation-matching pay award to all public sector employees would add something like £18bn to current budgets. This is a significant amount of money. But we are talking about livelihoods, households, families. We are talking about key workers. The government owes it to them to consider new ways of raising revenue to pay for it.
Austerity is not the only game in town. The time has come for the government to look seriously at introducing taxes on wealth. The wealth tax commission has given a rigorous academic base to our understanding of how we could levy either a one-off or an annual wealth tax. Its simulator suggests that around £18bn could be raised through an annual wealth tax of 2% on wealth over £5m. Tax Justice UK, the IPPR and Common Wealth think tanks have all set out in recent days how billions could be raised. The resources are there. The government must examine them and use them.
The current pay settlement is an attack on living standards on top of an already decade-long attack on living standards. And there is an alternative to it that means we must look at new revenue streams that tax wealth to increase public sector – key-worker – pay.
We have arrived at this crisis – and are experiencing it in this acutely unequal way – due to policy choices, choices driven by political decisions and priorities. My priority is the living standards of my Cynon Valley constituents. I will therefore be continuing to support all actions to protect them and will proudly stand shoulder to shoulder with our workers.