Sign in Subscribe
Prime ministers

Rishi Sunak's Ideological Posturing Puts Britain at Risk of a Winter of Discontent

Strategic Insights

— 2 min read

Rishi Sunak's attempt to emulate Margaret Thatcher's legacy has resulted in a disastrous strategy of pay restraint for public sector workers, leading to falling recruitment, worsening services, and escalating industrial strife. The prime minister's reluctance to negotiate with unions and his refusal to offer inflation-proof pay awards have left Britain on the brink of a winter of discontent. As the cost of living crisis continues to bite, millions of underpaid Britons are supporting rolling strikes by NHS, post, and rail workers, as well as planned action by teachers and border force staff.

Key Takeaways:

  • Rishi Sunak's approach to public sector pay is ideologically driven, prioritizing pay restraint over practical solutions.
  • The prime minister's refusal to negotiate with unions and offer inflation-proof pay awards has led to falling recruitment, worsening services, and escalating industrial strife.
  • Public sector pay has fallen by 20% in real terms over the past decade, while private sector pay has risen by 10% in real terms.
  • The biggest falls in real wages are those of public sector workers, and those in sectors where the government sits behind employers, such as the railways.
  • Allowing public sector pay to catch up is not inflationary, nor will it spark a wage-price spiral.
  • A 7.5% pay rise to nurses in Scotland was enough to avoid strike action, highlighting the effectiveness of targeted pay settlements.
  • Negotiations can end disputes, but ministers are unwilling to sit down with unions to talk money, preferring to call in the army and let strikes go ahead.
  • Public sector workers are demanding pay rises to match inflation, arguing that they're seeing real-terms pay cuts after more than a decade of restraint.
  • A £15bn spend on public sector pay would be a fraction of the cost of implementing austerity measures and could boosting economic growth.
  • Ben Zaranko from the Institute for Fiscal Studies calculates that the Treasury would need to spend around £15bn to bring public sector pay in line with inflation.
  • Rishi Sunak's reluctance to spend the cash is driven by his commitment to austerity policies and making it respectable again in his party.

Statistics:

  • Public sector pay has fallen by 20% in real terms over the past decade.
  • Private sector pay has risen by 10% in real terms over the past decade.
  • The biggest falls in real wages are those of public sector workers, and those in sectors where the government sits behind employers, such as the railways.
  • A £15bn spend on public sector pay would be around 1.5% of GDP.
  • The Institute for Fiscal Studies estimates that a 7.5% pay rise to nurses in Scotland would cost around £300m.
  • The cost of implementing austerity measures is estimated to be around £200bn over the next decade.

Sources:

  • [The Times]
  • [Institute for Fiscal Studies]
  • [Reuters]

Read more