GEIS-新闻详情

Rachel Reeves' public sector pay bonanza risks fresh inflation spike and strikes

2024-08-23 00:00:00.0 每日快报-政治原网页

Rachel Reeves is under fresh pressure for her public sector pay decisions. (Image: Getty)

Rachel Reeves' public sector pay giveaways could fuel another rise in inflation and "spur unions" to strike, an economist has warned.

by Taboola by Taboola

Sponsored

Online Shopping Tools

Online Shopping ToolsAmazon's Worst Nightmare: Millions Canceling Prime for This Clever Hack

Undo

by Taboola by Taboola

"It looks like a new wave of UK strikes might be on the way as pay deals spur unions to bargain harder. Such strikes will lift wages across the economy and add to (significant) inflationary pressures.

"On the policy front, the results here suggest that the latest public sector pay rises will trigger inflationary pressures from around the second half of 2025 onwards.

"My results suggest it might be prudent to resist the pace of monetary easing financial markets currently expect."

An economist has warned the Bank of England should resist as many interest rate cuts as some want. (Image: Getty)

The Chancellor has already announced the Government would accept the recommendations of pay review bodies to grant millions of public sector workers above-inflation pay rises of between 5% and 6%.

Junior doctors will be given pay increases of around 20% over two years while a multi-year pay offer has been made to train drivers in a bid to resolve the long-running pay disputes and end strikes.

Ms Reeves told the Guardian that the Government wanted to "draw a line" under strikes given the cost of them to the economy, saying: "We have not caved in to any demands.

"We haven't done so with the train drivers or the junior doctors."

She noted there are "massive recruitment and retention problems" across the armed forces, teaching and the NHS.

Against the backdrop of calls for "pay restoration" settlements to reverse real-term wage reductions for public sector workers, Ms Reeves said: "(Prime Minister) Keir Starmer and I decide our policy, not the trade unions.

"There are no blank cheques."

Meeting the 2024-25 pay proposals will cost ￡9.4 billion more than the previous Conservative administration has budgeted for.

Ms Reeves last month said she would ask Government departments to find savings of at least ￡3 billion to help fund them, including by stopping non-essential spending on consultancy and communications.

Ms Reeves last month said she would stop winter fuel payments for those people in England and Wales who are not in receipt of pension credits or other means-tested benefits.

That policy is expected to reduce the number of pensioners in receipt of the payment by 10 million, from 11.4 million to 1.5 million, saving some ￡1.4 billion this financial year.

On Thursday, the Government laid in Parliament the regulations to make the change.

The explanatory memorandum for the Social Fund Winter Fuel Payment Regulations 2024 states: "The measure is in response to the substantial pressures faced by the public finances this year and next.

"Whilst making the necessary Exchequer savings, it retains support for pensioner households on the lowest incomes."

The regulations are expected to come into force on September 16.

MPs can seek to challenge the regulations in the House of Commons, which returns from its summer recess on September 2, although the Government has a working majority of 167.

Trending

SUBSCRIBE Invalid email

We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy

The Trade Union Congress's annual conference this September will see hardline unions pressure the government to spend up to ￡50 billion on restoring real-terms public sector pay to 2011 levels.

The Public and Commercial Services Union (PCS) is the main force behind the hard-left plot, pushing a conference motion that argues: “Pay levels have fallen by an average of 1.5 per cent per year since 2011”.

“Pay restoration in the public sector should be a key feature of our campaigning with the new government.”

FBU leader and TUC president Matt Wrack sounded bullish about the planned cash-grab demand, telling the Financial Times he expects that the motion will pass.

DON'T MISS

Warnings that a ‘slash and pillage Budget' would threaten property market recovery

Comments

Nigel Farage warns of more 'shocks' to come in Labour budget after winter fuel axe

1215 Comments

Rachel Reeve's economic 'con' that she will use to hike your taxes exposed by Jeremy Hunt

1104 Comments

What Rachel Reeves and Keir Starmer don't want you to notice about their economic plan

128 Comments

Labour's wealth tax is coming - and you won't have to be rich to pay it

791 Comments

'Money grabbing' Rachel Reeves' shock stamp duty plan will hit millions

1140 Comments

Labour deceit exposed as Tories slam Keir Starmer and Rachel Reeves over Winter Fuel 'con'

1082 Comments

Keir Starmer's winter fuel fiasco could trigger 'public health emergency'

559 Comments

Suella Braverman tears into Rachel Reeves 'gimmick' that could cost taxpayers thousands

937 Comments

British pensioners to keep winter fuel allowance but only if they live in EU

827 Comments

Income tax calculator: Find out how much you should be taking home before Labour tax hikes

44 Comments

Trade unions could rinse Rachel Reeves for more than ￡50bn in fresh pay demands

461 Comments

Rachel Reeves' autumn budget tax plans predicted with 10 bad things to come

146 Comments

Stark warning issued to every state pensioner with ￡18,200 or more

Comments

Happy in Shape

Cruise Ship Encounters Pirates - Watch What the Captain Does Next!Happy in Shape

Undo

by Taboola by Taboola