PM Sunak has said he is yet to make a ‘final decision’ on whether to accept the recommended pay rises for public sector workers.
Official pay review bodies are recommending rises of between 6-6.5% for employees including teachers, junior doctors and police. This is well below the current levels of price inflation that has shattered the living standards of UK workers.
The junior doctors are demanding a pay rise of 35%, to make good the savage wage cuts that they have suffered due to inflation.
The prime minister and chancellor are expected to meet next week and are expected to rule out the pay rises, while the cabinet is split over what to do next.
Sunak says pay awards must be ‘responsible’ to avoid making inflation worse. He has made tackling rising prices his top political priority. Several cabinet ministers, including the health secretary and education secretary, have pushed internally for the review bodies’ minimal recommendations to be accepted.
Ministers have had the recommendations from pay review bodies for weeks. Submissions from departments to the pay review bodies said they could only afford rises around 3.5% from within their own budgets.
The PM and Chancellor Jeremy Hunt will tell ministers that any awards higher than 3.5% will have to be funded entirely through cuts or savings elsewhere in their own departments, ie by mass sackings.
Hunt has ruled out further borrowing to fund pay rises, The reality is that any pay rises will have to be funded by massive job cuts!
In a speech to leading figures from finance and business at the Mansion House this week, Hunt laid down the Treasury law: ‘Borrowing is in itself inflationary.’
It comes at a time when businesses, as well as households, are being hit by higher costs due to inflation remaining stubbornly high in the UK.
Speaking on the way to a Nato summit in Lithuania, Sunak said his decision about pay would be decided by whether it was ‘fair’, ‘affordable’ and by ‘what’s responsible’.
Speaking on Monday during a visit to Avon and Somerset police force, Home Secretary Suella Braverman demanded a pay rise for the police, after all they are going to have a lot of work to do imposing the new anti- union laws!
Sunak has previously pledged to halve inflation this year to about 5%, as part of his top five priorities since becoming prime minister. The rate at which prices are rising remained unchanged at 8.7% in May, despite predictions it would fall.
Sunak’s pledge is in reality a pledge to try to starve the working class into submission.
Persistent inflation levels will make it hard to cut taxes before the next election, Chancellor Jeremy Hunt said in an interview with the Financial Times.
PM Sunak said he and the Chancellor were ‘completely united on wanting to reduce taxes for people. But the number one priority right now is to reduce inflation and be responsible with government borrowing,’ he added.
In a report, the Bank said mortgage holders ‘may struggle with repayments’ on loans. But it said the lenders are strong enough to withstand a rise in customers defaulting on repayments!.
The Bank has raised interest rates from 0.1% in December 2021 to 5% to curb rising prices.
Expectations that borrowing costs might rise even further has pushed up mortgage rates. This week, the average rate on a two-year fixed deal hit a 15 year high of 6.66%. The Bank of England has meanwhile been preparing for an acute sharpening of the class war.
The Bank of England has already said that it is ready! Its report showed the result of a ‘stress test’ on the UK’s eight biggest banks and building societies to see if they could withstand catastrophic economic conditions.
These include house prices falling by 31%, the unemployment rate increasing to 8.5%, and inflation rising to 17%. The banks and building societies that have been tested include: Barclays, Lloyds, HSBC, NatWest, Santander UK, Standard Chartered, Nationwide Building Society and Virgin Money.
UK banks are strong enough to withstand a fresh economic crisis, according to the Bank of England. It is under these conditions that the Tories are planning to take on the working class to push it back to the conditions of the 1930’s.
Workers must demand at once that their trade unions instruct the TUC to call a general strike to get the Tories out and bring in a workers government and socialism. This is the only way forward!
