By Sadie Robinson
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Workers need a pay rise the budget won’t deliver

This article is over 6 years, 7 months old
Issue 2581
Tory chancellor Philip Hammond
Tory chancellor Philip Hammond (Pic: Andrej Klizan)

Chancellor Philip Hammond will likely claim that he’s scrapped the 1 percent public sector pay cap when he delivers his budget this week.

It’s a lie. The majority of public sector workers remain subject to the cap. And all still face real terms pay cuts, taking inflation into account.

Health workers, teachers, civil service staff and local government workers have had no new pay offer. Workers in further education were offered just 1 percent this year.

The government agreed a 1 percent pay deal for most teachers and school workers earlier this year. But as this is at schools’ discretion, so some won’t even get that.

The NASUWT union said the average pay award for teachers last year was just 0.6 percent.

In the HMRC, civil service workers were offered an “average” 1 percent deal. Some received less based on “performance”.

Typically, the Tories chose cops and prison officers to give “above the cap” rises to earlier this year of 2 percent and 1.7 percent.

Higher education workers received a 1.7 percent increase and firefighters were offered 2 percent.

Firefighters in the FBU union were right to reject that offer and demand more. A 2 percent rise is below-inflation and doesn’t make up for years of real terms cuts.

And the Tories aren’t providing any extra money to fund higher pay, so any rises are snatched from already overstretched budgets.

TUC figures show that many public sector workers earn around £3,000 less a year in real terms today than they did seven years ago. Public sector pay has been slashed by 10 percent in real terms since 2010. For the majority of NHS workers, the fall is 17 percent.

At September’s TUC conference 13 unions agreed to demand a 5 percent pay rise. Unions say this would cost £9 billion. Fourteen health unions, including Unison, Unite and the GMB, wrote to the government soon after demanding a pay rise in line with inflation, 3.9 percent.

Some unions are beginning to ballot for strikes. There have been strong votes for action in two national consultative ballots. PCS members returned a 79 percent vote in favourite of striking to beat the cap on a turnout of almost 49 percent.

The further education section of UCU voted by 75 percent to strike in a consultative ballot. UCU is set to ballot workers for strikes in some colleges. It also demanded an extra £800 to make up for some of the pay cut over the last seven years.

The government claims it can’t afford the rises. The truth is that there’s plenty of cash—but the Tories prefer to hand it to their fat cat mates.

Prices rise while wages and bosses’ taxes stay low

Tory pay freezes and pay caps have had a disastrous impact on public sector workers. A recent poll commissioned by the TUC found that one in seven had skipped meals to make ends meet.

Over a fifth had left the heating off or pawned something, while half said they were worried about expenses. And nearly a quarter said they would be unable to pay an unexpected bill of £500.

And while pay and benefits are held down, prices are rising. The official CPI measure of inflation rose to 2.9 percent in August from 2.6 percent in July.

The more realistic RPI figure, which takes housing costs and council tax into account, rose to 3.9 percent.

Meanwhile life is rosy for the rich.

Britain has the lowest rate of corporation tax, the tax on bosses’ profits, in the G20. The main rate is just 19 percent. It’s set to drop to 17 percent by 2020. In 2008 it was 30 percent and under Margaret Thatcher it was 52 percent.

In May the Institute for Fiscal Studies (IFS) said that cuts announced between 2010 and 2016 would hand bosses £16.5 billion a year. “Changes to corporation tax have represented some of the largest giveaways in both parliaments since 2010,” it said.

It said corporation tax was set to make up just 2.3 percent of national income by 2021-22, compared to a “pre-recession high” of 3.2 percent.

Yet another IFS report last year showed that over 4 percent of national income came from corporation tax in the mid-1980s.

It said corporation tax as a share of national income had dropped “substantially” by around 25 percent since the start of the financial crash in 2007-08.

Yet the share of money coming from indirect taxes that affect everyone, such as VAT, has gone up.

Disgracefully, the bosses are raking in such enormous profits that the actual amount of money raised from corporation tax is rising, despite the lower rate.

More are on the breadline

Food prices rose at their fastest rate in four years last month. Food and non-alcoholic drinks cost 4 percent more in October than a year earlier, the Office for National Statistics said.

Vegetables cost 5.7 percent more and meat 3.9 percent more.

Rich families get better off

Households on below-average incomes saw their housing costs rise by an average of £714 between 2007-08 and 2015-16, new figures showed last week.

Yet those on above-average incomes paid an average of £271 less over the same period. And for the tenth richest households, housing costs fell by £1,206 on average.

Nurses have to borrow to live

One in 20 nurses has been forced to take out a payday loan to cover living costs, the Royal College of Nursing revealed last week.

One in four has had to borrow money, and a quarter have taken a second job.

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