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Reject bad pay deals after new inflation figures

Food prices are going up by 18.3 percent a year
Issue 2861
People shopping in a grocery store or supermarket with trolleys

Price rises are forcing people to cut back on food shopping and other essentials

Against all the “expert’” forecasts and bold predictions, inflation—the rate at which prices are rising— has not fallen. And some measures of it are going up. It’s another blow to Rishi Sunak’s claim that life will improve under the Tories.

The government’s preferred CPI measure of inflation stayed at 8.7 percent last month, the Office for National Statistics (ONS) announced on Wednesday morning. Core inflation, which strips out items such as food and energy costs, actually rose from 6.8 percent to 7.1 percent.

The more accurate RPI index, which includes housing costs, was almost unchanged at 11.3 percent. And food prices are going up by 18.3 percent a year.

The figures underline that when bosses want to push through pay deals of 4 or 5 percent—or less—they are demanding pay cuts once price rises are taken into account. And union leaders who push such offers are betraying their members. 

The Unite union press release said the figures gave “little comfort”, presumably because it had been prepared in the expectation of a small reduction in inflation. The numbers are no comfort at all and should be a spur to unions to fight harder.

Following soaring costs of gas, electricity and food, now rents and mortgages are going through the roof. That’s the result of government and Bank of England policy. Their method of combating inflation is to hold down workers’ wages and to jack up interest rates to crash the economy.

When interest rates go up, so do mortgage costs. And landlords put up rents to maintain and boost their profits.

Chancellor Jeremy Hunt is to call in banks to discuss what one Tory MP called a “mortgage bomb that is about to go off”, but he ruled out actually helping people struggling with the rising cost of housing.

The Bank of England is expected to raise interest rates on Thursday to their highest level since 2008. The inflation figures make that more likely.

Already millions of poorer people are living a “horrendous new normal” of debt, hunger, and fuel poverty, according to a survey.

The Joseph Rowntree Foundation (JRF) said, “5.7 million low-income households are having to cut down or skip meals because they don’t have enough money for food. The number going without items such as food, heating or basic toiletries has remained around 7 million for more than a year.”

The anti-poverty charity said record food inflation and soaring energy bills, combined with poverty-level Universal Credit rates, had made everyday life a constant crisis for many.

JRF’s survey of households on less than £26,000 a year—the bottom 40 percent of incomes—found that 39 percent were behind with at least one bill with average arrears of £1,600.

Rachel Earwaker, a JRF senior economist, said, “Over the past year people have been telling us about being unable to afford hot meals, shampoo or a warm shower. 

“We need to get real that this is a hardship crisis that won’t end as inflation starts to fall. Higher prices will remain baked in, and cost of living payments, while necessary, are not even providing breathing space for people who desperately need it.”

The government is always trying to tell people that their health is in their own hands and they must eat better and take personal responsibility for avoiding illness.

But, said Earwaker, “The extraordinary levels of food inflation are also forcing people into buying less fresh and healthy food and more packaged, processed or less nutritious food. 

“Poverty is already having a profound impact on the nation’s health and we face the moral outrage of life expectancy falling for some groups. At the same time, hardship on this scale will drive yet more demand onto the NHS over the years to come.”

Independent Age, a charity supporting older people, has reported “more and more calls every day” from people who “really don’t have any idea how they’re going to pay their bills.” Pensioners have even told them they are turning their fridges off overnight to save money.

It’s time to step up the fightback, and reject rotten deals that mean pay cuts.

Join the Workers Summit on 23 September 

A “Workers’ Summit” is meeting around the slogan, “Link the fights, reject bad deals, fight to win,” on Saturday 23 September in London.  

It’s described as “an afternoon for grassroots collaboration” and was initiated by Lambeth and Hackney NEU, NHS Workers Say No, and Strike Map. It’s not just for those involved in battles taking place now, but for every worker. The summit will host discussion but can also strengthen the networks of resistance at the base of the unions.

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