Government yet again capitulates to the unions

In yet another capitulation by this government, above-inflation increases have been handed over to their trade union paymasters. To be completely clear – this is not the government’s money, it is taxpayers’ money.

Since assuming office, the government have eliminated the financial headroom left by the previous administration and have had to borrow nearly £15 billion more than expected, largely due to increased benefit spending and last year’s disproportionate public sector pay awards.

Under the threat of industrial action, the government have once again kowtowed and splashed out on offers far above that recommended by independent pay review bodies.

By failing to attach any conditions to these awards, the government have entirely surrendered to the trade unions and are being completely walked over while losing control over how to deliver desperately-needed public sector efficiencies and service improvements.

Groups like the PCS have already voted to ballot for strike action while the BMA has called their offer “derisory”, despite a 4% rise on top of a bonus £750. Trade unions do not change – they will keep coming back for more and we now risk a summer of discontent due to the government’s meekness.

Whether it is carving out tax exemptions for Indian foreign workers but not British ones, making us worse off in trade arrangements with America, or surrendering our fishing industry to Brussels, this government has now shown it cannot even get a decent deal done with itself.

The Chancellor and her team must urgently realise that you cannot build an economy by relying on the closed public sector pay loop. Private sector workers are being hammered and have demonstrably not enjoyed the same safety net as their public sector counterparts since the pandemic. Productivity is stalling, unemployment is worse than last year, and investment is drying up. This is entirely the consequence of the policy choices of this government.

If the government were truly serious about economic growth, they would reverse their hugely damaging Jobs Tax, rip up draft employment legislation which will strangle our businesses and make workers worse-off, and finally choose to stand up to the trade unions.