The Payhike would cost billions that could mean cuts elsewhere against a backdrop of inflation and a sluggish economy
The Prime Minister of the United Kingdom (U.K.) – Rishi Sunak, has announced plans to end months of crippling public sector strikes by offering a pay increase of 6% and above for teachers, doctors and other workers.
He also warned that this rise would cost billions that could mean cuts elsewhere. His remarks come against a backdrop of inflation and a sluggish economy, which is struggling to cope with the aftermaths of Brexit and Coronavirus (COVID-19).
In addition, the rising energy cost owing to Russia’s invasion of Ukraine has also added to the woes of Sunak. Besides, Sunak faces an election in the next 18 months. As per the Opinion Polls, the Conservatives Party is far behind the opposition Labour Party.
He said he has accepted the recommendations of independent pay review boards on wage rises for public sector workers, stressing that it was a final offer intended to end months of industrial action.
In a series of Tweets, Sunak tweeted,
I just announced a fair way to end the strikes – and already ALL teaching unions are backing it.
— Rishi Sunak (@RishiSunak) July 13, 2023
It’s a fair deal for workers.
And a fair deal for the British taxpayer.
This is a major breakthrough for parents and families across the country.
Here’s what it means 🧵 pic.twitter.com/fxYmo9w2Hl
He further tweeted,
3️⃣ Today’s offer is final.
— Rishi Sunak (@RishiSunak) July 13, 2023
There will be no more talks on pay.
This country will not be bullied into higher taxes or higher borrowing to fund unrealistic pay demands, risking higher inflation.
The package will mean finding an additional £ 5 billion (U.S. $ 6.55 billion) from existing departmental budgets. Of this, £ 2 billion will be incurred this year and £ 3 billion next year.
Junior doctors will get a 6% pay uplift and a lump-sum pay increase of £ 1,250, while teachers will get a 6.5% raise. Police and the military will get similar settlements. The pay increases are below Britain’s current 8.7% inflation rate but are aimed at bridging the gap following the country’s worst bout of industrial unrest in more than 30 years.
Post the announcement, Education Unions immediately said they would call off planned strikes and recommend accepting the deal. However, 2 Unions representing doctors said the offer would unlikely end strikes.
Sunak said the pay rises would not push inflation because there would be no new borrowing or spending to fund the increases. Teachers’ pay raises would be funded by reallocating the existing department budget.
Explaining how he would fund the higher salaries, Sunak said measures would include raising a fee paid by international workers to access the country’s health service, and the cost of securing a visa to enter Britain would also increase.
