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Employment

The summer of discontent? Why the cost of living crisis is causing so many strikes

Industrial disputes are on the rise as workers demand better pay and conditions amid a cost of living crisis.

In 1978, Britain’s widespread labour strikes started, in what became known as the ‘winter of discontent.’

This week, as the country woke up to the largest rail strike in three decades, disputes over pay and conditions amid the biggest drop in living standards since the 1950s have been labelled as marking the beginning of a ‘summer of discontent’.

And industrial action is not confined to rail workers. Lawyers are the latest profession to have voted to go on strike amid a “record backlog” at crown courts. Several days of court walkouts are expected from next week.

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Unrest is also growing among teaching staff and NHS workers. Threats of widespread strikes were splashed across front pages on Monday, and staff at St George’s Hospital in south London are already on a week-long strike in a dispute over pay and conditions.

So what’s going on and how is it related to the the cost of living crisis?

Why are train workers striking?

The Rail, Maritime and Transport workers’ union (RMT) confirmed that talks to resolve a bitter row over job cuts and below-inflation pay rises, failed, meaning strike action would go ahead.

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RMT says the source of the dispute is government-imposed spending cuts, with the Tories cutting £4bn of funding from transport systems, £2bn from national rail, and £2bn from Transport for London.  

Boris Johnson has chosen to ignore the unions’ demands, denouncing the strikes as “unnecessary”. Sentiment echoed by transport secretary Grant Shapps, who condemned the industrial action as a “stunt”.

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How are the strikes connected to the cost of living crisis?

The walkout comes amid a cost of living crisis, caused by surging inflation. The Bank of England has raised interest rates to a 13-year high of 1.25 per cent and warns that inflation – now at 9.1 per cent – will exceed 11 per cent in the autumn.

With everything from groceries to bills rising faster than average household incomes, families are facing painful squeezes on living standards. To help households navigate spiralling living costs, unions are urging the government to fund an above-inflation pay rise in the public sector. 

The strikes are also exacerbated by the fact companies are making huge profits and bosses are taking home big bonuses.

A new report by the Institute for Public Policy Research (IPPR) shows profits of many of the largest non-financial companies are rising significantly faster than inflation and wage growth, having increased 34 per cent at the end of 2021 compared to pre-pandemic levels.

Are all workers feeling the cost of living pinch?

It is not just rail workers fighting for better pay closer to or in line with inflation.

Teachers, NHS staff and communications workers are among those planning strikes for the same reasons.

A study by GMB union found almost half of its workers have been forced to borrow money from banks, payday lenders or friends and family, so they can afford essential items.

GMB general secretary Gary Smith described the situation as a “disaster for workers”, while criticising the government for “doing nothing.”

But as prices outpace public sector pay, and the likes of civil servants, NHS workers and teachers face the biggest squeeze in pay in 20 years, many companies enjoy high levels of profit, something that is exacerbating the discontent.

Energy companies, for example, have seen their profits increase by billions of pounds as a result of price spikes.

What has the government said?

Despite being faced with a wave of strikes and a ‘summer of discontent’, Boris Johnson says pay rises are not the solution to a surge in prices. Backtracking on the promises just eight months ago to make the UK a high-wage economy, the prime minister is now calling for wage restraint.  

In its ‘Price and Profits After the Pandemic’ report, the IPPR argues that, instead of wage restraint, profit restraint measures must be part of the government’s policy toolkit to tackle inflation.

The government is also coming under fire for plans to reduce controls on City bosses’ pay.  A leaked copy of a letter from a cabinet office minister to the chancellor seen by the i newspaper, reveals plans to remove restrictions on director and non-executive director remuneration.

What’s the reaction been like?

A poll published late on the first day of the rail strikes shows a majority of adults in the UK feel the strikes are justified.

RMT boss Mick Lynch has also won praise for his performances on the media rounds to defend the strikes.

Other unions and sectors will be keeping a close eye on negotiations taking place between RMT and Network Rail over better pay and conditions. Reports say Boris Johnson told his Cabinet on Tuesday that Britain must be prepared to “stay the course, with The Times reports the rail strike stalemate could last for months. Elsewhere, though, there are talks of offers of a 6 per cent pay rise, though that’s still some way off the 7/8 per cent demanded by the RMT.

It looks likely that the battleground for better pay and conditions will spread. The National Education Union has said that unless teachers receive a pay offer closer to inflation, it plans to ballot its 450,000 members.

And the cost of living crisis is already sparking widespread protests. Last weekend, anger over unfair pay and lack of government support was expressed on the streets of the capital when thousands of public sector workers gathered in Parliament Square. Organised by the TUC, protesters called on the government to make a “better deal” for people struggling to cope with surging inflation.

Frances O’Grady, TUC general secretary, who spoke at the rally, said it was “gut wrenching” to hear how workers were struggling.

Saying the PM was “cynically abandoning” his commitment to a high-wage economy, O’Grady said: “He and other ministers are treating workers like Oliver Twist by telling them not to dare ask for a decent pay rise. The last thing we need right now is for wages to be held down.”

The Big Issue is committed to helping readers make it through the cost of living crisis. Here’s where to turn for some real solutions:

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