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Tory pay offer to schools, NHS staff and carers is all wiped out by inflation

Rocketing inflation figures show the government is taking food from the mouths of key workers

Parliamentary reporter @TrinderMatt

SKYROCKETING inflation figures show that Tory ministers are taking food from the mouths of carers, NHS workers, school staff and council workers, general union GMB said today.

The organisation questioned why Prime Minister Boris Johnson is persisting with public-sector pay freezes while price growth surges to a near decade high after rising at the fastest pace on record last month.

The Consumer Prices Index (CPI) inflation jumped from 2 percentage points in July to 3.2 per cent in August — the highest since March 2012, according to the Office for National Statistics (ONS).

Higher prices for food, petrol and used cars were all behind the spike, which is the largest since CPI records began in 1997. 

The spending watchdog said August’s rise is likely to be temporary, as eating out cost more last month in comparison with August last year when the Eat Out to Help Out Scheme was running and diners got a state-backed discount on meals.

But experts forecast inflation will hit at least 4 per cent by December as economic activity cranks up following 18 months of Covid-19 disruption.

Britain’s ongoing supply chain crisis is adding to the issue, with disruption related to Brexit and coronavirus having combined with a long-term shortage of low-paid HGV drivers to create a perfect storm.

Manufacturers are seeing huge cost rises for raw materials as a result, the ONS warned, with input and output prices rising at their fastest rates for a decade.

The costs could soon be passed on to consumers.

GMB national secretary Rehana Azam said: “The cost of food, of rent, of basic day-to-day living is the highest it’s been for 10 years, yet the government persists with a real-terms pay cut for public-sector workers.

“After the pandemic and a disastrous decade of cuts, workers should be rewarded with a proper pay rise — not more slashed wages. 

“Any recovery needs pay to not only beat the cost of living but also start restoring what’s been lost over the last 10 years.”

Labour shadow chief secretary to the Treasury Bridget Phillipson warned that people are already “feeling the effects” in their weekly shop and at the petrol pump.

She warned the problem will be exacerbated by the PM’s plans to raise National Insurance — supposedly to support the NHS and fund an overhaul of social care — and his cuts to universal credit, with its £20-a-week uplift set to end on October 6.

Mr Johnson has claimed the increase to the benefit was only ever a temporary measure to help the poorest families through the pandemic. 

Ms Phillipson said: “The government must do all it can to secure the supply chains that keep our economy going and shouldn’t be hitting families with a devastating cut to universal credit and tax rises.

“With the recovery showing signs of slowing, Labour’s plan to buy, make and sell more in Britain would get our economy firing on all cylinders.”

The Institute of Economic Affairs’ Julian Jessop urged the Bank of England to avoid adding to inflation by injecting further cash into the economy via quantitative easing.

“Why take the risk that higher inflation becomes baked in?” he asked.

“A sustained increase in inflation will also wipe out any benefit from the pick-up in underlying pay growth, which the ONS has estimated at between 3.6 per cent and 5.1 per cent.

“The Bank of England should therefore take the foot off the accelerator, rather than continuing to pump more money into an economy which is already overheating.”


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