The decision by the UK government yesterday to lift the one per cent annual cap on public sector pay may have brought an end to seven years of pay controls, but it seems to have created a new problem for Theresa May in the form of possible widespread industrial action.
Downing Street announced yesterday that police and prison officers would both receive pay rises in 2017-18 above one per cent, and made a commitment to “flexibility” for all public sector workers from next year. The announcement – made on the same day that official figures showed greater-than-expected inflation - brought a close to one of the most controversial austerity policies introduced in the wake of the financial crisis.
However, the news has not been met with universal approval, far from it. Three of Britain’s biggest unions, who represent more than two million workers, derided the increase and warned of the “strong likelihood” that coordinated strike action is an option on the table. The leaders of GMB, Unite and PCS unions have claimed that the increase does not go far enough and instead are pushing for pay rises of at least five per cent for the whole of the public sector workforce.
The government's announcement hasn’t even appeased the unions representing the workers who will benefit from the increase. Steve White, the chair of the Police Federation of England and Wales, claimed that many of his members would be “angry and deflated”, while the Prison Officers Association said the deal amounted to a real terms pay cut. Labour leader Jeremy Corbyn yesterday refused to say whether he would support any illegal strikes over pay, simply claiming it was a “matter for the unions.”
The strength of fallout from yesterday’s decision gives an indication of the scale of the task in front of the prime minister, as she navigates the country’s industrial relations amid rising inflation, and tries to avoid strikes in the public sector.
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BUSINESS & ECONOMY
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What happened yesterday?
Stronger than expected inflation in August yesterday caused the pound to hit its highest level against the dollar this year.
CPI inflation rose to 2.9 per cent, which was 0.1 per cent above forecast and a rise of 0.3 per cent on July’s rate. This news trigged a rise in the pound, which ended 0.84 per cent up to $1.3275 at the close of London business hours.
The rise in inflation means all eyes will be on the Bank of England tomorrow, which is expected to make a decision on whether to increase interest rates.
The movement of the pound caused the FTSE 100 to fall 12.9 points, ending the day at 7,400.69. The most high profile mover was Sky, where shares fell 5 per cent at one point after the UK government confirmed it was “minded” to investigate 21st Century Fox’s attempt to take over the business. Shares were down 1.5 per cent by the close of business.
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UK Economic Announcements
(09:30) Claimant Count Rate
Int. Economic Announcements
(07:00) Consumer Price Index (GER)
(07:00) Wholesale Price Index (GER)
(11:00) Industrial Production (EU)
(12:00) MBA Mortgage Applications (US)
(14:30) Producer Price Index (US)
(15:30) Crude Oil Inventories (US)
COLUMNS OF NOTE
Labour MP Caroline Flint explains in The Guardian why she opted to defy her party’s three-line whip on Monday and support the government’s EU Withdrawal Bill. A campaigner for Remain during the EU referendum, Flint acknowledges that there are flaws with the bill but ensuring that the UK secures a smooth Brexit will require the adoption of current EU law onto the British statute book.
Writing in The Times, Daniel Finkelstein says that the best leader does not always win, and that is why Jeremy Corbyn could still become prime minister if he fights another general election. Finkelstein says circumstances, as well as character, define political victories and a flagging economy at the time of the next vote could see Corbyn enter Downing Street as prime minister. (£)
House of Commons
Prime Minister's Question Time
Employment tribunals - Mike Penning
House of Lords
Comprehensive timetable for Brexit negotiations with the EU; and the public availability of all relevant documents - Lord Foulkes of Cumnock
Addressing concerns about the breeding of dogs and cats - Lord Black of Brentwood
Implementing the Government commitment to bring 480 unaccompanied child refugees from Europe to the UK - Lord Dubs
Financial Guidance and Claims Bill [HL] - Committee stage (day 4) - Committee of the Whole House - Baroness Buscombe
Portfolio Questions: Environment, Climate Change and Land Reform
Scottish Conservative and Unionist Party Debate: Housing
House of Commons
Digital, Culture, Media and Sport (including Topical Questions)
Business questions to the Leader of the House
Abuse and intimidation of candidates and the public during the General Election campaign
House of Lords
Recommendations in the Housing White Paper 'Fixing our broken housing market' - The Lord Bishop of St Albans
First Minister's Questions
Ministerial Statement: Community Justice in Scotland
Scottish Government Debate: Scotland’s Food and Drink Strategy, Ambition 2030