Chancellor Alistair Darling warned today that it would be “disastrous” for Britain if big pay rises are demanded and handed out this year in response to spiralling prices.With average pay rises falling behind the official inflation rate, ministers fear public sector workers will use the threat of strike action to demand big pay rises to compensate for the higher cost of living.
Mr Darling, speaking before an important speech in the City of London this evening, said it would be “ridiculous” for the UK to get into the same inflationary position experienced in the 70s, 80s and early 90s.
“We have got to do nothing here at home which would exacerbate the problems which have been caused by inflationary pressures coming from abroad through rising oil and food prices,” he said.
“I think that most people will understand that if you get yourself into a position where every penny extra you get in pay is eaten up through price rises - through inflation - you will get into precisely the problems that Britain had in the 1970s, 80s and early 90s when inflation was at very high levels.
“So we have got to be vigilant in relation to all pay - public and private sector alike - because if we got ourselves back into that spiral it will take years to get out of it, so we must not do that.
“We cannot get ourselves into a position where we allow inflation to take hold because we get into inflationary pay rises. That would be disastrous not just for the country, but for each and every one of us,” said the Chancellor.
Nevertheless, with people’s incomes failing to keep up with huge increases in bills for food, gas, electricity and vehicle fuel, the pressure for higher pay seems certain to continue.
By London Editor John Hipwood
8 Comments
So in typical New Labour fashion the gap between the rich (including MPs) and the rest of us will continue to grow
OK, no big payrise, howabout big tax cuts!!!!!!!!!!!!
Funny how he’s never said anything critical of the obscene payments to ‘City’ types, nor of the obscene inflationary profits made by oil and energy companies, nor indeed of the tax avoidance successfully practiced by hedge fund managers who end up paying less in tax than their domestic staff.
Instead he chooses to focus on the 2 and 3 per cent pay rises typically awarded to public servants - which aren’t inflationary in the first place, since they don’t even keep pace with current inflation rates.
Sounds like he’s looking for an easy target to me!
Do as I say, not what I do, and the rest of the overpaid members of parliament and by the way we want anothere pay rise now on top of our last one and massive increase in expenses
I’ll be happy with a 0% payrise provided that I can claim unlimited expenses for everything I do from the time I get up in the morning until I go to bed - just like MPs do!
policemen 1.9% increase, tanker drivers 14% over 2 years, adam crozier head of royal mail last years pay package £3 million pounds. come on alastair darling higher taxes for the rich please
up to 18500 10p in pound
18501-35000 20p
35001 -50000 25p
50001-99000 40p
99001 250000 60p
250001 upwards 80p in pound
this i suggest labour will not apply and it is too hot for the lib dems and the tories won’t go above 40p tax in pound, it is called socialism. come on alistair
The worst case of all, Nurses and midwives 1.9% based on a pittance of a wage to start with. (Coppers, albeit they also got 1.9%, are very well paid and rightly so).
Generally I agree with you again Peter (we must stop meeting like this). I can also agree with you devon salopian - this idea is long overdue albeit the exact amounts could be tinkered with - but the principle, certainly.
The low paid and the less than senior grades in the Public Services have been well and truly shafted by Brown/Darling and co and we should not get up tight ourselves - or be surprised if we now get a string of Strikes.
It’s turning out to be the Callaghan Government all over again by the sound of things to come. And here was me thinking strikes were a thing of the past and here I am advocating them.
I am no economic expert but how does Mr Darling honestly expect the low paid back bone workers of this County to accept under inflation wage rises when all they hear and read about daily are the fat cats in parliament and big companies etc asking for and getting whatever they want. What a screaming cheek! it’s not our fault there’s a global crisis its the incompetance of world leaders huge corporate companies and greed, greed, greed. We at the bottom just want to keep our heads at least above the water, not floundering in the mess others have made for us and then being told it’s our responsibility to get the county back on track. What in God’s name do you expect us to do?