Pay is falling and it’s going to get worse – Labour must stand up – Jon Trickett MP


‘The time has come to stand up for them and ensure these key workers who have helped us through the pandemic, get the pay rise they deserve. ‘

Jon Trickett MP

By Jon Trickett MP

‘Basic pay is now falling noticeably in real terms.’ That was Darren Morgan, Director of Economic Statistics at the Office for National Statistics. 

‘The nation has effectively had a pay cut … The big pay squeeze is still in the pipeline.’ That’s Jonathan Boys the labour market economist for the Charterted Institute for Professional Development.

Pay is falling and it’s going to get worse. Not views from the left, but the analysis of the government’s statistics office and also of the human resources sector. 

These comments followed the latest earnings numbers published by the ONS this week. 

Regular pay had increased 4% in the three months to February. But over the same period, the CPI inflation average has been 5.7% meaning a real terms fall. And today’s inflation stats of 7% drives that gap wider.

And statistically the numbers are worsening. Looking only at the last month, the real fall is worth 2%. And again, today’s inflation rise is higher than the previous month again.

It’s the fifth month in a row that pay has fallen compared to CPI, and is the biggest month-on-month fall since 2014.

The TUC has calculated that compared to a year ago, real weekly pay has dropped by £11 a week

And drilling down into the numbers, it is clear that the Tories are making the pay crisis worse. Parts of the private sector are continuing to make above inflation regular pay increases, including 3.6% in real terms in the finance sector last month. 

But the worst sector for pay increases is currently the public sector – where the Government largely determines pay awards, regardless of the cosmetic pay review process. For health workers, education workers, firefighters, police and soldiers, the Government is in charge. It also has a major control over local government pay as well.

For the public sector, the drop in real weekly pay over the last month was 4.2%, more than double the average. From today that’s more like 5%.

The TUC calculates this is equivalent to an incredible and totally unaffordable £26 a week for public sector workers. 

For public sector workers, this comes on top of what is now more than a decade of lost pay under Tory austerity since 2010. 

If inflation increases – and experts are expecting it to – everyone’s real pay will have fallen further. 

From today we now know even the recent 6.6% increase in the National Minimum Wage, constitutes a fall, and will continue to be below the Living Wage Foundation’s Real Living Wage.

This is the context in which public sector pay review bodies will consider the increase in pay for health, education, police and other workers this year. 

The time has come to stand up for them and ensure these key workers who have helped us through the pandemic, get the pay rise they deserve. 

As Sharon Graham of Unite said, The only way this big business profiteering can be stopped is by building the strength of trade unions to fight for a better deal.’

If you’re not already, make sure you are a member of a trade union. And whether it is signing petitions, writing to your MP, or joining the TUC demonstration on June 18, make sure you are doing what you can to express your view and build trade union pressure.

In these difficult times, the Labour Party must stand unequivocally on the side of workers. This means supporting a real terms pay increase for all workers and bold action to control rising bills and prices. 

This is what is needed to help people through the present crisis. Labour must not stand for anything less. 

  • Jon Trickett is the Labour MP for Hemsworth
  • You can follow Jon on facebook and twitter
Jon Trickett MP

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