Showdown on Britain’s railways portends a summer of strife
The National Union of Rail, Maritime and Transport Workers is by no means one of the largest unions in the UK. But this week, the RMT, as it’s called, wants to show that it’s all muscle. Strikes by 40,000 of its members largely shut down British railways on Tuesday and are expected to do the same on Thursday and Saturday, causing widespread disruption and impacting millions of people.
While these rail strikes will be less of a nuisance to some businesses than they were before the pandemic, they will still come at a significant cost. Many workplaces cannot work remotely. City centers, ravaged by the pandemic, will take another beating – and this week is high school exam season.
With inflation set to hit 11 percent, all employers are facing wage-setting problems. The Treasury faces a complicated version of this conundrum: it must control public sector wages, a major driver of the cost of government services. The government is concerned that any wage settlement it agrees will become a benchmark for the next negotiations.
Wage increases also affect inflation, which is particularly worrying at the moment. Public sector wage policies must fill jobs so that public services can be delivered, but the government also has a responsibility, along with the Bank of England, to prevent a wage-price spiral.
Ministers have indicated that they want to aim for a wage increase of 2 percent. But from 2010 to 2021, public sector wages fell 4.3 percent in real terms, before the latest rise in inflation. The Treasury has piled a problem on itself by trying to squeeze the public sector payroll for a decade.
This is essentially why the public sector unions are preparing for union action. Some services – notably healthcare, schools and hospitals – had already been stretched before 2020 and routinely struggled to recruit sufficient staff. They also spent two years at the sharp end of the pandemic.
Conservative ministers are clearly enjoying a railway fight and have tried, rather unconvincingly, to blame Labor for the strike. They can calculate that the RMT, which has a tradition of fierce confrontations, is a tougher opponent than many unions, so this battle is one to pick and win.
The government has rightly taken a tough initial stance. The principle it should try to establish is that any wage agreement should be treated on a merit basis, keeping quality of service and staff retention in mind as well as cost. In this case, there’s a deal to be made: The RMT has a point that the employers’ offer, which comes in at a 2 to 3 percent increase, looks barely generous after a two-year freeze. The cost of living crisis is making it particularly difficult for tall union members with low-paid jobs.
But in exchange for any improved offer, the RMT has to make concessions on productivity and modernization. The demand from commuter to rail is uncertain as more people work from home and rail technology has advanced: drones and sensors can now replace some engineers walking up and down to monitor the rails. After talks still failed to reach an agreement on Monday, Network Rail wrote to the RMT with plans to consult on 1,800 job cuts and changes in working practices; it said it hoped the majority of the layoffs could be voluntary. As part of a settlement, the union must accept the reality that the industry is changing.
It is the government’s responsibility to impose tax controls on behalf of taxpayers, but must also minimize disruption to travelers and businesses and keep public services running in the long run.