Rishi Sunak hints at blocking public sector pay rises as he attacks ‘completely unreasonable’ doctors’ strikes
Rishi Sunak has hinted he will ignore recommendations for public sector pay rises, saying workers “need to recognise the economic context we are in”.
Reports surfaced over the weekend that the prime minister planned to block upcoming proposals from public sector pay bodies in an attempt to tackle soaring inflation in the country.
And health minister Helen Whately refused to commit to the uplift during an interview with Sky News on Monday morning.
Unions and opposition parties have hit out at the rumoured decision, saying inflation was not being driven by the wages of nurses and teachers, but by the economic decisions taken by the Conservatives over their 13 years in power.
Politics live: ‘Seriously?’ – Labour responds to lack of commitment on pay rises
Last week, the Office for National Statistics confirmed inflation was stuck at 8.7% and the Bank of England raised interest rates to 5% – a 15-year high.
Asked by broadcasters today whether public sector pay was a major driver of that inflation, Mr Sunak said: “Government borrowing is something that would make inflation worse, so the government has to make priorities and decisions about where best to target our resources.
“And that’s why when it comes to public sector pay, we need to be fair, but we need to be responsible as well.”
Pay review bodies or PRBs take evidence from across sectors like the NHS and education each year, as well as submissions from government, before saying what wage rises should be introduced for the following 12 months.
Amid anger from unions about the figures failing to match inflation last year, Health Secretary Steve Barclay insisted it was right for ministers to “continue to defer to that process to ensure decisions balance the needs of staff and the wider economy”.
The PRBs’ recommendations are expected to be published next month, alongside formal pay offers, with reports claiming they could be around 6% for the health service and 6.5% for teachers.
But while being questioned on public sector pay, Mr Sunak said: “It is important that we don’t make the inflation situation worse and it is important we prioritise the things that are right.
“I am making the decisions that are right for the long term and that is what I am going to continue doing.”
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TUC general secretary Paul Nowak accused the government of “playing politics with working people’s incomes”, adding: “It risks permanent economic harm – and will undoubtedly damage recruitment and retention of staff in our vital public services.
“Instead of blaming workers who can’t afford to put food on the table or petrol in their cars to get to work, ministers should focus on a credible plan for sustainable growth and rising living standards.”
The joint general secretary of the National Education Union, Kevin Courtney, also claimed Mr Sunak was “laying the groundwork for a further real-terms pay cut and one that flies in the face of the recommendations of the pay review body”, demanding the reviews be published as soon as possible.
Labour’s shadow health secretary, Wes Streeting, did not commit to his party accepting the recommendations were they to win power at the next election, but he did say he wanted PRBs “back up and running with the full confidence of everyone involved”.
He added: “It is not working people that have driven our economy off the cliff, it is the Conservative Party. We are still paying through the nose for that disastrous mini-budget that all of those Conservative MPs cheered on.
“People are paying through the nose on their mortgages, paying through the nose with their bills going up and their weekly shop, paying through the nose with rising energy bills, and Britain is an outlier when you look at other economies.
“That’s why we need a serious plan to get growth back into the economy.”
Government pay position offers Labour opportunity and challenge
The government’s wavering position on NHS pay presents Labour with both an opportunity and a challenge.
On the plus side, they can point to the fact the position of ministers seems at odds with what they were saying back in December.
Then, the government argument went that it was not for them to decide how much nurses, teachers, or police officers should be paid because this is determined by independent pay review bodies.
Now, they are suggesting the opposite – with health minister Helen Whately the latest to refuse to commit to following recommendations if the government judges they are not affordable.
Labour’s Emily Thornberry was withering in her interview with Sky News this morning: “I mean, seriously – do they really have a policy at all?”
Highlighting government inconsistency on political issues of this sort is exactly what you would expect an opposition party to do.
But it’s not entirely straightforward for Labour. They know there are questions that follow which could be challenging for the party.
Would they commit, for example, to following all pay review body recommendations in power?
Around half of public sector workers are covered by them (civil servants are not), but they are not binding, although Conservative governments have ignored their recommendations more than Labour did in power.
And given Labour agrees with the government that inflation needs to come down, and agrees with the Bank of England that interest rates needed to rise – how comfortable will they be supporting potentially inflationary public sector pay hikes?
The reports come while strike action by junior doctors over pay and conditions continues, with unions planning a five-day walkout next month.
Calling for pay restoration equating to a 35% rise, the British Medical Association (BMA) said wages had decreased by more than a quarter since 2008 when inflation was taken into account, and many doctors were burnt out from an increasing workload.
But when asked why he wouldn’t pay the profession more, the prime minister hit out at the industrial action and called the BMA’s demands “totally unreasonable”.
Mr Sunak said: “I think everyone can see the economic context we are in, with inflation higher than we’d like it, and it is important in that context that the government makes the right and responsible decisions in things like public sector pay.
“It is very disappointing that junior doctors have taken the decision that they have done. Over half a million people’s treatments have already been disrupted and I don’t think anyone wants to see that carry on – it’s just going to make it harder to bring waiting lists down.”
He added: “And I think people need to recognise the economic context we are in, and I am going to make the decisions that are the right ones for the country.
“That’s not always easy, people may not like that, but those are the right things for everybody, that we get a grip on inflation, and that means the government not excessively borrowing too much money and being responsible with public sector pay settlements.
“That is what I am going to do and I would urge everyone to see that is the right course of action.”
Labour’s Mr Streeting said he understood the “pain junior doctors are feeling in their pockets”, and while pay restoration for doctors could not happen “overnight”, staff understood that – and it was for Mr Sunak to fix it.
“I think the important thing is the prime minister has now got to grip this and get around the negotiating table to negotiate an end to this strike action,” he added. “Because every time we see strikes in the NHS we see delays and cancelled operations.
“The real risk to the NHS now isn’t just that staff walk out for another five days of strike action, but they walk out of the NHS altogether.
“If Rishi Sunak can sit there for an hour negotiating gongs and peerages for Conservative Party donors, supporters and MPs, he can sit around the table for an hour with junior doctors and put patients out of their misery.”
A household energy supplier has failed, weeks after it attracted attention from regulators.
Rebel Energy, which has around 80,000 domestic customers and 10,000 others, had been the subject of a provisional order last month related to compliance with rules around renewable energy obligations.
The company’s website said it was “ceasing to trade” but gave no reason.
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Industry watchdog Ofgem said on Tuesday that those affected by Rebel’s demise did not need to take any action and would be “protected”.
Customers, Ofgem said, would soon be appointed a new provider under its supplier of last resort (SoLR) mechanism.
This was deployed widely in 2021 when dozens of energy suppliers collapsed while failing to get to grips with a spike in wholesale energy costs.
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Why is the energy price cap rising?
The last supplier to go under was in July 2022.
Ofgem said new rules governing supplier business practices since then had bolstered resilience.
These include minimum capital requirements and the ringfencing of customer credit balances.
The exit from the market by Bedford-based Rebel was announced on the same day that the energy price cap rose again to take account of soaring wholesale costs between December and January.
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Tim Jarvis, director general for markets at Ofgem, said: “Rebel Energy customers do not need to worry, and I want to reassure them that they will not see any disruption to their energy supply, and any credit they may have on their accounts remains protected under Ofgem’s rules.
“We are working quickly to appoint new suppliers for all impacted customers. We’d advise customers not to try to switch supplier in the meantime, and a new supplier will be in touch in the coming weeks with further information.
“We have worked hard to improve the financial resilience of suppliers in recent years, implementing a series of rules to make sure they can weather unexpected shocks. But like any competitive market, some companies will still fail from time to time, and our priority is making sure consumers are protected if that happens.”
Harrods is urging lawyers acting for the largest group of survivors of abuse perpetrated by its former owner to reconsider plans to swallow a significant chunk of claimants’ compensation payouts in fees.
Sky News has learnt that KP Law, which is acting for hundreds of potential clients under the banner Justice for Harrods, is proposing to take up to 25% of compensation awards in exchange for handling their cases.
In many cases, that is likely to mean survivors foregoing sums worth of tens of thousands of pounds to KP Law, which says it is working for hundreds of people who suffered abuse committed by Mohamed al Fayed.
Mohamed al Fayed. File pic: PA
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Under a redress scheme outlined by the London-based department store on Monday, which confirmed earlier reports by Sky News, claimants will be eligible for general damages awards of up to £200,000, depending upon whether they agree to a psychiatric assessment arranged by Harrods.
In addition, other payments could take the maximum award to an individual under the scheme to £385,000.
A document published online names several law firms which have agreed to represent Mr al Fayed’s victims without absorbing any of their compensation payments.
KP Law is not among those firms.
Theoretically, if Justice for Harrods members are awarded compensation in excess of the sums proposed by the company, KP Law could stand to earn many millions of pounds from its share of the payouts.
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‘Many more’ likely abused by Fayed
A Harrods spokesperson told Sky News on Tuesday: “The purpose of the Harrods Redress Scheme is to offer financial and psychological support to those who choose to enter the scheme, rather than as a route to criminal justice.
“With a survivor-first approach, it has been designed by personal injury experts with the input of several legal firms currently representing survivors.
“Although Harrods tabled the scheme, control of the claim is in the hands of the survivors who can determine at any point to continue, challenge, opt out or seek alternative routes such as mediation or litigation.
“Our hope is that everyone receives 100% of the compensation awarded to them but we understand there is one exception among these law firms currently representing survivors who is proposing to take up to 25% of survivors’ compensation.
“We hope they will reconsider given we have already committed to paying reasonable legal costs.”
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Further claims against al Fayed
Responding to the publication of the scheme on Monday, KP Law criticised it as inadequate, saying it “does not go far enough to deliver the justice and accountability demanded by our clients”.
“This is not solely a question of compensation but about justice and exposing the systematic abuse and the many people who helped to operate it for the benefit of Mohamed al Fayed and others.”
Seeking to rebut the questions raised by Harrods about its fee structure, KP Law told Sky News: “KP Law is committed to supporting our clients through the litigation process to obtain justice first and foremost as well as recovering the maximum possible damages for them.
“This will cover all potential outcomes for the case.
“Despite the Harrods scheme seeking to narrow the potential issues, we believe that there are numerous potential defendants in a number of jurisdictions that are liable for what our clients went through, and we are committed to securing justice for our client group.
“KP Law is confident that it will recover more for its clients than what could be achieved through the redress scheme established by Harrods, which in our view is inadequate and does not go far enough to compensate victims of Mr al Fayed.”
The verbal battle between Harrods and KP Law underlines the fact that the battle for compensation and wider justice for survivors of Mr al Fayed remains far from complete.
The billionaire, who died in 2023, is thought to have sexually abused hundreds of women during a 25-year reign of terror at Harrods.
He also owned Fulham Football Club and Paris’s Ritz Hotel.
Harrods is now owned by a Qatari sovereign wealth fund controlled by the Gulf state’s ruling family.
The redress scheme commissioned by the department store is being coordinated by MPL Legal, an Essex-based law firm.
Last October, lawyers acting for victims of Mr al Fayed said they had received more than 420 enquiries about potential claims, although it is unclear how many more have come forward in the six months since.
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