Ministerial messaging on the inflationary threat of ‘unaffordable’ wage demands by low-paid NHS staff doesn’t ring true, according to expert opinion, and reflects a political expediency that prevents the health service being equitably supported by higher taxes on the private sector. Meanwhile the government continues to push through new legislation severely restricting industrial action by those same staff seeking better remuneration.
The missing link
Last week, Essex University professor Paul Whiteley wrote a blog pointing up the shortcomings of the government’s PR strategy on this politically sensitive subject, stressing that it is private – not public – sector pay that drives inflation. He asserted that public healthcare is free at the ‘point of use’ and so does not affect inflation statistics at all, and gave as evidence the fact that last year inflation and private sector pay both rose around 6 per cent, while public sector pay increased by just 1.7 per cent.
Whiteley concluded his blog by saying, “Public sector workers are striking in response to inflation, but there is no evidence that their [proposed] wage increases are producing inflation. In effect, the wage-price spiral does not exist for public sector pay. A key reason for this is that the public sector makes up only 17 per cent of the total workforce, so it has much less of an impact on the economy than the private sector.
The upshot… is that public sector workers are being penalised by reductions in their pay for reasons that do not bear up to scrutiny. Public sector pay increases do not translate into high inflation.”
This assessment is backed up by an earlier analysis from the Left Foot Forward (LFF) thinktank, which suggested that talk of an NHS-driven ‘wage-price spiral’ was nonsensical because, unlike the private sector, the health service can’t raise prices to pay for higher wages.
Full story in The Lowdown, 28 February 2023