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UK’s Summer of Misery Was Just a Prelude of What’s to Come

·8 min read

(Bloomberg) --

Most Read from Bloomberg

The strikes that erupted across Britain’s railways and airlines this summer are about to spread across the public services, extending the “summer of discontent” into the autumn and beyond.

Workers in schools, hospital and the courts are threatening to walk off the job in the coming weeks in protest that their real wages, adjusted for inflation, are falling at the quickest pace on record.

The most active run of industrial action since the early 1970s is likely to compound the miserable period the UK is enduring. It follows weeks of travel chaos that wrecked holiday get-aways while drought turned usually lush parks and gardens brown.

Anger building among Britain’s government workers is part of the bleak backdrop that will greet whoever takes over as prime minister when Boris Johnson steps aside on Sept. 6. It reflects decades of spending cuts across the public services that have left key public services struggling to cope and workers fed up and ready to pick a fight with ministers.

“A lot of these services which enable the economy to keep turning are all in a bit of a crisis,” said Kitty Stewart, a researcher on social policy at the London School of Economics. “A lot of that is a longer-term story about the past decade.”

Public sector employees including teachers, nurses and civil servants are weeks away from voting on whether to walk out from their positions. Meanwhile, barristers in criminal courts have voted for an indefinite strike.

Their main frustration is pay, with employees revolting over the government’s decision to keep wage increases below inflation. Prices are rising at the strongest pace in 40 years, and wages aren’t keeping up. Factoring in inflation, real wages across the economy fell 4% in the second quarter.

Government workers are falling further behind after decades of neglect. Since the 1960s, investment in the public sector has been on a downward trend from a peak of 8% of gross domestic product, to 1.6% in the wake of the Great Financial Crisis in 2013-14 after successive administrations slashed spending. Those levels crept up once more to 3.4% during the pandemic as the government spent heavily to stem the damage from lockdowns, but have since subsided.

“It’s quite easy when times are a bit tight to cut this non-urgent spending, but it does have long-term impacts,” said Krishan Shah, an economist for the Resolution Foundation, a think tank that focuses on improving the standard of living for low- and middle-income earners. “You’re running a much leaner system and it might be more efficient, but when this government system interacts with shocks it makes it a lot more difficult to be resilient.”

Those frustrations put Liz Truss, the front-runner in the race to succeed Johnson, on a collision course with workers. Truss has vowed to cut taxes, implying little if any resources to pay workers more. The depth of anger that workers express across the public services suggests the trouble is only just beginning.

Criminal Barristers

Criminal law has always been one of the worst-paid specialties in the legal world, but the government piled on the pressure starting a decade ago with cuts to legal aid. That money goes to fund representation for those unable to afford it and the funding reduction in one year cut the number of cases that could be fought by 46%.

Now, many criminal barristers at the start of the careers could earn more working in pubs. Rosalind Burgin, 28, got paid more working at a coffee shop before she qualified as a lawyer specializing in crime and housing.

“Genuinely having no money coming in means I’m borrowing money from different friends, from my partner, and I’ve never had to do that before,” she said. “I’ve never been in so much debt. I can’t turn away cases — so the option is work through the night or get a different job.”

Average earnings after expenses are less than £13,000 a year for some publicly funded criminal lawyers in their first two years of practice, less than the minimum wage, according to the Bar Council in 2020. As a result, the number of people specializing in crime has dropped by a quarter in the past five years, and the rest have voted to strike.

That’s contributed to a record-breaking backlog of almost 60,000 criminal cases in England and Wales. Since the strike began over 6,000 trials and hearings have been affected by the action, according to government data.

“If we hemorrhage specialist criminal barristers, who provide both prosecutors, defense advocates and judges, then victims of crime take the added pain of more months or years to their trial dates,” said Jo Sidhu, chair of the Criminal Bar Association. It is now “quite normal” for complainants in serious criminal cases to wait four to five years for a trial, he said.

Barristers rejected an offer for a 15% increase in fees and are pushing for a 25% hike. From early September, they will be striking indefinitely until the government improves its offer.

Heath Service

Doctors and nurses in the National Health Service are threatening to strike over pay raises the British Medical Association calls “deeply insulting.” They want inflation-adjusted wages to return to levels prevailing in 2008 and 2009.

Real pay for junior doctors has plummeted by a quarter in the past 13 years, according to the BMA. That’s pushed more into private practice, starving the NHS of staff. The system as a whole is suffering its worst staffing crisis since it was founded after World War II, with the Nuffield Trust estimating 50,000 unfilled nursing and midwife vacancies and 12,000 for hospital doctors.

That’s a particular problem for the UK as it has an aging population with increasingly chronic health problems, building demand for the NHS for decades to come.

“Everything’s busier,” said Dolin Bhagawati, a neurosurgeon based in London who qualified in 2007. “There’s a general sensation from pretty much all of my colleagues that there isn’t enough time or resources to treat our patients properly, which didn’t used to be the case.”

He’s increasingly had to apologize to patients and their families for being unable to go ahead with operations because the hospital hasn’t been able to get the correct equipment, and also found people coming in with more serious conditions as services such as physiotherapy have been cut. He doesn’t see the situation improving any time soon.

“There won’t be a dramatic point at which the healthcare service breaks,” he said. “This is a slow decay.”

The government’s decision to offer sub-inflation raises to staff at the low end of the pay spectrum was the final straw after the pandemic, when health workers put their lives at risk lacking protective equipment before vaccines were in place, said Mike Henley, deputy chair of the BMA consultants committee and a urologist based in the East Midlands. Three consultants in his team died during the pandemic.

“That’s the reason for the level of anger in the profession,” he said. “It’s difficult to know where to turn in this sort of situation.”

Schools

Teachers are also considering whether they’d earn more and have less stress in another line of work.

School spending per pupil dropped by 9% in the decade through 2019-2020, rebounding slightly in the Covid pandemic, according to the Institute for Fiscal Studies. Most teachers will feel even steeper cuts to their salaries when inflation’s taken into account, with salaries 12% lower than in 2010 under the government’s latest pay offer.

That’s one of the factors angering teachers. For Tadgh, a 30-year-old secondary school teacher based in London, higher energy bills will make rent at his shared house unaffordable starting in October. He would prefer not to be identified by his full name to avoid an impact to his job.

“Many of my friends who I started teaching with will be leaving within a couple of years to either go to international schools where the pay conditions are better or to change careers,” said Tadgh. “They would like more time to actually live.”

He’s not alone; 31% of teachers quit within five years. And for those still in the job, the added stress of the pandemic is starting to take a toll. 64% said their work had impacted their physical health in the last year, according to the union NASUWT.

“I’m at the beginning of my teaching career, and already I’m sure that I will leave the British school system at the end of next year,” he said. “We do have a very stressful and difficult job. We knew that when we signed up. But we would like to have at the end of the day the means to live.”

Read more:

  • UK Inflation to Rise Past 18% in Gas Crisis, Citigroup Says

  • UK Outlook Dims With Consumers Paying More to Buy Less in Shops

  • UK Inflation Hits Double Digits for the First Time in 40 Years

  • UK Real Wages Plunge Most on Record as Job Vacancies Fall

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