Millions of British public sector workers will be offered a 5% pay rise.

Millions of British public sector workers will be offered a 5% pay rise.

Boris Johnson will next week offer an average pay rise of around 5 per cent to millions of public sector workers, but ministers fear the below-inflation deals across the economy could spark months of strikes.

The wage offer will be higher than originally proposed by the government; ministers will claim it will help nurses, teachers and others cope with a cost-of-living crisis as inflation is expected to hit 11 per cent in the autumn.

But ministers are prepared for months of unrest in the public and private sectors. Sharon Graham, general secretary of the Unite union, said there could be hundreds of disputes if workers had to “pay the price of inflation”.

BT, the former telecoms monopoly, faces the former industrial action for 35 years, as the Communications Workers Union announced on Friday that 40,000 staff members will strike on July 29 and August 1.

The action will lead to delays in the repair of internet and telephone lines in households, which will make it difficult to work from home. The CWU is also voting for 115,000 Royal Mail workers over possible strike action in August.

In the public sector, teachers, nurses, police, prison staff, civil servants and the armed forces are waiting for Johnson’s cabinet to decide on this year’s pay deals — one of the big decisions for his transition government.

The public sector pay review covers roughly 2.5 million people, around 45 per cent of public sector workers, with total pay costing taxpayers £220 billion in 2021-21.

One cabinet minister said the government would accept recommendations from independent pay review bodies, which make pay proposals based on guidelines set by ministers.

Former chancellor Rishi Sunak had hoped to keep pay rises to 2 per cent in most cases. But another minister said settlements are now expected to average around 5 percent, given the recent spike in inflation.

But Sarah Gorton, head of health at Unison – the biggest public sector union – told the FT this was insufficient: “A pay rise below inflation will not be enough to persuade disillusioned health workers to stay in the NHS.”

Pay review bodies take into account recruitment and retention pressures, but must also consider the affordability of their recommendations.

If pay review bodies recommended a typical 5 per cent rise – this will vary from sector to sector – and applied across the public sector, it would cost almost £7 billion more than a 2 per cent increase. The Treasury insists it must come from the existing 2022-23 budgets, which were set last autumn.

“If you went below their recommendations, you would save some money, but what would be the net savings?” the minister asked. “You would end up with a lot of strikes and a big economic hit. You will have strikes anyway, but that would make things worse.”

The Minister said that the Government will not give “inflationary” increases above the wage authority’s recommendations.

Johnson’s spokesman said a decision on public sector pay would be made next week before MPs go on summer recess on July 21, but declined to comment on the details.

Last month the rail network came to a virtual standstill when The RMT union held a wave of strikes. Now the government is ready for further rail industrial action over the summer holidays from both the RMT and Aslef.

Next week, a third rail union – TSSA – will set dates for further national strikes, which could be co-ordinated with other unions.

Network Rail has offered a 4 per cent pay rise, followed by a further conditional 4 per cent next year – plus some bonuses – as well as a promise that there will be no redundancies.

Meanwhile, the new head of the British Medical Association, Philip Banfield, has warned that it will strike was “inevitable” until next spring. The BMA last month voted to increase doctors’ pay by 30 per cent over five years to restore their real income cuts since 2008.

Additional reporting by Filip Georgiadis

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