The cost of living crisis continues to bear down on working-class families, despite sugar-coated assurances from Rachel Reeves that we are all better off under Labour and that cuts to public services do not signal another era of austerity. In reality, working people and their families know better, with the price of all goods and services continuing to rise, while wages and incomes are held back below the rate of inflation.
By Mike Forster
For the poorest in society, especially those reliant on benefits or living on the minimum wage, the situation is desperate. It cannot escape the attention of working people that the same does not apply to their bosses.
In the top 100 FTSE companies, the average pay of a CEO is now £1,170 per hour! Reeves lifted the cap on bankers’ bonuses, resulting in pay packages for banking executives reaching the highest levels on record, with Barclays boss, for example, earning £10.5 million last year. Similar stories can be repeated across so many boardrooms as they cash in on super-profits in the finance, energy and service sector. The boss of British Gas was given a pay rise of 25%, taking pay to £4.3 million, yet debts now stand at £3.8 billion! Chris O’Shea said last year’s pay of £8 million, including a £5 million bonus, was impossible to justify, but he still took it. The boss of Tesco’s pay came to £9.23 million, even after dropping by £1 million compared to the previous year. Yet we continue to endure the worst cost of living crisis for decades.
Birmingham bin strike victory vital for our movement
Reeves’ calls for ‘living within our means’ and for pay restraint are naturally falling on deaf ears for millions of workers. This has been exemplified in the titanic struggle of the Birmingham bin workers, who have refused to take pay cuts of up to £8,000 per year imposed on them by the Labour Council. Instead, they have been on indefinite strike since March this year and are determined to continue until this injustice is reversed.
Attempts by Angela Rayner to ‘resolve’ the dispute included backing a miserable deal which would have cemented these wage cuts. This was rightly rejected, with workers voting to continue the strike.
A defeat at this stage for these workers would set a terrible benchmark and could signal further attacks on workers’ pay and conditions across every council. This strike is therefore now a vital litmus test for the whole of the union movement. It requires maximum solidarity to ensure victory.
Prospects for wider struggle
Perhaps the greatest unrest over pay can once again be seen in the NHS, with resident doctors (formerly known as junior doctors) once again balloting for strike action over the latest pay offer, with their ballot concluding on 7 July.
Similar militancy has been expressed by nurses, with the Royal College of Nursing consulting their members over a 3.6% pay offer, which will mean pay falling even further behind. Should nurses vote to re-embark on strike action, a bold strategy, including calling for coordinated action with the doctors in the British Medical Association (BMA), will be crucial.
There remains continued unrest in the education sector, with the National Education Union (NEU) conference voting to embark on another strike action ballot to force an improved and fully funded pay offer. Since that vote, the national leadership has tried to dilute that decision by pursuing a ‘political campaign’ for a fully-funded settlement. The union’s National Executive remains locked in arguments about the best way forward, with the left arguing instead that this government will only listen to more militant and coordinated strike action.
This debate is being played out in most of the other public sector unions, whose leaderships are seeking to reach agreements with a government which they see as a potential ally, rather than the previous union-busting Tory administration. This ‘partnership’ approach is sorely mistaken, and will see union leaders allowing their members’ pay and conditions to deteriorate. Instead, Labour’s austerity plans should be confronted head-on. Reeves has made it crystal clear that this is a pro-business administration which cares little for workers’ living standards.
Employment Rights Bill
This clash between the needs of working people and the priorities of the Starmer government is being played out in the passage of the Employment Rights Bill, introduced in October 2024, which remains at the committee stage. However, significant changes were published in March 2025 by the government, which is already bowing the knee to the bosses to dilute workers’ rights.
The changes include watered-down proposals around unfair dismissal, zero-hour contracts, industrial action ballots, and flexible working. Those trade union leaders who seek to persuade their members that this bill will offer better workplace protection are already battling to keep it in its original form.
Instead, they must mobilise their members’ anger and desire for change to enhance and improve upon the bill’s original proposals – but this means ditching their cosy relationship with Starmer’s government.
The growing drumbeat for war and the massive increase in arms spending by Starmer exposes even further Labour’s commitment to ‘living within our means’. They had already committed to lift military spending to 3% of GDP, an average of £10 billion a year, and to invest a further £15 billion in Britain’s nuclear warhead programme – all at the expense of education, welfare benefits, and public services.
Trump has gone further, demanding military spending of 5% of GDP, which Labour has pledged to put in place by 2035. Workers facing further wage restraint, cuts to services and joblessness will need a more militant and determined response from their leaders.
It is clear that capitalist society is becoming more unequal and that Starmer’s priorities are totally wrong. It is the role of unions to mobilise their members to confront the cost of living crisis, not to passively beg for crumbs of comfort from Labour’s cabinet. The determination and solidarity of the Birmingham bin workers demonstrates how workers will be thrown into struggle to defend their standard of living, which will increasingly become the norm.
This may bring workers into conflict with their union leaders, but it is essential that they find a leadership which can lead a fightback against the reality of austerity and wage restraint.
We say:
- Fight for a decent living wage and across-the-board pay increases in line with inflation!
- Stop all cuts to public services!
- For coordinated strike action to win above-inflation pay rises for all workers!
- For a fighting trade union leadership, based on a mobilised membership and organised left, to carry forward the struggle!
