Workers' Strike Paralyzes the UK and Could Plunge It Into a Prolonged Recession

Murad Jandali | 2 years ago

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The wave of protest strikes continues to rock the UK economy, denouncing the phenomenon of high prices and historical inflation levels amid growing anger over the government's failure to agree to a detailed package of help for families after its announcement that average gas and electricity bills are to rise by 80% starting next October.

In light of the serious economic repercussions, more than one hundred thousand workers of the British Royal Mail Company began on August 26 their first strike, which continued for the next four days due to a dispute over wages.

The UK is witnessing a series of major strikes, affecting, in particular, the transport, postal and port sectors, while the wave of strikes is expected to affect workers in the health and education sectors during the next month.

The workers' demand is the same across the UK: a salary increase in line with rising energy bills and inflation, which reached 10.1% year-on-year in July. It is also expected to exceed 13% in October, the highest level in a country in the Group of Seven.

 

Strike Wave

High inflation rates and flat wages over more than ten years have led to Britain's worst cost-of-living crisis since records began in the 1950s, exacerbating labor tensions across all sectors.

More than 115 thousand of the British Royal Mail Company, a private sector entity with the largest number of workers, carried out several strikes between the end of August and early September at the call of the Communications Workers Union (CWU), according to what the Guardian reported on August 27, 2022.

Also, about 40,000 workers at the Telecom operator BT are also continuing their first strike in 35 years.

"We will fight as hard as we can to get the pay rise our members deserve," said Dave Ward, general secretary of the CWU.

Royal Mail responded that it had offered a 5.5% pay increase for CWU workers, the largest increase in years.

Meanwhile, about 1,900 Unite Union members, including crane and machine operators and dockers, stopped working to demand better wages in the midst of the cost-of-living crisis in Britain, warning that if they do not get their demands, there will be more strikes.

Unite Union members are demanding a 10% wage increase, noting that this percentage is at least equal to the rate of inflation, while employers are only offering a 7% increase in addition to a £500 one-off bonus.

This is the first strike since 1989 in the port, through which about 4 million containers pass annually.

The ongoing strike aimed at increasing wages at Britain's largest shipping port could cause serious disruptions to supply chains, a Unite union official confirmed to Sky News.

In addition, workers in other professions, such as lawyers, who announced that they decided to intensify their movements after consultation, are moving, which may exacerbate pressure on the courts.

The National Union of Rail, Maritime and Transport Workers (RMT) has called tens of thousands of railway employees in Britain to stop working, which represents a new chapter in the largest strike in the sector in thirty years, which began at the end of last June.

The strikes are expected to continue beyond the summer and could expand to include teachers, health workers, and cleaners who rejected an offer of a 4% wage increase.

On the other hand, the British government criticized the strikes, describing them as counterproductive, hurting even low-income people who depend on public transport and cannot even reach their work.

In turn, Transport Secretary Grant Shapps attacked the trade unions, accusing them of intensifying strikes and threatening to carry out strikes at the expense of thousands of employees.

"We must do more to prevent these very extreme left-wing unions from causing disruptions in the daily lives of ordinary people," Shapps told Sky News on August 19, 2022.

It is noteworthy that the British government changed the law last July to make it easier for companies to hire temporary workers to reduce the impact of the strike.

 

Living Crisis

UK home energy bills are set to rise by around 80% in October, when the UK's energy regulator raises the maximum that suppliers can charge consumers, following rising costs.

Average billing is likely to approach £3,549 a year when the new level is announced next week for the three-month period, which begins in October, up from £1,971, which took effect in April, AFP reported on August 26, 2022.

Given the current situation, the Office of Gas and Electricity Markets (Ofgem) warned that prices could deteriorate significantly throughout 2023, calling on the government to provide urgent aid at the height of the cost-of-living crisis.

Experts expect it to rise to more than four thousand pounds in January and up to six thousand pounds in the spring, according to the most pessimistic estimates, which will lead to an increase in inflation in the country.

The Bank of England warned earlier this month that inflation would rise to just over 13% this year, its highest level since 1980.

It also expected the country to enter a recession that would last until late 2023, with official data showing last week that the British economy contracted in the second quarter of the year.

Analysts at Citibank believe that inflation in Britain could exceed 18% next year on the back of rising energy costs.

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With the continuing strikes and protests organized by various sectors in the UK, demonstrators raised a large banner outside the British House of Representatives as part of the Don't Pay in the UK campaign, which urges people to refuse to pay energy bills from the beginning of October, where some 132,000 people so far pledging not to pay.

However, the campaign asserts that it will not take action unless a million people sign up to participate in a mass strike for non-payment of energy bills in order to put energy companies in serious trouble, bring them to the negotiating table and force them to end the crisis, the Guardian reported on August 07, 2022.

The newspaper pointed out that mass non-payment is not a new idea, as it occurred in the UK in the late eighties and nineties when more than 17 million people refused to pay the election tax, which helped bring down the government and repeal its harsh measures.

On the other hand, Reuters quoted on August 19, 2022, a union representing the health care sector in Britain as saying that "the country is facing a humanitarian crisis this winter, as low-income families will find themselves facing difficult choices due to the sharp rise in energy costs, which may cause serious physical and mental illness."

Prime Minister Boris Johnson has rejected calls for more support for families struggling with rising prices, insisting that his government leave major financial decisions to the next prime minister, who takes office in early September.

 

Government Pledges

The cost-of-living crisis continues to dominate the race to Downing Street, with double-digit inflation and the British economy approaching the brink of recession.

However, the two contenders to replace Boris Johnson as Conservative Party leader and prime minister take different approaches to the issue.

The favorite to become Britain's next PM, Liz Truss, has pledged to cut taxes and cancel increases in National Insurance contributions that fund public health services and social benefits, the Guardian reported on August 17, 2022.

It also proposed cutting fuel taxes that fund the transition to cleaner energy and rejected temporary solutions to the cost-of-living crisis, such as direct government aid.

Supporters of the candidate, who is currently secretary of state, say she plans to draw up an emergency budget within two weeks if she wins the party vote.

Her opponent, Rishi Sunak, believes that tax cuts do not affect low-income families as they do not generate enough income to pay them anyway.

The former finance minister, who is considered wealthy thanks to his career in finance and his marriage, prefers to provide direct aid to low-income families who are more likely to be affected by higher prices.

He described pledges to cut taxes at a time of economic downturn and soaring inflation as a figment of the imagination.

He suggested lower sales taxes on energy bills and lower taxes on commercial property instead.

In turn, lawyer Bassam Tablieh pointed out in a statement to Al-Estiklal that "in democratic countries where the law has a great impact, it has been proven that strikes are the only legitimate means for workers to achieve good results in their favor."

"The unions usually stand with the workers in the face of the government and private companies for their own interests. The recurrence of such strikes indicates that the government is constantly trying to circumvent such interests and trying to take with its right hand what it gives them with its left hand, by imposing new taxes or restricting workers with other matters," he added.

"The government, which is loyal to its country and its work, cannot try to circumvent the strikes of its workers by bringing in temporary workers from abroad. Thus, this indicates mismanagement by the government and the failure to employ workers inside the country and achieve the national interest," the lawyer continued.

Mr. Tablieh concluded that "the turbulent situation in the UK needs to be addressed by independent economic experts far from the government, which is trying to implement the deep state's agenda and achieve its interests at the expense of national interests."