The UK’s Winter of Self-Destruction

Comment

Already mired in an economic slump, Britain is grappling with a new “winter of discontent” — an outbreak of strikes and stoppages across its public services. Apart from the immediate inconvenience for businesses and households, the unrest will further erode the country’s standing in the global economy. Unions and government alike need to compromise and prevent this pattern of persistent, willful dysfunction from becoming entrenched.

Strikes are threatened or underway this month in rail, health, education, postal and local-government services. It’s the worst labor disruption for 30 years. The details vary from case to case, but in most of these disputes, there’s blame on both sides.

Public-sector unions in the UK, as in most countries, reflexively resist more efficient working practices and higher productivity. Once you allow for typically generous public-sector pensions, their members aren’t conspicuously underpaid. Nonetheless, they’re right to complain that, thanks to surging inflation, their wages have recently dropped much further in real terms than earnings in the private sector. To maintain a semblance of fiscal responsibility during the recent economic emergency, the government leaned hard on public-sector pay. Workers’ patience is understandably exhausted.

At the same time, a prolonged labor standoff risks crippling Britain’s economy and harming workers even more. To avoid such a crisis, both sides need to be more flexible. For a start, the unions should moderate their pay demands. Nurses, for example, seek a pay increase of 19% — enough to recover inflation of 14% and then some. The economic stresses caused by the pandemic and the war in Ukraine were bound to erode real incomes, at least for a time, and public-sector unions shouldn’t be exempt. They should accept inflation-adjusted wage cuts like those borne by the private sector, and open their minds to the need for greater efficiency.

What if they dig in their heels? It’s unacceptable for industrial action to throw essential public services into disarray, and the government would be right in that case to tighten restrictions on their freedom to strike. At the moment an escalation of this kind looks politically unattractive, because many of the workers have considerable public support. But that could change quickly, as it has previously had such confrontations.

For its part, the government ought to bend as well. The squeeze on public-sector pay has been unduly tight. Ministers have compounded that error by refusing to defend or even acknowledge the policy, insisting that public-sector pay settlements are outside their control. This is disingenuous at best and adds to worker frustration. Policy sets the parameters for public-sector pay negotiations, and the relevant managers and pay-setting bodies have only limited freedom. The government should recognize this reality, and settle for smaller pay cuts (after inflation) in return for union concessions on working practices and other labor-contract terms.

A little more give and take can get the country off the hook for now. A deeper problem will remain. Many of the UK’s public services are chronically under-resourced. Standards of care in the National Health Service, to name the most obvious case, are falling precipitously. This year’s pay deals aside, the country will have to spend more to avoid further deterioration in access and quality. That means substantially higher taxes, and less spending on other things.

Government, unions and voters at large have a common interest in confronting this challenge together. Avoiding a winter of needless self-inflicted damage would be a good start.

More From Bloomberg Opinion:

• Brits Won’t Let Snow and Strikes Steal Christmas: Andrea Felsted

• Rishi Sunak Can’t Just Keep Blaming the Strikers: Therese Raphael

• Sorry, UK, Brexit Was Worse Than Trump: Ian Buruma

The Editors are members of the Bloomberg Opinion editorial board.

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