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News > United Kingdom

Strikes in UK Fueled by High Inflation Take Huge Economic Toll

  • British rail workers on strike, Jan. 2, 2023.

    British rail workers on strike, Jan. 2, 2023. | Photo: Twitter/ @AndyVermaut

Published 3 January 2023

The winter of strike-induced chaos is the result of both immediate pressures from high inflation and longer-term downward ones on pay and working conditions.

A winter of widespread strikes facing Britain has dealt a blow to people's daily life as well as the country's already struggling economy, showing no sign of stopping at the beginning of a new year as lengthy disputes over pay went unresolved.


Downward Pressure on Pay Fuels UK Industrial Strife, Expert

The first week of 2023 is marked by further strikes as workers of the Rail, Maritime and Transport union began their two 48-hour strikes from Tuesday and Friday and the train employees' union Aslef has called strike for Thursday.

Passengers, including those returning to work after the festive break, were warned to expect significant disruption as only a limited number of trains will run.

As chaos dragged on, with medical services under great strain, and widespread travel disruption to be continued in the month ahead, public patience was wearing thin and discontent rising. The political stakes for the government, which still locked horns with the unions, were high.


Starting in the summer of 2022, the latest wave of strikes in Britain dragged into December. An estimated 1 million working days were lost to strike action in December alone, the highest figure since 1989. Over 40,000 railway workers staged industrial action throughout the month, including the Christmas holidays, after negotiations broke down.

"Until the government gives the rail industry a mandate to come to a negotiated settlement on job security, pay and conditions of work, our industrial campaign will continue into the new year, if necessary," said Mick Lynch, general secretary at The National Union of Rail, Maritime and Transport Workers.

Members of the Royal College of Nursing (RCN) staged a national walkout, the first in the organization's 106-year history, in mid-December due to successive below-inflation pay. Two more strike dates for January have recently been announced.

"The voice of nursing will not be ignored. Staff shortages and low pay make patient care unsafe -- the sooner ministers come to the negotiating table, the sooner this can be resolved," said RCN general secretary Pat Cullen.

Unison, one of the largest trade unions in Britain, has also announced further strike days in January involving ambulance staff after walking out in December.

"This year's pay rise simply wasn't enough to halt the exodus of staff" from the National Health Service, Unison general secretary Christina McAnea said.

The winter of strike-induced chaos faced by Britain is the result of both immediate pressures from high inflation and longer-term downward ones on pay and working conditions, said Deborah Dean, co-director of the Industrial Relations Research Unit at the Warwick Business School.

Britain's annual inflation rate reached 10.7 percent in November. When adjusted for inflation over the year, total and regular pay among British employees fell by 2.7 percent from August to October, which remained among the largest falls in growth since comparable records began in 2001.

"Public sector pay, in particular, is in decline in comparison to the private sector at the moment," as the austerity policies introduced after 2010 have had a disproportionately severe effect on the public sector, Dean said.

In response, the government said the pay rises are unaffordable and higher pay will not help fight inflation. Prime Minister Rishi Sunak has expressed disappointment about the disruption caused by the strikes.


Strikes have taken a huge economic toll. Back in the summer when walkouts were staged at Britain's key container ports like Felixstowe and Liverpool, estimates showed over 60 percent of the country's container port capacity could be affected.

On average, export containers wait about seven days at Felixstowe before being loaded onto a vessel, but August's strike caused export containers to wait as long as 21 days in port while import containers waited as much as 13 days, according to a report published by logistics technology company project44.

"There is reason to be concerned about the disruption to supply chains, trade and business across the UK caused by the industrial disputes," it noted.

Then the public transport chaos inflicted more damage. Into December as the action intensified, the strikes may mean the gross domestic product (GDP) is up to 0.5 percent lower than otherwise, and that may be repeated if more strikes happen in the new year, said economist Ashley Webb at consultancy Capital Economics.

A bigger point is that if workers are successful in negotiating higher pay deals, that could contribute to wage growth being stronger than otherwise, and that is at a time when strong wage growth is already keeping upward pressure on high inflation, Webb added.

Adding together the forecasted direct cost of all strikes and the indirect cost of worker absences due to rail strikes puts a lower bound estimate of 1.7 billion pounds (2 billion U.S. dollars) on the total cost over the eight-month period to January 2023, according to economist Karl Thompson at the Centre for Economics and Business Research.

Broader indirect costs include the hit to retail, hospitality, and leisure spending at an important time for such businesses, a dent to confidence, supply chain disruptions and higher business costs, and a hit to public coffers, Thompson said.

Many industries have been struggling. Michael Kill, chief executive officer at the trade body Night Time Industries Association, said his sector, already under mounting pressure during the COVID-19 lockdowns, is one of the hardest hit by the rail strikes.


Amid travel chaos, discontent grew. "It is clear public opinion is shifting, with many angry at being unable to enjoy a traditional festive period after three years of disruption," Kill said.

More than a quarter of people who faced having their Christmas travel plans ruined by the strikes did not have an alternative means of traveling arranged, showed research published by the automotive services company RAC in mid-December.

"The nation is definitely getting very frustrated with strike action again, especially around Christmas time," said Madeleine Stevens, a senior lecturer at Liverpool John Moores University.

Stevens's travel was disrupted in December as her train to Manchester was canceled. "I had to use the car and a normal journey just took so much longer because everybody had to use the car and find alternative routes," she said. "It's impacting the Christmas markets, people who want to go and enjoy the festive season all around."

YouGov data in early December found that the number in Britain who think trade unions play a negative role has risen noticeably since June. "Britons are now more likely to say they think trade unions can take strike action too easily and that there should be more restrictions on them," the survey showed.

Public anger was also targeted at the government. A YouGov poll in mid-December showed Britons think the government is to blame for most strikes, especially nurses' and ambulance workers' strikes.

Gideon Skinner, head of political research at Ipsos, also said the potential for a wave of industrial action is hardly greeted with enthusiasm by Britons, and sympathy for the rail unions has dipped, "but it is the UK government that receives the least sympathy of all."

Through 2022, amid consistently high inflation, which has fueled widespread walkouts, the government already came under increasing criticism. YouGov data in mid-December showed 78 percent of Britons say the government was doing a poor job of managing the cost of living.

The big question mark is whether the prime minister has the necessary political judgment and skills to make it through his confrontation with nurses and ambulance drivers, said Jill Rutter, a senior research fellow at the academic network UK in a Changing Europe.

Alongside post-Brexit disputes with the European Union, those "are the tests which he will face straight away in the new year and may define his premiership," Rutter added.

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