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Trade union leaders are already squaring up for a fight with Rachel Reeves over pay, even before she has published her first Budget.
The Independent has been told that union bosses have made it clear they expect massive public sector rises in the new year “after 14 years of Tory austerity and wage constraint”.
It is another headache for the chancellor who is expected to be forced to bring in some of the biggest tax rises in history to cover a £40bn black hole in Labour’s spending plans. Ms Reeves is expected to increase employers national insurance contributions and capital gains tax among a range of measures.
With her main objective to bring economic growth, Ms Reeves has also pledged to her party and unions that “there will be no more austerity”.
But The Independent has learnt officials have been emboldened by bumper pay deals for junior doctors and train drivers.
Now they believe that other sectors should receive pay deals to turn around the fall in real wages since the banking crash in 2008.
Meanwhile, one union leader made clear that they are braced for disappointment on Wednesday when Ms Reeves gets to her feet. They told said: “The impression we are getting is that no-one is going to be happy.”
The Royal College of Nurses recently decided against immediate industrial action but rejected a pay-off from the government, indicating an early fight as ministers desperately try to bring NHS waiting lists down.
Already, NHS bosses are warning that the pay deal of more than 20 per cent for junior doctors means that the expected 4 per cent rise for the NHS as a whole will be lost in pay wage increases.
The push for significant pay rises is being led by the Fire Brigades Union whose general secretary, Matt Wrack, recently became president of the Trades Union Congress.
The Independent has seen a letter to Ms Reeves from Mr Wrack who has made clear that his members and those in other unions will expect an end to austerity to be reflected in their wages.
While welcoming Labour’s workers’ rights package, the union warned that this approach “must be reflected in funding for pay offers in the public sector workers to avoid disputes similar to that faced by the fire service in early 2023”.
In the letter, Mr Wrack said: “Low wages, crumbling infrastructure and inadequate public services are not just a blight on the lives of working people. They are also a threat to public safety.
“Fire and rescue service response times are worse than ever before in recent history. It now takes more than nine minutes for a first appliance to reach a fire, significantly longer than it did thirty years ago.”
Labour has already promised to re-establish national standards in the fire service but, Wrack warned, funding will be crucial: “we cannot deliver a resilient, joined-up fire service that is fit for the future without investment. Under the Tories, the fire service lost 30 per cent of its central government funding in cash terms.
“Now, as the Labour Chancellor, you can deliver a Budget that marks the end of the catastrophic ‘austerity era’. The Labour government’s Budget must begin to make up for the decade and a half of constant cuts to services and wages that have left many firefighters and other workers struggling to make ends meet.”
Meannwhile, Ms Reeves has been briefing the cabinet about the Budget today.
The prime minister opened the political cabinet meeting by saying that “politics is about choices” and that the Budget tomorrow will show that “we are choosing to fix the NHS, rebuild Britain and protect the payslips of working people”, to deliver on our mandate for change.
He then repeated the warning about the £22 billion black hole in the public finances he claims the Tories left in the public finances for this year and “covered up”.
Ms Reeves said the Labour Party had promised there would be no return to austerity and the Budget tomorrow would deliver on that promise.
