: Yesterday Jack Straw announced that he wanted to deprive prison officers of the right to strike, exhuming a Tory idea from 1994. Today Gordon Brown declared that he intends to replace annual public sector pay deals with three-year settlements for public sector workers. It’s how he plans to keep a cap on inflation. Though it’s much more likely that inflation will go up due to rises in the prices of food and fuel. Have a look at my posting a couple of weeks ago remarking on the higher prices of bread and butter. That’s not Brown’s fault, probably, but this is the government that staged nurses’ recommended 2.5% rise in England, reducing the value to 1.9%.

Another serious inflationary pressure, particularly in the south of England, is housing. One reason for this is the lack of social housing. Add this to the upward pressure on house prices from the very affluent workers in the finance sector and it has become virtually impossible for most young workers to afford to live in anything but rented accommodation. Labour now seems to be more kindly disposed towards City workers than nurses.

The government’s own statistics as shown in the graph say:

“CPI annual inflation – the Government’s target measure – was 2.1 per cent in November, unchanged from October.
The main upward contribution came from changes in the price of road fuels. Average petrol prices rose by 3.5 pence per litre in November to stand at over £1 per litre; this compares with a fall of 0.4 pence per litre last year. Diesel prices also rose, by 5.0 pence per litre compared with a fall of 0.4 pence last November.
There were also small upward effects from:
• heating oil which rose in price this year, reflecting movements in crude oil prices, but fell a year ago, and
• financial services, where the cost of exchanging foreign currency fell a year ago”

It goes on to add, in words that now raise a bitter laugh:

The main downward contribution to change in the CPI annual rate came from gas and electricity bills which were little changed this year compared with price rises a year ago when there was continued phasing in of tariff increases.

The reason the RPI line in the graph is rather higher is because it includes mortgage payments which makes it a more accurate indicator of the effect on inflation on many working class people.

Credit where it’s due. The GMB which represents 300,000 public sector workers flatly rejected the idea of a 3-year pay compact across the public sector.  General secretary Paul Kenny was on the radio earlier today and was asked if the union, which is affiliated to the Labour Party, had been consulted on Brown’s plan. It hadn’t. Well blow me down! How much does the Labour Party accept from this union in order that it can allow its polices to be influenced?

The TUC’s Brendan Barber has made a couple of angry(ish) sounding statements. For example the government is “on a collision course with six million public servants” because the deal represents a significant cut in living standards.  And “The problem is last year we saw the government impose pay deals of only around 2%. Inflation was running at over 4%, so millions of public service workers saw themselves facing a real cut in their living standards,” he said.

Except it’s not likely to be Brendan who steers six million public sector workers towards the collision course. It was left to Lib Dem Vince Cable to start talking about strikes even though he’s probably not in favour of them.

What are the political conclusions from this? Well I think it shows that union money and affiliations don’t affect labour’s neo-liberal political directions. The other point is that the political space on the left is wide open for agitation and initiatives on housing, wages, pensions, food and transport costs. For you can bet your life savings that this will be rubberstamped by most Labour MPs and that the union leaderships are already working out how to stitch together a rotten deal.