Press Release: This is not the right time for another NHS pay claim

Commenting on tomorrow’s (24 November 2014)  four-hour NHS staff strike, Director of the Adam Smith Institute, Dr Eamonn Butler, said:

The decision to hold a second strike over pay is a serious misjudgment on the part of the unions that have decided to join in. Average pay in the UK grew just 0.1% last year, and many businesses are hanging on by the skin of their teeth. But NHS pay has been rising since 2012.

55% of NHS staff already get an annual 3% rise: so the government is saying that any extra cash for wages should go to the workers who do not get this. So it is proposing a 1% rise for the others, but not an extra 1% on top of the existing 3% increments.

Extending the 1% rise to all NHS workers is estimated to cost around £300 million. Some 75% of hospitals’ budgets is staff costs, so the extra cost that the union proposals would impose on them would mean cutbacks in staff – some 4,000 nurses lost this year, and another 10,000 next year.

The UK has economic growth of 3% but it is still fragile, and there are lots of things that could still spell disaster; and the British government is 1.45trillion in debt, and adding to that debt by another £100 billion a year. This just is not the right time for another pay claim. And certainly not for another Winter of Discontent (with images of ambulance crews dropping ‘non-emergency’ cases off in the snow to find their way home).

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

The ASI features in the Wall Street Journal on tax competition

The Adam Smith Institute features in the Wall Street Journal Europe‘s article on tax competition and rates throughout Europe.

The clearest example of that came with the tax reductions enacted byMargaret Thatcher and Ronald Reagan in the 1980s. Those tax-rate cuts in the U.K. and U.S. forced other industrialized nations to cut their average top marginal rate for personal income to 42% today from more than 67% in 1980 simply to remain competitive, according to the Adam Smith Institute. Tax competition has driven down the average top rate for corporate income in the developed world to less than 27% today from 48% in 1980.

Read the full article here.