Boris Johnson willing to cut deal with unions over rail strike threat
Treasury digging in against Number 10's push for a 5pc pay rise for thousands of workers
Boris Johnson is prepared to strike a pay deal with unions to avert a sweeping railway strike as a new rift opens between the Prime Minister and Rishi Sunak, the Chancellor.
Senior rail industry figures say that Mr Johnson is keen for an agreement but the Treasury will not grant an exemption to lift the public sector pay cap to avoid the
most potent rail strike in a generation.
The disagreement has sparked a fresh row between Number 10 and Number 11, with a rail industry source accusing the Treasury of "King Canute-like behaviour" in trying to resist the demands.
The Rail, Maritime and Transport union (RMT) last night voted to bring train services to a halt this summer as they call for a new pay deal and resist much-needed reforms to the railways.
The Prime Minister and Grant Shapps are understood to be supportive of rail industry proposals to offer a pay rise of around 5pc to tens of thousands of rail workers to break the industrial relations deadlock.
Increases in public sector pay were capped at 2pc last month, rising to 3pc if certain “productivity gains” can be shown as deliverable.
The Treasury is aware that creating a special exemption for the railways would be likely to spark anger among the likes of nurses, doctors and teachers.
A senior rail industry source said: “Let’s just say we could settle this for 5pc. And let’s just say they [the RMT] agree. But at the moment we wouldn’t be allowed to settle it - because we are breaching the 3pc [cap], even though we can fully fund it.
“The Prime Minister gets that. Grant Shapps gets that. There is the risk of almost King Canute-like behaviour within the Treasury.”
The split is the latest stand-off between the Prime Minister and the Chancellor,
who are at odds over the rollout of a controversial windfall tax on energy companies.
A strike by Network Rail workers, the first since 1994, would have significant repercussions for the UK economy. Without signal workers, only a handful of services would be able to run.
Andrew Gilligan, the Prime Minister’s transport adviser, is leading contingency planning to combat such an eventuality - which would also have serious implications for supply chains.
The Telegraph disclosed earlier this month that a Network Rail strike could cause power outages and food shortages. Last night the
RMT general secretary Mick Lynch said that he was targeting industrial action in mid-June after workers back industrial action at the ballot box.
He said: “[Our] members want a decent pay rise, job security and no compulsory redundancies.
“We sincerely hope ministers will encourage the employers to return to the negotiating table and hammer out a reasonable settlement with the RMT."
In response Andrew Haines, chief executive of Network Rail, said: “We know our people are concerned about job security and pay. As a public body we have been working on offering a pay increase that taxpayers can afford, and we continue to discuss this with our trades unions. We urge the RMT to sit down with us and continue to talk, not walk, so that we can find a compromise and avoid damaging industrial action.”
George Eustice, the Environment Secretary, warned this morning that public sector workers should not expect big increases because the current economic circumstances mean there is a need for "pay restraint".
He told Times Radio: “There is going to have to be, obviously, some pay restraint and when it comes to the public sector right from MPs, right through to doctors and nurses, there are independent pay review panels.
"They will make their recommendations and obviously we look very closely at that when setting public sector pay.
“But it is going to be quite important to try and show restraint because if we continue to borrow and spend money as the Labour Party have said they would do, to do that when you are in an inflationary environment could compound the problem and could drive prices higher still.”