The Labour leader said it is ‘very difficult’ to tell people not to ask for a pay rise, following Bank of England Governor Andrew Bailey’s comments.
16 February 2022
Labour leader Sir Keir Starmer said it is reasonable for workers to demand higher wages as he urged the Government to do more to tackle the rising cost of living.
In comments seen as a veiled rebuke to Bank of England Governor Andrew Bailey, Sir Keir said it is “very difficult” to tell people they are not entitled to ask for a pay increase.
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation reached 5.5% in January, while wages have failed to keep up with rising prices.
Mr Bailey, who took home £575,538 in pay and benefits last year, suggested this month that workers should not ask for large pay rises in order to avoid fuelling the rise in inflation.
But Sir Keir told the Guardian: “It’s very difficult to universally say to people ‘You are not entitled to even ask for a pay rise’.”
The ONS figures, published on Wednesday, showed CPI inflation increased to 5.5% in January, up from 5.4% in December.
It is expected to hit 7.25% in April – the highest level since August 1991.
ONS figures published on Tuesday showed total pay growth rose to 4.3% for the quarter to December – from 4.2% for the three months to November – meaning pay is failing to keep pace with rising prices.
Sir Keir called on Boris Johnson’s Government to take action to ease the squeeze on household finances – including axing April’s planned tax increase.
The Prime Minister has insisted the 1.25 percentage point rise in National Insurance will go ahead to pay for measures to clear the NHS backlog.
“The Government is forever saying these are forces beyond its control, that it can’t do anything because this is all global,” said Sir Keir.
“Actually, those tax increases are the Government’s own deliberate policy and half their own side don’t think they’re right.”
Labour has also called for a windfall tax on oil and gas firms which have benefited from soaring global prices in order to help fund a cut in consumers’ energy bills.
The Government has dismissed the measure and Chancellor Rishi Sunak has announced a package of measures to soften the impact of rising bills.
But Sir Keir said: “To hear the Prime Minister say that he wants to protect oil and gas companies and their windfall profits at the expense of working families is a very clear answer to the question, you know, whose side are you on?”