Starmer faces backlash from unions as PM prioritises mortgages over public sector pay

Sir Keir Starmer’s post-election honeymoon period is coming to an end as union leaders make threats over public sector pay.

The prime minister’s statements at the NATO summit in Washington seem to confirm that he places economic stability and lower mortgage rates above wage demands.

With the threat of further strikes by junior doctors demanding a 35 per cent pay rise and reports due to be published soon by other pay review bodies across sectors, Sir Keir has been pressed on whether he is prepared to accept above-inflation pay rises.

Health Minister Wes Streeting, who has also warned of a 35 per cent pay rise, is holding talks with doctors as an urgent priority, but if pay demands are not met there could be other talks.

But the Prime Minister also faces a number of other challenges as he flies back to the UK:

When asked if he would “give the unions what they want,” he replied: “No.”

He said: “Of course, every year there are a number of payroll settlements that have to be done. But the finances are in a very bad state, I think that’s obvious. And that’s why we were careful in what we said before the election and we’ll be careful in what we say after it.”

Instead, he made clear that a far higher priority is bringing the rising cost of mortgages under control by lowering interest rates, thereby stabilizing the economy.

He said: “Mortgage rates have rocketed because of the instability caused by the previous government, particularly Liz Truss, but not just Liz Truss.

“That’s why we said before the election and we’ve doubled down now, that economic stability is the first step in growing our economy. We need that stability to make sure we can get mortgages down. They’re punishing people, I mean people who get off fixed-rate mortgages almost always have to pay hundreds of pounds more a month.”

He continued: “People who even have dual incomes cannot afford a mortgage. We have to stabilize the economy, we have to stabilize the economy for a secondary reason, which is to attract investment, and that will only happen if there is a stable economic environment. This is the single biggest factor that prevents investment in our country, there has been a destabilizing economic effect and a chaotic effect over the last few years.”

But union leaders have expressed outrage, hoping the Labour government will introduce a new approach.

Sharon Graham, the leader of Britain’s largest union and Unite general secretary, said: “The biggest crisis facing the NHS and other public sectors is the inability to recruit and retain staff, caused by years of pay freezes and below-inflation pay rises. Experienced staff are leaving the NHS in droves.

“If we don’t solve the people crisis, we won’t solve the NHS crisis. New scanners need staff to run them. Whatever the plan, it will need more money. That’s an indisputable fact.”

Daniel Kebede, general secretary of the teachers’ union National Education Union, warned: “This is not what we want to hear from the new prime minister. We expect an above-inflation teacher pay offer that is fully funded. Failure to provide adequately funded pay increases will have significant costs in terms of recruitment, retention and education delivery.

“Education is at its breaking point. Another below-inflation rate hike will destroy it.”

A spokesman for the Royal College of Nurses said: “The next NHS award must be fair and it must come quickly. We will consult with our members to see if it meets their expectations. Any award must begin to reverse the staffing crisis in our health service.”