Triumphant claims in some quarters that the cost of living crisis is coming to an end as inflation falls to 6.8% are, quite frankly, a load of toffee. Working people have been left scratching their heads as to how this supposed good news for the economy will impact them – there is certainly no sign of it in the pockets of families across the country.
What the latest inflation data fails to take into account is the huge rise in rent and mortgage costs that the public are facing, thanks to Bank of England interest rate rises. The retail prices index paints a very different picture of our economy, standing at a staggering 9%.
On this measure, which includes key costs such as rent and mortgage payments, real wages have fallen by 5.7% since the start of 2022. That’s just the tip of the iceberg: real wages are lower than they were at the start of the financial crisis more than 15 years ago. Those are shocking figures for a government that has claimed all along to be getting our economy back on track. Ministers should be hanging their heads in shame for what they have done to this country and its workers.
When employers with the ability to pay refuse to give employees a decent pay rise, workers are increasingly taking matters into their own hands through strike action. Since I became general secretary almost two years ago, Unite has secured more than £400m in pay increases for everyday people across the UK through industrial action. It’s a sign of growing confidence that, through union action, workers are winning the decent wage rises they deserve.
Politicians are clearly not coming over the hill to save us or to take on the profiteers. It raises the question: whose side are they on and who is this economy for? Workers should not just be fighting to exist. We should be fighting to live. This government is placing the burden on everyday people when the solution is staring it in the face: rampant profiteering.
Research by Unite has revealed that corporate profits, not workers’ wages, are at the heart of the cost of living crisis. And whole swathes of corporate Britain are being allowed to get away with it. As people continue to be hammered by food and energy greedflation, with food prices up by 23% and energy bills up by 57% since the start of 2022, companies in these sectors are flush with cash.
Tesco has made £3bn in profits in the last two years alone, and our research has shown that UK energy companies made £45bn in profits in 2022. Meanwhile, the big four banks have made combined profits of £29bn for just the first six months of 2023 – up 77% on last year, according to our investigation.
The weight of evidence shows that the UK is in the grip of a profiteering crisis. Workers’ wages, and what they can afford to buy with them, are being squeezed by corporate wreckers pursuing runaway profits, quite literally at our expense. This crisis doesn’t just implicate a few “bad apples”: it’s systemic. These are the stark inequalities in wealth and power that govern Britain.
Workers won’t be fooled by this inflation drop, as they see prices and profits continue to rise faster than wages. There is a very real risk that Britain will sink into recession and until policymakers stop attacking wages and begin to tackle corporate profiteers, communities will continue to bear the brunt of this crisis.
There is an urgent need for well-paid jobs, but until then, working people will be left with no choice but to take matters into their own hands through collective action. In my union, we are under no illusion: this is not the end – the cost of living crisis is not over. Furthermore, those who have profited from the crisis should pay for it. We make absolutely no apologies for demanding better pay. Wage restraint? Is that a joke? It’s time to demand profit restraint.
Sharon Graham is the general secretary of Unite