The government already admitted that they have spent more money fighting the unions then the pay rises would have cost, so I think this is entirely more ideological fo the government than whether or they are able to afford it. This deal also does not match inflation, so would still see workers getting pooper.
It's worth highlighting that is the total cost of the pay increase, however some of that cost would have been incurred anyway because pay would go up by something.
For example let's say there's 10 people earning £100, the cost to pay them an extra £5 is £50, they aren't happy so go on strike for an extra £6 costing the company £70 because of the strike.
Not only has the company lost £70 but even if the strike is dealt with and they all agree £55 of staff costs (£105.50 per year) the actual cost would be £125. £125 is several years worth of the extra 50p per person per year, even if it was and extra £2 per person (£20 in staff costs) that's still nearly 6 years of the extra costs (due to compound growth is unlikely to be as simple as divide 125 by 20).
I agree not paying enough causes people to leave, but we appear to have a government that only cares about reducing costs and does not appear to care very much if the service is not provided. I suspect they'll just cut services and increase fares until the numbers look how they want them to, and not care about the strikes at all, other than as a justification for bringing in anti strike measures or as a stick to attempt to beat Labour with.
Cutting costs without understanding the impact of that is folly.
The rail industry could cut costs significantly by not reinstalling the line near Hook due to the land slip, chances are by bit doing so it would cost the rail industry a lot more than it would cost to rebuild it.
I suspect the point being made was a challenge to the statement that "settling would have been cheaper than the cost of the strikes" (I paraphrase). Impact of strikes is mostly a one off cost - 1 million people don't travel to work on Wednesday and therefore sandwich shops lose £5m in revenue for 1 day whereas the cost of a payrise is perpetual
Whilst that's true, as I highlighted above, the EXTRA cost is likely to be quite small compared to the TOTAL cost, as there would have been some level of pay rise if the unions accepted the first offer made.
As such the future cost isn't really the TOTAL cost, rather the EXTRA cost. The EXTRA cost is likely to be small enough that the TOTAL cost could find it for several years before you used that pot of money up.
This just popped up on The Spectator’s lunchtime bulletin:
Just because a crazy increase in pay wouldn't be viable, doesn't mean that all increases in pay would result in the same outcome.
Also it's worth noting that with public sector workers making up ~18% of the workforce, if all staff were paid £65,000 the vast majority of that extra cost would fall on private businesses and so wouldn't harm the governments ability to pay their staff a good wage as for every company which did so there would be an uplift in taxes.
What the union leader was saying though was this shouldn't be a race to the bottom.
The problem the government has is that there's a shortage of staff in the country. This is impacting lots of industries and they are all trying to recruit from each other. There's basically two ways to fix it, pay everyone more (so you make it attractive enough for just enough people to come here to work) or you allow more people in from overseas (so you keep a lid on pay increases). However few are likely to move here unless the pay is reasonable.
There's been reports suggesting that many of our working poor would be better off moving to an Eastern European country as they would have a better standard of living. IF that is the case then actually have freedom of movement may actually make our shortage of workers worse than it would have been. It's certainly not going to make people think that the UK is somewhere they want to move to for work.
Furloughed staff had no protection against being made redundant or any T&C changes. When I was furloughed from the travel industry (initially "asked" to take 8 weeks unpaid leave before furlough was a thing) me and my team got letters saying we were at risk of redundancy and many got made redundant despite being on furlough. I jumped ship and got another job, not especially easy during lockdown 1. I did this before I got to find out if I was for the chop, whilst on furlough, as I was losing a lot of money and didn't fancy sticking around.
At least railway staff knew their jobs were safe and were doing something useful with their days for a few people at least, the "fun" of furlough wasn't quite as good as it looked on paper, I don't know how others felt but being told you're "not essential" didn't actually feel that great when jobs were being cut.
Yes the railways were protected, however in part that was because (unusually for a government) someone understood that if the railways shut down the economy would follow suit and that without it other key workers wouldn't be able to do their jobs.
It's an understanding that isn't well recognised now.
Let's say National Highways staff went on strike, how many would be suggesting that we could just let the trunk road network go into a period of decline?
We don't need all of it, as there's plenty of other roads which can be used instead and it would certainly cut costs to the country of we weren't having to fund them. There's only about 32,000 miles of major roads, this is fairly small compared to the circa 220,000 miles of minor roads were have in the UK.
If we halved the number of major roads that's only 7.5% of all roads we'd be cutting and most people don't even live within 2 miles of a motorway junction. However I'm not even talking at the whole major road network, just the motorways, which we could have in length from 2,300 miles and it be just 1% of the length of roads.
Maybe we could start by cutting some of the less used motorway junctions and looking for those lengths of motorway where once we've got rid of several motorway junctions is not really worth keeping the rest of the road as so much of the travel is between those junctions that it's not worth the medium sized town at the end still having a motorway.
It's not like road charges (not taxes, they don't count as they are too reduce fuel use and not a charge to use the roads, it's why, as an example EV's don't pay VED) cover the costs of the motorways. Too long motorway users have been subsidised by hard working tax payers.
WFH means that fewer people need to travel for work, so it's not like it's going to harm business if we close some of the notary network down.
Motorway use in 2021 was 85% of that pre pandemic but with still all the same costs as when it was running at 100%. There needs to be cuts!
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Rightly so anyone making that argument (and all the numbers are correct for the motorways, including the 85% use in 2021) would be shoot down, so why is it that the railways (which are just as important to the viable functioning of the economy as the motorway network) get singled out for cuts?
It's because many people see the users as others, rather than as people like them, as the people saying it don't use the railways so don't think that the railways benefit them.
If we could shut the railways down overnight, those road users would soon realise just how much they benefit from people and foods being moved about by rail, as traffic congestion would get a lot worse with quite a few more lorry movements on the roads as well as a load of extra buses and cars.
Even with WFH being an option and there's being some rail services road congestion on strike days is generally worse than other days.