Branch Secretary :

Make sure inflation doesn’t give you a pay cut

Make sure inflation doesn’t give you a pay cut Says Sharon Graham Unite Executive Officer for organising



This month’s Work, Voice & Pay shows that RPI is back to 2018 levels at 3.3%. But while prices are up, pay has been growing at a slower rate than inflation for some time. Ever since the financial crisis working people have been bearing the brunt of the biggest squeeze on peace-time wage growth since the Napoleonic wars – and the favourite way to make that happen is the below inflation “pay rise”. In real terms average pay has still not recovered to the level it was at in February 2008.


In order to work out whether a pay offer is actually a pay rise in real terms you need to know how much the purchasing power of your wages has changed. One of the key missions of Work, Voice & Pay has always been to advise Unite reps that the Retail Price Index (RPI) is the best measure of rises in the cost of living faced by members – and so also the best yard-stick for pay. The Government (and many employers) prefer to use CPIH, an inflation benchmark that among other things uses a different mathematical model to RPI which means it is comes in around 1% a year lower.


Indeed, regular readers will know that the Government plans to scrap RPI altogether in 2030. The logic for this is not only about imposing pay cuts disguised as pay rises (although public sector workers have seen plenty of this). Many defined benefit pension funds buy Government debt linked to inflation (known as index-linked gilts) which are currently measured using RPI. By changing the rules to pay out at the lower CPIH levels, the Government will avoid pay-outs of about £96 billion. The pension funds are currently suing the government about that.


At Unite we have contingency plans in place to continue calculating RPI if the Government do scrap it. In fact we hope to create new even better measures to help you accurately calculate the true value of your pay, terms and conditions.  In the meantime, please use the Work, Voice & Pay tools – especially to check the two most important measures for negotiating on pay – how much your employer has been making and how much (according to RPI) your wages have been devalued by inflation since the last increase. We need wages to start going back in the right direction.


In solidarity,


Sharon Graham



Headlines from this month's Work Voice Pay:


Cost of Living - Going Up


The latest RPI figure shows inflation at 3.3%

On 16 June the UK Government’s Office for National Statistics (ONS) released the latest Retail Price Index (RPI) figure. This provides the RPI rate to 11 May 2021. It shows that prices are up 3.3% from a year ago.


Clothing and footwear are up 10.7%

Each of the areas within clothing and footwear has gone up faster than headline inflation over the last twelve months. Women’s clothes have risen 14.2%, while new gear for the kids is 12.3% more expensive than last year. Men’s clothes cost 12.6% more and footwear has risen 6.1%. Last of all, other clothing (we are talking socks, underwear and scarves) is up 4.5%.


Motoring expenditure is up 4.4%

This has largely been driven by petrol and oil prices rising by 18.5%.


Leisure goods are up 4.7%

Books and newspapers have gone up 7.8% over the period. The cost of toys, photographic and sports goods has increased 4.5% and gardening products cost 5.2% more.


Housing is up 3.8%

Council tax and rates have gone up by 4% over the same period.


Personal goods and services are up 3.7%

Personal services (such as dental charges and residential and nursing home fees) which are up 5.9% on last year. Personal articles (for example umbrellas, watches and luggage) went up by 5.5% on last year.


Fares and other travel costs are up 6.1%

Bus and coach fares have increased by a massive 17.5% over the last year. Other travel costs are 4.7% more expensive.


Household goods are up 4.5%

Furniture is 8.4% more costly than a year ago while electrical appliances increased by 6.4%. Furnishings have gone up by 7.1% over the same period.


Leisure services are up 3.5%

Foreign holidays cost 4.1% more than a year ago but uncertainty around restrictions makes them risky anyway. UK holidays are a safer bet but they are 5% more costly than last year.


See Work Voice Pay monthly here


Sharon Graham is speaking at our July branch meeting.  The meeting is at 6pm on Tuesday 13th July. All members should have received login details from branch secretary Jack Jeffery, but if you haven't, please contact Suzanne Muna.


Our branch nominated Sharon in the General Secretary election - for some reasons see here.


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