Branch Secretary :

Crucial news for pay claims: RPI inflation hits 7.1%

Highest inflation figure for thirty years


RPI inflation to November 2021 has hit 7.1%, its highest level for over thirty years according to figures released today by the Office for National Statistics.


Many members will already be all too aware that inflation is cutting into rates of pay and causing real hardship. Unite is committed to ensuring that workers do not pay for the crisis and has been winning pay claims above the rate of inflation. Pay claims being prepared now will need to start from this figure and Unite reps will seek to ensure that members are fully aware of the figure.


See Sharon Grahams response to last months figure here.


There are several inflation indexes; while employers and the press prefer the CPI index, Unite is clear that the RPI index is more accurate for wage bargaining. While RPI is currently used for wage bargaining and certain government bonds and Unite has set out detailed reasons why it is more accurate.


The CPI (and its sister index the CPIH) covers all expenditure within the UK, meaning that the index covers the spending of groups not usually relevant to our negotiations, including:

  • Residents of institutional households such as university halls of residence or nursing homes; and
  • Visitors to the UK from abroad.

The RPI is also more realistic for bargaining purposes because it is based on the actual spending of private UK based households only and excludes:

  • The top 4% of households by income; and
  • Pensioner households (where the head of the household is retired and economically inactive and where at least three-quarters of the household income is derived from state benefits)


Unite statement on today's inflation figures:


Sharon Graham says below inflation rises are a wage cut with workers paying the price of the pandemic.

Unite’s general secretary Sharon Graham says the union will continue to base claims on the RPI figure rather than CPI because it better reflects the actual price rise experienced by Unite members.

Speaking on today’s rising inflation figures, Sharon Graham said: “Today’s figures mean our members must fight for wage rises above the current rate of inflation, as measured by the RPI. Otherwise, they will be facing a calamitous drop in their standard of living. Current estimates suggest that costs for the typical UK family will jump by £1,700 in 2022*.  Workers did not create this cost-of-living crisis so why should they pay for it?”

On calls for restraint on wage demands to avoid rising inflation Sharon Graham said: “Today’s inflation figures are a reflection of rising fuel and energy costs and shortages – and that means higher bills for food, fuel and everyday items.

“Predictably the Bank of England has said workers must show pay restraint. Tell that to the CEO of Nat West, for example – last year her wages went up by a staggering 85 per cent to £2.6 million. There’s no restraint in the boardrooms, where it’s one wage rise for them and another for us."   

Sharon Graham challenges the use of the CPI instead of RPI by the Office of National Statistics as potentially a hidden tax on workers’ wages. The ONS CPI figure for November is 5.1 per cent, while the ONS RPI figure is 7.1 per cent.

She added: The RPI, which includes housing costs, is a far more accurate measure of the real cost of living than the CPI, which is always lower. Employers favour the CPI in cost calculations because it saves them money, but the truth is that this is a hidden tax on workers’ wages. Unite will always seek wage settlements that reflect the true cost of living because anything else is a wage cut.”

With the government determined to abandon RPI altogether by the end of the decade for the lesser measure of CPI, Unite is working with economists to develop the Unite Bargaining Index. The Unite BI, which will track all real living costs, will be the union's benchmark measure in all wage and pension negotiations.

In her first 100 days in office as Unite general secretary, Sharon Graham has led the union to deliver pay rises totaling £25 million, with many well above inflation.


15 December 2021




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