On the eve of the Budget and Comprehensive Spending Review, a coalition of trade unions representing workers across the UK economy has confronted the Chancellor of Exchequer with a damning fact-file of evidence suggesting that workers have been stretched to the limit by the Tory pay squeeze.

The eleven national trade unions which make up the Trade Union Coordinating Group, or TUCG—BFAWU, Equity, FBU, NAPO, NEU, NUJ, PCS, POA, RMT, UCU, and URTU—have told Rishi Sunak that the pay freeze of 2020/21 exacerbated the financial pressure on workers that had accumulated over the period of austerity and the Covid-19 pandemic.

Even before the pandemic, the squeeze on workers’ pay had persisted for well over a decade, in what was described by economists as ‘the longest period without wage growth since the Napoleonic Wars’. In the UK in 2019/20, pre-pandemic, it was estimated that ‘11.7 million people were on relative low income before housing costs (18 percent of the population), [which is] a similar level to the years before. 14.5 million were in relative low income after housing costs (22%).’

NHS workers won the well-deserved praise of the nation for supporting us through the pandemic, but the heroic contributions of key workers didn’t stop at the health sector. Food workers kept us fed, transport workers ensured vital journeys could take place, firefighters took on additional emergency duties, educators enabled schools and colleges to reopen safely and university teaching to continue, workers in the justice system continued to keep us safe, and reporters ensured we had access to reliable sources of public health information—the list goes on and on.

The staff of government departments moved heaven and earth, with the DWP asked to process a record number of urgent Universal Credit applications and HMRC staff taking on the additional workload necessary to roll out the Job Retention Scheme. Sadly, some workers paid the ultimate price as their work fatally increased their exposure to the virus. BAME workers, in particular, who already experience pay discrimination in relation to their white counterparts, were also disproportionately impacted by Covid-19.

Despite the applause, the reality of life in low-pay Britain means that workers are now reaching breaking point. The Office for National Statistics reports that ‘around a third of workers saw their household income fall in the financial year ending 2021, rising to 42% for the 20% on the lowest incomes (who were more likely to be furloughed and less likely to be able to work from home than people on higher incomes).’ The hundreds of thousands of self-employed workers not covered by the government’s assistance scheme and those in the hardest-hit sectors, such as the performing arts and hospitality industries, were particularly vulnerable.

Now, under further pressure from rising inflation, a spike in energy prices and the hike in employees’ National Insurance contributions, the real value of take-home pay will be eroded still further. RMT data, for example, shows that rail workers are set to lose between £5,000 and £15,000 over the next four years in real terms if pay continues to lag behind current rates of inflation as measured by the Retail Price Index.

The report is particularly critical of the decision to scrap the £20 uplift to Universal Credit and the reinstatement of the Minimum Income Floor—which will have a devastating impact on workers on low incomes. The TUCG unions condemn this as ‘the biggest overnight cut to the basic rate of social security since World War II at a time when the economic effects of Covid-19 are still being felt.’

The result of such policies has been to make the phenomenon of ‘in-work poverty’ a blight on the economy. Take those who work in the food sector, for instance: a survey of BFAWU members—overwhelmingly employed in the private sector—reveals that 40% of respondents had not eaten enough during the pandemic for lack of income. 19% reported that there had been a time when their household had run out of food, also for lack of income; 35% had gone without food so others in their household could eat properly; one in five relied on friends or relatives to provide meals; and more than 7% had relied upon a food bank to provide meals. The labour market in the food sector has become dominated in recent years by trends towards low pay, zero hours contracts, and insecure work, such that the very people who keep the nation fed are themselves worried about putting food on the table for their own families.

Nor are public-sector workers cushioned from the impact of low pay. PCS members working in the Department of Work and Pensions (DWP) have seen their incomes drop to the extent that they are themselves in receipt of the benefits they are responsible for administering. As a single mother in this position said:

‘By the time I pay for childcare I actually don’t make anything. I have had a lot of anxiety and stress about this in recent months and have barely slept due to the worry of where I am supposed to make up this loss of income […] To me, that’s two weeks’ food shopping. I don’t have anything to cut back on anymore and I am going to be forced into a position where I am asking family to help me out with food in the last week of the month.’

The impacts of inadequate pay are now being felt across the economy and society. While the shortage of HGV drivers and seasonal agricultural labourers has received public attention, the TUCG’s fact-file demonstrate that low rates of pay are leading to a recruitment and retention crisis across a range of key public services—including in the Civil Service, prison and probation system, transport and further education.

The evidence is compelling that the pay squeeze must be definitively ended, with significant above-inflation pay rises together with the reversal of the callous cut to Universal Credit. Restoring the spending power of hard-pressed workers and low-income families will not only help tackle the blight of inequality but will also allow help to stimulate demand for our struggling local high streets. There is no reason to delay.