It is always a temptation for a rich and lazy nation,
To puff and look important and to say: –
“Though we know we should defeat you, we have not the time to meet you.
We will therefore pay you cash to go away.”
And that is called paying the Dane-geld;
But we’ve proved it again and again,
That if once you have paid him the Dane-geld
You never get rid of the Dane.
A couple of weeks ago, I asked readers the tad-presumptuous question as to whether they missed the Tories yet. Since the first few post-election opinion polls have been uniformly grim reading, we must take the answer as a resounding no. But I do have a slight fear that I will find myself writing a variation on that theme once a week for the next five years.
I am prompted to do so today by Labour’s embarrassment over striking train drivers. Within two days of Louise Haigh announcing a new deal with Aslef to end industrial action dating back to 2022, the rail union announced another 22 days of action along the east coast mainline, stretching to November. Labour has paid the Dane-geld and failed to get rid of the Dane.
Aslef claims that this dispute is due to a breakdown in relations with the management of LNER, not pay. But ministers had argued that a 15 per cent pay rise for the train drivers over the next three years would prevent further disruption, save money, and reboot unions-government relations. Aslef donated £100,000 to Labour during the election. A wise investment?
The pay deal came with “no strings attached” regarding productivity. With the railways consuming £12 billion in government subsidy last year, value-for-money was an obvious sticking point for Conservative ministers. But Haigh and co have shrugged, accepted the unions’ eclectic list of Spanish practices, and paid out hand-over-fist to some of Britain’s best-paid workers.
Indeed, if accepted, this deal will mean that the average salary for drivers will have reached £67, 034 this year, an increase of £24, 544 since 2011. As well as prompting many to ask themselves why the hell they’re not train drivers, this morning’s Telegraph suggests this far more than nurses, teachers, Army privates, and police sergeants have managed. Thomas the Bank Engine, am I right?
Already, other unions are seeing the Government’s prodigality and wondering what they can pump out. The train drivers aren’t the first to be bought off, with Wes Streeting having agreed a 22 per cent pay rise for junior doctors. As well as GPs having embarked on action against a 7.4 per cent pay rise, the BMA is reportedly plotting to strike again once Labour is down in the polls.
The RMT, local government workers, technical college staff – all are queuing up to demand more and consider strike action, wholly conscious as to what has been dished out to their union confrères. Ministers must worry about buying off Angles, Saxons, and the Jutes. But wait! Didn’t Rachel Reeves mention something about a £22 billion hole in the public finances? This can’t help much.
As I covered, £9.4 billion of Reeves’s ‘black hole’ came from her decision to increase pay for various public sector workers by 5.5 per cent. The Chancellor claimed her hands were tied by the recommendations of independent pay review bodies. The same does not apply to the cash subsequently dolled out to doctors, train drivers, and whoever next benefits from her largesse.
How will all this be paid for? Bridget Philipson was unable to answer when pressed on the train drivers. Even without Labour re-nationalising the railways, the answer is obvious: Joe Public. Higher fees or higher taxpayer subsidies – more cash will be shoveled in the drivers’ direction, even as they retain the right to restart their lunch break if spoken to by a manager.
What about the other increases? Bye-bye winter fuel payments, bye-bye the £86,000 cap on social care costs. If 14 years of Tory government were a prolonged exercise in buttering up retirees, Labour have already shifted their focus to their public sector friends. It might be a good decision for their party’s coffers. It is not so good of one for the national ones, as that ‘black hole’ grows.
Or does it? This week the Bank of England revised up their growth forecast for the year from 0.5 per cent to 1.5 per cent, on the back of the strongest growth in the G7 this year. As well as boosting the inevitable conservation as to whether Rishi Sunak should have waited until the autumn, this also produced a headache for Reeves, by making her first Budget ever-so-slightly easier.
The Chancellor argues that her dire inheritance from the Tories means tax hikes and spending cuts will be required on 30 October. If these pay increases hadn’t already made a mockery of any claim we were re-entering an age of austerity, Reeves might have more fiscal headroom than Jeremy Hunt had in March. Her justification for parsimony grows weaker as the cash is spent.
With a goal this open, should we bring forward the leadership election, so that the new leader can make their public debut attacking Reeves’s fiscal fallacies? It would make sense. But Hunt seems to be doing a good enough job at that already if our Cabinet league table is anything to go by. Voters will pay us little attention for quite a while. Let Labour own their hikes.
If any reader of this site had doubted, this union imbroglio proves a fundamental truth: even the worst Tory government is better than a Labour one. Many right-wingers disdained the Sunak administration, but at least it understood the basics of pay and the public finances. He raised taxes with gritted teeth. Reeves wants to and needs to, if the unions keep coming back for more.
The spectre looms of the next right-wing government having the traditional task of a Conservative ministry on coming to power: clearing up Labour’s mess. I say “next right-wing”, as it is unclear whether it will be us, Reform, or some Northumbrian start-up taking Labour’s place in 2029. Whoever it is will have one hell of a clean-up job to do. The future is bleak; the work is grim.
The giddy years of opposition must be spent planning out just how Humpty Dumpty will be put back together again. Policy Exchange have a report out today urging the Government to take on 2,000 new train drivers a year to end the use of overtime bans in negotiations. Thinking like that is a start, even if my instinct is to take one look at the DLR, and suggest we sack them all.
Future governments will have to make such choices if my worst fears about Labour’s worst instincts are born out. When they pay the Dane-geld, it is Britain that pays the price. And it is our side of the political divide who will have to switch from saying that we told you so, to suggesting what we would do differently, to getting back into government and doing it. Where there is discord…
