Rail walk-out kicks off in UK amid fears of a summer of pay strikes

LONDON — A days-long rail walkout that is causing severe travel disruption across Britain could be just the beginning of a summer of strikes, U.K. workers’ unions have warned, as numerous professions consider industrial action over pay.

Around 40,000 Network Rail staff and workers at 13 train operators went on strike Tuesday in the first of a series of planned strikes. This came after talks between operators and Britain’s RMT union failed to reach an agreement on pay, working conditions and possible redundancies.

Just 20% of rail services in England, Scotland and Wales were running Tuesday, with further cancellations due on Thursday and Saturday, resulting in major disruptions for millions of workers and holidaymakers ahead of the peak summer travel season.

London Underground tubes were also running at limited capacity Tuesday as staff went on strike.

Labor unions say the rail strikes — the worst in a generation — are supported by staff in other sectors, and could galvanize them to step up action in an intensifying stalemate between the government and public sector workers.

That could lead to similar walkouts by teachers, health care workers and local government staff, the TUC, Britain’s main movement for organized labor, told CNBC Tuesday.

“Many public sector workers are waiting to hear what their pay offer will be. Unions in education, the civil service and other parts of the public sector have already been clear that if the offers are substantially below inflation they will ballot their members for industrial action,” TUC’s Deputy General Secretary Paul Nowak said.

It comes as the U.K. suffers its worst cost-of-living crisis in decades, with wages failing to keep up with rising food and energy prices.

U.K. inflation jumped to a 40-year high of 9% in May — a figure the Bank of England has forecast could hit 11% in October. Still, the government has sought to hold public sector pay increases well below that.

Britain’s teaching union has said that the profession is on the brink of an “existential crisis” as workers struggle to make ends meet.

NASUWT has now said that it will ballot members for national industrial action in November if the government does not meet is demands to increase pay by 12% this year.

“Teachers are suffering, not only from the cost of living crisis, which the whole country is grappling with, but 12 years of real terms pay cuts which has left a 20% shortfall in the value of their salaries,” General Secretary Patrick Roach said in a statement Sunday.

Nurses are similarly seeking a 15% pay increase, with a spokesperson for nurses union RCN telling CNBC Tuesday that pay was a “crucial factor in recruiting and retaining the nursing workforce.”

TUC said any decision to strike would not be taken lightly, but urged the government to do more to support those facing pay freezes and real-terms pay cuts.

“It’s our hope that industrial action will not be necessary,” said Nowak. “But we need this Conservative government to recognize the harm they have done by holding down public sector pay for so long. It has pushed working people to the brink. We have teachers and nurses relying on foodbanks — that can’t go on.”

Talks between Network Rail and RMT fell apart Monday after the workers’ union rejected proposals, including for a 3% pay rise, in exchange for changes to workplace practices.

RMT leader Mick Lynch accused the government of “shackling” rail operators’ pay offers, calling instead for a 7% to 8% pay increase and warning that industrial action would last “as long as it needs to” until workers’ demands are met.

The U.K.’s Transport Secretary Grant Shapps said the standoff had been “manufactured” by unions and said workers were striking under “false pretenses.” However, he again on Tuesday dismissed calls for the government to step in on negotiations, saying it was “the job of the employers to meet with the unions.”

The strikes come as the U.K. economy struggles to get on its feet following the coronavirus pandemic and Brexit-related supply issues. New figures released last week showed the country’s economy unexpectedly shrank by 0.3% in April, adding to concerns of a forthcoming recession.

Business leaders have said that the walkouts could have major implications for other sectors, particularly those already hard hit by Covid-19 restrictions.

This week’s rail strikes alone could cost Britain’s leisure, theater and tourism industry more than £1 billion ($1.22 billion) as more people stay at home, according to trade body UKHospitality.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the rail strikes have turned ongoing operational headaches into a “fully blown migraine” for the hospitality industry.

“Restaurants, bars and hotels were already struggling under the strain of sky-high energy prices, supply chain disruption and the ongoing labor crunch, and now the mass walkouts are set to cause fresh financial pain,” she said in a note Tuesday.

“As the transport network seizes up, bookings are expected to plummet as the lucrative lunchtime crowd stay at home, and night-time revelers cancel reservations whilst fearful they won’t be able to get home at the end of the night,” she added.