NHS strikes are one subplot of UK’s gloomy economic story

Good morning. I had a very informative weekend: on Saturday, I learnt a lot about what voters in High Peak are thinking, and on Sunday I learnt that Arsenal Football Club is not going to win the Premier League this year.

I will be speaking about the former in Inside Politics’ exclusive webinar for FT subscribers on Wednesday at 1pm BST, which you can sign up to watch and submit questions here.

I have visited High Peak many a time in elections past; I was in the Derbyshire constituency when I first began to really believe that David Cameron was going to be re-elected in 2015. But one thing I was struck by was just how much more I was hearing concerns about the NHS and the state of the economy. Linking both of those are the various industrial disputes taking place. Some thoughts on all that below.

But first, an apology. In Friday’s edition, I mentioned you can now sign up to the FT’s new newsletter, One Must-Read, which will feature a single piece of standout journalism every evening, but the registration link attached went elsewhere. Please do sign up to One Must-Read here.

To make matters worse, I was also wrong about Chatsworth: the house is claimed as a direct influence for Pemberley in Pride and Prejudice, not in the BBC TV adaptation, in which Lyme Park and Sudbury Hall served as Pemberley.

Exits at both ends

The Royal College of Nursing has voted to reject the government’s improved pay deal, and with it, thrown the Conservative party’s hopes of resolving the various strikes and pay disputes taking place across England. Under the proposed offer, health staff would receive a one-off payment worth 2 per cent of their wages in 2022-23, with a bonus of at least £1,250. In 2023-24, staff would reap a rise of 5 per cent, with a bigger increase for the lowest paid.

The rejection result is a triple shock because the RCN’s leadership had recommended that members vote in favour of the settlement, because members of Unison have voted to accept the deal in England, and because it is roughly equivalent to the deals struck by the Scottish and Welsh governments to bring their industrial disputes to an end.

It has a number of political and policy consequences. As Delphine Strauss and Valentina Romei set out, these strikes have direct and indirect consequences, among the biggest of which is the worsening health of the population:

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Anything that exacerbates the UK’s labour shortages adds to the country’s gloomy economic picture, which compounds the pressure on wages, which adds to the upward pressure on government spending, which contributes to increased taxes, which worsens the government’s general malaise, etc.

In addition, it means further delays and problems within the NHS, increasing the potential that the next general election will take place against the backdrop of crisis and disarray in the health service. But it also makes it more likely that Rishi Sunak and Jeremy Hunt will have to accept constraints on their ability to cut taxes ahead of the next election.

One thing I noticed when I was knocking on doors in High Peak was that most people expected their taxes to keep on rising no matter who wins the next election. This isn’t particularly surprising, given that it is palpably correct.

But it comes with risks for both parties. On the Labour side, it always has to contend with the perception that it will always want to tax more. On the Conservative side, I think if it does go ahead with its planned pre-election tax cut, it risks landing very badly. There’s a real risk it just looks either cynical, or, worse still, a tax cut for “other people” that will mean yet higher taxes for voters themselves.

As Martin Wolf argues in an excellent column in today’s paper, what links essentially everything that is going wrong for Britain, and the political challenges facing both main parties, is our sluggish economic growth:

Political stability, too, depends on the positive-sum politics that economic growth creates. If, as now, in the UK and other high-income countries, the economy stagnates, politics becomes fraught, since one group cannot have more without others having less. The struggle becomes more bitter if the labour force shrinks relative to the population and so tax-funded transfers tend to rise as a share of national incomes.

Ultimately this remains the thing that underlies everything else in British politics at the moment: industrial disputes are just one subplot.

Now try this

Arsenal Football Club aside, I had a lovely weekend. Thanks so much for the recommendations of places to eat between knocking on doors in High Peak.

I always enjoy reading the FT Weekend — albeit this weekend on a train across a very beautiful marginal constituency — but it’s a particular delight when I’ve written something for it, on the rise of the nerd dollar, classical music and low expectations.

Among the highlights this week: Ian Hogarth’s thought-provoking essay on the risks of God-like AI, Zehra Munir’s very funny fantasy dinner, and Laura Onita on the challenges facing John Lewis.

Top stories today

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• Palantir bid for £480mn NHS contract raises concerns | NHS data specialists have warned against the rollout of Palantir’s software across the organisation, as the US tech company vies for a £480mn contract to build the UK health service’s operating system.

• Community Windpower threatens to sue government | One of the UK’s largest onshore wind operators has called on ministers to exclude new developments from its windfall tax on renewable electricity generators, claiming it has made investments “almost impossible”.

• Sturgeon plays down party finance woes in leaked video | Footage published by the Sunday Mail, said to be from an online meeting of the party’s National Executive Committee in March 2021, features the former first minister saying the party’s finances have never been stronger. “There are no reasons for people to be concerned about the party’s finances and all of us need to be careful about not suggesting that there is,” she added.