Unions accused of plotting an ‘action replay’ of the 1970s with massive public sector pay demands as minister quotes Margaret Thatcher saying there is ‘no alternative’ to keeping rises low due to soaring inflation

• Simon Clarke quoted Thatcher saying there was ‘no alternative’ to pay restraint
• Teachers, doctors and dentists threatening to walk out in summer and autumn
• They argue that below inflation pay rises are essentially pay cuts for millions 

Unions were accused of plotting an ‘action replay’ of the 11970s with massive public sector pay demands today as the Government geared up for a summer of strikes.

Minister Simon Clarke said that bids for rises that keep pace with or exceed soaring inflation would exacerbate the UK’s already precarious economic situation.

Teachers, doctors and dentists are threatening to walk out over the summer and autumn in a row over proposed pay rises for two million workers announced yesterday. 

They are all lower than the rate of inflation, with the consumer price index today hitting a 40-year-high of 9.4 per cent. Unions say that because of this, the increases of around 5 per cent amount to a real-terms pay cut.

But Mr Clarke, the Treasury Chief Secretary, quoted Margaret Thatcher today as he said there was ‘no alternative’ to pay restraint.

Asked how Tory leadership candidates could promise tax cuts that also threaten to increase inflationary pressure,  he said: ‘The challenge that we face is not to worsen the inflation risk. If you look at public sector pay, that is one of the leading drivers of pay expectations across the wider economy.’

He said the Government wants to prevent an ‘action replay’ of the 1970s and worsen the inflation crisis.

But Unite general secretary Sharon Graham said: ‘Workers have had the spring, summer, autumn and winter of discontent for years. We now have record inflation to match record temperatures. 

‘Average pay is now falling at the fastest rate in 20 years. Unite will not stand by and let workers take the hit for a crisis not of their making.’

Teachers, doctors and dentists are threatening to walk out over the summer and autumn in a row over proposed pay rises for two million workers announced yesterday.

Minister Simon Clarke said that bids for rises that keep pace with or exceed soaring inflation would exacerbate the UK’s already precarious economic situation.

But Unite general secretary Sharon Graham said: ‘Unite will not stand by and let workers take the hit for a crisis not of their making’

More than a million NHS staff, including nurses, midwives and paramedics, have been offered increases that will see the worst-paid receive an extra £1,400 – up to 9.3 per cent – ministers said.

But doctors and dentists are gearing up for industrial action after being offered an increase of 4.5 per cent.

NHS doctors and GPs have been pushing for a whopping 30 per cent pay rise over five years.

In addition, police have been offered pay increases averaging just 5 per cent, as have experienced teachers.

It comes as official figures showed Britons saw their pay packets continue to lag heavily behind inflation despite a slight rise in earnings.

State employees saw growth of just 1.5 per cent in the quarter to May compared to 7.2 per cent in the private sector.

But UK inflation today surged to a fresh 40-year high as fuel and food prices turned the screw on struggling families.

The headline CPI rate climbed to an eye-watering 9.4 per cent in June, up from 9.1 per cent the previous month.

The increase was even bigger than analysts had expected, and sets another peak since February 1982.

To add to the pain for households, the Bank of England has hinted that it will hike interest rates by another 0.5 percentage points to 1.75 per cent next month to combat surging prices. 

The CPI rate is predicted to soar to around 11 per cent in the Autumn, when the cap on energy bills is due to rise again. 

The Bank’s target is for inflation to be just 2 per cent, and new Chancellor Nadhim Zahawi has warned that public sector pay must be restrained to help prevent a disastrous spiral.

Meanwhile the head of the largest postal union lashed out at the ‘nonsense’ argument linking pay rises with inflation. 

Terry Pullinger, deputy general secretary of CWU, spoke out after Royal Mail workers yesterday voted overwhelmingly in favour of strikes in a dispute over pay.

He told BBC Radio 4’s Today Programme: ‘I’m not an economist, but I believe it is nonsense. We are dealing with the facts in front of us. 

‘The prices are going up, so people are pushing the prices up. Take Royal Mail for example, they put the price of a stamp up 11 per cent, but they have offered a 2 per cent pay rise to their workers. 

‘The extra money they make on that doesn’t come back into the industry and to the workers, but it will go straight out of the window and into shareholders’ pockets.’

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