‘I’m quite fearful’: workers and employers on growing inflation | Inflation

Pay growth in the UK continued to lag behind inflation in December as households faced the biggest fall in living standards in three decades. Average weekly pay, excluding bonuses, fell in real terms, according to official figures. The Guardian spoke to workers and employers about the pressure to keep up with inflation.

Home From Home Care, Lincolnshire

Paul de Savary has raised pay to recruit and retain staff at the care home provider he runs in Lincolnshire. With shortages of staff in the sector nationwide, the managing director of Home From Home Care has raised the firm’s wage bill by 20% in a year to avoid losing staff.

“We saw a situation building in the summer where we were going to run out of staff if we weren’t careful. They were all going to hospitality and other sectors than care,” he said.

The operator of 11 care homes, which has 450 staff and supports adults with learning difficulties and complex needs, has raised starting pay from the £8.91 national living wage to at least £10 an hour. This is above increased legal pay floor of £9.50 an hour due from April.

However, the firm faces spiralling costs across the board, including for energy bills and insurance, and lacks the ability to pass on bumper prices to its customers owing to a lack of adequate government funding for social care. Still, de Savary said retaining staff was vital, even if at the expense of profitability in the short-term.

“We were concerned about the cost of living for our staff,” he said. “If they’re worrying about things, we have to help them. They’re at the heart of everything we do.”

Matthew Tovey, NHS nurse, south Wales

“It seems to me like I’m just working to be able to cover the bills,” said Matthew Tovey. The 30-year-old from Merthyr Tydfil, south Wales, said his pay had not risen above inflation for a decade under the Conservatives’ austerity drive.

Tovey, who uses his car to commute to work, has seen the cost of diesel rise sharply and is concerned that his pay packet will not keep up with the surge in gas and electricity bills due in April. “I’m quite fearful of how I’m going to manage,” he said.

He said it felt as if NHS staff had been ignored despite being on the frontline of the pandemic. “I worked through three waves, and they stood on their doorsteps and clapped, but they’re taking food away from our tables, really.”

Having gone to university to become a nurse, Tovey says he probably earns more than other people but is still struggling. “It feels like if I’ve worked hard and gone into a profession to better myself, and I’m in this position, how the hell are other people coping?

“It impacts on your mental health, there’s nowhere to turn. You’re caught between a rock and a hard place and you wonder, when are we going to have a break?”

Jaltek, Luton

The Luton-based electronics manufacturer Jaltek has found hiring staff tougher as Brexit barriers and Covid-19 have reduced the number of EU workers in Britain, while rising inflation has led the company to increase pay.

“It’s a scarcity of people,” said Steve Blythe, the business manager at the family-owned company. “It’s an employees’ market. I think short-term that will put pressure on wages. It goes back to when Brexit happened. Some staff went back to Romania, Poland. These aren’t people who politicians would have you believe are low-paid and low-skilled. They have degrees in science and engineering and are on good money. It leaves you looking for a pool of people who are scarce in the UK.”

The firm, which is a member of the Make UK trade body and builds electronics for cars, spacecraft and medical devices, is raising pay to compensate workers for higher rates of inflation, though this is made harder as inflation climbs more than expected. “When we looked at pay a month ago it’s a different picture to where we’re even at now. We have to monitor inflation keenly,” Blythe said.