Bank of England HQ

Strike at the Bank of England

August 7th, 2017 by

It’s not often you hear about strikes by bureaucrats in a place like Great Britain, notorious for being the world’s first unabashed “Welfare State.”

Even more surprising? The disgruntled workers are all employed by the Bank of England (BoE), the central bank of the United Kingdom.

Public or Private?

According to Reuters, a group of perhaps more than 100 employees at the BoE staged a three-day strike that coincided with last week’s policy meeting of the bank’s committee that decides on any changes to the country’s monetary policy.

Bank of England HQ

Bank of England HQ

Like the Richard Nixon masks that are popular during Halloween, many protesters and striking workers were donning satirical masks—of BoE Governor Mark Carney rather than the disgraced former U.S. president. It was quite an interesting scene outside of the headquarters of an institution that is more than 300 years old.

The dispute centers around a lack of significant wage increases at the central bank. 1% pay increases are supposed to automatically accrue for public (government) employees following legislation passed by Parliament in 2013. However, the Bank of England is technically independent of Westminster and any branch or department of government. This means it’s not legally bound to hike wages the way other state-run organizations are. Nonetheless, the BoE has selectively followed the pay-raise pace of official state departments, just not for 100% of its workers.

With the slow pace of inflation around developed countries over the past five years, many major employers have been hesitant to commit to paying higher wages. This is particularly true for positions that are not based on specialized skills.

(The Federal Reserve, the U.S. central bank, operates under this same principle of being a special “Fourth Branch” of government that is still independent from the official levers of the State. In many ways it is functionally part of the government, and in other ways it is a private enterprise not bound by the normal constraints on the legislature, judiciary, and executive branch.)

Obviously, as the leadership in the U.K. seeks to navigate the Brexit negotiations with the rest of Europe, this strike has taken a backseat behind other more pressing issues. The demonstrations reportedly only impacted about 4% of the bank’s total workforce, meaning that most operations went on as normal.

 

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