Strikes (Minimum Service Levels) Bill

Earl of Leicester Excerpts

2nd reading
Tuesday 21st February 2023 Lords Chamber

[The Earl of Leicester (Con)]

My Lords, I had hoped to follow the noble Lord, Lord Berkeley, but unfortunately his name was scratched from the list.

Why are the Government introducing this Bill? First, and most obviously, it was in my party’s 2019 election manifesto. Secondly, it is to ensure minimum service levels in key public sector areas of employment, to try to ensure that any clear danger to human life is averted, as far as it can be, by ensuring a basic service during strike action. Thirdly, they have been forced into this action now by the sheer level of strikes that occurred last year and continue to be planned for this year, which are adversely affecting the national economy and many people throughout the country, including working parents.

As my noble friend the Minister stated in his opening remarks, in December alone, 843,000 working days were lost due to labour disputes, the highest since November 2011. By comparison, the monthly average in 2019 was only 19,500 days. The Centre for Economics and Business Research forecast the direct cost of all these strikes and the indirect cost of worker absences due to rail strikes to be at least £1.7 billion over the eight-month period to January, or 0.1% of expected GDP over this period.

Cebr also states that unresolved industrial disputes are having an adverse impact on growth at a time when many forecasters expect—and in some cases, it would seem, want—the economy to be in recession. There is a clear and urgent need for this legislation. Recent strikes have demonstrated the disproportionate impact strikes can have on the public and have cost the economy at least £6 billion.

It is not only the effect of teachers going on strike without being required to inform the headteacher of whether they would be striking so that the head can plan for the care of the children coming into school, but the knock-on effect for two-parent working couples, as one has to elect to stay, often at a moment’s notice, to look after their children. The place of work that parent was due to be at then has its own employment issues and challenges to deal with. As for single-parent families, I need say no more.

On the face of it, some public sector pay is low. For example, basic pay for a newly qualified nurse would be £27,000 a year. With overtime, unsocial hours and London weighting, this could increase to £31,000, but the Government Actuary’s Department states that their total package amounts to £50,000. About a third of this is in their defined salary pension scheme, with the rest in other benefits. Given the choice, I am sure many public sector workers might like to take an enhanced salary with a commensurate reduction in their pension—but they are not being given that choice.

A close member of my family is a very committed nurse, having been in the NHS all her life. She has voted for strike action for the first time. When I asked her what her salary was, she was able to tell me. That was not the case when I asked what her total package or her pension was worth, or what percentage contribution her employer paid. For every £1 a nurse puts into his or her pension, a further £3 to £6 in benefits accrues from the employer, with a total pension contribution of 20.6%. Furthermore, their pension scheme allows them to activate it from the age of 55, allowing for a phased retirement.

I must make it clear that I do not begrudge nurses these benefits, because we all know that they work under great pressure, often in appalling conditions and, sadly, in some cases, with little leadership shown by their bosses. It is true that since 2010 they have seen their actual pay—that £27,000 or £31,000—fall in real terms. But if the cake was cut in a different way, as I have alluded to earlier, I am sure that many public sector workers would not be striking for these unattainable pay awards, which Labour itself has said are not sustainable. Increasing all public sector pay by 11% would cost £28 billion, equivalent to an extra £1,000 for every UK household, because of all the on-costs of the pension packages. The average wage for a teacher in 2021 was £42,000, but they were also benefiting from an employer pension contribution of nearly 24%. In my county, Norfolk County Council’s employer contribution was a staggering 37%.

While in recent years—it was not always thus—some private sector pay has been outstripping public sector pay, government regulations stipulate that a private sector employee must pay a 5% contribution to a defined contribution scheme, not a public sector defined salary pension scheme, and their employer must pay the balance of 3% to take it up to 8%. Some employers share the burden equally, with a 4% contribution. So, you can see a huge disparity in pension benefits that rarely gets aired in public debate. Any large pay awards north of the independent NHS Pay Review Body recommendations will, of course, make these already generous pensions even more unaffordable, as well as making the total package very attractive. Indeed, pension contributions being paid in by today’s workers and their employers are being paid straight out to already retired public sector workers.

I cannot see my arguments turning government policy around; we are where we are. Hence, I lend my support to the Government and to the Bill. In these circumstances, when so many days of work are being lost, with crises such as the Ukrainian war and the massive mountain of debt that has been built up by the country’s handling of Covid, we really must insist on minimum service levels being maintained and legislated for. That is why I support the Bill.