Regional Pay (NHS)

Alison Seabeck Excerpts

Wednesday 7th November 2012 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I, too, was in the Westminster Hall debate this morning and I congratulate my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing it.

As we have heard, regional pay would damage our economy and the NHS. As the shadow Secretary of State said, 60 senior academics have written to The Times to warn the Chancellor that there is “no convincing evidence” to support his claims on the benefits of regional pay and that

“On the contrary, such a policy could reduce spending power, undermine many small and medium-sized businesses in areas of low pay, and aggravate geographical economic and social inequalities.”

According to research by the New Economics Foundation, the Government’s evidence of an alleged public sector pay premium

“suffers from a number of serious shortcomings”

and their statements are

“at best misconceived, at worst mischievous and ideologically driven.”

It concludes that regional pay would cost our economy £2.7 billion at best—if the private sector expanded where the public sector contracted—but that the cost could be up to £9.7 billion each year, with the loss of 110,000 jobs. Regional pay would reduce spending power in the south-west by £1.2 billion.

When we consider regional pay from the perspective of the NHS, we cannot, or at least should not, talk about private sector jobs replacing public sector jobs. The public’s response to the Government’s disastrous reorganisation of our NHS proved that patients do not want to be treated by Virgin Care or Serco, but Ministers still seem determined to remove the N from NHS.

For my constituents, today’s debate is even more important because, as we have heard, trusts in our region have been developing the NHS south-west pay, terms and conditions consortium. This morning, I asked the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)whether the Government knew about the consortium before it was established and whether they encouraged the trusts to set it up, and it was interesting that she said, “My understanding is we were involved”—[Interruption.]

[Alison Seabeck (Plymouth, Moor View) (Lab)]

That is a fascinating answer because it is at odds with the one I received from the Secretary of State during Health questions.

[Kerry McCarthy]

I very much hope that when the Government—[Interruption.]

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[Alison Seabeck (Plymouth, Moor View) (Lab)]

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb), who very openly mulled over some of the problems posed by regional pay.

The unfairness, irrationality and economic illiteracy of the proposal made by the south-west cartel, as highlighted by the hon. Member for Southport (John Pugh), who is no longer in his place, are stunning. The upshot of the documents that have been leaked to the public has been an outcry in my region. I, too, have received hundreds of e-mails and letters from local people who are concerned about what they see as an unfounded and unfair attack on hard-working Plymouth families.

The south-west proposals are tacitly supported by the Government. When questioned in the House, they washed their hands of any responsibility for the action being taken by the 20 trusts in my region. Why is that? Is there something about the south-west? Did the Government believe that the south-west would be supine because there are lots of Government MPs in the region? Did they think they would try regional pay in the south-west and put their toe in the water and perhaps that nobody would notice—after all, it is a long way from London? Did they think, “We now have regional pay in the south-west. It’s a good idea, so we’ll roll it out in the rest of the country”? The response from people across the party divide in the south-west, including those working in the NHS, has put the proposal firmly in its place. We will not accept it or take it lying down.

[Dr Wollaston]

Does the hon. Lady agree that there are concerns in the south-west that regional pay will impact on the ability to recruit in certain key specialties?

[Alison Seabeck]

The hon. Lady speaks from a wealth of experience of working in the NHS. She is absolutely right on that point, which I will make more of later in my speech.

The public have a right to know what the Government’s position is, but as with so much else, confusion reigns. The Deputy Prime Minister has said at times that he is not in favour of regional pay, but it will be interesting to see how he votes today. The Chancellor of the Exchequer is clearly in favour, but the Prime Minister says nothing. The Secretary of State for Health has not helped to clarify matters today. The amendment, which is in the name of the Chief Secretary to the Treasury, is interesting. It states that the Government will not go down the route of regional pay

“unless there is strong evidence and a rational case for proceeding”.

How will the Government consult and gather the evidence to decide whether there is a rational case for regional pay? When will the Minister make the evidence available to Members of the House?

The Government must understand that the proposal is causing huge concern. The debate is not just about public sector pay restraint. Labour Members have accepted that there needs to be restraint in the public sector. We are not saying that that should not happen in times of austerity, but there is a need for equal pay for equal work. It is wrong if a nurse in Plymouth, working the same hours, doing the same job and providing the same high-quality care, is paid less than her counterpart in a hospital in Peterborough or Preston.

[Chris Skidmore]

Does the hon. Lady therefore disagree with the concept of London weighting, which has been around since the 1920s? There are 44 London MPs in the London area, so I would be interested in her views on London weighting.

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[Alison Seabeck]

The hon. Gentleman dug an enormous hole for himself earlier, and I think I will leave him in it. As hon. Members know, London weighting has been around for quite a long time.

Even NHS employers in the south-west have admitted, in their submission to the consultation that the Government are allegedly carrying out, that the breaking up of national pay systems could jeopardise the progress made in delivering equal pay for women, a hard-fought right being all too easily diminished. “Agenda for Change” was a challenge for the NHS when it was introduced, but it has been a driver for change and fairer pay.

Although the Government are unlikely to listen to questions of principle, it is normally incumbent on Governments to look at evidence to understand the history of a policy that they are considering introducing or broadening. NHS regional pay was tried over a period of about a year in the 1990s. When the evidence was looked at, the differentials across the region were so small that it was put to one side. Regionalised pay is not an idea whose time has come; it is an idea whose time has long since passed. It should be left to lie in peace.

However, as the Government have chosen to resurrect regional pay, perhaps it is worth questioning why they think it is a good idea. The Chancellor claims it is good for the economy, but all the evidence speaks to the contrary. It would be nice if we had a Government who were willing to accept the facts. Instead, their plan is to introduce pay cuts for nurses while introducing tax cuts for millionaires. They are looking to make savings by hitting people throughout the health sector. Regional pay is not just about nurses—the paperwork from the consortium is clear about the impact on doctors and consultants as well as people on lower pay grades.

The Government are ignoring the impact that regional pay would have on living standards and the private sector. It risks a brain drain from the regions. I had an e-mail from a man, now in his 70s, who told me that he had voted Conservative all his life, and that he had even campaigned and canvassed in south Wales for the Conservative party, which takes some courage. The issue that moved him was regional pay. I went to have a chat with him, and while I was there, his daughter—a nurse—came in. I asked her about her experience and how morale was, and she said, “I’m already looking for jobs outside the region. I went to a jobs fair in London, where I spoke to the people from Devon NHS. They did not tell me about regional pay and were not up front about the fact that it’s being discussed.” She found that absolutely shocking. She has considerable experience, but she is looking to move out of our region.

Can the Government look hard-working families in the south-west in the face and tell them that their food bills are lower than anywhere else? Can they claim that south-west gas and electricity bills are not going up in the same way as those in the rest of the country? No. Would they dare say that water bills in the south-west are the same as for everybody else in the country? No. They certainly cannot say that housing is cheaper. The mortgage to income ratio in the south-west is exceeded only by that of London and the south-east. If rising living costs are having the same pernicious effects in the south-west as elsewhere, why should the south-west be singled out for the policy of regionalised pay cuts? Once again, the case simply fails to hold together. By not opposing this policy, the Government are, by stealth, supporting it.

The Government also claim that they need to address the differences in pay in the private and public sectors. Higher pay in the public sector is supposed to be skimming off the best talent and holding the private economy back. They work hard to pit worker against worker, but the evidence shows that 55.8% of public sector workers have a degree, diploma or equivalent, compared with only 28.5% in the private sector. That is comparing apples and pears. People in the public sector are better qualified and can quite reasonably expect to be better paid. Many hon. Members have experience of the law, and barristers and others would certainly expect to be paid better because they have their qualifications.

We also see a skewing with unskilled workers. In the private sector, we often see corners being cut—unfortunately —and very low levels of pay, whereas in the public sector, we expect unskilled workers to be paid a decent wage. It is not yet always a living wage, but that is a separate debate—and one that we certainly need to have.

Is it fair that a nursing graduate in Plymouth, with a degree and £30,000 of debt, should, if she wants to stay in the area and work for the NHS—a job for which she has been training for many years—have to take a pay cut? That does not work for me.

The issue of foundation trusts has been raised on many occasions. Foundation trusts have members, and they all encourage people to join and become members. Plymouth Hospitals NHS Trust is no exception. I suggest that people who have very strong views on regional pay might want to consider becoming a member of a trust, because that will give them a direct line to the chief executive and chairman of the trust, and the board, and they can make their views very firmly felt.

We should support the motion tonight. I hope that Members from across the region who have publicly opposed the measure will join us, and we can put an end to the nonsense of regional pay once and for all.

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[Dan Rogerson]

I agree with the hon. Lady up to a point, in that there has been a narrowing in the “distance from target” figure. Of course, it is much easier to get closer to target when there is more cash around and more money is being put into the NHS—in the good times. That is when the distance from target should have been tackled. We are obviously very much not in the good times in terms of the economic circumstances, for reasons that all parties would agree with.

If the trusts continue down this path, and create efficiencies by doing so—as well as making life much more difficult for their valued employees—we run the risk of what I call the boa constrictor approach. Snakes that kill by constriction wait until their victim breathes out and then tighten up, so they cannot breathe in again. My worry is that if trusts in Cornwall make these changes first, before other areas, they will make it easier for the distance from target funding to continue. The view will be, “Well, they don’t need the cash now, because they’ve dealt with the problem.” But the burden will have been borne by NHS employees, and that cannot be right.

I think this process is wrong because, as hon. Members on both sides have pointed out, there is an existing process for NHS employers and employee representatives to engage in to examine terms and conditions and pay levels, and see where savings can be made.

[Alison Seabeck]

Does the hon. Gentleman agree that the document that became public contains clear reference to the fact that the consortium had already been working with those staff-side organisations effectively to find some changes? We need to build on that rather than pursue this policy.

[Dan Rogerson]

That is exactly the point that I was going to make. Given the history of the two sides of the House, it is interesting to note that the motion tabled by the Opposition does not refer to the role of the trade unions in these negotiations. However, the amendment calls on the Government

“to continue to support employers and trade unions to work together for the benefit of patients and staff.”

I very much agree with that. I do not think that the approach set out by this consortium—or cartel, as others have called it—goes along with that, and that is why the amendment would send a powerful signal to those employers to get back round the table with the representative organisations, the trade unions. I do not join in the trade union bashing—talking about Labour’s paymasters and so on. Having met trade union representatives here, as the hon. Member for Plymouth, Moor View and others have, I know that some give a certain amount of cash to the Labour party and that others do not. That does not matter. They are local representatives representing their staff and doing the job that they are there to do. I have always supported, and continue to support, officials having time to do that job, as it actually saves the public sector a great deal of money. There will be accord from some parts of the House on that issue, too.

This is about market-facing pay versus a top-down, imposed regional pay structure. The Deputy Prime Minister has said that we will not have that. I am delighted that he said that, and I support him. I think that all hon. Members on these Benches—including many of our coalition partners—would say that that is not the way to go. We are not going to have a regional structure that mandates a different level of pay in different parts of the country. However, there is a risk with the market-facing approach, of which the hon. Member for Kingswood (Chris Skidmore) seems unfortunately to be a fan, that that could happen via another route.

The argument has been made repeatedly that public sector pay somehow holds back private sector employment. That is absolute nonsense. The idea that the widget factory next door to the hospital is struggling to employ people, and that if we pay nurses less they might suddenly all decide to go and work in the widget factory, is absolute rubbish and I hope we can knock it on the head right here and now. However, if there are challenges facing the NHS, as there are in other public services, as a good employer it should get around the table and look at ways it can defend jobs and make sensible changes that have the support of the work force. Local government has done that in a lot of places. The challenges facing local government have been great, but in a number of areas that process has protected jobs, so it is possible. There is a national process under way to deal with that, as other hon. Members have said.

I am opposed to the process that is going on independently of national pay bargaining. The motion effectively states that the current system is encouraging that process and that the Secretary of State needs to step in and stop it. I would like a stronger message from the Secretary of State—do not get me wrong about this—and I hope that the Minister will listen to remarks from all parts of the House about the message that we would like the Department to be sending to the trusts. However, if I look at the motion and the amendment, it is the amendment that mentions the continued role of staff, employers and trade unions working together, and that is what I will be supporting tonight.