Regional Pay (NHS)

Andrew George Excerpts

Wednesday 7th November 2012 Commons Chamber

[Andy Burnham]

No, I will make some progress.

Breaking national pay is what the Government want to do, and that springs from an entirely different philosophy from the one that forged the NHS in the first place. The Government are rejecting the “one NHS” approach, whereby hospitals collaborate and the unpredictable pressures of any health service are balanced across the system. Instead, they have a vision of hospitals as stand-alone small businesses, on their own in the marketplace, with no bail-outs and free to earn up to 49% of their income from the treatment of private patients, but—as we are seeing in south-east London—finding little mercy in a private-sector-style administration process if the sums do not add up. That is a very different vision of the NHS, and it is not one to which the British people have ever given their consent in a general election.

[Andrew George (St Ives) (LD)]

I will join the right hon. Gentleman in the Lobbies on one reasonable condition: he acknowledges that the last Labour Government did not just introduce regional pay in the Courts Service, but introduced flexibilities for foundation trusts which, through employment law, could result in detriment to NHS employees. If he acknowledges that and apologises for his introductory remarks, I will certainly join him in the Lobbies.

[Andy Burnham]

I partly welcome what the hon. Gentleman has said. I have already acknowledged the flexibilities, and mentioned that only one trust in England ever sought to make use of them, because it wanted to add to the national floor that we had introduced. The flexibilities were there and I support them, but we left office with a national pay system in place. I look forward to his support later this afternoon.

We have a new Secretary of State, but those who expect a change of direction look set to be disappointed. In his first major interview, he described his mission thus:

“I would like to be the person who safeguards Andrew Lansley’s legacy”.

That must qualify as the shortest suicide note in political history. We have Lansley-lite—more of the same—but, in fact, it may be worse.

Looking at the Secretary of State’s past speeches, I could find nothing that conveyed any passion, belief or commitment to the NHS. On the contrary, I was worried when I read that he tried to remove Danny Boyle’s NHS tribute from the opening ceremony of the Olympic games. He is also one of the co-authors of a right-wing pamphlet entitled “Direct Democracy”. He may remember that pamphlet. It said:

“Our ambition should be to break down the barriers between private and public provision, in effect denationalising the provision of health care in Britain.”

Is that still the Secretary of State’s view? He has gone quiet now, has he not?

You will understand, Mr. Speaker, why NHS supporters get nervous about the intentions of this Secretary of State, but today he has a chance to calm those nerves. He can come to the Dispatch Box and send the clearest of messages to NHS trusts seeking to break from national pay. What he will learn about his job is that, if he says something with sufficient force, the NHS will respond.

The developing pay crisis in the NHS is the Secretary of State’s first real test, but so far he is failing it. As we reveal today, on his watch, the 20 NHS trusts that were threatening to break away in the south-west have become 32 NHS trusts across England. That is creating real worry for thousands of NHS staff and uncertainty for businesses, which have raised their concerns with the Chancellor. But what do we get from the Government today? A “do nothing” amendment expressing no view on the south-west issue, and inviting Government Members to sit on the fence and wait for the conclusions of the pay review body’s review. That will not do.

As the Government do nothing, national pay is being unpicked and the NHS is fragmenting before our eyes, but perhaps that is all part of the plan—it is nothing to do with them; it is all due to a local decision. The idea is to hide behind a review while national pay slowly and conveniently unravels, region by region, trust by trust. Staff facing the threat of a pay cut deserve some straight answers, but rather than getting a straight answer to the question “Does the Secretary of State support regional pay in the NHS or not?”, they are hearing contradictory statements from this shambolic Government. Not for the first time, the coalition is not speaking with one voice. I understand that the Liberal Democrat conference passed a motion opposing regional pay and that the Deputy Prime Minister was captured on film voting for it—although, as we know, being photographed making pledges does not make him more likely to keep them.

The Deputy Prime Minister has also made the following unambiguous statement:

“There is going to be no regional pay system. That is not going to happen.”

The trouble is that it is happening, under the Deputy Prime Minister’s nose and by the back door. Twenty NHS trusts in the south-west are openly defying the authority of the Deputy Prime Minister. Some 88,000 NHS staff are being affected by a unilateral drive to set a new going rate of NHS pay in the regions, which would be up to 15% lower than national “Agenda for Change” rates. The trusts are proposing to end overtime payments for night, weekend and bank holiday working, and to reduce holiday leave. They are also proposing to force staff to work longer shifts, and to cut sick pay rates drastically. That is no idle threat. The silence from Ministers is clearly emboldening them. Despite concerns raised here and elsewhere, they have built a fighting fund, set up a website, and appointed lawyers to make all this happen.

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[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

It is never pleasant not to be in complete concurrence and happy harmony with one’s own Front Bench, but I hope the Minister will not ignore the fact that, despite voicing concern about the Government’s position, I strongly deplore the Labour party’s behaviour in taking a position that can only be described as cynically opportunistic. It is simply untenable for the right hon. Member for Leigh (Andy Burnham) to contend that he can, like Pontius Pilot, take his hands off the situation and wash them clean of what is going on in the NHS in the south-west today.

It is precisely the implementation of the freedoms granted under the right hon. Gentleman’s stewardship that these consortia are operating. He is in exactly the same position as the householder who opens the door to the burglar, and then complains when he walks in and burgles the property. He opened the door with his changes. It was his policy that introduced flexibilities, and to suggest that he was blind to the probability that trusts would exploit it by introducing differentials in pay up and down the length of the country is not merely naive but wilful irresponsibility and will be judged by people listening to this debate. The people in the low-wage areas I have the honour and privilege to represent will not be fooled by the Labour party’s position.

On the other hand, it is perfectly fair to say that the introduction of regional pay in the NHS would be a retrograde and wrong step. The fact is that low-wage areas, such as those I represent, are already suffering: 26% of families and homes in Torridge are on the edge of poverty. Only two constituencies in Cornwall, an area that receives special help in the form of objective 1 money from the EU, are in a worse position than those in Torridge and West Devon.

[Andrew George]

I represent one of those constituencies. In view of the hon. and learned Gentleman’s comments about the right hon. Member for Leigh (Andy Burnham) and his criticism of regional pay—a stand I entirely agree with—would he acknowledge that the Conservatives voted in favour of the legislation that brought in foundation trusts and flexibilities, and does he regret that? I recognise, of course, that he was not in the House at the time.

[Mr Cox]

I do not believe that any party can take its hands off and claim to be not responsible for measures that allowed trusts to exploit the ability to drive down pay by forming such consortia. The Labour party cannot disavow responsibility, and neither, if it voted for it, can the Conservative party.

I want to say something about regional pay. I hope and I am sure that the Minister is listening. I have already written to my right hon. Friend the Secretary of State. In areas such as Torridge and West Devon—areas that depend on public sector pay to create the spending and buying power that puts at least some life into its economy—the concept that pay could be even lower than it is now is unconscionable and inconceivable to those of us who represent them. I hope that the Government will think again in this review. I am comforted by the Secretary of State’s words when he says that they are committed to national pay scales. I hope that those words can be counted on.

I, for one, could not support a measure that introduced regional pay as formal NHS policy, unless I was satisfied that there were sufficient safeguards for the low-wage areas I represent. People often associate rural areas such as Torridge and West Devon with prosperity, but that is a grossly inaccurate caricature. In Torridge, 26% of households are on the edge of poverty, wages are in the bottom 5% of all areas in the country, and West Devon is not far behind. It is simply inconceivable for me, as its representative, to agree to a proposition that would further depress incomes in those areas.

Having said that, it is clear that the NHS has to do something about the pay bill, which is 70% of its budget, and the only appropriate way of dealing with it is for the unions and all parties, including all political parties, to tackle it at a national level. I am disturbed that those national negotiations are apparently not taking place. I hope that the right hon. Member for Leigh will encourage the unions to take part in those discussions, because we all have to accept that there is a major national problem with the burden of the NHS pay bill.

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[Andrew George (St Ives) (LD)]

It is a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley), a fellow member of the Health Committee. I endorse her comments. She, like many others, has emphasised the reason it is so important that the House rejects the concept of regional pay and urges unions and employers to accelerate the process in order to reach a speedy conclusion on national pay bargaining. This is a serious issue, and it deserves a serious response from all parties in the House. It should not become a subject to be kicked around the playground of an Opposition Day debate in an opportunistic manner, as has so often happened—before the election as well as after it, to be fair. A matter as serious as this should not be debated in that way.

I intervened on the right hon. Member for Leigh (Andy Burnham) to ask whether he would acknowledge that we are where we are today because of the freedoms the previous Government created for the cartel in the south-west, or in any other part of the country. We are aware that other trusts are looking closely at what is happening with that cartel. The previous Government should be applauded for introducing the “Agenda for Change” and attempting to introduce a rigorous and effective method for agreeing pay and conditions at national level, but they also legislated to introduce foundation trusts and the new freedoms that went with them. The Liberal Democrats opposed that legislation at the time.

[Andy Burnham]

rose—

[Andrew George]

I was going to go on to talk about employment law, but I am happy to give way to the right hon. Gentleman.

[Andy Burnham]

This subject has featured a lot in today’s debate. I would encourage the hon. Gentleman to go back to the speeches made by Ministers when that legislation was being introduced. They were clearly saying that there could be occasions when flexibility would be needed at the margins to deal with a particular short-term pressure or problem. Such an arrangement was used once, in respect of Southend, to put pay up. It is important to understand that there was no suggestion that pay could be reduced across the board in a co-ordinated, orchestrated move to undercut the national pay system that was being brought in at the same time. That argument has been put today, but it simply does not hold water.

[Andrew George]

That might have been the stated intention, but the effect is being seen through the cartel’s actions. What is happening is not the result of any coalition Government legislation; it is the result of an opportunity having been made available under employment law. This is not within the parameters of “Agenda for Change”. It is a result of the freedom given to foundation trusts to step outside those agreements and to use employment law to seize the opportunity of certain flexibilities, to the detriment of the employees in their pay. That might not have been the intention behind the legislation, but it has been the effect of it, whether the previous Government appreciated that or not.

If the right hon. Gentleman is really so concerned about this, and given the fact that he can now see the effects of his legislation being played out by the cartel in the south-west, perhaps the shadow Minister, the hon. Member for Copeland (Mr Reed), will acknowledge, in summing up the debate, that that was not the intention behind the legislation. Will he, having noted what is now going on as a result of that legislation, commit to rescinding that element of it if Labour were to come to power, to put right the weaknesses of it? If so, we would know that Labour Members were genuine and sincere in their intent, and that they acknowledged that weakness, which they had not anticipated at the time but which is now being exploited.

I strongly support my hon. Friend the Member for Southport (John Pugh) and congratulate him on his characteristic breathtakingly brilliant contribution to the debate. He was most entertaining, and there was disappointment across the whole House when he resumed his seat without having used all the time available to him. He made many insightful comments about the situation we are in today, and the weaknesses of it.

I also thank my hon. Friend the Member for North Cornwall (Dan Rogerson) for pointing out the significant weaknesses in the legislation and the impact they are likely to have on NHS staff. I am pleased to see my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) in the Chamber today. We are all aware that the Royal Cornwall Hospitals Trust’s involvement in the cartel is creating deep concern across Cornwall. The hon. Member for Truro and Falmouth (Sarah Newton) made a telling intervention earlier when she said that Cornwall has some of the highest costs of living in the country, while perpetually being at the bottom of the earnings league table, pretty much since records began.

One of the drivers behind the problem is the cherry-picking in the NHS. The private sector is already offering the easiest procedures. A private provider in Cornwall carries out the easiest procedures for the fittest patients with low anaesthetic risk and those who are the least likely to suffer complications following orthopaedic procedures. It is now extending its services into areas such as cardiology, hernias, haemorrhoids and endoscopy. If any complications occur, it will simply pass the patient across to the Royal Cornwall Hospitals Trust to deal with any difficulties or emergencies. It therefore has no need to invest in all the facilities necessary to provide the kind of wrap-around service that we want the NHS to provide. The fact that such private sector companies are able to vary wages, terms and conditions for their staff is undermining the NHS. The foundation trusts are having to compete with those companies, and that is one of the pressures that is driving their agenda. All parties need to recognise that fact, and Ministers need to acknowledge that this continued cherry-picking by the private sector is fundamentally undermining the capacity and ability of the NHS to respond adequately.

We must also ask why we are in this situation in the south-west. In regard to resource allocation, only two years ago Cornwall was getting £56 million a year less than the Government said that it needed to provide the necessary services. If there is a significant gap between the funding actually provided for the local health community and the amount that the Government say is the target funding, it is no wonder that local trusts find themselves having to make extremely challenging decisions.

I urge the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), when he winds up the debate, to acknowledge that resource allocation still needs to be addressed. Members of Parliament from across the south-west and I have arranged to hold a meeting with him on this matter, and I hope that it will take place soon so that we can have an opportunity properly to address the issues.

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[Andrew George]

If the hon. Gentleman really believes that, and the motion does say that the Government should intervene, is he aware that his Government gave foundation trusts such freedoms that in fact the Government cannot intervene?

[Mr Bradshaw]

Of course they can.

[Andrew George]

They cannot.

[Mr Anderson]

Clearly, there are issues about foundation trusts, but the Government can do what they want—or they can as long as the Liberal Democrats help them. Tonight, however, the Liberal Democrats have a chance of stopping the Government doing what they want, by doing what their party wants, and what the people they represent want—by throwing out the proposal, and voting on the clear principle that national pay bargaining should happen in the national health service, and nothing should be done to undermine it, including supporting the amendment.