Agenda for Change: NHS Pay Restraint

Debate between Andrew Smith and Catherine McKinnell

Monday 30th January 2017 Westminster Hall

[Catherine McKinnell]

My right hon. Friend is absolutely right. It is also a false economy to lose professionals, given all the money that has been invested to make them a well-trained, well-performing workforce.

As hon. Members will be aware, Agenda for Change was introduced in 2004 as a system of pay, terms and conditions, and it applies to more than 1 million directly employed clinical and non-clinical NHS staff, with the exception of doctors, dentists and some very senior managers. It was designed with the intention of delivering fair, transparent pay that is better linked to career progression, skills and competencies. Agenda for Change is based on the principle of equal pay for work of equal value. According to NHS Employers, the system allows NHS organisations to

“design jobs around the needs of patients rather than around grading definitions”

and individual NHS employers are better able to define the skills and knowledge that they want the staff in those jobs to develop.

Importantly, in relation to this debate, Agenda for Change was also designed to enable employers to address more local recruitment and retention difficulties. However, as with hundreds of thousands of people who work in the public sector, all Agenda for Change staff have been affected by the previous and current Governments’ imposition of pay restraint.

[Mr Andrew Smith (Oxford East) (Lab)]

My hon. Friend is making an excellent speech. Is it not perverse that the Conservative party seems to favour the introduction of all sorts of markets in the NHS apart from a labour market? The devolution of responsibility to trusts that it often heralds is completely inconsistent with a centralised, state-imposed pay freeze.

[Catherine McKinnell]

My right hon. Friend makes an important point. There was a two-year pay freeze from 2011-12 and a 1% increase in 2013-14 and 2014-15, followed by confirmation in the Budget of summer 2015 that the Government would fund an average public sector pay award of only 1% for the four years from 2016-17. As has been pointed out, the Government decided to reject the independent NHS Pay Review Body’s recommendation of a further 1% uplift to all pay scales from 2014-15, stating that there would be an annual increase of at least 1% for Agenda for Change staff in England through either contractual incremental pay or a non-consolidated payment.

Taxation (Living Wage)

Debate between Andrew Smith and Catherine McKinnell

Tuesday 22nd January 2013 Westminster Hall

[Catherine McKinnell]

I accept that the Government have increased the personal allowance, but their other policy changes have impacted on those very people whom they purport to be helping, with a real-terms effect on families up and down the country. In fact, the hon. Member for Cleethorpes admitted that his constituents are certainly not happy about some of the changes and their impact. I know for certain that my constituents would agree, but the shocking fact is that almost 5 million people across the UK are currently paid less than the living wage, and 3 million of them are women. The Government may believe that the way to motivate people on low incomes is to pay them less, and the way to motivate those on the highest incomes is to pay them more, but the Labour party believes that this is an issue of dignity at work and social justice.

[Mr Andrew Smith]

My hon. Friend is doing a very good job of batting off the attacks from Conservative Members. Does she agree that the hon. Member for Aberconwy (Guto Bebb) must not be allowed to rewrite history? The Conservative party argued vigorously against not just the level of the minimum wage, but its very introduction. It said that it would destroy jobs, but after it was introduced, 1 million extra jobs were generated in the economy. I think the Government now accept the point, but the hon. Gentleman must not be allowed to get away with rewriting history.

[Catherine McKinnell]

I thank my right hon. Friend for making that important point. I said that there was fierce opposition, particularly from Conservative Members, when the national minimum wage was introduced, and he has given some colour to the debate that took place at that time. We are moving on to the next stage, and the Labour party is backing the living wage campaign, which is a perfect example of how we can deliver a one-nation economy in which everyone has a stake, and prosperity is fairly shared. That is why Labour councils are delivering a living wage throughout the country, despite straitened economic circumstances for many and in the face of swingeing Government cuts. We believe in doing the right thing for low-paid employees. Those local authorities include Islington, Lambeth, Wigan, Camden, Oxford, Preston, Southwark, Hackney and, from November last year, my city council, Newcastle, which is meeting the cost of paying the living wage entirely from a reduction in management costs.

Labour councils are paying a living wage because it is a powerful symbol of the change that the Labour party wants to see in our economy. We do not want the race-to-the-bottom approach backed by the Government, who seek to erode workers’ rights and make it easier to sack staff. We want to aim for a higher skilled, higher waged and more productive economy that can genuinely compete on the global stage so that workers are not forced into several jobs with no chance of spending proper time with their families.

It is vital that the Government, both central and local, take a lead, but it is not enough, as hon. Members have said, for just the public sector to implement the living wage. It is great news that around 140 private sector employers have taken that step, including notable firms such as KPMG, Barclays, Deutsche Bank, PWC, Lush, Westfield shopping centres and InterContinental Hotels Group. Many of those firms have been clear about the positive impact that paying a living wage has had on their companies. KPMG has reported higher employee morale, motivation and productivity alongside a reduction in staff turnover and absenteeism since the policy was implemented.

[Mr Andrew Smith]

Does my hon. Friend agree that the really important commitment is not just that large organisations commit to the living wage, but that they require their contractors and subcontractors to do so? Otherwise there is a risk that they will simply outsource their low-paid jobs while taking credit for paying the living wage to their direct employees. We want everyone to have it.

[Catherine McKinnell]

My right hon. Friend raises an important point, and I will come to the Government’s approach to procurement in the private sector as the ripple of understanding of the benefits that the living wage can bring spreads to employers throughout the supply chain.