Public Sector Pay: Proposed Strike Action

Beth Winter Excerpts

Tuesday 1st November 2022 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

I beg to move,

That this House has considered the matter of proposed strike action in response to public sector pay announcements.

It is a pleasure to serve under your chairmanship, Sir Edward. We are deep in a cost of living emergency 12 years in the making, which is about to be made even worse by this Tory Government. I sought this debate because of the perilous situation resulting from the cost of living crisis. Poverty is already increasing, and current and future decisions by the Government will make it even worse. The number of trade unionists in public sector work being balloted for industrial action over pay now exceeds 1 million. That is because the Tories are holding down their pay and driving industrial action, and would rather suppress industrial action than end the conflicts through a fair pay award.

I want to make three fundamental points. First, public sector pay has been eroded in real terms for 12 years through this Conservative Government’s austerity measures, which have destroyed morale and damaged recruitment and retention. Secondly, the proposed public sector pay settlement in this cost of living crisis is the worst so far and will reduce living standards significantly. Inflation is at over 10%, and the cost of energy, food and fuel is higher. Reports in today’s The Times and The Daily Telegraph suggest that a real pay settlement will be even worse next year and will anger public servants more—rightly so. Finally, there is an alternative to more austerity and the suppression of industrial action, which is to fund a fair, inflation-proofed pay rise through a fairer taxation system.

This summer has been described as the summer of solidarity. There has been major strike action in the postal and telecoms sectors and on the railways, with a great degree of public support despite the impact. We are now seeing a huge escalation of that, with widespread balloting for industrial action in response to meagre public sector pay offers across universities, Departments, hospitals, schools and fire stations.

Last week, 60,000 University and College Union members in higher education met the Trade Union Act 2016 threshold and confirmed that they were ready to defend their pay. Some 150,000 Public and Commercial Services Union members will conclude their ballot at the end of this week. In health, the Royal College of Nursing is now at the end of a historic first UK ballot of 300,000 nurses, and we have seen the start of pay ballots of another 400,000-plus members of Unison, GMB and Unite, which all conclude at the end of this month.

[Mike Amesbury (Weaver Vale) (Lab)]

My hon. Friend is making such a powerful speech. Does she agree that, regardless of whether they are railway workers, health workers, BT and Openreach workers, education workers, teachers or support assistants, it is our fight? It is about a fair day’s pay for a fair day’s work: genuinely levelling up.

[Beth Winter]

I completely agree. Their fight is our fight.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Such a low pay offer will inevitably lead to disillusion. We are already seeing the detrimental impact of low pay on the NHS workforce. Essential public sector services will struggle to recruit and retain staff, and workers will be drawn to the private sector in the hope of higher wages. Does the hon. Lady agree that Ministers must urgently undertake a full impact assessment before finalising any decisions on a full pay offer?

[Beth Winter]

I thank the hon. Lady, and I will come to that later.

Let me return to my speech. In education there is an unprecedented situation: two major education unions, the National Education Union and NASUWT, voting together alongside the National Association of Head Teachers. In the fire service, over 30,000 members of the Fire Brigades Union are doing the same.

Why is that? The latest statistics show average regular pay growth of 6.2% for the private sector and 2.2% for the public sector—both below inflation, but one much further below it than the other. We are now talking about a potential 1.5 million public sector workers being balloted on the Tories’ low pay agenda.

[Sir George Howarth (Knowsley) (Lab)]

I apologise: I will not be able to stay for the entire debate as I have another commitment in the House. My hon. Friend is making a powerful case for why, in all justice, public sector workers should not be the the most penalised, and they will obviously agree with her. Another consequence is that, as the TUC recently highlighted, there will be labour shortages in vast parts of the public sector, as workers decide they can get more pay in the private sector. Who can blame them? However, in terms of public policy, that will be a real problem.

[Beth Winter]

Yes, and we all welcome the TUC coming to Parliament tomorrow for the day of action.

Early in the new year, there could be significant co-ordinated strike action, and the TUC is planning for such action. It is absolutely right to do so, because the Government are creating public sector poverty to balance their own books. We must understand why people are being forced to strike. Because of the burden of low pay in the context of the worst cost of living crisis in living memory, trade unionists in the public sector have no option but to consider industrial action. They are being forced to take action to survive. The Tories’ plan to suppress industrial action does not ease the financial burden on households.

I will briefly go through my three key points. First, the background to the current situation is the erosion of public sector pay over 12 years. When David Cameron came to power in 2010, his first speech in Downing Street referred to “difficult decisions”, and we heard the Prime Minister use the same line last week. The TUC has called the 10 subsequent years a “decade of lost pay”. Nurses and paramedics will see their pay shrink by £1,100 and £1,500 respectively this year.

It is worth reflecting on the human cost for workers on the ground, because behind all the figures are real people. One PCS member has said:

“To try and survive the cost of living crisis, I keep my lights off at home, live the vast majority of time in just one room and don’t use my central heating. I’ve already taken every conceivable cost-cutting measure I can.”

It is absolutely appalling that, in this day and age, somebody is forced to do that through no fault of their own. It is a damning indictment of the impact of 12 years of austerity that imposed pay freezes on our hard-working public sector staff. Those who sacrificed so much during the covid pandemic to keep our sectors running have been left badly exposed in the cost of living emergency.

Secondly, in this year’s pay review body consultations, unions were unequivocal in demanding an inflation-proof pay rise and stating that the Government’s offer was a significant real-terms pay cut for key workers. On teachers’ pay, the NEU was clear that Government evidence to the pay review body failed to explore the impact of pay cuts on

“teacher recruitment, retention and morale”.

On NHS pay, the RCN said that the pay announcement

“makes it harder, not easier, for them to cope with the rising cost of living.”

Unison’s Christina McAnea said:

“If there is to be a dispute in the NHS, ministers will have no one to blame but themselves.”

In a violation of the pay review body process, the civil service did not consult unions until it met the PCS union a few days before publication. The union said:

“this process was farcical and could not under any circumstances be considered a serious consultation.”

There are lots of questions to be answered.

Finally, local government workers have lost an average of 27.5% from the value of their pay when measured against the retail price index. It is unsurprising, then, that 78% of councils experience recruitment and retention difficulties. I am really pleased that we are joined today by Unison members from Barnet, who have been striking for 12 continuous days in support of a colleague regarding non-payment of sick pay. I know other Members will speak more about that in their contributions. I welcome the Unison members and thank them for joining us today.

I want to address the situation in Wales. Trade unions are balloting for strike action in Wales against the pay awards set by the Welsh pay review bodies, who have offered the same as in England. The offers are insufficient—just as much a pay cut—and need to be revised upwards. There is one significant difference: in Wales we are completely reliant on a funding settlement from the Treasury. When Conservative Ministers inflict pay cuts here, they offer little or no space for Wales to do differently.

I will quote our First Minister, Mark Drakeford, who said at the Labour party conference:

“As a point of principle I absolutely believe public sector workers should be fairly rewarded and that they shouldn’t see take-home pay eroded by inflation…they should at least match inflation.”

Rebecca Evans, the Finance Minister, said:

“we absolutely need the UK Government to undertake to provide a decent pay uplift.”

That fair funding demand has been echoed in my constituency. I undertook a cost of living survey and I delivered a petition to Parliament a couple of weeks ago for fair funding and an inflation-proofed income.

My third and final point is that there is absolutely no justification for public sector pay cuts when an inflation-proofed rise is affordable. When the human cost of more cuts is so great, we must surely explore alternatives to further cuts. If we are to give workers the inflation-proofed pay rise that they deserve and need, we have to fund a pay settlement that can match the 10.1%. That is not an unreasonable expectation. People are saying they do not wish to be poorer this year because they are key workers. We have to identify what that would cost.

The Institute for Fiscal Studies green budget from earlier this month, which the Library directed me to, makes it clear that departmental budgets were predicated on pay awards in the region of 3%. That is far below the current rate of inflation and below the pay awards of roughly 5% announced over the summer. The IFS estimates that offering an inflation-matching pay award to all public sector employees would add more like £17.8 billion. I am under no illusions—that is a significant amount of money—but we are talking about livelihoods, people’s lives, households and families, and the difference between existing and living. We therefore have to look at new ways of raising revenue to pay for it.

[Clive Lewis (Norwich South) (Lab)]

I thank my hon. Friend for this critical debate; I notice there are more civil servants in attendance than there are Government Members, which is shameful.

I want to pick up on the human cost that my hon. Friend mentioned. In 2011, on my first day in the job as a young parliamentary candidate, I stood on a picket line with Unison members in the mental health services. They were not just striking for pay, but because they were warning the public about the cuts coming to mental health. We have now had a decade of failure. I look now at GMB ambulance workers who have said that a third of the deaths that they see are because of delays caused by bottlenecks in the NHS—caused by the cuts. Does my hon. Friend agree with me that we cannot let the Government blame strikers, public servants or even climate activists for the deaths that occur because of what they are doing on their watch?

[Beth Winter]

I thank my hon. Friend for that powerful comment. I fully agree.

How will we pay for pay awards? The time has come for the Government to seriously look at establishing the infrastructure and valuation systems to levy taxation on wealth. There has been increasing interest in wealth taxation in recent months and years. The Wealth Tax Commission has given a rigorous academic base to understand how we could levy either a one-off or annual wealth tax. Tax Justice UK argued last week that the Government could raise up to £37 billion a year through a number of taxes on wealth, including equalising capital gains with income tax rates to raise £14 billion a year.

The Institute for Public Policy Research and Common Wealth think-tanks’ latest research on taxing share buyback profit transfers found we could raise £11 billion. The Wealth Tax Commission simulator suggests that around £18 billion could be raised through an annual wealth tax of 2% on wealth over £5 million. It is clear that the resources are there; the Government must examine and use them.

To conclude, this pay settlement is an attack on living standards, on top of a decade-long attack on people. There is an alternative that means we have to look at new revenue streams that tax wealth to increase public key worker pay. If the Government do not act to ensure a proper settlement on public sector pay and a progressive, fair taxation system to pay for it, living standards and livelihoods are going to get worse for the people that we all represent.

We have arrived at this crisis, and are experiencing it acutely and in an unequal way, due to policy choices—choices driven by political decisions and priorities. Society cannot thrive if we do not get our priorities right. My priority is the living standards of my constituents in Cynon Valley and every single person throughout the United Kingdom. I will continue to support all actions to make that happen, and stand shoulder to shoulder proudly with workers. Diolch yn fawr.

[Several hon. Members rose—]

--- Later in debate ---

[Beth Winter]

I thank all Members for their contributions. As others have said, it is woefully inadequate that nobody from the Government Back Benches is present.

In summing up, there are three key points for me. First, it is time for the Government to listen. Given the Minister’s comments just now, I really despair, because it seems she is not listening to the reality for so many people in this country—

[Sir Edward Leigh (in the Chair)]

Order. Sorry, but I have to end the debate at 4 o’clock sharp. I have no choice; I apologise.

Motion lapsed (Standing Order No. 10(6)).