Public Sector Pay 2024-25

Bim Afolami Excerpts

Wednesday 17th January 2024 Westminster Hall

[The Economic Secretary to the Treasury (Bim Afolami)]

I thank the hon. Member for Cynon Valley (Beth Winter) for securing this debate and for her opening remarks. I echo her comments and those of many others about a dear friend of the House, Tony Lloyd, and his passing. As was evidently the case with so many other Members, ever since I came to the House, he was unfailingly kind to me. But he was not just kind; he was also knowledgeable and thoughtful, and he knew a huge amount about governance, about Manchester, and about this House and how it works. He will be sorely missed, particularly by Opposition Members.

I am grateful for this opportunity to set out the Government’s appreciation of our public sector workforces and the spirit of public service that lies behind the vital work that they do up and down the country.

Before I get to the meat of my remarks, let me say that many comments have been made in this debate about how, as a result of inflation, the real spending power of wages decreases. That is completely correct; it is true. That is why halving inflation has been the Prime Minister’s No.1 priority since he took office, and we have focused so strongly on doing that. Having more than halved inflation—although we have not yet finished the job—we are now able to pay our public sector workers more. I will explain that a bit further.

As Members know, pay for most frontline workers is set through an independent pay review body process. These independent bodies consider a range of evidence when forming their recommendations. It is important to note that the process is independent of the Government, but Members should be in no doubt that this Government wholeheartedly appreciate the public sector workers who play a vital role in delivering our world-class public services.

[Richard Burgon]

I am listening very carefully to what the Minister is saying. Why does he think that nursing staff are leaving the profession in droves? Does he agree that it is because they are underpaid and overworked, or does he think there is some other reason? If he thinks there is some other reason, could he enlighten the House on that now?

[Bim Afolami]

Although this a debate about public sector pay, I will say this in relation to nurses: we have more nurses now than we had at the beginning of the Parliament. There are problems with the retention and recruitment of nurses, which we are addressing, but those problems are receding and those who leave do so for a range of reasons. We are working with the Health Secretary and across Government to ensure that we retain high-quality staff across our public services. Pay is of course part of that consideration, as it is for us all.

The Government strongly believe that dedication to public service should be appropriately rewarded, which is why for the 2023-24 pay round we accepted the headline pay recommendations of the public sector review bodies in full—for the armed forces, teachers, prison officers, the police, the judiciary, medical workforces and senior civil servants. What precisely does that mean for those professions? To answer, I will give three clear examples.

First, it means that policemen and policewomen received a 7% uplift that rightly recognises the risk that those brave men and women take at work. Secondly, teachers, who have been mentioned today, have received a 6.5% uplift and an increase in starting salary for newly qualified teachers to £30,000—significantly above the median wage in this country—which helps to ensure that we can continue to attract the brightest and best to safeguard our children’s education. Thirdly, NHS consultants, doctors, dentists and GPs have received uplifts of 6%, with junior doctors receiving an enhanced pay increase that averaged 8.8%.

Alongside those headline pay awards, we have since agreed offers with the unions representing senior medical workforces, including consultants, which covered reforms to their pay structures. The junior doctors strike has come up in this debate, as one would expect. We were in talks with the British Medical Association’s junior doctors committee, but they unfortunately chose to walk away. I am saddened by the strike because, frankly, it is having an impact on all our constituents. Nobody in this House should want the strike to continue. We urge the junior doctors committee to reconsider its decision, call off the strikes and come back to the table so that we can make further progress. Its demand of a 35% salary increase is unreasonable, and I hope the committee is reflecting on that and will come back to the table as soon as possible.

The pay settlements I mentioned appropriately reward the key role that staff play in safeguarding public health and the health of our NHS.

[Beth Winter]

The Minister has spoken a lot about the pay increase, but in preparation for the debate we received a number of submissions from trade unions, including the RCN, Unison and the NEU, which made two points that the Minister has not addressed and on which I will table questions. The first was regarding the independent review bodies’ concerns about terms of appointments and reference terms for multi-year deals. I did raise that specific question, but the Minister failed to respond.

The unions’ second point was the pay restoration argument. The figures are staggering, but I will just pick out a couple: nurses have seen a 27% decline in the value of their pay since 2009; social workers have seen a decline of 28%; and all that the junior doctors—who the Minister just mentioned—are asking for is pay restoration back to those 2010 pay award levels. Surely they are entitled to that, and it is not too much to ask. The strikers I was with on the frontline on Monday were having to cut heating and food; they were struggling. They do not want to be on the picket line. All they want is pay restoration. I really hope the Minister addresses that issue.

[Bim Afolami]

Median pay in the public sector in 2023 was 9% greater than in the private sector, which is broadly in line with the gap between the two sectors over the past decade, so I do not fully accept the situation described by the hon. Lady. To repeat the point I made at the beginning of my remarks: inflation does erode the spending power of wages, which is why it is so important to focus on bringing down inflation.

Let me address another point that the hon. Lady made—as did the hon. Member for Liverpool, West Derby—about health in Wales. As everybody in the House knows, health is fully devolved in Wales; the Welsh Government set health worker pay in Wales, just as the Scottish Government do in Scotland.

Let me answer the question about when the devolved Governments will know their final budgets, which was asked by either the hon. Member for Glasgow South West (Chris Stephens) or the hon. Member for Strangford (Jim Shannon): they will do so following the conclusion of the supplementary documents process, which I believe is published after the Budget. That information will come.

[Dr Poulter]

The Minister might also remind the Chamber that the Welsh Parliament has had its own income tax-raising powers since 2019. I do not think that is on dividends or savings, but there are other mechanisms available in Wales to meet funding commitments that the Welsh Government may wish to make. Indeed, they may wish to make commitments with the unions to end the strikes in Wales.

I have one question for the Minister. I believe in the importance of the pay review body process, which, as he has rightly said, is independent. If the pay review bodies make a recommendation this year for public sector pay, will the Government adhere to that recommendation?

[Bim Afolami]

What I can say at the moment is that the Treasury will look at and seriously consider it. We hope to accept it in full, but I cannot make a commitment now. Obviously, I have not seen the recommendation.

[Hywel Williams]

Will the Minister give way?

[Bim Afolami]

I will, but I am running short on time.

[Hywel Williams]

I will be very brief on a slightly tangential point. The Tories here have already spent the extra income tax that Wales could raise many, many times over—this time on junior doctors’ pay.

--- Later in debate ---

[Bim Afolami]

I thank the hon. Member for his point.

Having described the commitments we have already undertaken on public sector pay, I will outline the next steps we plan to take on this important issue. The Government have now asked the independent pay review bodies to consider and make recommendations on the pay of the workforces for the 2024-25 financial year. The Government hope to strike a balance on pay awards this year. On one hand, those awards should provide a fair, reasonable and proportionate offer for our public sector workers. At the same time, it is paramount that they deliver value for the taxpayer, particularly given the wider economic situation and the implications for the public finances.

Members will be eager to know what the pay award is going to be. Additionally, I know that for many people beyond this Chamber, particularly public servants and those who work for unions, the decision is important and keenly anticipated. I hear them, as do the Government and the Treasury. Given the recent economic picture, we understand that the outcome of the pay review process is not just academic or intellectual; it has real-world impacts on real people, including through mortgage payments, rents, schooling and healthcare. It is about how people plan their lives and how they take care of their loved ones. We hear their concerns and are considering the pay award carefully. The pay review process is independent and will take time. At this early stage, I hope people grant us their patience while we allow the process to take its course.

In conclusion, I thank the hon. Member for Cynon Valley and all Members who have spoken for playing their part in this valuable, interesting and important exchange of views.