Agenda for Change: NHS Pay Restraint

Debate between Catherine McKinnell and Richard Fuller

Monday 30th January 2017 Westminster Hall

[Catherine McKinnell]

I thank the hon. Lady for that intervention—I think that many of us are surprised that we agree so entirely with the hon. Member for Kettering (Mr Hollobone). She raises an important point about the concern that many people up and down the country feel about some of the Prime Minister’s early actions in her time in office.

There are real concerns that the continuation of pay restraint in the NHS threatens to undermine the very benefits that Agenda for Change was supposed to bring to employers and staff. A centrally imposed cap on pay rises limits employers’ ability to respond to recruitment and retention problems while compromising the extent to which skills and competencies acquired by staff throughout their careers can be properly recognised and rewarded.

The extended nature of the pay restraint imposed first by the coalition Government and now by the Conservative Government also throws up this question: what is the point of having an independent NHS Pay Review Body, given that the Minister is clearly content to impose a figure on NHS Employers and staff each year? Indeed, the Royal College of Midwives has warned that the policy

“undermines the integrity of the system; and will cause lasting damage to the morale and motivation of staff, worsening the staffing crisis in the NHS.”

Despite the widely promised but yet to materialise extra £350 million a week for the NHS, we all know that our health service faces real and significant challenges in financial terms, both now and in the years ahead.

[Richard Fuller (Bedford) (Con)]

I add my congratulations to the hon. Lady on securing this important debate. She has somewhat moved on to the topic of Brexit. In Bedford hospital, to fill vacancies in our nursing staff we have relied on bringing in staff from the European Union. Does she not agree that the Government have a choice: they can continue with pay restraint if they wish, but if so we must retain that ability to attract people from within the European Union and secure the rights of those already here?

[Catherine McKinnell]

The hon. Gentleman raises some important points. I would never admit to having strayed into the subject of Brexit in this important debate on the NHS, but his comments are on the record and should be noted by the Minister. As NHS Employers stated in its 2017-18 submissions to the NHS Pay Review Body:

“The NHS continues to face unprecedented financial and service challenges. The majority of trusts fell into deficit during 2015-16 and the overall shortfall has now reached over £2.5 billion… The financial settlement for the NHS up to 2020 is extremely challenging, with employers set ambitious targets to deliver efficiency savings. At the same time, demand for services continues to rise. Performance indicators show the service is under great pressure as demands for care increase and other public services reduce provision.”

National Insurance Contributions Bill

Debate between Catherine McKinnell and Richard Fuller

Monday 4th November 2013 Commons Chamber

[Catherine McKinnell]

It is interesting that the hon. Gentleman raises that point, because the Opposition will set out clearly that we very much support and welcome this measure. It is something we have been proposing for the past three years, so we greatly welcome its introduction through the Bill.

We have had a wide-ranging debate. We have touched on the living wage, the economy, employment, unemployment, self-employment—many forms of employment. We have strayed far from the core subject and, I think, strained the patience of the Deputy Speakers in the Chair today. At times, we have been on a magical history tour in which the history of this country and its economy has not only been airbrushed, but at times rewritten. In my concluding remarks, I hope to bring back a bit of realism to the discussion. I know that the hon. Member for Skipton and Ripon (Julian Smith) finds that somewhat depressing, but I am going to do it anyway.

I am disappointed that the Exchequer Secretary is not in his place for the winding-up speeches, as it is important to take a little step back in time and recall how the Bill was introduced. Until recently he was my opposite number, and it would have been good to have him in his usual place. The hon. Gentleman has the dubious privilege of being one of an ever-diminishing number of junior coalition Ministers who have been in the same job since 2010. He therefore finds himself in an unfortunate position because we can measure the ambitions that he set out for supporting small businesses and job creation against his actual record of delivery in government.

As we have heard, although this was not included in the draft Bill published on 16 July, the main purpose of the National Insurance Contributions Bill is to implement the employment allowance announced by the Chancellor in the Budget 2013. Given the apparent importance of the policy—which accounts for clauses 1 to 8 of this short Bill—perhaps when she concludes the Minister will say why the employment allowance was not mentioned in the draft legislation. It would be useful to clarify that.

As my hon. Friend the Member for Birmingham, Ladywood made clear in her excellent opening speech, the Opposition support the introduction of this measure and this Bill. It might be painful for the Exchequer Secretary—although he is not here to pained—but it could be helpful to cast our minds back to why we support this Bill. Let us think back to 2011 and the similarly entitled National Insurance Contributions Bill of that year.

[Richard Fuller]

Before the hon. Lady casts our minds back to 2011, may I ask her the question I asked her hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood)? In 2010 she stood on a manifesto that planned to increase the jobs tax. People want politicians who are honest, so will the hon. Lady say that that was a mistake?

[Catherine McKinnell]

I will repeat the words of my hon. Friend, who said that she was proud to stand in 2010 on a manifesto for a Labour Government who were committed to reducing the deficit but had an economy that was growing. Since then we have seen three years of stagnating growth, wages rising slower than prices, and borrowing not coming down anywhere near the amount the Government promised. I would caution Government Members against trying to rewrite in this Chamber the history of what they have achieved over the past three years.

On that point, let us return to 2011. The Bill taken through this House by the Exchequer Secretary—I welcome him back to his seat—included the introduction of the three-year national insurance holiday, worth £5,000 for employers. The scheme, which was originally announced at the Chancellor’s first Budget in June 2010, was not aimed at supporting just any employers, however, because it was restricted. It did not apply to businesses in London and the south-east or east of England, as we mentioned earlier, and it extended only to new business start-ups, and then only to the first 10 employees of those firms—but, of course, only to those first 10 employees who had been hired in the first year of that business. I hope hon. Members are still with me. [Interruption.] I am sure the Minister is still with me as he designed the dubious policy.

Indeed, serious concerns about the scheme’s complexity were raised at the time by Robert Chote—then at the Institute for Fiscal Studies; now at the Office for Budget Responsibility—who told the Treasury Committee that the policy

“might be a little too complicated to offer best value for money.”