Financial Reward for Government Workers and Key Workers Debate

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Department: HM Treasury

Financial Reward for Government Workers and Key Workers

Chris Stephens Excerpts
Monday 14th December 2020

(1 year, 1 month ago)

Westminster Hall
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Chris Stephens Portrait Chris Stephens (Glasgow South West) (SNP)
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It is a pleasure to see you in the Chair, Mr Stringer.

The House of Commons Library tells me that the Glasgow South West constituency has the highest percentage of workers in public sector employment, so it is only fitting that I contribute to the debate. I refer colleagues to the Register of Members’ Financial Interests. I chair the Public and Commercial Services Union parliamentary group, I worked 25 years before arriving in this place in the public sector, and I am a proud trade unionist of 20 years’ trade union activity. I would safely argue that the best political education and lifelong learning that one can achieve is through being a trade union activist.

I thank the hon. Member for Gower (Tonia Antoniazzi) for leading the debate. I use the word “debate” advisedly because no one has justified the Government’s position. The history that others have referred to is important. In 2010, there was a two-year pay freeze and then there was a six-year pay cap of 1%. Other Departments maintained that pay cap.

Public sector workers and civil servants have, during the last nine months, performed heroics, and the general public seem to think so too, with more than 100,000 people signing the petitions. The point has been made that the devolved Administrations have provided pay for NHS staff—£500, as a thank-you payment—and frankly we have seen a disgraceful response from the Treasury, which wishes to take tax and national insurance off that payment. I really hope that the Treasury thinks again on that point.

I will confine most of my remarks to the civil service and what it has done over the past nine months, including administering millions of new universal credit claims for the Department for Work and Pensions and processing furlough payments in Her Majesty’s Revenue and Customs, all despite—this has to be emphasised—staff in a number of Departments not being provided with the proper equipment for homeworking during the crisis, including in the Department for Work and Pensions.

Colleagues made the point about the problems of low pay in HMRC. I emphasise again that the median salary in HMRC is the lowest across the civil service. Is that not ironic, given that a key role of HMRC is to chase all these rogues—the Googles, the Vodafones and all these other companies that have not been paying their tax for years—and try to collect that tax? Around one in five staff is paid the minimum wage or just above it, but there is also another issue. It is clear that pay delegation has also led to pay segregation by gender, and that the gender pay gap can only be reduced by increasing the pay of staff in the lowest-paid Departments and agencies.

It is really disappointing that not one Government Back Bencher is here to justify these policies; people watching will wonder why the Government have thrown in the towel in the middle of the debate. However, I can tell hon. Members that PCS members have been sharing emails they have received from Government Back Benchers in reply to their request to not go ahead with this public sector pay freeze. I think the politest term I have heard is “short and sniffy responses”. It seems that the position of many Government Back Benchers is that public sector workers should be thankful for their job security. Tory MPs could perhaps tell that to the 2,000 workers in HMRC facing redundancy at the end of the year and knowing that vacancies within that Department are not being offered to them but are instead being farmed out to agency staff, and God knows the cost to the taxpayer of the more than 100,000 civil servants who have lost their jobs in the past decade due to Tory austerity. The Prime Minister responded to me, as emphasised by the hon. Member for Gower, that he was “lost in admiration” for the work of the civil service during the covid crisis. I can only suggest that a pay freeze is an extraordinary way of showing that.

A public sector pay freeze is both counterproductive and economically illiterate, and it gets to the whole debate on the role of the public sector itself. Research before the pandemic consistently showed that 70p in every pound of public money ends up in the private sector economy, whether via grants, contracts or, indeed, public sector workers’ wages. We really need to end the notion that public sector workers, when they get a pay increase, hide it in a shoe box under the mattress. That is not how it works, I can tell you. When people get more money in their pockets, they spend it, and they spend it in the private sector. If we are serious about helping the private sector and about ensuring that the economic wheels turn, it surely stands to reason that public sector workers, as thanks for all the work they have done over the past nine months, should get a proper pay rise.

I hope that the Minister will tell us what progress is being made in ending the 200-plus bargaining units across Whitehall Departments. I hope that the Government —this political party of small government and efficiency—will tell us how they will enact that particular policy. Workers in Westminster Departments are moving to the Departments of devolved Administrations. Why? Because the devolved Administrations pay better wages.

There can be no return to the austerity programme that flatlined the economy. A public sector pay rise could start the post-pandemic recovery. Investment is required in the civil service to reflect the changed circumstances in which we now find ourselves. I and my SNP colleagues support the demands of the petition because they are morally just and economically sound.

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Kemi Badenoch Portrait The Exchequer Secretary to the Treasury (Kemi Badenoch)
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Thank you, Mr Stringer. It is a tradition on occasions such as this to congratulate the hon. Member for Gower (Tonia Antoniazzi) on securing a debate on the issue of the day. Today, however, we should also congratulate the thousands of people who secured the debate by taking the time to express their support for key workers. On hundreds of occasions, Government Ministers have, in public and in private, expressed their gratitude and respect for what our millions of key workers have done, and I would like to do so again.

I would also like to express my condolences to the hon. Member for Bootle (Peter Dowd) and his family on the death of his daughter. As a mother of three, I cannot even begin to imagine such as loss. We are divided by politics but united in our passion for public service, and I pay tribute both to him and to her for all her service.

We tend to think of key workers as nurses, teachers and police officers, whose efforts, as ever, have been invaluable. In the context of the pandemic, however, our understanding of who is key has rightly stretched far more widely, which is pertinent for the subject of the debate. Understanding who is key extends to local government, national Government, transport, utilities and communications. Importantly, many of the people on whom we have relied are in the public sector. The right hon. Member for Hayes and Harlington (John McDonnell) said they are the people who kept the country going, but it is not just the public sector. Food retail workers, train conductors, farmers and lorry drivers—every one of them is a crucial link in the chain and deserves our thanks.

The substance of today’s debate is asking why we choose restraint when it comes to the way in which some of those in the public sector are financially rewarded. Hon. Members will know the answer. Many, in fact, have referenced fiscal policy since 2010. They should all know—if not, I am happy to remind them—that it was the difficult decisions we made during that period that have enabled us to borrow to fund such a significant package of support. Members have repeatedly said today, “We should borrow.” We are borrowing. A year ago, who would have believed that we would have spent £43 billion on people to be furloughed, £13.7 billion on the self-employed, and over £280 billion in total, in the space of eight months, on an unexpected pandemic?

Chris Stephens Portrait Chris Stephens
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Will the Minister give way?

Kemi Badenoch Portrait Kemi Badenoch
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No, I am afraid I am not giving way.

I am also happy to remind hon. Members that almost exactly a year ago, after nine years of Conservatives in Government and the very same fiscal policies that hon. Members have criticised today, the public chose to renew their faith and trust in this Government—not just with an increased share of the vote, but with a much increased majority. Since 2010, they had heard these arguments about what we were doing on fiscal policy over and over again, from many colleagues on the Opposition Benches who are not in the House today. We all believe in fair pay, but we disagree on where it is sent. However, I remind hon. Members that the public also want fiscal responsibility.

Good government is about making the right choices. To paraphrase the Chancellor, our health emergency is not yet over, while our economic emergency has only just begun. At a time like this, it is the responsibility—in fact, the duty—of Government to prioritise and target support where it is most needed, in a way that is fair and sustainable, that protects jobs and businesses, and that limits long-term damage to the economy. The hon. Member for Gower referenced many previous responses the Government have given on this topic. She may not like the answer, but the facts have not changed, and I am happy to repeat them here. Fairness has been a guiding principle.

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Kemi Badenoch Portrait Kemi Badenoch
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I will conclude by saying that this Government and all the people of this country are grateful for everything that our key workers in both the public and the private sector have done and continue to do, but in the choices we make, we must chart a way ahead that is fair and sustainable and that gives us the best chance of a strong economic recovery. That is the thinking behind what we have done and it will remain the thinking behind what we do in the challenging months and years ahead, as I believe it should.

Chris Stephens Portrait Chris Stephens
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On a point of order, Mr Stringer. If I heard the Minister correctly, it was suggested that there were to be no job losses in the public sector, yet a number of us in the debate mentioned that there were 2,000 redundancies in HMRC. Mr Stringer, can you tell me how the record can be corrected—or has the Minister just cancelled the redundancy notices of 2,000 workers in HMRC?

Graham Stringer Portrait Graham Stringer (in the Chair)
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That is not a point of order; it is a matter of fact and for debate.