Public Sector Pay Policy

Debate between Christian Matheson and Dan Poulter

Tuesday 5th June 2018 Westminster Hall

[Dr Poulter]

The hon. Gentleman makes a fair point. I draw attention to my declaration in the Register of Members’ Financial Interests in making this intervention, but there has been great reliance on agency and temporary staff in both the education sector and the NHS as a result of the failure to retain and recruit staff in many areas. Does he agree that improving the terms and conditions and the pay of NHS staff would help to address that and would improve NHS finances overall, and that it is a short-sighted Treasury that does not take note of that point?

[Christian Matheson]

The hon. Gentleman is very experienced in matters of health and the NHS, and I suspect that what he says has real merit. Frankly, there are private companies offering bank staff across the NHS and making a large amount of money that would be better spent on frontline services and on paying staff more than the 1% pay cap. I thank him for his contribution.

We have all heard the heart-wrenching stories of public sector staff having to work two jobs to pay their bills or having to use food banks just to eat. This is modern Britain, where our greatest national treasure and our most valuable assets are treated with the same contempt and disregard that tax-dodging conglomerates have for our country. The Chancellor agreed to a below-inflation pay increase for NHS staff of 6.5% over three years on the condition,

“that the pay award enables improved productivity in the NHS”.

In real terms, that means forfeiting a day’s holiday each year for less money. Public sector workers have been cheated out of thousands, have had their pensions negatively affected and have now had their workload increased for less money.

If hon. Members visit any hospital, such as the Countess of Chester hospital in my constituency, they will see the NHS running on the goodwill of its staff. I know of health care assistants on wards who will work a 12-hour shift with barely a 10-minute break. They do that because they believe in what they are doing, but they are already working to maximum capacity and productivity, yet the Government still demand more to earn a pay rise that they have, in reality, already earned several times over. If hon. Members visit any school, where cuts still bite despite Government promises of more cash, they will find headteachers worried that any pay rise granted by the Government will have to be found from existing school budgets—the usual Conservative tactic of passing the responsibility on to someone else.

The hon. Member for Glasgow South West and my hon. Friend the Member for Easington referred to the study by the Centre for Labour and Social Studies on the terms of civil service pay rises. It is the same tactic. We have heard that the pay rise would have to come out of resource departmental expenditure limits for current spending; yet, as we have also heard, Departments as a whole will continue to suffer real-terms cuts to their RDELs up to 2020 and, of the principal Departments covered, only the Ministry of Defence will see an increase in this area of its budget. They made that point clearly, and it calls into question whether the Departments will be able to award pay rises of more than 1%; in fact, they might not even be able to raise that 1%.

Our police and prison service staff were offered a 1% increase and a 1% bonus, which will leave them with, yet again, a below-inflation increase. The chairman of the Police Federation said that staff had been left “angry and deflated” and had experienced a 15% decrease in real spending terms compared to seven years ago. Prisoner numbers are up and are increasing by an average of 3.5% per year, while the number of frontline prison officers, who have been offered a below-inflation 1.7% increase, has remained static.

The pay cap may have been verbally ended, but there is no evidence of its ending in the real world. Take-home pay, in real terms, has not increased. The quite shocking reality is that less than 4% of public sector workers will benefit from the Government’s decisions last September, and no further spending or new money has been made available in the autumn or spring Budgets. What makes one part of the public sector more worthy of being paid fairly than another? Even if the pay cap was genuinely lifted, it would not make up for the loss of thousands of pounds in the past—and indeed in the future, as a knock-on of the pay freeze now. One advantage of the pay cap is that, by keeping wages low, it makes it easier for parts of the public sector to be privatised, and for the privateers to make bigger profits off the back of low-paid but hard-working employees.

I will finish on a point also made by the hon. Member for Glasgow South West, first about pay in the private sector. For many positions in the private sector, public sector roles and pay increases are used as a comparator. Squashing public sector workers’ pay keeps some private sector pay deals flat as well. By crushing the pay of several million public sector workers, billions of pounds of spending power is taken from the private sector, as the hon. Gentleman said. I imagine that very few civil servants, school dinner ladies or police officers salt away their money in offshore tax havens. They spend it here in the UK in the private sector, which then pays the taxes to support public services. The pay freeze is therefore not just unfair—it is bad economics.

For the record, I will wind up by suggesting that the next Labour Government will lift the public sector pay cap for all public sector workers. We demand nothing less from this Government. In “Funding Britain’s Future”, Labour set aside a costed £4 billion to ensure that every public sector worker will get an above-inflation pay rise. The pay review bodies have been operating under the constraint of a Tory 1% cap for eight years. The Government must now lift the pay cap across the whole public sector, rather than playing one group of workers off against another.