Public Sector Pay 2024-25

Dan Poulter Excerpts

Wednesday 17th January 2024 Westminster Hall

[Beth Winter]

I totally agree. The PCS union has produced a number of very comprehensive reports outlining the devastating impact that the cost of living crisis is having on the mental health and wellbeing of its staff. I recommend that the Minister and those on the Benches opposite read those reports.

This comes after a two-year pay freeze between 2011 and 2013 and the four-year pay cap of 1% from 2013 to 2017, which preceded the obliteration of pay awards by inflation over the past two years. The TUC has estimated that the average public sector worker is earning £177 a month less in real terms compared with 2010. That is based on ONS pay statistics. Unison and the NEU have briefed me on the real-terms reduction in the value of wages for their members. Teachers are getting £12,000 less in real terms since 2010; social workers £15,000 less; and paramedics £16,000 less. The key workers that keep this country going are being driven into poverty by this Government. Putting money in workers’ pockets is the way out of the cost of living crisis.

The Governor of the Bank of England repeatedly warned last year that pay rises were inflationary, but provided no evidence. Some organisations have challenged that statement. For instance, the Institute for Public Policy Research said,

“Tax-funded…public sector pay restoration…is not significantly inflationary”—

again, I recommend that the Government Minister reads the documents. That is why in the past two years we have seen the most significant period of industrial action in 40 years.

The ONS states that over 5 million days of work have been lost to industrial action since the start of the current cost of living crisis. The Government’s response has been not to address the retention and recruitment crisis, but to curtail trade union freedoms by bringing in the Strikes (Minimum Service Levels) Act 2023. In Wales we have seen junior doctors on strike this week because of public sector pay cuts. Yes, they are administered by the Welsh Government, but the purse strings remain here in Westminster, which is responsible. I joined those junior doctors this week, as I have joined all public sector workers, as have all Labour Members here. Our solidarity remains strong with those workers.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I wish to declare an interest as a practising NHS doctor. I gently remind the hon. Lady that it is beholden on the devolved parts of the United Kingdom—Scotland and Wales—to come to their own pay settlements with the trade unions. In Scotland, under the SNP, a settlement was put in place, which averted a strike by doctors. Why does she believe that things are different in Wales, and why could the Welsh Government not have averted a strike had they wished to do so?

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[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Robert. I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on a passionate and well-argued debate, and I associate myself with her remarks about our friend Tony Lloyd. I first met Tony when I was an intern in Parliament nearly 22 years ago, I think. The way he was so nice to me sticks in my mind: he really showed the character of a public servant in being so nice to an unpaid, lowly intern. I am very sorry to hear that he has passed away. What a life he had—a real life of public service. My thoughts are with his family.

Working people have seen 14 years of low growth, stagnant wages and the highest tax burden in decades. What are they getting in return? On this Government’s watch, the average pay for workers is lower in value now than it was 14 years ago when the Government first came to power. The NHS, which we all love, is on its knees, with 7.5 million people waiting for treatment. Schools across the country face crumbling concrete as our children are forced into temporary classrooms.

My hon. Friend the Member for Liverpool, West Derby (Ian Byrne) and the hon. Member for Strangford (Jim Shannon) talked about how public services are broken but it is their constituents who are paying the price. My hon. Friend the Member for Liverpool, West Derby described how his constituents are facing food insecurity and skipping meals. I think you would agree, Sir Robert, that in 2024 in the United Kingdom, that is absolutely unacceptable for our constituents.

Call me old-fashioned, but I believe that it is the Government’s responsibility to ensure that quality public services are provided for the common good of the country. The sorry state of our public services and their recruitment and retention crisis are a result of 14 years of this Government. My neighbour and hon. Friend the Member for Brent Central (Dawn Butler) talked about the cost of living crisis in her constituency, the struggle that her constituents face, particularly in renting, and the fact that workers’ pay is now lower than in 2010. I believe that this is a direct result of the Government’s inability to grow the economy.

The Government like to talk about public service productivity, yet only yesterday the head of the National Audit Office, Gareth Davies, said:

“Parts of our infrastructure are crumbling…The public sector is finding it harder to retain staff…These factors and others have combined to leave public services with a productivity problem.”

Our constituents have suffered almost a decade and a half of stagnant public and private investment, and the cuts to public services are forcing them more and more into decline.

The Opposition would take a fresh approach to public services. We want to drive up standards in every state school, provide access to mental health support in every single school and recruit thousands of new teachers to ensure that their expertise is in every single classroom. We will get our NHS back on its feet with our plan to cut the waiting lists, and we will pay for it by removing the non-dom tax status. My hon. Friend the Member for Coventry South (Zarah Sultana) said that people who can afford to pay should be paying their fair share of tax; I fully agree. We will clear the backlog by offering 2 million more appointments every year, seven days a week.

We recognise that the current crisis in public services cannot be addressed through additional money alone. That is why the next Labour Government will fully transform the NHS. We need a health service that prevents illnesses and keeps people healthy and out of hospital in the first place. We will move care closer to our communities, guarantee mental health treatment where and when people need it and, most importantly, end the 8 am scramble to get a GP appointment. The next Labour Government will also use technology to overhaul every aspect of NHS delivery and deploy the power of artificial intelligence to spot diseases quickly.

We want to reform the outdated national curriculum to transform our schools with a greater focus on children’s creativity, speaking skills and the confidence to shatter the glass ceiling at source. Across our public sector, we want to provide a more dynamic, joined-up and strategic approach to government. We want to focus on Britain’s long-term national renewal. We understand that delivering fair and effective public sector pay and repairing and reforming our public services will require a strong and secure economy. That is why we set ourselves the ambitious mission of securing the highest growth in the G7.

[Dr Poulter]

The hon. Lady is making a number of points. On the specific issue of public sector pay, which is what this debate is actually about, could she please outline the Labour Front-Bench position? Does she agree with Opposition Back Benchers that public sector pay should go up this year by at least the rate of inflation, if not higher, and that there should be a long-term pay settlement of that type for the public sector?

[Tulip Siddiq]

I support the view that we have to make sure that we treat our public sector workers better. If we were in Government, Labour would ensure that the pay review bodies give greater weight to recruitment and retention issues. That is what we will consider when we are in Government—whenever the current Government decide that they want to call an election, so that we can put our views to the country. I notice that the hon. Gentleman is smiling, but the Government still have not given us a date; I will allow him another intervention if he can give me a date, but I do not think he will.

We will deliver a proper industrial strategy and higher investment, because we believe that if we can grow the economy, we can pay people properly. We want to cut planning red tape and get Britain building. We will transform our labour market with stronger workers’ rights. We want to get the economy growing again. We want to increase tax receipts and improve our public finances, so that we can invest in our public services and boost wages.

In contrast, the current broken economic model has driven down people’s wages and undermined their security. The Government have failed to deliver growth and have weakened our public services. My hon. Friend the Member for Sheffield, Hallam (Olivia Blake) made a powerful speech about the recruitment and retention crisis, and about how public services are in a state of collapse. That is not what we want to see in our constituencies. We want to get the economy firing on all cylinders; we want to repair our public services, so that they work for communities; and we want the public sector workforce across the country to work properly. I want to hear what the Minister has to say about the fact that the economy is broken. What is his plan to grow it, so that our constituents can have a better life in the future?

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[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.