Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 18th July 2017 Commons Chamber

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

1. What fiscal steps he is taking to help increase the average level of wages paid by employers.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

The key thing that we can do to increase productivity is to ensure that we invest in education and improve skills. We have more people going to university and doing apprenticeships, and we are investing in our rail and roads.

[Martyn Day]

Unlike the Scottish Government, the UK Government voted for the public sector pay cut. Moreover, this Government’s so-called national living wage is not based on the cost of living. What new measures will this Government bring in to provide people with a wage that they can live on?

[Elizabeth Truss]

We have made sure that basic rate taxpayers are paying £1,000 less tax by raising the personal allowance. We are also introducing the national living wage, bringing in a £1,400 rise in take-home pay for the lowest earners.

[Mr Mark Harper (Forest of Dean) (Con)]

The important thing for ensuring that people get a wage from an employer is to make sure that they have a job. Will the Chief Secretary to the Treasury welcome the record fall in unemployment to a 42-year low, particularly among young people, which is giving them much better opportunities in Britain than those available in most other European Union countries?

[Elizabeth Truss]

My right hon. Friend is right. We now have the lowest levels of unemployment since 1975, thanks to the economic policies pursued by this Government to improve skills and infrastructure, and to take sensible decisions on public sector pay.

[Laura Pidcock (North West Durham) (Lab)]

As has been clearly demonstrated, the Government are celebrating falling unemployment without any critical analysis of the nature of the employment being created. Many residents of North West Durham are in work that exacerbates their financial difficulties because their pay is low, their terms and conditions are poor, and they do not have regular hours. Will the Minister update the House on the number of people who are currently working on zero-hours contracts? Will she also accept that looking at employment figures in a vacuum does nothing to help us to understand whether people are any more secure or any better off?

[Elizabeth Truss]

Fewer than 3% of people are on zero-hours contracts and, as Matthew Taylor recognised, many people want that flexibility so that they can combine their work with the other things in their lives. We need to ensure that people have the skills to get better jobs in the future, and that is exactly what this Government are investing in.

[Charlie Elphicke (Dover) (Con)]

Will the Chief Secretary to the Treasury join me in welcoming the fact that 75% of the 2.8 million jobs created since 2010 are full-time jobs, and that zero-hours contracts account for just 3% of all jobs?

[Elizabeth Truss]

My hon. Friend is absolutely right. Is it not amazing that not one Labour Member has welcomed the fact that we have the lowest unemployment since 1975, or that we have lower youth unemployment? In fact, the Opposition model their policies on countries such as Greece, which has exceptionally high youth unemployment, and they take for granted the progress that we have made over the past seven years.

[John McDonnell (Hayes and Harlington) (Lab)]

First, let me welcome any increase in jobs in our society, but when it comes to commenting on wages, does not the Chief Secretary to the Treasury agree that it ill becomes a multi-millionaire earning £145,000 a year, admittedly in a temporary job, and living in two grace-and-favour properties at the taxpayer’s expense to attack public sector workers—our hospital cleaners, nurses, teachers and firefighters—as being “overpaid”? Public sector workers’ pay has fallen on average by £4,000 in the first six years of this Government. One in five NHS staff are forced to take a second job, and teachers are facing a further cut to their salaries of £3,000 by 2020. Does she not think that the Chancellor should just do the right thing and apologise?

[Elizabeth Truss]

Yet again, the right hon. Gentleman is not giving the House the full picture of what is happening with public sector wages. Last year, teachers’ pay went up by 3.3%. More than half of nurses and other NHS workers saw a pay rise of over 3%, and the armed services saw a pay rise of 2.4%. The cleaner he talked about was employed not by the public sector but by Serco. The right hon. Gentleman needs to get his facts right.

[John McDonnell]

That is true—the Government privatised the jobs.

I note that the Chief Secretary did not dispute the fact that the Chancellor said that staff were overpaid. The Chancellor tried to justify his attack on public sector workers by trying the classic divide and rule between public and private sector workers, citing public sector pensions. Is the Chief Secretary aware that those supposedly generous pensions across several professions pay on average the princely sum of just £5,000 a year, and that low pay has forced many public sector workers to opt out of their pension scheme? Eleven per cent. of those in the NHS have opted out; if that figure continues to rise, the whole scheme could be undermined. Will the Chief Secretary recognise the damage that the Chancellor is causing and lift the pay cap so that public sector staff can have some hope of a fair wage settlement—and, yes, a decent future pension?

[Elizabeth Truss]

The right hon. Gentleman still has not acknowledged the truth of the figures that I cited—the 3% pay rise for over half of nurses and the 3.3% rise for teachers. He simply will not look at the facts. The reality is that public sector workers are, rightly, paid in line with the private sector to allow the public and private sectors to flourish so that we can create wealth in this country. In addition, public sector workers have a 10% premium on their wages in pension contributions, and that is in the Office for Budget Responsibility report.

[James Cartlidge (South Suffolk) (Con)]

2. What progress is being made on reducing the national debt.

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[Diana Johnson (Kingston upon Hull North) (Lab)]

14. What assessment he has made of trends in the level of public sector pay since 2010; and if he will make a statement.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We hugely value the work of public servants—teachers, police and nurses. That is why they are paid in line with the private sector, and, in addition, receive a 10% increment, on average, for their pensions.

[Diana Johnson]

We all agree that MPs’ pay recommendations are decided independently and go through automatically. However, other public sector pay review bodies take into account Treasury submissions but then find that their recommendations are vetoed by Ministers. If it is good enough for Members of Parliament, why is it not good enough for nurses, the armed forces, firefighters and teachers?

[Elizabeth Truss]

We do take notice of what the independent pay review bodies say. We have just approved the recommendations of the teachers pay review body and of the nurses pay review body. Listening to their recommendations, the pay review body for the NHS said:

“We do not see significant short-term nationwide recruitment and retention issues that are linked to pay.”

We followed that advice and gave the pay accordingly.

[Alan Mak (Havant) (Con)]

Increases in the tax-free personal allowance since 2010 have put £1,000 into the pocket of each basic rate taxpayer, including those who work across the public sector. Will the Chief Secretary continue to help public sector workers to keep the money they earn, through lower taxes?

[Elizabeth Truss]

My hon. Friend is absolutely right. The worst thing that we could do is to support the Labour party’s policies, which would, according to the Institute for Fiscal Studies, lead to the highest levels of taxation in peacetime history.

[Tommy Sheppard (Edinburgh East) (SNP)]

19. I think the Treasury response today to the questions about the 1% pay cap are profoundly disappointing. This is the single biggest thing ensuring that inflation erodes living standards. It is impoverishing workers, and it is driving up consumer debt. When will the Treasury agree with the Foreign Secretary that the time has come to end this cap?

[Elizabeth Truss]

I point out to the hon. Gentleman that, in fact, teachers have seen a 3% pay rise, many nurses get progression pay and people in the armed forces get an X-factor supplement that is worth 2.4% a year. Their salaries are in line with private sector salaries. It would be wrong to have a significant differential between the public and private sectors, because we need businesses to thrive in addition to having well-funded public services.

[Several hon. Members rose—]

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[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T5. Will my right hon. Friend, for the benefit of the House, confirm the cost to the economy of cancelling student debt, say whether that is affordable and explain what effect it would have on the work we have done to reduce the deficit?

[The Chief Secretary to the Treasury (Elizabeth Truss)]

As the Labour party admits, cancelling student debt would cost £100 billion. The Opposition made that reckless promise, which would see the debt soar, during the election campaign, but now they say it is just an “ambition”. Are they going to say sorry to the people they made their promise to, and are they going to say sorry to the British public for threatening to bankrupt the economy?

[Alison McGovern (Wirral South) (Lab)]

Further to the questions asked by my hon. Friends the Members for Wakefield (Mary Creagh) and for Lewisham East (Heidi Alexander), will the Chancellor confirm, as he failed to do before, that the cost to us of Brexit will be as described by my hon. Friends some moments ago?

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[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

T8. Noting that the unemployment rate is at a 42-year low, may I inquire of my right hon. Friend what the effect has been on average personal incomes for workers in Ayr, Carrick and Cumnock—and, indeed, the rest of the UK—of increases in the minimum wage and the national living wage?

[Elizabeth Truss]

The increase in the national living wage to £7.50 an hour means that a full-time worker on minimum wages has had a pay rise of £2,800 since 2010. More than 150,000 low-wage workers in Scotland are benefiting from that extra money.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Tyne and Wear Metro is in urgent need of investment if we are to see the new rolling stock rolled out by 2021. What conversations has the Chancellor had with the Transport Secretary about funding that vital piece of infrastructure for the north-east?

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[Margaret Greenwood (Wirral West) (Lab)]

The TUC estimates that nurses, firefighters and border guards face losing more than £2,500 in real terms by 2020. For ambulance drivers, who earn significantly below the UK average wage, the figure is more than £1,800. Does the Minister agree that it is about time that we gave hard-working public sector workers the pay rise they deserve?

[Elizabeth Truss]

The hon. Lady should be aware that more than half of nurses and NHS workers saw a 3% pay rise last year. She needs to check her facts.

[Stephen Hammond (Wimbledon) (Con)]

T10. Last night, I met a major financial institution. Does my hon. Friend agree that for London to retain its place as the leading financial centre we need a regulatory regime based on mutual recognition and an early-agreed transitional phase to provide certainty?