Public Sector Pay

Debate between George Howarth and Helen Jones

Monday 4th December 2017 Westminster Hall

[Helen Jones]

My hon. Friend is right. This Government have been very good at trying to place the blame elsewhere for a policy they introduced. In fact, so bad have things got that last year the chief executive of NHS Providers told the Health Service Journal that one trust had tracked where its low-paid workers were going when they left. They were leaving to work in supermarkets because the pay was better.

Of course, it is not just pay that has caused problems for public sector workers. While their pay is being held down, they are being asked to do more with fewer resources, and they worry about that because they are committed to their jobs. The TUC report includes interviews with various people. One midwife said:

“The pressures on wards, the size of our caseloads and the level of pressure means we worry about making mistakes.”

Another said:

“I’ve seen people walk away from the profession because they can’t take it anymore. It all affects the continuity of care for the women in our care”.

A firefighter told the TUC:

“My station used to have fifteen firefighters and two vehicles on each day. Now there are only six firefighters and one frontline vehicle.”

That combination of pay restraint leading to real-terms cuts and increased pressure on public sector workers means that in many areas we are now having serious difficulty recruiting and retaining staff.

The school workforce census in 2015 showed that one in 10 teachers had left the profession in the previous year. We now know that one quarter of newly qualified teachers leave within three years. That is the highest since records began, and that is not surprising, because they are under enormous pressure. The Government have tried to deprofessionalise the job. They have taken away the checks and balances that used to ensure that heads did not behave unreasonably. Not all bosses are saints, even in the public sector. Cuts to schools are changing the balance of the workforce. We used to have that balance between young teachers coming in with new ideas and older, more experienced staff who could support them, but that is subtly shifting because schools cannot afford to employ the more experienced staff.

I know of one woman, fluent in two languages, who could not find employment when she wanted to come back into teaching after looking after her children. She can only find a job as a teaching assistant. That is a scandalous waste of her experience and qualifications. The Government got rid of lots of prison officers, and now our jails are at risk of serious violence, yet they are having difficulty recruiting more staff because the pay is poor. The NHS has shortages in various areas—accident and emergency, anaesthetics and psychiatry, for example—and the Government’s response when trusts bring in locums or agency staff is to blame the trusts for spending too much money. In fact, the cure is in the Government’s own hands: recruit staff, train them well and pay them properly. That means not only abandoning policies such as refusing to give trainee nurses a bursary, but stopping treating staff as the enemy, as the Health Secretary did in the case of the junior doctors, and it now seems that he plans to do that again to other staff.

In the Budget the Chancellor announced the Government would fund a pay rise for nurses. It applies to all the “Agenda for Change” staff, although we are used to the Government forgetting that cleaners, porters, lab technicians, support workers and a whole load of other staff work in hospitals, and without them our doctors and nurses could not do their jobs. However, the Health Secretary immediately announced that he wanted to change the conditions of work for staff, particularly their unsocial hours payments, so the Government are giving with one hand and taking away with another.

A very wise old headteacher once said to me—in the days when headteachers stayed around a long time, rather than getting burnt out and leaving—“People say the most important thing in school is that the children are happy, but I think the most important thing is that the staff are happy, because if the staff are happy the children will be happy and well taught.” That needs to be applied in other areas as well. Public sector pay has dropped 15% from its peak, and has lagged behind growth in the economy as a whole since 2016. It is now at its lowest level relative to the private sector since the 1990s, when, funnily enough, there was also a Conservative Government in power. As my hon. Friend the Member for Wrexham (Ian C. Lucas) has said, that has had a huge effect on regional economies.

If we take average public sector pay and look at the number of full-time equivalent workers in a region, we can estimate the loss. The north-west has lost £3.7 billion from its economy; the midlands £3 billion; and London a whopping £9.1 billion. That is all money that would have been spent in local businesses, protecting local jobs. Most of the people we are talking about are low paid and the extra money they get is spent on essentials, but the Government choose to ignore that. They have several excuses, or explanations, depending on one’s point of view. First, they try to say that public sector workers have better terms and conditions than the private sector. Well, they no longer have better pensions—although most of them never did—as their pensions have been changed. Estimates of private sector pay are always depressed by the fact that some areas of the private sector have very low pay indeed. The Government know that, because their statistics authority told them so in 2016 and showed that on a like for like comparison public sector workers are on average paid 5.5% less than in the private sector, not more.

The second attempted explanation usually implies that public sector workers have cushy jobs and have it easy. Tell that to a police officer in the inner city, a nurse in A&E, someone who cleans in a hospital, or the bin men working out in the rain and snow this winter. Cushy? Most Conservative Members here would not last a week. In fact, I do not think many of us would last a week. The jobs are hard.

The third explanation says that all this is dreadfully, terribly regrettable, but necessary to get down the debt. We need to say that that is simply and absolutely wrong because during the time of the public sector pay cap, debt has increased, not diminished. It has increased by £496 billion. So if the answer to debt is a public sector pay cap, someone is asking the wrong question. The Government fail to take into account the tax that the public sector generates. It has been estimated that for every 1% increase in public sector pay, at least £710 million worth of tax receipts are generated, possibly as high as £800 million, cutting the amount that is spent on tax credits and benefits. That reduces the total cost of a 1% increase to around £600 million. Opposition Members will say, “That is a lot of money”, which it is, but it is a drop in the ocean compared with what the Government have spent on reductions in corporation tax.

The total of the reductions in the main rate of corporation tax, the small profits rate and the combined rate costs the country £16.5 billion a year on current prices. So there we have it: tax cuts for big companies and pay restraint for public sector workers. Nothing could tell us more about the Government’s priorities. They also ignore the fact that public sector pay increases generate more jobs in the wider economy and at least £470 million in the wider economy, probably nearer £800 million, and that supports at least 10,000 full-time equivalent jobs in hospitality, transport and retail. The truth is that the policy is based on a failed economic model.

[Mr George Howarth (Knowsley) (Lab)]

My hon. Friend is typically making a powerful and eloquent case, which I agree with. Does she agree that another excuse the Government frequently use is that it is not down to them, but down to pay review bodies? The difficulty with pay review bodies, which are generally a good thing, is that they are not required to close the gap that already exists, but to consider relativities as they stand at the moment. Is it not time we had a proper review that looked at all the issues my hon. Friend has mentioned and that accepted that public sector workers are important to our economy, our safety and our everyday existence?

[Helen Jones]

My right hon. Friend is right. The cap has depressed the wider economy. It is now starting to depress wages in the private sector, and it is seriously depressing public sector workers. It has failed all round. The Government need to accept that they have failed and should stop trying to put the blame elsewhere. They announced, for instance, that the police can have a rise, but they will not fund police authorities to pay for it. Council workers can have a rise, but they are cutting the money available to local authorities. Health service workers can have a rise, but they will take it back from somewhere else. The Government must stop making excuses and recognise that the policy has failed.

Two things need to happen: first, all of our public sector workers should at least get a proper living wage: not the spurious national minimum wage, but a real living wage. We cannot run public services on the backs of poorly paid workers any longer. Secondly, the Government need to let proper negotiations begin in the various pay review bodies. My right hon. Friend is right: at the very least they should look at the discrepancies that have been created and how far public sector workers have fallen behind. Then they need to fund those pay rises. That would be good for public sector workers, the wider economy and our regions, and in the end it would be good for our country. It is time to abandon the policy and give people a decent wage.

Transitional State Pension Arrangements for Women

Debate between George Howarth and Helen Jones

Monday 1st February 2016 Westminster Hall

[Helen Jones]

I could not agree more with my hon. Friend.

Let us remember that during our consideration of the 2011 Bill, the then Pensions Minister promised to look at transitional arrangements for some of the women affected. Towards the end of the Bill’s passage, the Government made amendments that at least prevented people from having to wait longer than an extra 18 months for their state pension. That certainly helped some women born between January and September 1954, but there was still a whole load of anomalies that were not dealt with. One of the things that has made the situation worse, as has been said, is the lack of notice that women received about the changes.

[Mr George Howarth (Knowsley) (Lab)]

My hon. Friend is making a powerful case. May I give her one instance of what she described? Somebody who was born in 1956 was notified in 2006 what her state pension would be at the age of 60. That was the last communication that she had, so in 2010, when she was offered early retirement as a teacher, she took it on the basis of that information, and retired in 2011. She was given absolutely no indication that she would be in this situation, but she has now been told that she will not get her state pension until she is 68.

[Helen Jones]

Absolutely. Many, many women have found themselves in a similar position. They have been given information that has never been corrected and they have relied on that information.

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[Helen Jones]

I am grateful to the hon. Gentleman for giving way.

[Mr George Howarth]

On a point of order, Mr Stringer. Did I just hear the hon. Member for Gloucester (Richard Graham) correctly in his accusation that some people were behaving dishonestly? Is that a parliamentary expression?

Local Government Finance Bill

Debate between George Howarth and Helen Jones

Tuesday 24th January 2012 Commons Chamber

[Helen Jones]

My hon. Friend, herself the former leader of a major local authority, makes a fair point. It is what we have been debating throughout the Bill. Everywhere we look in it, we see no consideration of need; the poorest local authorities are being penalised most at every point.

We have said that the Bill does not recognise the barriers to growth that some areas face, such as the lack of appropriate transport infrastructure or of surplus capacity, as my hon. Friend will know from Halton, near her own area of Liverpool, for example. Everyone seems to accept that some growth happens simply because of where it is. Add to that the fact that councils also face a 10% cut in money to fund council tax benefit and we see that there will be real pressure on many local authorities. They will face having to cut benefits for some of the poorest people, having to cut services or having to raise council tax. We all know how difficult it is going to be to raise council tax. The result of the changes is that stronger local economies will find it easier to grow while others find themselves caught in a trap of rising demand and declining resources.

[Mr George Howarth]

My hon. Friend mentioned Knowsley. Does she accept that the problem is not just current, but stretches out into the future? My information is that from 2017-18, wealthier authorities will begin to see real-terms growth in resources, yet Knowsley will still face year-on-year reductions in resources of more than 5%. After 10 years, it will still have reductions of 3.8%. If what we are discussing is wrong now, it will become progressively more wrong as the years go by.

[Helen Jones]

My right hon. Friend has hit on the key to the Bill. It is not simply wrong in the beginning; it will increase inequalities—get more and more wrong—as it proceeds.

Inequalities will widen, even if the top-ups and tariffs are uprated by the retail prices index, and the levy will not fully compensate for that. Remember that even if we get a proper definition of what constitutes a disproportionate gain—bearing in mind the earlier debate, that seems unlikely at the moment—councils need to pay only a proportion of that in levy. The logic of that is that some areas will benefit from disproportionate growth. Others will fall further behind.

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[Helen Jones]

I did not say that they were in every constituency: I said that they are concentrated in London and the south-east, which is a plain fact.

In any case, we do not believe that this is the way to proceed. If the Government do not take steps to tackle the gap—and those steps are not set out in the Bill—services in many councils will decline, while others are able to reduce, even abolish their council tax as time goes on. We will therefore seek to divide the Committee on the amendment later, and I commend it to my hon. Friends.

[Mr George Howarth]

I rise to support my hon. Friend the Member for Warrington North (Helen Jones) on amendment 65, which encapsulates an important principle. The 2012-13 settlement, which will be used as the baseline for the new finance system that is to be introduced, has a number of problems that will affect areas such as Knowsley disproportionately—we have already heard examples from other areas.

It is important for Knowsley in particular—and I hope the Minister will comment on this when he replies to the debate—that the system is based on the damped allocations, including the grant floor, as that will lock £6 million in for Knowsley, which is a very important sum of money. The baseline also needs to consider the scale of cuts faced by some local authorities in the recent multi-year settlement which, as my hon. Friend has said, targeted some of the most deprived areas in Britain, including Knowsley. It is worth reminding the Committee that Knowsley’s cut in revenue spending power per head of population in 2011-12 was £156.09 compared with the average in England as a whole of £49.18.

If the Secretary of State were here for this debate, he would be sitting there smiling and might even be tempted to say, “The point we’re trying to make with this Bill is that local authorities such as Knowsley should go out and promote their businesses, get more inward investment and shore up the business rate, the benefits of which would offset some of these problems.” However, the difficulty is, first, that that does not address the fact that we cannot switch around economic activity in a given area in a short space of time. We can do it over time, and Knowsley has been quite successful in retaining major industries. Earlier I quoted the example of Jaguar Land Rover, which has remained in Knowsley; indeed, it has grown, with new products and a major recruitment programme last year. New businesses can also be attracted, which is what we did with QVC, a massive business, employing about 1,500 people in Knowsley, and a major contributor to the business rates of the borough. However, doing that takes time, and such changes cannot be made in a short space of time.

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[Mr George Howarth]

rose—

[Helen Jones]

rose—

[Andrew Stunell]

I shall give way to the right hon. Gentleman and then to the hon. Lady.

Local Government Finance Bill

Debate between George Howarth and Helen Jones

Wednesday 18th January 2012 Commons Chamber

[Helen Jones]

The hon. Gentleman makes a fair point, although I do not believe it is impossible to find independent people in the sector and of course the Government could have taken the Bill into Public Bill Committee and taken evidence, and then had a long Report stage on the Floor of the House to enable Members to participate.

To go back to my point, we are not against providing incentives for local authorities, but we do not believe that this Bill goes about it in the right way. We believe that any system has to be fair and equitable, and must recognise that weaker local economies find it harder to achieve growth and need help to do so. The Government have signally failed to recognise their responsibilities in that regard and we are faced with a “Leave it to Pickles” Bill. The Secretary of State is going to decide who gets what on the top-ups, the tariffs and so on. That is all being left to regulations, with no indication given as to the factors that he will take into account. As I keep saying, there are no draft regulations for us to look at.

[Mr George Howarth (Knowsley) (Lab)]

I apologise for not being able to be here for the earlier part of the debate. My hon. Friend knows my constituency well. Does she agree that unless we make a provision along the lines of amendment 19, which deals with need, the capacity to benefit from business rate growth and the council tax base of the authority, areas such as Knowsley are likely to be badly penalised?

[Helen Jones]

My right hon. Friend, who has been a doughty champion of his constituency for many years, hits on exactly the point that we are trying to make: unless the distribution of the central and local share is based on a number of factors, inequality will be built into the system—indeed, it is built in already because of the starting point. We do not believe that this approach is good enough. The future of communities and of the services available, particularly to the poorest people in this country, cannot simply be left to chance. If the Government believe in fairness and really believe that they would take into account the factors we mention in any case in determining central and local shares, I cannot see why they would have a problem in accepting our amendment. After all, the Prime Minister and the Deputy Prime Minister told us during their now forgotten love-in back in May 2010, before the romance had gone and they started squabbling, that they

“will ensure that fairness is at the heart of…decisions so that all those most in need are protected.”

That is all we are asking for in this amendment and the others that follow it.

Unfortunately, the Bill does not provide that fairness. If it goes through as drafted, service provision will, as my right hon. Friend the Member for Wentworth and Dearne said, increasingly be based on the ability to raise local business rates and council tax. As council tax increases will often be subject to a referendum, most of the demand will be put on local business rates.