Balancing the Public Finances

Debate between Justin Tomlinson and Mark Harper

Tuesday 11th July 2017 Westminster Hall

[Mr Harper]

I am glad that the hon. Gentleman raises zero-hours contracts. It simply is not true that everyone on a zero-hours contract is being exploited. There is some good evidence from the Chartered Institute of Personnel and Development. I am not sure whether these data have been updated, but it did a survey in 2014 that showed that around 63% of people on a zero-hours contract—higher than the proportion of people on a permanent full-time contract—were satisfied with their terms and conditions. Most people on zero-hours contracts actually find that they fit their requirements, because they are either students or people with caring responsibilities.

There are of course people who would prefer not to be on a zero-hours contract. That is why I welcome Matthew Taylor’s review, which was published today. He thinks that employees should have the right to ask their company to put them on a permanent contract. Indeed, McDonalds recently offered that to its employees. It is true that some of its staff on flexible contracts said that they would prefer to move to a fixed-term contract, but about 80% preferred to stay on a flexible contract because it suited them. I just do not agree with the contention that a zero-hours contract is by definition exploitative. In many cases, it suits the worker and it suits the business—it is a win-win. But it is completely true that if such contracts do not suit people, it is better that they should have the opportunity to move to a full-time or permanent contract to guarantee them hours. I am pleased with Matthew Taylor’s report.

My final point about youth unemployment concerns what happens to young people’s opportunities in countries that do not deal with their public finances. The most obvious example is Greece, which clearly has not dealt with its public finances, where 47%—nearly half—of young people are without work. Countries that do not deal with their public finances damage young people’s opportunities, probably for their lifetime. I do not want us to go down that road and be that sort of country; I want us to keep focused on balancing the public finances.

There is an interesting factor relevant to my constituency. I looked at a debate in the House in 1983, in which my predecessor but two, Paul Marland, spoke. He pointed out that at that time unemployment in his constituency was 15.3%, which was 2% above the national average. I am pleased that, seven years into a Conservative Government, unemployment in my constituency is 1.6%, which is below the average for the south-west—1.7%—and below the United Kingdom average. Our economic record has not just delivered for the United Kingdom and for the south-west; it has absolutely delivered for my constituents, who now have the opportunity to be in work, which is important for their families.

[Justin Tomlinson (North Swindon) (Con)]

My right hon. Friend is giving a characteristically powerful speech, which is why this debate is so well attended. In my constituency, youth unemployment has fallen by a staggering 61%, making a real difference to people’s lives. That is partly due to the expansion of apprenticeships, which more than 10,000 students have started. Last week I was proud to attend once again the graduation ceremony at Swindon College, where we are equipping young people with the real skills they need.

[Mr Harper]

I am grateful to my hon. Friend for raising that point. He knows—not everyone in the Chamber will—that Swindon is my home town. I actually did my A-levels at Swindon College, so I am particularly pleased to hear that that institution is still delivering opportunities. The opportunities that I got at a comprehensive school in Swindon and at Swindon College meant that I was the first person in my family to go to university, and definitely the first person in my family to make it to the House of Commons. I am pleased to have had those opportunities, and I want every young person in our country to have them too. That is why this matters.

All that I will say about the Opposition—[Hon. Members: “Where are they?”] My hon. Friends make the point that there are hardly any of them here. [Interruption.] An hon. Friend says that they are out spending. They opposed all the reductions in public expenditure over the past seven years. It seems to me, having done a back-of-the-envelope calculation, that the debt would already have been more than £300 billion higher based on the Opposition’s public spending plans, and that if they had carried on spending at the rate they were when they left office, an extra £1 trillion would have been added to the public debt by the end of this Parliament. At the last general election, the Labour party manifesto was just, “Spend, spend, spend other people’s money,” with no credible plan to pay for it. That is not the route that our country should follow. The fact that so few Opposition Members are here to defend their plans tells us everything we need to know.

Having gone through our record and why I think we have been successful, let me say a few words about the challenges we face. Public sector pay is an important topic—in fact, it is what prompted me to call this debate. We all know hard-working public sector workers in our constituencies. It is good to pay them fairly for the jobs they do, but it is also fair that we look at all our constituents—those who work in the public sector and those who work in the private sector. It is worth reminding ourselves that after the financial crash a lot of people in the private sector experienced reductions in their pay, which did not happen in the public sector. According to the Institute for Fiscal Studies, which is a respected organisation, public sector workers are still paid slightly better than private sector workers, even after adjusting for qualification levels. Even after some public sector pay restraint, the levels of pay in the private and public sectors are about the same, and people in the public sector obviously have the benefit of a more generous final salary pension scheme.

We have not talked much about the fact that the 1% pay cap is of course a cap not on individuals’ pay but on the pay scales. Most people will not be aware that, even with that pay cap, many public sector workers have actually seen significant rises in their pay because they have moved up pay bands. I think that half of national health service staff have had a pay rise of more than 3%. Teachers have had an average pay rise of 3%, because many, unless they have a performance issue, move up the pay bands during their career. That is on top of the 1% pay rise. We need to look at all those facts and conduct the debate in the proper spirit.

There are many pressures on public spending. There is public sector pay and funding for our national health service and for social care, and colleagues want more money put into schools. Part of the challenge of being in government is that we cannot say yes to everyone; we have to make choices and set priorities. The right way to do that is to look at the economic growth forecast, at how much tax revenue we think we will have, and at recruitment needs in public services. We have to look at all those things together.