Regional Pay (NHS)

Kerry McCarthy Excerpts

Wednesday 7th November 2012 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I, too, was in the Westminster Hall debate this morning and I congratulate my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing it.

As we have heard, regional pay would damage our economy and the NHS. As the shadow Secretary of State said, 60 senior academics have written to The Times to warn the Chancellor that there is “no convincing evidence” to support his claims on the benefits of regional pay and that

“On the contrary, such a policy could reduce spending power, undermine many small and medium-sized businesses in areas of low pay, and aggravate geographical economic and social inequalities.”

According to research by the New Economics Foundation, the Government’s evidence of an alleged public sector pay premium

“suffers from a number of serious shortcomings”

and their statements are

“at best misconceived, at worst mischievous and ideologically driven.”

It concludes that regional pay would cost our economy £2.7 billion at best—if the private sector expanded where the public sector contracted—but that the cost could be up to £9.7 billion each year, with the loss of 110,000 jobs. Regional pay would reduce spending power in the south-west by £1.2 billion.

When we consider regional pay from the perspective of the NHS, we cannot, or at least should not, talk about private sector jobs replacing public sector jobs. The public’s response to the Government’s disastrous reorganisation of our NHS proved that patients do not want to be treated by Virgin Care or Serco, but Ministers still seem determined to remove the N from NHS.

For my constituents, today’s debate is even more important because, as we have heard, trusts in our region have been developing the NHS south-west pay, terms and conditions consortium. This morning, I asked the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)whether the Government knew about the consortium before it was established and whether they encouraged the trusts to set it up, and it was interesting that she said, “My understanding is we were involved”—[Interruption.]

[Alison Seabeck (Plymouth, Moor View) (Lab)]

That is a fascinating answer because it is at odds with the one I received from the Secretary of State during Health questions.

[Kerry McCarthy]

I very much hope that when the Government—[Interruption.]

[Mr Speaker]

Order. Let me say to the Minister once and for all—[Interruption.] No. I say to the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)—perhaps she will have the courtesy to listen when she is being spoken to from the Chair—that it is not acceptable for any Member of the House to treat the debate as a private conversation between himself or herself and the Member on his or her feet. If the Minister is dissatisfied with what is being said, other people on her Benches can pick up those points. It is totally unacceptable to behave in this way and it will stop straight away. I hope the Whip has noticed it, and I will be speaking to others about the matter.

[Kerry McCarthy]

There is some confusion. When I wrote to the Health Secretary to get some clarity—

[Ian Mearns (Gateshead) (Lab)]

On a point of order, Mr Speaker. I could not help but notice that the clock did not stop during that intervention. I see that a minute has been added on, but I think it should have been more than that.

--- Later in debate ---

[Kerry McCarthy]

I shall try to move on. When I wrote to the Health Secretary, the response I got back was very ambiguous. It referred mysteriously to when the document was first leaked to the public, rather than saying what the Government were aware of in relation to the consortium.

In the debate earlier today, the Minister definitely said the words, “Yes, we were.” The civil servant behind her was shaking his head and saying, “No, we weren’t. No, we weren’t,” so I hope that we get some clarity on the matter and a firm answer when the Government respond to this debate. To what extent did they know about and encourage the south-west consortium to start?

The consortium, as I indicated, was initially developed in secret but since NHS staff found out about it by accident, I have received hundreds of letters and e-mails from staff who are angry and anxious not just for their own futures, but for their patients. It is shocking that they found out about that only by accident and were not consulted by the consortium.

[Yasmin Qureshi]

Does my hon. Friend agree that we were a bit surprised to hear the Secretary of State say that Labour is asking for national pay and opposing regional pay because the unions are bankrolling us? My hon. Friend said that she had received many e-mails. I am sure that, like me, other Opposition Members have received hundreds of e-mails from people who work in the health service—ordinary people, working people—who say that they do not want regional pay. That has nothing to do with any union.

[Mr Speaker]

Order. Interventions on both sides should be brief, and rather briefer than that.

[Kerry McCarthy]

It is sad that the Secretary of State resorted to the union bashing that we also heard from the Minister in the Westminster Hall debate. I have had a meeting with the Royal College of Nursing, and I have a briefing from the BMA about the case against the local and regional approach to pay. That has nothing to do with Labour-affiliated unions. Those organisations are speaking up for their staff, who are extremely worried. It is patronising to say that staff are concerned only because someone stoked them up and told them falsehoods or whatever. They are worried about the proposal because they work in the NHS and they know what impact it will have on them.

The south-west consortium’s explicit intention is to reduce costs by considering

“further more radical changes to the pay and conditions of the workforce”.

Yet to do this at a time when hospital budgets are under great strain and nurses are being made redundant, each trust paid £10,000 of public money to join the consortium. They have to appoint a consortium director, establish a consortium working group and commission legal advice, so it remains to be seen how much the added bureaucracy of the consortium will cost.

Even more worrying is the lack of transparency or accountability for that spending, given that we still do not know who is responsible for employing the director of the consortium or to whom they are answerable. Perhaps most disturbingly, the project initiation document explained that

“it is likely that Trusts would be obliged to dismiss and re-engage staff to secure such changes”,

which not only calls into doubt the validity of their proposals, but has serious cost and legal implications.

I can only agree with the BMA that regional pay is a

“costly and time consuming distraction”.

But of course this affects not only the NHS as an institution, but the individual staff on whom the whole service relies, who potentially face a 15% pay cut. The consortium proposes to cut sickness absence payments so that they are paid only at the base rate, yet for staff permanently on nights, the extra payments that they get for working night shifts are an intrinsic part of their salary, on which their mortgage payments often depend. It would constitute, on average, a 20% pay cut if they were ill and were paid just at the base rate.

Reducing annual leave entitlement not only amounts to a pay cut but means that staff who rely on their leave to balance caring responsibilities will face additional costs, if they can even continue to work. At the same time, extra child care costs will be even less affordable if enhanced payments for nights and weekends—payments which are intended to recognise their personal sacrifices and the additional costs that these workers incur—are changed.

The consortium is also considering increasing working hours. Once again, this is an effective pay cut, which ignores the fact that so many overworked staff already work longer hours. According to the Royal College of Midwives, 87% of midwives “frequently” or “always” worked more than their contracted hours, and more than half reported that none of those extra hours were paid for. These are emotionally and physically demanding jobs and the consortium risks leaving staff even more tired, or coming into work when they are really too ill to do so, in order not to lose their extra pay.

The south-west is a net importer of NHS professionals, but our trusts risk losing demoralised and under-appreciated staff to other regions where the terms and conditions are more favourable. NHS staff require the same training, dedication and commitment all around the country, so why should my constituents be paid less simply because of where they live, especially when there can be a greater demand for health services in the south-west because of our older population, and when the cost of living in many places is so high?

[Mr Jim Cunningham (Coventry South) (Lab)]

The same sort of thing happened many years ago with plant bargaining, so to speak, at a regional and a national level in the private sector. The employer did away with the national agreements, did away with the regional agreements, and the end result was people being poorly paid. The Secretary of State has no experience of that and he has the effrontery to come to the House today and foist it on everybody. It is a disgrace, bearing in mind who his paymasters are, when he talks about the trade unions.

[Kerry McCarthy]

I agree entirely. There is a danger of even greater fragmentation so that we move from national pay to regional pay to very localised pay, with everyone competing against each other—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Member for Coventry South (Mr Cunningham) said “paymasters”. I am sure that he would not want that to be on the record, and that he would want to withdraw it—[Interruption.]

--- Later in debate ---

[Mr Deputy Speaker]

Not individuals? I was worried that the hon. Gentleman was referring to individuals.

[Kerry McCarthy]

During the first two years of this Government, the south-west’s nursing work force has fallen by more than 3.5%, which is three times the national average. According to the 2011 national NHS staff survey, 11 of the 20 trusts involved in the south-west consortium are in the worst 20% for people feeling satisfied with the quality of work and patient care. The consortium arrangements will not alleviate these pressures and can only make working conditions worse.

These statistics are reflected in the often heartbreaking comments that I have received from constituents, who report on increased work loads, under-staffed wards, and friends and families they rarely get to see. They are considering leaving the south-west, or the NHS altogether. The consortium’s proposals are the last straw when morale is already at an all-time low. One constituent told me:

“I now feel as disposable as the equipment I use. Nursing is on the cusp of disaster.”

When the Prime Minister claimed to lead

“the party of the NHS”,

I do not think my constituents knew whether to laugh or cry.

Health Ministers’ answers on the consortium, like the Secretary of State’s speech today, frequently hide behind “Agenda for Change”, a framework that was agreed only after lengthy negotiations, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said. This prevented there being damaging competition for staff, avoided the risk of ratchet bargaining and minimised the costs of pay negotiation. It meant that nurses were no longer paid as little as £12,000 just because of where they lived. Significantly, “Agenda for Change” has largely eradicated equal pay challenges, so I hope Government Members do not want to replicate the larger gender pay gap that we see in the private sector.

National negotiations on “Agenda for Change” are now being undermined by the consortium, especially when the chair of NHS Employers, who also runs a trust in the south-west, was reportedly instrumental in establishing it. I would be interested to know what conversations Ministers have had with the chair of NHS Employers before she played a leading role in setting up the consortium. The Royal College of Nursing warns that the NHS is simply not equipped for the added bureaucracy, time and expense needed to negotiate pay on a more local basis, and that this ultimately would take the more experienced staff away from the front line.

Health Ministers have sought to defend the possibility of regional pay in the NHS by pointing to its potential under “Agenda for Change”. The inclusion of high cost area supplements and the recruitment and retention premiums, as we have already tried to explain to those on the Government Benches, were designed to help trusts recruit in high cost or low supply areas. They were not intended to drive down pay and drive away staff.

NHS staff in Bristol are having to work more, with fewer staff and when their pay is frozen. They are stressed at work and stressed at home as they try to make ends meet each month, and now there is a conspiracy to reduce their pay and conditions. My constituents need answers from Ministers. When did the Department of Health first find out about the consortium? I do not mean when it first found out that the documents had been leaked to the public. Who is responsible for appointing the consortium’s director and for its budget? Most importantly, will the Government intervene to prevent the consortium undermining the progress made under “Agenda for Change”, local health services and the NHS as a national service?

My constituents deserve to be paid according to the work they do, not where they live. The proposals for regional pay risk undermining our national health service and undervaluing the work done by those who have dedicated their lives to it. The proposals should be scrapped, and scrapped now.