Public Sector Pay

Laura Pidcock Excerpts

Monday 4th December 2017 Westminster Hall

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

I proudly declare my membership of Unite and I want to say well done to all the people who signed the petition to allow us to have this debate. I want the Minister to tell us two things. First, since pay rose by just 4.4% between 2010 and 2016 yet the cost of living rose by 22%, do the Government accept that they have in reality inflicted a real-terms pay cut on public sector workers? I say “real terms” because those are the only terms that matter to people outside the Westminster bubble. Secondly, can the Government really say that they value our public sector workers, who keep our services going day in, day out, when they first froze their pay and then capped it?

I ask those questions because it seems very difficult to get the Government even to acknowledge the problem. They are fond of saying that there have been pay increases, and we recently heard the Chancellor say that public sector workers are overpaid. Public sector workers across the board are unbelievably committed to their jobs—it is not all about pay. They are so committed to their work that they have worked £11 billion-worth of unpaid hours. Officially recognising them for the work that they have done would require a 24% increase in their pay.

Leaving aside the hundreds of unpaid hours of work, this is about a basic principle of work and pay. It is not right in principle that workers in North West Durham, for example, are worse off year on year despite doing absolutely nothing wrong. They are not directly responsible for inflation or prices; their living standards improve or degrade at the Government’s behest. If the Government are intent on keeping pay increases behind inflation, they ultimately have to accept that they are comfortable with making people poorer. I really wish that the Government would just admit that they are comfortable with that.

Fifteen unions, representing millions of workers, are asking for an end to the pay cap. Over the summer, thousands and thousands of workers took to the streets to protest about the pay freeze. I wonder whether any Government Members understand what forces workers out on to the streets or to withdraw their labour. That is always a last resort. It is a symbol of the hardship that these people are experiencing and of their anger—it is not about militancy.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

GS day is coming. My hon. Friend just touched on it. Public sector workers have had enough. Working men and women in all sectors, both public and private, have had enough. The race to the bottom has to stop. How much longer do the Government expect workers to wait? Workers should keep pushing: breaking point is coming. I urge all workers to join a trade union, get themselves a voice and become part of a movement—a movement for change and a voice for change. GS day is coming and I urge all general secretaries to get involved.

[Laura Pidcock]

I could not agree more with my hon. Friend. Joining a trade union is the only way that workers will improve their terms and conditions under this Government.

The inequality between this place and the rest of the public services has been mentioned. How can it be right that Members awarded themselves a 10% pay rise in 2015 while most public sector workers’ pay was capped at 1%? People really feel that there is one rule for us in this place and another for all the rest. I genuinely do not think that Government Members can claim that they support or value our public services while they suppress workers’ wages. Pay is inextricably linked to morale, productivity and efficiency. Every single public sector worker I have met has said that they are under more pressure now than ever before, at the same time as their pay is at an all-time low. In fact, if we continue on this trajectory, there will have been the biggest average contraction in real-terms earnings since 1851. Are the Government proud of that happening on their watch?

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I thank my hon. Friend for her generosity in giving way. She makes an excellent point about productivity. It is correct that the UK has the lowest productivity of the G7 nations. That is not just to do with the private sector; a large part of it is to do with the public sector and the fact that we overwork, underpay and under-resource our public service workers. That has to stop if we are really going to grip the productivity issue in the UK.

[Laura Pidcock]

Absolutely. If our public sector workers worked to rule, this country would come to a standstill—it would collapse. It makes no sense at all to suppress these workers’ wages. As hon. Members have said, people who are skint do not spend in their local economy; they are very cautious with their spending.

Public sector workers need an above-inflation pay rise as part of a properly funded settlement. If it is not properly funded—public sector workers know this—the cuts will just continue through redundancies. If public sector workers do not get that pay rise, I will support them in whatever industrial action they take. If withdrawing their labour is all they can do to get this Government to see reason, they have my support.

--- Later in debate ---

[Andrew Jones]

I will come to the issue of payment. It is of course part of a balanced approach to delivering public services, but I will address the hon. Gentleman’s point later.

I would like to re-emphasise the point that nobody on our side of the House in any way thinks that public sector workers are the enemy. I entirely agree with the hon. Lady’s point that modern economies have a mixture of public and private and the two are interrelated and work strongly together.

[Laura Pidcock]

For clarity, not one Conservative Member of Parliament has written to the Speaker to speak on behalf of public sector workers on the pay cap. They may not be the enemy, but there is a strong lack of interest in public sector workers.

[Andrew Jones]

I think that perhaps the hon. Lady is getting a bit carried away. We have no idea what the motives are for people being or not being at this debate. I have certainly been here in debates where there has been no Labour Member of Parliament, but I have not sought to make some kind of cheap political point off the back of it, because that is simply not appropriate and not reasonable.

To recap, the Government are acutely aware of how public sector workers form the backbone of our society and again I join Members in paying tribute to them. We have also had some questions about the reasons for pay policy. It is fair to remind the House that in 2010 we inherited the biggest deficit in our peacetime history. There was an urgent need to get public spending under some control, and that has been a key ingredient in returning our economy to health. The coalition Government implemented a two-year pay freeze, which has been mentioned several times by Members during the debate, but I remind the Labour party gently that it supported that policy at the time. The pay freeze was followed by a series of 1% pay awards for public sector workers. In the autumn Budget the Chancellor—he did mention this, I point out to the hon. Member for Bootle (Peter Dowd)—reconfirmed that under this Conservative Government the policy would end. It was a reconfirmation because that had been previously announced by the Chief Secretary to the Treasury in a statement on 12 September.

What does that mean? That means that for 2018-19 the Secretaries of State will have much greater flexibility in how they consider pay awards for public servants. I will return to the substance of the Chancellor’s announcement in a few moments, but first I will highlight the scale of the challenge. Public sector workers account for roughly £1 in every £4 that the Government spend, so we are dealing with some enormous sums of money here. The public sector pay bill in 2016-17 was £179.41 billion. That was an increase of 3.6% on the previous year, when it was £173.2 billion. There is a ginormous scale to the amount of money that has to be found. That leads me to one of the factors in determining pay policy: getting the right balance between finding the money and rewarding public servants for their vital work, while being fair to all taxpayers and ensuring that we return our public finances to balance.