Oral Answers to Questions
Laura Pidcock Excerpts(5 years, 11 months ago)
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The Chief Secretary to the Treasury (Elizabeth Truss)
I know that my hon. Friend represents some of the finest English sparkling wine vineyards, and I am pleased to say that some new ones have recently opened in Norfolk. We now have record exports of more than £100 million a year of our fantastic sparkling wine and we will continue to look at our policies to promote this brilliant product.
Laura Pidcock (North West Durham) (Lab)
Mr Philip Hammond
The hon. Lady focuses rightly on output per hour. The problem is a productivity gap between the regions of the UK and the most prosperous areas of London. We have to close that productivity gap. That is in the interest of not only those individual regions, but our overall national economy. We will do so by investing in public infrastructure and in skills, and by ensuring that the conditions are right for business investment, both domestic and foreign.
Finance (No. 2) Bill (Third sitting)
Laura Pidcock Excerpts(6 years, 3 months ago)
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Laura Pidcock (North West Durham) (Lab)
Will the Minister explain the severe imbalances in research and development across the country and how he will address them?
Mel Stride
As the hon. Lady knows, several announcements were made in the Budget about productivity, not least of which was the announcement about the national productivity investment fund; billions more pounds will be put in, raising its total investment level to around £30 billion. Initiatives such as the northern powerhouse and the infrastructure that will be put in place in the north and the midlands are evidence of our intent to make sure that productivity is levelled out across the country. We recognise that productivity is stronger in London, the south and the south-east, so particular attention is being placed on the midlands and the north of England.
There are two schemes for claiming R and D tax credits: the research and development expenditure credit—RDEC—scheme, and the small and medium-sized enterprise—SME—scheme. The SME scheme is more generous than the RDEC. The RDEC was introduced in 2013, featuring a new above-the-line credit. Businesses value it for several reasons, including because they can benefit from it whether or not they make a profit in the year in which they claim the credit. As R and D is often risky or pays back years after investment, this is a well targeted initiative. In 2015-16, the Government provided innovative businesses with more than £1.3 billion through the RDEC, which supported almost £16 billion of research and development.
In spring Budget 2017, it was announced that a review of the R and D environment had concluded that the UK’s R and D tax credits regime is an effective and internationally competitive element of the Government’s support for innovation. The changes made by clause 19 will provide around £170 million of additional support for innovative businesses every year from 2019-20. Increasing the rate of RDEC will make the UK even more competitive.
New clause 4 seeks to commission a review of the effect of this change on companies’ research and development spending, and of the effect of the increase on any changes to companies’ R and D spending as a result of the UK leaving the European Union. Since 2010, the amount of support that the Government have provided through R and D tax credits overall has more than doubled, reaching £2.9 billion in 2015-16.
Peter Dowd (Bootle) (Lab)
Again, it is a pleasure to serve under your stewardship, Mr Owen. I want to speak first to the points made by the hon. Member for Aberdeen North and then go on to my substantive comments on our amendment. It is worth noting what the hon. Lady says about funding research. Bill Gates, who knows a thing or two about research and development, said:
“I believe in innovation and that the way you get innovation is you fund research and you learn the basic facts.”
Are the Government funding research and development sufficiently? The answer, quite simply, is no. Neil Armstrong said:
“Research…is creating new knowledge.”
When set against that, the amount of research and development that the Government are funding, or indeed encouraging, is not creating that much more new knowledge.
Following on from the comments of the hon. Member for Aberdeen North about new clause 4, I am deeply concerned about the level of the Government’s research and development expenditure, particularly once we have left the European Union. The important question is not whether we are in or out—we are moving out; we recognise that—but how we fill that gap.
There is a rightly held concern that as a result of Brexit, the UK risks losing its reputation as a scientific powerhouse. In November, the Chair of the Public Accounts Committee stated that we are “sorely lacking” in leadership from the Government to maintain Britain’s position as a leader in robotics and in research to tackle climate change. She was responding to a National Audit Office report that highlighted that between 2007 and 2013, the UK was a “net recipient” of EU research funding and received more than £7.9 billion. In 2015, the UK Government’s expenditure on research and development was £8.7 billion, so it is almost equal.
The Government will have to make up the funding shortfall once we leave the European Union if the UK is to keep its status as a world leader in research and development.
Laura Pidcock
Even within the European Union, the north-east has suffered grave inequalities when it comes to research and development jobs, of which there are 5,300 compared with 36,000 in the south-east. Does the hon. Gentleman agree that the Bill does nothing to get rid of that disparity? The worry is that outside the European Union, it will be further exacerbated.
Peter Dowd
That is an important point. As I said, it is irrelevant—academic—where someone stands on Europe or whether they were in or out, because we are moving out of the European Union. There are all sorts of debates about the customs union, the single market and all the rest of it, but the bottom line is: what will the Government do to plug that gap? Will they give the commitment that they have given to other industries, such as agriculture, to plug that gap?
Peter Dowd
It would, and I will come to that in my final comments in relation to the speech by the hon. Member for Aberdeen North. There is a wider point, which the hon. Lady has highlighted perfectly. How much difference will raising the expenditure credit by one percentage point make to companies investing in the UK? That is the question, and we need to know the answers to it, hence the proposal for a review. I sound like a stuck record, but this issue is very important. It is only right that the Minister should come back to the House at a later stage and provide it with that information.
Laura Pidcock
Does my hon. Friend think that the Government have calculated the one percentage point figure on the basis that we are exiting the European Union and on formal calculations about what the net consequence of removal from the EU will be, or is this just an arbitrary figure?
Peter Dowd
The honest answer is that I do not know. If I can be the postperson for that question, I will pass it on to the Minister and perhaps he will answer it. I am sure that he will be able to do so, if not today, certainly in due course.
On new clause 9, the research and development expenditure credit gives corporation tax relief to companies that undertake research and development, as the Minister said, as well as to small and medium-sized enterprises subcontracted to undertake work of that nature. The current rate of relief for those companies is, as everyone knows, 11% of their qualifying expenditure, through either reduced liabilities or cash payments. As the Minister set out, clause 19 increases that to 12% of qualifying expenditure.
On Second Reading and today, the Minister has talked about the contribution that research and development makes to our nation’s productivity. It is worth our while to reflect on the Government’s record when it comes to productivity, because that goes to the heart of the matter. If we are to raise productivity, how do we know that it is linked somehow with research and development, or vice versa? If the figure is being moved from 11% to 12%, how do we establish the interaction, the causal links and the correlations? How do we do that? We do not do it, which is why we need a review.
As you know, Mr Owen, productivity has flatlined, and it has remained lower than its peak under the last Labour Government for the full eight years of the current Government and the coalition. The Office for National Statistics has found that since this Government took office, they have presided over the worst period of productivity growth since the Napoleonic wars. I think that was the last time we came out of Europe—well, perhaps not the last time, but one of the times. [Laughter.] That was a dodgy link, I have to say.
At present, UK productivity lags behind that of most of the G7 nations, notably the United States, France, Germany and Italy. What the Germans produce in four days, Britain achieves in five. We have heard that so many times, and the question that arises is: does the Government’s proposal do anything to enhance productivity? We do not know. Do the Government have any proposals for us to suggest how they might do that via a review? No, they do not. That is why we want a review.
This is not a mere technicality; it has serious consequences. As the Nobel prize-winning American economist Paul Krugman once said,
“Productivity isn’t everything, but in the long run it is almost everything.”
More than many other indicators, our productivity has a huge impact on both our future economic growth and the living standards of millions of British workers, who rely on productivity gains to improve their pay and conditions. We know that investment in research and development can, and does, enhance productivity. The question is: do the proposals do that? We do not know. Why do we not know? Because the Government—I suspect—will not agree to our review today. We will persist on that. As far as I can see, we do not have any information from the Government on the correlation.
Sadly, we are heading in the wrong direction. The Office for Budget Responsibility predicts that the Government’s plans will leave us with a 17-year period of wage stagnation. The Institute for Fiscal Studies agrees, arguing that we face two decades of lost pay growth. Will the Government’s proposals do anything significant to deal with that? We do not know, but we do not think so.
Time and again, the Chancellor has watered down the Government’s promise of increases in the wage floor. That will not help, either. We know that the most sustainable way to ensure a return to wage growth is to boost productivity, as well as ensuring that there is a strong framework of other worker representation to make sure that gains are shared evenly across any enterprise. That is also important. Research and development not only helps companies to grow, helps profits and helps income tax and tax generation, but helps workers and wage growth. Are the Government doing anything in the proposals to assist with that? No.
The Prime Minister recognised the importance of economic democracy and worker representation all the way back when she became Prime Minister. It is also important that workers can see what research and development investment there is, and what the Government’s proposals on it will do to help. It is difficult to establish what gains there will be under the proposals, and that is why we need to check and challenge the Government time after time on this one.
Of course, while research and development investment is not going into businesses, companies can rely on large pools of pretty cheap and expendable labour. That is important. In the past, the Minister has referred to us having quite high levels of employment, but we come back to the issue that the levels of employment per se—
Laura Pidcock
That disparity in investment does not make sense, because economic growth, employment rates and average earnings are all worse than average in the north-east. I do not see any mechanism to redress that disparity; I wonder whether my hon. Friend does.
Finance (No. 2) Bill
Laura Pidcock ExcerptsTuesday 19th December 2017
(6 years, 4 months ago)
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Stella Creasy
Goodness! The Minister says eight, but I can assure him that we have a good many more than eight feminists in total on this side of the House if he would ever like to test us. Our policies and our manifesto certainly speak to that fact.
The case that I want to make to the five men on the Tory Benches, given that gender inequality and equality impact assessments can sometimes be seen as special-interest issues, is that everything we are doing today is in everyone’s interest. Inequality costs us all dear. It holds everybody back in our society. Indeed, feminism is not about women; it is about the fact that power is unequally balanced in society so that 51% of those in our communities miss out on achieving their potential. That is what is behind new clauses 6 and 7. Good data help to drive good decisions. It is also good for Governments to follow their own policies. We have a public sector equality duty in this country, but the fact that the Government are not following it themselves makes it much harder for them to force other people to do so. Ultimately, we are here today to make the case that Britain will be better when we know more about the conditions that we face and about what impact policies are having.
Let me start with that cold, hard economic argument, because I am sure that the Minister, who once proclaimed his feminist credentials, already knows this, but I am not sure whether it has yet been put on the record. Bridging the gender gap would generate £150 billion in GDP by 2025. The economy has been struggling with a productivity problem for decades, and there is nothing stronger or faster that we could do to address that than to ensure that everybody in our society is able to realise their potential, but we should do more to help women in particular. We need to tackle the barriers and the discrimination they face that means they do not have that level playing field. Indeed, studies show the strong correlation between diversity and economic growth, so those who think that this is special pleading do not understand the maths behind the case Labour is making today. I would argue that the reason why they do not understand the maths is that we do not do the calculations, which is why it is so important to get the data.
Data is a good thing. It leads to difficult conversations. It makes us ask why, after the Equal Pay Act was passed in 1970, we still do not have equal pay in this country. I was born after that Act came into effect, but if the current policy continues, I will be dead before we have parity. That harms us all, because the 14% pay gap between men and women is not stagnating, but growing. There will be women in our constituencies who are missing out on equal pay because we are not acting as a country. Having this kind of data helps us to ask why that is and whether Government policy is helping to minimise the gap or exacerbate it.
This is not just about gender. The gap is much worse for women from ethic minority communities. The pay gap is 26% for Pakistani and Bangladeshi women and 24% for black African women. This is also not just about ethnicity, because the same applies for disability and age. Only 36% of women in the constituencies of the Conservative male Members here will be getting their full state pension. When those women come to see those Members about the Women Against State Pension Inequality Campaign, they are coming because they have been living with poverty for decades. They are asking for help to make things right, because they do not want to be dependent on the state. They want a level playing field, but historical inequality in our society has held them back, and it is holding us back now. Having the data helps us to understand where that is happening and why. It would show us whether Government policies—individual Budgets—are going to make it easier to tackle that inequality, so that fewer women will come to constituency surgeries asking for a referral to a food bank, or whether they will make things worse.
If the Government want to tackle inequality, they need to know that data also tells us that this Budget, and the Budgets of previous years, are causing more problems. I do not doubt the sincerity of the five Conservative Members here or that they do want to tackle inequality in our society, but when I look at this Budget I do doubt whether they are going to be able to do that. This Budget will hit women 10 times as hard as it will hit men—13 times for women from an ethnic minority background. Going back to the equal pay issue, 43% of people in society do not earn enough to benefit from raising the personal income tax threshold, and 66% are women. We have unequal pay in our society, so 73% of the people who will benefit from changing the higher rate threshold will be male. Having the data and then looking at what is being done with tax and benefit policies will help us to understand just how much further this Budget is moving the goalposts for women and ethnic minorities. This applies to other policies, too. Corporation tax changes disproportionately benefit men, because we still do not have parity in the boardroom, in enterprise or in the number of women shareholders.
The lack of data also leads to bad decision making. As my colleagues have already set out, this Government have not done any equality impact assessments to understand just how far the goalposts are moving in getting to this House’s shared aim of an equal society. Tax information and information notes dismiss the issue and do not help Ministers to make good decisions. I am sure that the Minister, with his feminist soul, wants to make good decisions, but those assessments claim that there is little or no impact. Indeed, we do not even have TINs for all the policies that we know have a differential impact such as excise duty rates or fuel duty giveaways, because we live in an unequal society.
The lack of data also means that Ministers simply cannot come to the Dispatch Box and tell us that any concerns we may have about the differential impact of individual tax and benefit changes can be offset by the impact of other policies. If we do not know the impact of one policy, how can it be said that that can be offset by another? Even if we are concerned that men have received a windfall from Budgets for several years, it is simply not good enough for Ministers to try to tell us that women are being compensated through public services, because they cannot provide the analysis to show us that either case is true. Indeed, when we look at the impact of public service cuts—surprise, surprise—women, ethnic minorities and the disabled tend to be disproportionately hit again.
As I said at the start, it is also a matter of following our own laws. The public sector equality duty came into force in this country in 2011. It is a legal requirement, and it has driven some of these difficult conversations, whether in the Bank of England or in the BBC. It helps us to challenge everyone to do more to unlock the potential of every member of our society by reducing barriers and breaking down the discrimination that means, 40-plus years on, we still do not have equal pay.
If the Government themselves are not upholding their duties, what hope do we have in asking other organisations to do so? It is important to recognise that the legal duty is not passive. It is a duty not just to manage inequality but to do something about it. It is a duty to know the numbers before we make a decision so that we do not make things worse, as this Budget clearly does, and it is an ongoing duty that cannot be delegated. Ministers cannot leave it to a civil servant in the back office; they have to take direct responsibility. Crucially, it is a duty that, once a problem has been identified, the Government have to act, and not having the resources is no excuse for not acting.
The arguments Ministers are making against calculating the figures are not just about the practicalities, but they are completely surmountable. As the Women’s Budget Group, the Fawcett Society and the Institute for Fiscal Studies have shown, it is perfectly possible to make these calculations, and it is worth doing because it would help the Government to make better decisions. That it is possible to do it both for individuals and for households is important because, as my hon. Friend the Member for Rotherham (Sarah Champion) said, single parents, who tend to be women, are disproportionately hit by these changes. Even if the Minister were to quibble about calculating the figures across households, we could certainly see the impact we are having on some of the most vulnerable people in our society.
The reason why we have called it “lady data” is to try to help Ministers understand what they are missing and why it matters, but in truth this is everyone’s data. Getting this right and having that information would help us to make better decisions and would help us to understand why it will take us 100 years from today to have parity, so that women who are still struggling with unequal pay—including women in the communities of the Members to whom I have referred—can have some confidence that they may still live to see that wonderful day when everyone in this society is treated equally and so that people from ethnic minority backgrounds and disabled people living in poverty, and a poverty that is getting worse, can have some confidence that the Government are not ignoring them but understand where the challenges are and are considering a Budget that will do something about it.
Frankly, when we see the analyses that are being done, we know why the Government oppose new clauses 6 and 7. They do not want to do the maths because the figures tell the ugly truth about the inequality we have in Britain and its stubborn supporters, who unfortunately sit on the Government Benches. Jane Addams said:
“Social advance depends as much upon the process through which it is secured as upon the result itself.”
We cannot take the journey to a more prosperous, more successful and more egalitarian Britain if we do not know the direction of travel. The numbers will give us the direction of travel, but it is the political will that will give us the way forward.
Ministers should not dismiss this case as special pleading but should look at the economic argument for why tackling gender inequality matters and vote accordingly today to put Britain on a better path, because everyone will be richer for it.
Laura Pidcock (North West Durham) (Lab)
As my hon. Friend the Member for Brent Central (Dawn Butler), Labour's shadow Minister for Women and Equalities, said, new clause 6 would require the Chancellor to carry out and publish a review of the Bill’s effect on equality. In short, it touches on the fundamental difference between the Labour party and this failing Government, whose policies work for only the richest few. New clause 6 seeks to shed light on the truth of who benefits from Government choices and who does not.
In order to change society, we must understand society; and in order to have a fully functioning democracy, we need transparency. People in my constituency deserve to know what is going on, not least because this Government are failing the country on so many levels that it is hard to know where to start.
New clause 6 refers to equality in relation to
“households at different levels of income”.
Real pay has fallen and is now lower than it was in 2010. Too many jobs that have been created are insecure and entrench poverty through low pay. These employment models fuel inequality, and certain parts of the country, particularly in my north-east region and my constituency, have a disproportionate number of workers on these contracts, where there has been a long-term move towards casualisation. This poverty is not just about worklessness; 60% of people in poverty live in a UK household where someone is in work. Many professionals have joined the queues at food banks, where, nationally, 1.4 million emergency food parcels were handed out last year—that has to be a perfect symbol of a failed state, does it not?—yet the Government just don’t get it.
Mr Jim Cunningham
Does my hon. Friend agree that the limit on child benefit now increases poverty? Does she recall that one of the Government’s slogans used to be, “Let’s make work pay”? Well, it does not pay because poverty wages are being paid.
Laura Pidcock
Absolutely. We are seeing lots of inadequacies in the universal credit system, which completely smash out of the water the idea that work pays under the Conservative Government.
Even taking account of housing costs, which I know take a huge slice of wages from people in the south-east, in the north-east we are still £84 a week worse off. The disparities in investment in my constituency create a vicious circle. We cannot attract the large-scale business investment that we desperately need without the infrastructure and the skilled people, and as much as Derwentside College in my constituency is a beacon of excellence in the education it provides, it is like every other further education establishment in the country in that it has a dwindling budget with which to educate the future skilled workforce that we need.
Ian Mearns (Gateshead) (Lab)
My hon. Friend is making an excellent point. There are very good FE colleges all over the north-east of England, with my local one in Gateshead being a very good example, but I am sad to say that when young people are leaving those colleges with skills, they are doing what generations of Geordies have done: leaving to come south for jobs because there is not the investment in the north-east of England.
Laura Pidcock
It is heartbreaking. Of course we want to keep as many of those brilliant young people in my constituency as possible, with the education they have received being put back into infrastructure and a rich economy, but the long-term employment just is not there.
New clause 6 would also address gender inequality, because it is women in my constituency and right across the country who have borne the brunt of inequality, as most women always do. Women, particularly working-class women, suffer structural inequality throughout their lives. On average, women earn less than men, have lower incomes over their lifetime and are more likely to be living in poverty. As has been mentioned, women are therefore less likely than men to benefit from cuts to income tax, and are more likely to lose out because of cuts to social security benefits and public services.
In conclusion, I urge Members to support new clause 6 and I call on the Government to carry out equality impact assessments so that my constituents can see, in black and white, the hard facts and the truth. If the Government are so proud of their achievements, why are they not shouting them from the rooftops so that they can receive full credit? Why not let everybody know what Government policy has achieved? Unfortunately, Opposition Members know that the facts will tell the truth and reveal that the Government do not care one jot about my region and that they are happy for wages to stagnate and for people to experience poorer lives with all the consequences that that entails. People in my constituency work extremely hard, and they definitely deserve much better. Please support the new clause so that we can see what the Government are actually doing to our region.
Bim Afolami (Hitchin and Harpenden) (Con)
I rise to respond to some of the points that have been made by Opposition Members. I shall start with what the hon. Member for North West Durham (Laura Pidcock) said about the Government, or the Conservative party, talking about how work is the best route out of poverty. Do correct me if I have misquoted you, but you went on to say that the work in our economy at the moment exacerbates poverty. You felt that it is currently not the best route out of poverty. Is that correct?
Laura Pidcock
In my speech I was talking about precarious work. In debates on universal credit, Government Members talk about it getting people into work faster, but we know that the system is for people who are in work and that they receive a top-up payment because their pay is low. I meet many people in my constituency, including social care workers who do not get paid for their mileage. They are working, say, 14 hours a day and getting paid for six hours. That entrenches their poverty because they do not have a proper contract and they are not being paid a fair rate, but they have all the outgoings that they would have if they were not receiving state help.
Bim Afolami
Whether it is in respect of the Bill, the new clause or what we are discussing now, the important thing is that it is of course the Government’s intention to create more better-paying jobs. That is what the Treasury team and everybody across Government strive to do every single day. That is not to say that every single person in this country is currently at the level of prosperity we would like, but that is the aim of all the activity that is coming out of the Bill and out of the Treasury.
Laura Pidcock
The hon. Gentleman is celebrating two female Prime Ministers somehow drastically pulling every single woman out of poverty. That is not the answer. We need structural change and the evidence to tell us whether women are equal, not the tokenism of two female leaders. Margaret Thatcher did not do much to pull women in my community out of poverty.
Public Sector Pay
Laura Pidcock Excerpts(6 years, 4 months ago)
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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.
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.
Oral Answers to Questions
Laura Pidcock Excerpts(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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.