Public Sector Pay

Laura Smith Excerpts

Monday 4th December 2017 Westminster Hall

[Laura Smith (Crewe and Nantwich) (Lab)]

I proudly declare my membership of Unison and congratulate it on its work on this matter. Rather than asking whether they can afford to scrap the public sector pay cap, the Government should be asking whether they can afford not to. Recruitment and retention costs in the public sector are soaring. The local government workforce survey revealed that 71% of councils are having trouble recruiting and retaining staff, with pay in local government and schools cited as one of the main drivers.

According to data produced this year, almost a quarter of teachers who have qualified since 2011 have left the profession. As an ex-primary schoolteacher, in my experience that is due to teachers feeling undervalued and under-supported. They long to do the job, but everybody has their limit. The pay cap has been cited as one of the reasons why nurses have been leaving their profession in droves. Nearly 40% of full-time vacancies advertised on NHS jobs in March were within the nursing occupational group.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I agree with everything my hon. Friend is saying. Does she share my concern that the issue is really urgent, considering the impact of Brexit? We know that some 10,000 EU nationals have left the NHS since last year. I therefore agree that continued pay restraint does not make sense in the light of the retention and recruitment challenges that the public services clearly face.

[Laura Smith]

I agree, and I will move on to another affected group. We have 900 careworkers leaving their job every day—every single day. An Age UK study estimated that, over five years, the NHS lost 2.4 million bed days as shortages of social care support meant that vulnerable patients could not be discharged, which has cost the NHS £669 million. For every extra pound put in a public sector worker’s pay packet, they are far more likely to spend it in our shops than to save it or stash it away in some offshore tax haven.

Unison research suggests that a 1% increase in public sector pay generates up to £820 million in increased income tax, national insurance and tax receipts, and it means reduced spending on benefits. It also adds £470 million to £880 million to the economy and creates between 10,000 and 18,000 jobs. A public sector worker paid the median public sector wage in 2010 and subject to the two-year pay freeze followed by the 1% pay cap ever since has seen the value of their wages drop by £4,781.

A Unison survey of its members in the NHS revealed that over 200 respondents had used a food bank in the last 12 months; 73% had had to ask family and friends for financial support; 20% used a debt advice service; 17% pawned possessions; 16% used a payday loan company; and 23% moved to a less expensive home or had to mortgage their house. As a child, I watched as my mother had to pawn our possessions. No child should ever have to watch that. Our public sector workers were told we are all in this together and that a pay cap is necessary to deal with our country’s debts.

[Thelma Walker (Colne Valley) (Lab)]

Does my hon. Friend believe it is appalling that the Government are trying to play public sector workers off against one another and that every public sector worker deserves a pay rise, as they are the glue that holds this country together?

[Laura Smith]

Government Members may sit and roll their eyes and shake their heads, but as far as I am concerned they just do not like listening to the truth. I absolutely agree with my hon. Friend.

The Government told us that it would all be over by 2015, once they had cleared the deficit. That was pushed back to 2016 and then 2018, 2019 and, most recently, 2025. In the meantime, we have become the only OECD country to see wages fall while the economy grows. The cap means that public sector workers received a pay increase of just 4.1% between 2010 and 2016. In stark contrast, dividends to shareholders in the top companies rose by 57% over the same period.

Austerity is not working; it is only hurting ordinary working people while the super-rich get ever richer. The Paradise papers show us exactly where their extra money is going. We were all hoping that the Chancellor would see sense and change course in the Budget, but instead we got more of the same for our public sector workers. The Government are great at thanking our emergency services in the aftermath of a crisis, but when they reach into their pockets, they find nothing more than a pat on the back for the workers who hold those services together.

The Government must stop viewing a pay rise as a burden on the public purse. To do so is not only economically illiterate but an insult to those who work to keep us safe, healthy, educated and cared for. With every new spending pledge, politicians are asked, “How can we afford to do it?” I ask the Government this: how can we afford it? Well, nurses are unable to afford food, police officers are unable to afford houses and cleaners are unable to afford to get into work—how can they afford it? Tax havens for the rich, executive pay ballooning, rapidly growing inequality—how can we afford it?

This is no longer a question of choice; it is a question of necessity. The Government must pay up now with above-inflation pay rises for all public sector workers. They cannot afford not to. I want to thank the public sector workers of my constituency for all that they do. Now, let us get them the pay rise they all deserve. It is shameful that Government Members sit shaking their heads, ignoring this and playing on their phones instead of listening to the facts that people in the Chamber have brought them and Unison has given them.