Public Sector Pay

Patricia Gibson Excerpts

Monday 4th December 2017 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Had the Chancellor’s Budget a couple of weeks ago been different, we might not all be sitting here this evening; we might not even need to have this debate. Many public sector workers have seen their pay fall by up to £5,000 over the past seven years, and in the same period consumer price inflation has risen by 15%. That is not sustainable in anybody’s book. The Budget can only be seen as a missed opportunity to redress the balance.

Most people, not just in this Chamber but across the UK, understand that the 1% pay cap is not only unsustainable but deeply unjust. Surely the Minister will not attempt to justify it. How on earth could he? The UK Government’s current position, as I understand it, seems to be to cherry-pick certain public sector workers and set them against the others. That certainly looks like their plan, but how will setting workers against each other improve matters?

In Scotland, the Scottish Government are unequivocal in saying that the pay cap must go. It cannot be justified or sustained any longer. The rising inflation alongside too many years of pay restraint means that our public sector workers feel too hard pressed, despite delivering essential services, which we all use, to our communities daily.

I must declare an interest: until I was elected in 2015, I served in the public sector, as I am sure many hon. Members did. I was an English teacher for more than 20 years, and I too endured the pay cap and saw my wages fall in real terms, so I know what it is like. Scotland’s Budget in 2018-19 will be about £3.1 billion lower in real terms than the 2007-08 Budget due to the cuts by successive UK Governments.

The proper way to fund the lifting of the pay cap is for the UK Government to commit new money, which will bring a consequential to Scotland. That is the only realistic way to do it, as the hon. Member for Ogmore (Chris Elmore) pointed out. Like the hon. Member for Warrington North (Helen Jones), I am fed up that, while the Government mouth concerns about their so-called appreciation for public sector workers, they are quite willing to justify holding down their wages and seeing their living standards fall.

Unlike the UK Chancellor’s Budget, the Scottish Government’s Budget, which will be announced next week, will focus on trying to strike a balance between affordability and giving staff a fairer deal. The full details will be published next week. The Scottish Government face budgetary constraints, but let us do what the hon. Member for Ogmore said and put the ultimate fiscal responsibility for the situation we are all in where it belongs: squarely on the Chancellor’s shoulders.

I urge the Minister to be mindful of the real and understandable anger of the public sector workers who provide essential services. This petition reflects their anger about the fact that the UK is on course for the longest fall in living standards since records began, according to the Institute for Fiscal Studies, which described its forecasts of slumping productivity and wage stagnation as “pretty grim reading”. Household disposable incomes are set to fall until 2020.

The Chancellor’s Budget did not address any of those issues. As has been pointed out, it was a profound and cruel missed opportunity to show public services across the UK that they are valued and that they matter. Warm words do not pay the rent or put food on the table. The UK Government’s ideologically driven austerity is affecting every corner of the UK and every devolved Administration’s Budget.

The claim that there is no new money available to fund increases in public sector pay, which has been held down for too long—workers’ take-home pay is being hurt—has caused great anger. There are billions of pounds on the table for Brexit and the Democratic Unionist party, and there is apparently a blank cheque for Trident. There is money, but public sector workers are simply not a priority. That is disgraceful. I ask the Minister to reflect on that. The Government say they value public sector workers, but how does that value manifest itself? Whatever it means, it cannot mean continuing the cruel pay cap and continuing to alienate our hard-pressed public sector workers. I hope the Minister will go back to the Cabinet and his ministerial colleagues and convey the anger that public sector workers justifiably feel.

--- Later in debate ---

[Bambos Charalambous (Enfield, Southgate) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for Warrington North (Helen Jones) for presenting the petition in this debate, and I declare that I am a member of the trade union Unison.

Before being elected to represent my constituency in Parliament, I worked for a local authority and, along with my colleagues, was subject to the pay cap. Since the election, I have been contacted by many of my constituents who work in our essential public services and are struggling to make ends meet. They provide the services that keep our society going. One of my constituents emailed me recently and said:

“I am a highly skilled professional, and yet my pay packet does not reflect this…The Westminster Government’s public sector pay policy has eroded my salary year on year and caused me considerable hardship, including having to move out of the family home for 4 years to make ends meet…Many of my colleagues have left the profession and low pay and other poor working conditions, including excessive workload, are deterring new entrants.”

It is a travesty that we are seeing poor pay and conditions result in people leaving the public sector jobs they love. Local government has huge statutory responsibilities and our local government workers are carrying out necessary, vital and admirable duties in ensuring that our communities are healthy, educated, housed, cared for in old age and living in a clean and safe environment. As the savage and ongoing cuts that local authorities have faced since 2010 have resulted in redundancies, those still working for local authorities are not only enduring unprecedented workloads but, to add insult to injury, are seeing their pay capped, which is in effect a massive pay cut for them.

As in all our public services, the fact that those workers and their families are struggling makes it clear that the Government are failing in their economic and moral arguments, and are oblivious to what makes society flourish. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) pointed out, most public sector bodies are the biggest employers in their borough, town or city, and the knock-on effect of the pay cap affects the local businesses that serve the local workforce. As my hon. Friend the Member for Warrington North referred to in her excellent speech, in the House of Commons Chamber we hear many platitudes from Government Members, praising the work of our public sector workers, but that pat on the back does not put food on the table, keep a family sheltered or give dignity to workers.

[Patricia Gibson]

The hon. Gentleman is correct that we often hear platitudes and warm words from the Government about how valued the public sector is; a number of people have alluded to that fact. Is he, like me, deeply bewildered and alarmed at the fact that today we hear not even platitudes—nothing but silence?

[Bambos Charalambous]

The hon. Lady is absolutely right; the silence is deafening.

--- Later in debate ---

[Chris Stephens]

Well, I would have thought a Conservative would know that the Scottish Budget follows the UK Budget. On 14 December, the Scottish Government—[Interruption.] The hon. Member for Cheltenham (Alex Chalk) can shout people down and follow the lead of the Scottish Conservatives that we have seen in the last six months, but he obviously has not read the petition. We are debating a petition that says additional funding should be made available by the UK Government for this. As I said, a local authority, a health board or a devolved Administration should not be clearing up the mess of this Government, who continue to impose poor wages on public sector workers.

[Patricia Gibson]

Does my hon. Friend, like me, despair at the fact that there has been a £3.1 billion cut to Scotland’s budget since 2010? It is appalling that people representing Scotland in the Chamber today are attempting to ignore that.

[Chris Stephens]

My hon. Friend is right. The facts speak for themselves.

I am reminded of the speech I made in the Chamber less than two weeks ago on the Budget, in which I said:

“The only difference between this Chancellor and the previous one is that of style, not substance. Where George Osborne could best be described as a tin of gloss, superficially painting over the cracks in our broken economy, the current Chancellor is the tin of matt, hoping to hide the worst lumps and bumps with repeated applications of more of the same. Either way, they are both the same shade of Tory austerity blue”.—[Official Report, 23 November 2017; Vol. 631, c. 1255.]

As a former treasurer of Glasgow city Unison, I know all too well that trade unions have a welfare fund, which is an important aspect of membership and the recruiting of public sector workers. That branch’s accounts show that from 2010 to 2015, there was a year-on-year increase in spending of that welfare fund. Is that because the pay did not quite match the increases in food, housing and fuel costs? Of course it is.

Today, the average household has lost £7.74 per week due to higher prices for goods, including bread, milk and cheese. The Trussell Trust statistics tell us that in 2010, it delivered 61,400 emergency food parcels to hungry people. Today’s figure, which the Trussell Trust released last month, is 1,182,594 food parcels. All the evidence suggests that many of those going to food banks are, in actual fact, public sector workers.

Despite all the hints, the Budget failed to lift the public sector pay cap. With inflation at a five-year high of 3%, the value of public sector wages has collapsed. In 2017, the civil service people survey, referred to by the hon. Member for North Tyneside, has shown that satisfaction with pay and conditions has fallen and now stands at 30%.

The Government’s solution is to park the issue with pay review bodies. The problem with that approach is that 55% of public sector workers in the UK are not covered by a pay review body. They include jobcentre workers, who administer our social security and pensions system; those who staff our borders, working in immigration and asylum services; civilians in the Ministry of Defence, providing equipment and support to our armed services; and, of course, workers in the national health service and local government.

In November 2015, I secured an Adjournment debate to demonstrate the low pay in the Department for Work and Pensions. Over 40% of its employees were receiving tax credits. As a result of that debate, the Government had no option but to negotiate with the PCS a wage rise for staff in that Department.

Of course, there is the Treasury pay remit, which covers about 400,000 workers. This is the so-called delegated pay system—a notional arrangement whereby Departments and agencies are individual employers responsible for negotiating pay and conditions. Although the remit is “guidance” for civil service departmental employers and other bargaining units, it does set a pay cap framework.

That was not always the case. In fact, national pay bargaining was first introduced in the civil service in 1919, and that position held for more than 70 years until the then Conservative Government, over a period between 1994 and 1996, broke it up and delegated responsibility to individual departmental employers. The reality is not only that it is incredibly wasteful and time consuming to hold hundreds of sets of negotiations about an issue decided and controlled centrally, but that that has led to inequalities whereby staff at similar grades across Departments, and even across agencies within the same sponsor Department, are paid vastly different salaries.

A real danger of the Government’s current approach is that it will increase the gender pay gap, because it is clear that so far the Government have announced the ending of the pay cap for those services that are male dominated, and those Departments that are female dominated do not yet see evidence that the public sector pay cap will be lifted. That is a very dangerous route for the Government to go down.