Public Sector Pay: Proposed Strike Action

Richard Burgon Excerpts

Tuesday 1st November 2022 Westminster Hall

[Richard Burgon (Leeds East) (Lab)]

It is a real pleasure to serve under your chairship, Sir Edward. I, too, congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing this important debate.

We are seeing an assault on living standards, and their biggest decline in the 70 years since records began. From energy costs to food, and from mortgages to rents, everything is going up—everything except pay. In fact, over the past year, wages have fallen dramatically by almost 3% in real terms. That does not happen in a vacuum, of course; it comes after a decade of austerity slashing public services and the tightest squeeze on wages in 200 years.

Average wages are still below 2008 levels and falling. We are now likely to have had two decades of lost wage growth. One jaw-dropping statistic is that average wages would now be around £10,000 higher if they had carried on rising at pre-financial crisis levels. It is no wonder, then, that workers have had enough. Things have been bad so far but, with real-terms pay set to plummet over coming years, they will get whole lot worse.

That is the context in which so many workers are balloting for strike action and saying, “Enough is enough.” Before I was elected to Parliament, I was a trade union lawyer in Leeds for 10 years, so I know from experience that it is complete rubbish when the right-wing Tories and newspapers say that workers go on strike at the drop of a hat. Workers go on strike as a last resort, when they feel that they have no other option, especially when their pay and terms and conditions are being attacked, and they feel that they are being disrespected by their bosses and by the Government. As we have heard, the term “key workers” quite rightly became popular during the worst of the pandemic, but that term is used less and less by Ministers these days, and we should reflect upon the reasons why.

Inflation of 10% means a real-terms pay cut of 8% for nurses, teachers and many others. Pay cuts will be justified by talk of a need to cut back our services to fill spending holes. We will hear the language of “tough choices” and “difficult decisions”, but any time I hear those phrases being used by Conservative Ministers, I know that the easy choice—sticking the boot into those who can least afford to take it—is on the way. Those real-terms pay cuts, piled on top of a decade of lost pay, mean that we need to consider alternatives. What is the alternative to cuts? What is the alternative to tax hikes on the many? I would argue that there are alternatives.

We do not need cuts or tax hikes on ordinary people. We could tax the very richest instead. Why not end non-domiciled status, which would raise £3 billion? Why not have an annual 1% tax on wealth above £5 million, which would raise £10 billion? Why not have a 45p income tax rate on earnings above £80,000 and a 50p tax rate on earnings above £125,000, which would raise £6 billion? Why not equalise dividend and capital gains tax with income tax rates, which would raise £21 billion? Those four measures would raise a total of £40 billion, which is the so-called gap that needs filling according to Treasury briefings.

Pay cuts are a political choice and the Tories are choosing to push people into poverty. They plan to make working people pay for the cost of the pandemic, just as they made working people pay—through austerity —for the bankers’ crisis. At a time of pay cuts for the many, the wealthy few are having a bonanza. Britain’s billionaires have increased their wealth by £55 billion in the last year alone, City bankers’ bonuses are up 28%, and the average pay of bosses at Britain’s 100 top firms is now £3.6 million a year. It does not have to be this way; there is a better way forward. Let us support our trade unions and working. We call upon the Government to choose the real alternative that is necessary: wealth taxes, rather than further cuts to people’s pay in real terms, and further cuts to our vital public services.