Regional Pay (NHS)

Sarah Newton Excerpts

Wednesday 7th November 2012 Commons Chamber

[Mr Hunt]

That is a funny way of defending the principle of national pay: legislating to give foundation trusts the ability, for the first time ever, to set their own terms and conditions. I do not know how the right hon. Gentleman defines it, but that does not seem to me to be in any way logical.

[Sarah Newton (Truro and Falmouth) (Con)]

I represent an area with a very high cost of living. Does my right hon. Friend agree that trusts trying to balance their books should not do so at the expense of modestly paid care assistants and nurses?

[Mr Hunt]

I agree that I want local trusts to have the freedom to get the best health care for people in their areas, including my hon. Friend’s constituents. I agree that that means recruiting and retaining the very best staff and ensuring that they are highly motivated. My hon. Friend makes an important point: we must think about areas where the cost of living is lower, but we must also think about areas where it is higher. People in my constituency who work for the NHS have to commute from Portsmouth because they cannot afford to live near the hospitals and community health centres where they work. That is why an element of flexibility is a very important principle.

--- Later in debate ---

[Dan Rogerson]

Absolutely, and of course the process of trusts becoming foundation trusts was just under way—it has gathered pace over the last two years—and they were bedding down. It is likely—especially given the challenges of efficiency savings that his party would still have imposed if they had won the 2010 election—that the same set of circumstances would have prevailed. In fact the managers in those trusts who are taking those decisions are the same people who would have been in post had Labour won. It is nonsense to say that because the coalition is in power, those people woke up one day and made those decisions. Those things would have happened anyway. To be fair to the right hon. Gentleman, perhaps we should say that we cannot know what would have happened because we are not in that world. We are in the world in which his party lost the last general election. However, the NHS that he left behind is the one that is allowing this to happen, and it is the one that we have to deal with.

We have private providers next door to the NHS treatment centre I mentioned. Bodmin hospital is full of great staff. It was built under a PFI contract and is now staffed by Peninsula Community Health, a community interest company on the social enterprise model. It had to move those nurses into the private sector—or the social enterprise sector, depending on how one views that form of body—on the basis of the provider/commissioner split in the primary care trusts that was set up by the right hon. Gentleman’s Government.

We also have the issue of funding, which is the background to much of this debate. It is no accident that trusts in Cornwall are looking at this. I disagree with them, and I agree with the hon. Member for Plymouth, Moor View about the process they are engaged in, but one of the reasons they are doing it is that the “distance from target” for NHS funding was massive for trusts in the area under the last Government. I have to say that I am not satisfied that our coalition Government have tackled that problem either. The problem also existed under the previous Conservative Government—health funding in our region has been lower than it should have been for decades. Trusts such as the Royal Cornwall Hospitals Trust are having to deal with the problem of funding for those historic reasons. It is not something that has suddenly been invented.

[Sarah Newton]

I am sure that the hon. Gentleman is proud, as I am, to be part of the coalition Government who have put lots more money into the NHS in Cornwall, so that the distance from the England average has really shrunk. Like him, I will not be happy until we hit the target, but it is now just 2% less. Under Labour, it was a maximum of 7%.

[Dan Rogerson]

I agree with the hon. Lady up to a point, in that there has been a narrowing in the “distance from target” figure. Of course, it is much easier to get closer to target when there is more cash around and more money is being put into the NHS—in the good times. That is when the distance from target should have been tackled. We are obviously very much not in the good times in terms of the economic circumstances, for reasons that all parties would agree with.

If the trusts continue down this path, and create efficiencies by doing so—as well as making life much more difficult for their valued employees—we run the risk of what I call the boa constrictor approach. Snakes that kill by constriction wait until their victim breathes out and then tighten up, so they cannot breathe in again. My worry is that if trusts in Cornwall make these changes first, before other areas, they will make it easier for the distance from target funding to continue. The view will be, “Well, they don’t need the cash now, because they’ve dealt with the problem.” But the burden will have been borne by NHS employees, and that cannot be right.

I think this process is wrong because, as hon. Members on both sides have pointed out, there is an existing process for NHS employers and employee representatives to engage in to examine terms and conditions and pay levels, and see where savings can be made.

--- Later in debate ---

[Mr Jamie Reed (Copeland) (Lab)]

NHS staff are among the most valued and respected members of any work force, public or private. Like so many public sector workers—the police, firefighters, teachers, social workers, and many more—they make a crucial and often critical difference every day to the real lives of ordinary people in communities throughout our country, wherever they may be and whatever their wealth. In so many ways, these universal services and the values that they both represent and live by are our national values. They support us, they strengthen us, and they bind us as one nation.

The values of the national health service were celebrated as an article of faith in what it means to be British by Danny Boyle during the opening ceremony of the Olympics. When the eyes of the world were upon us, we showed the world that the NHS and the values that underpin it are part of what makes us British—not Cornish, not Cumbrian, not Lancastrian, but British. It is little wonder that the new Secretary of State tried to have that tribute removed from the ceremony. He knew what it meant then, he knows what it means now, and his support for regional pay in the NHS—revealed at the Dispatch Box today—shows that he is determined to fragment the service.

Since the Government came to power, NHS staff have been marginalised, trivialised and ignored. Reorganisation was imposed upon them with no mandate, no support and no warning. Since then more than 6,000 nursing posts have been lost, and billions of pounds have been taken away from the NHS front line to pay for redundancies and a reorganisation that nobody wanted—a reorganisation that was hidden from the electorate before the election.

Despite all that, these people still achieve remarkable results in the most trying of circumstances every single day. They continue to succeed, despite the incompetence of the Prime Minister and his Health Ministers. NHS workers can surely be forgiven for having had enough of the Government being on their backs; but, not content with being on their backs, the Government now want to be in their pockets as well.

Regional pay is demotivating, demoralising and wrong. It will harm the NHS in the parts of our country that are most in need, not only in the NHS and not only in local NHS services, but in the local economies where those NHS services are located. The London Evening Standard’s city editor, Russell Lynch, wrote last week that the regions

“still account for more than three-quarters of the economy. And if I were in Middlesbrough, Manchester or Leeds right now, I’d be more worried about the mugging that’s on the way from the Chancellor over regional pay in the public sector.”

Of course he was right, and the fear is palpable. That is why this is so important. That is why the Government must intervene, stop regional pay taking hold, and uphold the principle of national pay agreements within the NHS.

As we have heard, 60 academics recently wrote to The Times damning the Government’s regional pay proposals. Let us examine why. The public sector wage bill last year was £162.5 billion for the employment of approximately 6 million people. The aim of the Prime Minister, the Chancellor and, I assume, the Health Secretary is to remove what they claim is an 8% disparity between the wages in the public and private sectors. As usual, that is a heavily disputed figure with no real basis, but let us assume that it is correct. If the Government succeed in removing the difference that they imagine exists, 6 million people will have a cumulative £13 billion less to spend. That is almost 1% of our total economy.

In an age of austerity, when the parts of our country that already rely heavily on public spending are feeling the cuts most acutely, what madness it is to take even more money away from those economies, those homes and those families. Talk about killing demand in the regions! This will not just hurt the public sector and damage local economies; it will bludgeon local private enterprise—those who work in partnership with the public sector, who have contracts with the public sector, who trade with the public sector, and who sell their products to local people paid by and working in the public sector. The insidious desire to divide and rule ignores the fact that one nation has one economy.

Let us consider what regional pay in the NHS could mean for the future of NHS services. The Government have encouraged privatisation to run amok in the NHS, deliberately and ideologically. Whereas we used the private sector in a targeted, limited and structured manner, the Conservatives want to let it run riot like the Bullingdon Club in a china shop. It is no wonder that private health care provides so many funds for the Conservative party.

One of the more flimsy Treasury claims about regional pay is that it would stop private firms being crowded out by the public sector, but how is this applicable to the NHS? Is the real purpose of the NHS regional pay proposals to allow the Government to facilitate faster privatisation of NHS services by hollowing out NHS terms and conditions? Unless the Government intervene —as they should—to halt this development, it will appear that part of the agenda underpinning regional pay is, indeed, to enable the easier privatisation of NHS services. Instead of seeing NHS staff for what they are—the best partners any Government committed to improving the NHS could ever have—this Government see them as surplus to requirements in too many parts of the country, with terms and conditions that the Government see as acting as a roadblock to further privatisation.

[Sarah Newton]

Will the hon. Gentleman give way?

[Mr Reed]

I am afraid I do not have enough time.

Let us concentrate on the impact of regional pay proposals in the south-west. Because the Government have given their clear approval through their submission to the NHS Pay Review Body, 20 trusts across the south-west have already each committed £10,000 to form a consortium—a cartel—designed to reduce staff pay and to break away from the established NHS terms and conditions. That is money that should be spent on patient care. Is the Secretary of State satisfied with that state of affairs? Some £200,000 is being spent in an effort to reduce the pay and conditions of NHS staff in the south-west—one of the lowest paid areas in England—against the backdrop of almost 1,000 nursing posts being lost in the south-west since this Government came to office.

It is barely credible that this Government should use the south-west as a laboratory in which to experiment with regional pay. It is a Liberal Democrat stronghold. The Liberal Democrat leader has said that regional pay will not happen, yet it is happening. It may call itself a coalition, but this is a Conservative Government in all but name, and with NHS regional pay they are treating south-west England in the same way that the last Tory Government treated Scotland with the poll tax. I know Members from the south-west see that, and I hope that they will vote with us to stop this gruesome experiment in its tracks.

Regional NHS pay is not being introduced only in the south-west, however. It is also being proposed by a series of trusts across the north-east, which is another region that cannot afford to let this Government pick its pocket. NHS trusts in Oxford, Birmingham, Cheshire and Manchester are also threatening to break away from the national pay agreements established under “Agenda for Change”.

This Government have lost financial control of the NHS, unless it is to cut it. They are now refusing even to try to control the demoralisation of NHS staff as their terms and conditions are denigrated. That is shameful. Why is this happening?

All roads lead back to the Government’s hated Health and Social Care Act 2012, with a £3 billion reorganisation at a time of an already unprecedented financial savings challenge. As trusts are plunged into financial turmoil, they are forced to look at opting out of national pay structures. And that is not all. The Treasury’s own figures show that real-terms NHS spending has been reduced under this Prime Minister year on year, as broken promise follows broken promise.

Regional pay in the NHS is opposed by the Royal College of Nursing, the Royal College of Midwives, NHS Employers, the British Medical Association and more. More importantly—[Interruption.] All Members would do well to listen to this point. Surveys show that 2 in 3 voters across the political spectrum believe that regional pay should be dropped: over 70% of Labour and Liberal Democrat voters and just over 50% of Conservative voters believe that.

That opposition is mirrored across this House. The Deputy Prime Minister claims to be against it—we will see—but Liberal Democrat MPs for Manchester, Withington, for Southport, for Torbay, for St Austell and Newquay, for St Ives and for North Cornwall are against it, and Conservative MPs for areas such as Torridge and West Devon, Hexham, and Brigg and Goole have also spoken out against these ruinous proposals. I commend the argument put forward by the hon. Member for Hexham (Guy Opperman). He has said:

“Our current pay system, which sets a base pay rate, already allows for adjustments in high cost areas like London”,

and

“I do not believe reducing public sector pay will help stimulate private economic growth.”

He added:

“I am very concerned that regional pay would lead to a reduction in the pay packets of some public sector workers in the North East.”

I share that view entirely, and the same can be said for communities across England.

Let none of us forget the disproportionate effects of regional pay on women, because this is also a gender issue. Not for the first time, working women around the country will be asking themselves just what this Prime Minister has against them. Do they all have to lend him a horse before he offers them some protection? Women make up 65% of the public sector work force and they account for more than 80% of NHS staff covered by “Agenda for Change”. Regional pay will hit women disproportionately. That is not right or fair. It is being done knowingly, and the Prime Minister will pay a heavy price if these proposals are not stopped.

We again find ourselves in the midst of a slow-moving disaster that the NHS can do without. We find ourselves having to deal with a Government who command no trust on the NHS, whether from the public or from health professionals. It is a disaster of the Government’s own making. As usual, the areas that can least afford to, and, most importantly, NHS patients, will end up paying the price for this ineptitude. The Secretary of State knows that regional pay will damage the NHS, he knows that the country is opposed to it, and he knows that he should intervene to stop it. A refusal to do so will demonstrate a failure to understand the values, principles and purpose of a truly national health service, and will illustrate his desire to undermine those very values. I commend the motion to the House.