Debate - Monday 4th December 2017
Show/HidePublic Sector Pay
(7 years, 6 months ago)
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Helen Jones (Warrington North) (Lab)
I beg to move,
That this House has considered e-petition 200032 relating to public sector pay.
It is a great pleasure to be here under your chairmanship, Mr Hanson.
When Conservative Members talk about public sector workers, it is common to hear them refer to them as if they were somehow a drain on the economy. They try to make a distinction between public sector workers and taxpayers, as if somehow to be fair to one is unfair to the other. That is nonsense, for two reasons. First, public sector workers, like most of us—or at least those of us who cannot afford obscure offshore tax avoidance schemes—are taxpayers and, secondly, in a modern economy the private sector and the public sector are interdependent. It is not possible to run a 21st-century economy without a healthy, educated workforce. The security that is provided by our armed forces, the police and the fire service is as essential to businesses as to individuals, and the rule of law they maintain, along with the courts and the Prison Service, provides the essential stability that allows businesses to grow and invest.
Nick Thomas-Symonds (Torfaen) (Lab)
I congratulate my hon. Friend on the speech she has started to make. Does she agree that one of the great betrayals and causes of instability is the constant promise that the pay cap is temporary, when all the time it has continued, and seven years down the line here we are?
Helen Jones
My hon. Friend is right, and I will come to that issue later.
None of us could function day to day without, for instance, the people who sweep our streets and empty our bins. I mention them because their hard and unglamorous jobs—as many public sector jobs still are—often get overlooked when we talk about the public sector. We understandably see documentaries about hospitals and schools, but I would like to mention those people who are now officially refuse disposal operatives, but in my neck of the woods are the binnies. They do a grand job.
Kevin Brennan (Cardiff West) (Lab)
I congratulate my hon. Friend on the way in which she is introducing the debate. As Chair of the Petitions Committee, she always introduces these debates with great force and eloquence. In addition to the points she has made, does she agree that public sector workers are also consumers? It is essential that they are appropriately rewarded, as consumers, for their work so that they too can contribute to stimulating the economy, including the private sector.
Helen Jones
My hon. Friend is right and, again, I will come to that matter later.
When we are told that only the private sector generates value in the economy, we should ask, “Yes, but who looks after your workers when they are sick? Who do you call if you are burgled or are the victim of fraud? Who do you call if a fire starts in your building? Who educated the workers you employ?” The answer is, of course, “the public sector”. There is something else about the public sector that cannot be measured so easily: it has contributed more to human improvement and happiness than it is possible to say. Without our teachers and our classroom assistants, for instance, so many hopes and aspirations would be stifled. Having a national health service has freed many families from the fear of being ill and not being able to pay the doctor. The improvements that NHS staff have made in preventing and tackling disease have vastly increased everyone’s quality of life.
Something else about the public sector is that its workers are often ready to go the extra mile, precisely because they believe in the notion of public service. We see that in teachers and classroom assistants, who put on extra classes in their own time to help children who are struggling or to help the very brightest achieve their potential. We see it in an NHS support worker, who will bring in a card or a small gift for an old person on their birthday because they know they have no one else. We see it in a police community support officer who will go around to reassure a victim of crime or antisocial behaviour, even when they are off duty. Nor should we forget that we saw it in this House when Westminster was under attack from terrorists. The staff of St Thomas’s Hospital ran—they ran—across that bridge, heedless of their own safety, to help others, and a very brave man, Police Constable Keith Palmer, lost his life defending us. After such incidents, a lot of gratitude is expressed to public sector workers, and rightly so, but gratitude does not pay the rent or the mortgage, or put food on the table. It does not buy a new uniform for the kids, or a day out.
Dan Carden (Liverpool, Walton) (Lab)
I, too, congratulate my hon. Friend. Aintree University Hospital is in my constituency. Nurses have had a 14% pay cut in real terms since 2010 and one in four of them is taking on additional employment to make ends meet. What does that say about the state of our economy?
Helen Jones
My hon. Friend is absolutely right. Gratitude for public sector workers is not enough; they also deserve our respect. Respect involves paying them a decent wage for the job they do but, sadly, under this Government their wages have been continually held down.
John Spellar (Warley) (Lab)
Many of the arguments my hon. Friend has made up to now would have been recognised and endorsed by traditional Conservatives. Is it not unfortunate that, having imported the anti-state ideology from the US Republicans, they now see the state and public service as the enemy rather than a key part of the mixed economy?
Helen Jones
I could not have put it better myself. The result was that one of the Conservative Government’s first actions was to announce a two-year freeze on public sector pay from 2011-12. They followed that up with an announcement that public sector pay would be capped at 1% for the following four years and, in his 2015 summer Budget, the Chancellor announced a further four years of the cap, saying that he would fund public sector workforces for a pay award of 1%. That did not mean, of course, that everyone would get even 1%: a letter from the right hon. Member for Chelsea and Fulham (Greg Hands), then a Treasury Minister, made it clear that the money was first to be used—as if—to address recruitment and retention pressures in the system: “there should not be an expectation that every worker will receive a 1% award”. What that meant, of course, was that those people in areas where there were retention pressures received less, and those in areas where there were many people on the minimum wage—46,000 in local government alone—who had rightly to receive a pay rise, received less. Even if a public sector worker got the 1% pay rise, their wages were still declining in real terms. A public sector worker on the median income who had their pay determined by the pay cap would, by 2016, have lost £3,875 in real terms. Real-terms losses of between £2,000 and £3,000 are common throughout the public sector.
A midwife on band 6 will have seen a real-terms decline in her wages of 12.1%. Midwives are leaving the profession at a previously unseen rate. They are leaving the register in serious numbers. A teacher outside London will have lost 10.4% and a band 5 nurse will have lost 11.9%. If the pay cap continues until 2020, there will be a further real-terms decline in wages. A social worker will lose £3,533. A border guard—I thought the Government wanted to secure our borders—will lose £2,520. A firefighter will lose £2,766. The reason for those falls is not hard to find: while wages have been stagnant or hardly rising at all, prices have been rising at a much faster rate.
Gloria De Piero (Ashfield) (Lab)
My hon. Friend is making an incredible speech, and I thank her for giving way. On the point about rising prices and falling wages, I want to tell her about a police officer who contacted me. He said that after 20 years of service, he never thought he would be in a position where he was struggling to look after his family. He ended with a question:
“Do we really want a police force that is stressed out and humiliated by not being able to look after their family?”
The clear and simple answer to that is no, we do not.
Helen Jones
Indeed. The situation my hon. Friend mentioned is true of many people in the public sector. Between 2010 and 2016, food prices went up by 8.5%, electricity went up by 27.7% and gas went up by 24%. These are not things that people can do without; they are essential for a decent life. Note that I am not talking about an extravagant life; I am simply talking about a decent life.
Ian C. Lucas (Wrexham) (Lab)
My hon. Friend is making a powerful case. The continuous process since 2010 is taking money out of local economies. All the salaries she is referring to are normally spent on our high streets and in our local businesses. They are being hit hard by the Government’s sustained deflationary approach.
Helen Jones
My hon. Friend is right. I will come to the effect on local economies in a moment. In the meantime, we should note that the costs of going to work have risen since 2010. Bus and coach fares have gone up by 25%. Many low-paid public sector workers are reliant on public transport because they cannot afford to run a car. The cost of a nursery place for a child under two has gone up by 21% on average. In big cities, it has gone up much more. For a child older than two, the cost has gone up by 19.6%.
In addition, public sector workers have seen other attacks on their wages. In many cases, their pension schemes have been changed. They are now having to pay more pension contributions than before. Those on lower pay have been hit by changes to tax credits and will be hit again by the universal credit system. Even when we take into account increases in the minimum wage and changes to the tax threshold, the changes to tax and benefits that the Government have introduced have hit poor working families even harder than those out of work. So much for having a system that makes work pay.
The real effect that those things have on people can be seen clearly in some of the evidence gathered by the trade unions. A Unison survey in 2015 showed that 73% of respondents had had to borrow from family and friends to get by. Some 17% had pawned items and 23% had had to move to a cheaper property or re-mortgage. Some had even used food banks. When those in the public sector—people we collectively employ—are having to use pawn shops and food banks to get by, it shames us all. [Hon. Members: “Hear, hear.”]
Many other staff have real issues, too. In its document on the pay cap, the TUC interviewed a number of people about their experiences. A midwife on £23,000 said she could no longer have a night out or buy gifts for family and friends. An ambulance control worker who works part time—colleagues may have been in an ambulance control room; I can imagine few more stressful jobs—found that his family was £200 a month worse off because of changes to tax credits. A dental nurse had seen her national insurance contributions go up by £28 and her pension go up by £10. That does not seem a lot, but it is a hell of a lot of money for someone on a low wage to lose each month. It is the difference between getting by and not getting by.
Chris Elmore (Ogmore) (Lab)
My hon. Friend is making a hugely important and informative speech, as she always does in her role as Chair of the Petitions Committee. On the trade unions point, the Royal College of Nursing has run a campaign in Wales asking the British Government, not the Welsh Government, to fund the public sector pay rise, because the Welsh Government have sustained £1.6 billion of cuts by the British Government to the block grant since 2010. Does she agree that it is not for the devolved Administrations to fund the pay rises? It is for the British Government to step up and increase the funding for our public sector workers to ensure they get the pay rise they deserve.
Helen Jones
My hon. Friend is right. This Government have been very good at trying to place the blame elsewhere for a policy they introduced. In fact, so bad have things got that last year the chief executive of NHS Providers told the Health Service Journal that one trust had tracked where its low-paid workers were going when they left. They were leaving to work in supermarkets because the pay was better.
Of course, it is not just pay that has caused problems for public sector workers. While their pay is being held down, they are being asked to do more with fewer resources, and they worry about that because they are committed to their jobs. The TUC report includes interviews with various people. One midwife said:
“The pressures on wards, the size of our caseloads and the level of pressure means we worry about making mistakes.”
Another said:
“I’ve seen people walk away from the profession because they can’t take it anymore. It all affects the continuity of care for the women in our care”.
A firefighter told the TUC:
“My station used to have fifteen firefighters and two vehicles on each day. Now there are only six firefighters and one frontline vehicle.”
That combination of pay restraint leading to real-terms cuts and increased pressure on public sector workers means that in many areas we are now having serious difficulty recruiting and retaining staff.
The school workforce census in 2015 showed that one in 10 teachers had left the profession in the previous year. We now know that one quarter of newly qualified teachers leave within three years. That is the highest since records began, and that is not surprising, because they are under enormous pressure. The Government have tried to deprofessionalise the job. They have taken away the checks and balances that used to ensure that heads did not behave unreasonably. Not all bosses are saints, even in the public sector. Cuts to schools are changing the balance of the workforce. We used to have that balance between young teachers coming in with new ideas and older, more experienced staff who could support them, but that is subtly shifting because schools cannot afford to employ the more experienced staff.
I know of one woman, fluent in two languages, who could not find employment when she wanted to come back into teaching after looking after her children. She can only find a job as a teaching assistant. That is a scandalous waste of her experience and qualifications. The Government got rid of lots of prison officers, and now our jails are at risk of serious violence, yet they are having difficulty recruiting more staff because the pay is poor. The NHS has shortages in various areas—accident and emergency, anaesthetics and psychiatry, for example—and the Government’s response when trusts bring in locums or agency staff is to blame the trusts for spending too much money. In fact, the cure is in the Government’s own hands: recruit staff, train them well and pay them properly. That means not only abandoning policies such as refusing to give trainee nurses a bursary, but stopping treating staff as the enemy, as the Health Secretary did in the case of the junior doctors, and it now seems that he plans to do that again to other staff.
In the Budget the Chancellor announced the Government would fund a pay rise for nurses. It applies to all the “Agenda for Change” staff, although we are used to the Government forgetting that cleaners, porters, lab technicians, support workers and a whole load of other staff work in hospitals, and without them our doctors and nurses could not do their jobs. However, the Health Secretary immediately announced that he wanted to change the conditions of work for staff, particularly their unsocial hours payments, so the Government are giving with one hand and taking away with another.
A very wise old headteacher once said to me—in the days when headteachers stayed around a long time, rather than getting burnt out and leaving—“People say the most important thing in school is that the children are happy, but I think the most important thing is that the staff are happy, because if the staff are happy the children will be happy and well taught.” That needs to be applied in other areas as well. Public sector pay has dropped 15% from its peak, and has lagged behind growth in the economy as a whole since 2016. It is now at its lowest level relative to the private sector since the 1990s, when, funnily enough, there was also a Conservative Government in power. As my hon. Friend the Member for Wrexham (Ian C. Lucas) has said, that has had a huge effect on regional economies.
If we take average public sector pay and look at the number of full-time equivalent workers in a region, we can estimate the loss. The north-west has lost £3.7 billion from its economy; the midlands £3 billion; and London a whopping £9.1 billion. That is all money that would have been spent in local businesses, protecting local jobs. Most of the people we are talking about are low paid and the extra money they get is spent on essentials, but the Government choose to ignore that. They have several excuses, or explanations, depending on one’s point of view. First, they try to say that public sector workers have better terms and conditions than the private sector. Well, they no longer have better pensions—although most of them never did—as their pensions have been changed. Estimates of private sector pay are always depressed by the fact that some areas of the private sector have very low pay indeed. The Government know that, because their statistics authority told them so in 2016 and showed that on a like for like comparison public sector workers are on average paid 5.5% less than in the private sector, not more.
The second attempted explanation usually implies that public sector workers have cushy jobs and have it easy. Tell that to a police officer in the inner city, a nurse in A&E, someone who cleans in a hospital, or the bin men working out in the rain and snow this winter. Cushy? Most Conservative Members here would not last a week. In fact, I do not think many of us would last a week. The jobs are hard.
The third explanation says that all this is dreadfully, terribly regrettable, but necessary to get down the debt. We need to say that that is simply and absolutely wrong because during the time of the public sector pay cap, debt has increased, not diminished. It has increased by £496 billion. So if the answer to debt is a public sector pay cap, someone is asking the wrong question. The Government fail to take into account the tax that the public sector generates. It has been estimated that for every 1% increase in public sector pay, at least £710 million worth of tax receipts are generated, possibly as high as £800 million, cutting the amount that is spent on tax credits and benefits. That reduces the total cost of a 1% increase to around £600 million. Opposition Members will say, “That is a lot of money”, which it is, but it is a drop in the ocean compared with what the Government have spent on reductions in corporation tax.
The total of the reductions in the main rate of corporation tax, the small profits rate and the combined rate costs the country £16.5 billion a year on current prices. So there we have it: tax cuts for big companies and pay restraint for public sector workers. Nothing could tell us more about the Government’s priorities. They also ignore the fact that public sector pay increases generate more jobs in the wider economy and at least £470 million in the wider economy, probably nearer £800 million, and that supports at least 10,000 full-time equivalent jobs in hospitality, transport and retail. The truth is that the policy is based on a failed economic model.
Mr George Howarth (Knowsley) (Lab)
My hon. Friend is typically making a powerful and eloquent case, which I agree with. Does she agree that another excuse the Government frequently use is that it is not down to them, but down to pay review bodies? The difficulty with pay review bodies, which are generally a good thing, is that they are not required to close the gap that already exists, but to consider relativities as they stand at the moment. Is it not time we had a proper review that looked at all the issues my hon. Friend has mentioned and that accepted that public sector workers are important to our economy, our safety and our everyday existence?
Helen Jones
My right hon. Friend is right. The cap has depressed the wider economy. It is now starting to depress wages in the private sector, and it is seriously depressing public sector workers. It has failed all round. The Government need to accept that they have failed and should stop trying to put the blame elsewhere. They announced, for instance, that the police can have a rise, but they will not fund police authorities to pay for it. Council workers can have a rise, but they are cutting the money available to local authorities. Health service workers can have a rise, but they will take it back from somewhere else. The Government must stop making excuses and recognise that the policy has failed.
Two things need to happen: first, all of our public sector workers should at least get a proper living wage: not the spurious national minimum wage, but a real living wage. We cannot run public services on the backs of poorly paid workers any longer. Secondly, the Government need to let proper negotiations begin in the various pay review bodies. My right hon. Friend is right: at the very least they should look at the discrepancies that have been created and how far public sector workers have fallen behind. Then they need to fund those pay rises. That would be good for public sector workers, the wider economy and our regions, and in the end it would be good for our country. It is time to abandon the policy and give people a decent wage.
Several hon. Members rose—
David Hanson (in the Chair)
Order. Some 22 right hon. and hon. Members have indicated that they wish to speak in the debate. The debate appears to have a long time to run, as it can continue until 7.30 pm, but my successor in the Chair will have to call the Front-Bench spokespeople at around 7 pm. Given that we have two hours and, at the moment, about 22 hon. Members who wish to speak, I suggest that Members stick to five or six minutes. I may have to impose a time limit later on, but I hope that we can manage that voluntarily. I call Gerald Jones.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Thank you, Mr Hanson, for calling me to speak so early in today’s debate. Given the large number of people who wish to speak, I will try to keep my comments relatively brief. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on setting out so powerfully how the Government are on the wrong track with regard to public sector pay. I also wish to declare an interest: two trade unions, Unison and the GMB, gave financial support to my constituency Labour party in the 2017 general election.
Right across the United Kingdom, we rely on our public servants each and every day to do the jobs that keep our communities and our country functioning—whether working for our local councils, maintaining our highways, cleansing our streets and villages, teaching in our schools, providing home care to the elderly, or working in our emergency services or Her Majesty’s armed forces. All those roles have one thing in common: they provide essential pubic services, and it is absolutely right that those public service workers need and deserve a fair pay rise.
The Government’s pay cap has been in place since 2010 —seven long years. Throughout that time, our hard-working public servants have endured significant financial pressures. Inflation has risen by 22% over this period, while public sector pay has risen by just 4.4%. Wage freezes and the Government’s pay cap have lasted throughout this time, bringing financial misery to public service workers and their families, and causing huge damage to services. For example, an average public sector worker, paid the median public sector wage in 2010 and subject to the two-year pay freeze followed by the pay cap, has seen the value of their wage drop by £4,700.
The pay cap and years of below-inflation pay awards are also having a significant impact on recruitment and retention, and are one reason why nurses have been leaving their profession in droves. Local government is having trouble recruiting and retaining staff, with the workforce survey revealing that 71% of councils are reporting issues. That recruitment and retention crisis applies across the public sector.
Although the Government have made pay offers in excess of 1% for some sectors, the pay cap effectively remains in place for the vast majority of public sector workers. It is important that the Government do not cherry-pick pay rises for some public sector workers, which could be seen as an attempt to divide.
Stephen Kinnock (Aberavon) (Lab)
Is my hon. Friend aware that in my local authority area, Neath Port Talbot, public sector workers took a voluntary pay cut totalling £8 million to avoid the catastrophe of compulsory early redundancies? Does he agree that such a situation cannot and should not be repeated?
Gerald Jones
Yes, I do. It is an example of the dedication of our public sector workers but, as my hon. Friend says, is a bridge too far.
We need to see an end to the public sector pay cap, with a fully funded pay rise for all those working in our public services. Local authorities have tried to ease the situation. The two local authorities serving my constituency, Merthyr Tydfil County Borough Council and Caerphilly County Borough Council, took decisions during the previous council term to become living-wage employers—the real living wage, not the pretend living wage that the Government are promoting. That has helped to mitigate, in a small way, the effects of the pay cap.
The Welsh Government have indicated their support for our public sector workers and repeatedly called on the UK Government to end the cap on public sector pay and give workers across the UK a much-needed pay rise, funded properly by the UK Government. They have stated:
“The UK Government must do the right thing and lift the pay cap right across the UK public sector as part of a wider strategy to end their damaging policy of austerity.”
With huge cuts to the Welsh Budget and local government in recent years, the Welsh Government have been unable to take further action without funding from the UK Government.
There are many economic arguments for paying our public service workers; however, as a country, surely it is our moral duty to value our public sector workers. They work to keep us safe, healthy, educated and cared for, in the face of prolonged real-terms pay cuts that have strained their working and family lives. The Government need to act. Last month’s Budget provided the Chancellor with an opportunity to bring an end to the period of unfairness and pay misery for public sector workers. The Chancellor chose not to act. Instead, public service workers are facing Christmas and the new year wondering how they are going to make ends meet.
Finally, figures have been released today showing a rise in the number of children and older people in poverty of 700,000. That may not be wholly attributable to the pay cap; however, in-work poverty is on the rise, and the pay cap will have had a significant impact on that. Food banks are now used more by people in work than by those out of work. Taken with the resignations of the members of the Social Mobility Commission, there is plenty of evidence to urge the Government to act. I look forward to the Minister’s response, and urge the Government to listen and take action sooner rather than later.
Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Mr Hanson. I, too, thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing the debate on behalf of the Petitions Committee.
Hundreds of people in North Tyneside signed the petition, and I have received emails from dozens of constituents asking me to be here today—some of them are former colleagues with whom I worked before becoming an MP. Thousands of people in North Tyneside work in the public sector. In fact, North Tyneside Council remains one of the largest employers in the borough, with over 3,000 employees. Many other constituents of mine are among the thousands of workers in Government Departments at Tyneview Park, Cobalt business park and Benton Park View, which was known as “the Ministry” for many years. It is not surprising that there has been so much support for the petition locally, particularly given that many of those workers saw their pay frozen between 2010 and 2012, with only a 1% increase each year since then, meaning that basic pay for local government workers has, on average, fallen by 21% in real terms since 2010.
The Public and Commercial Services Union, of which I remain an associate member, represents over 180,000 members in the civil service and related agencies nationally. Its members have seen the value of their incomes plummet, with pay being cut on average by £3,000 under the pay cap. Because of pay restraint in all our communities we have seen huge reductions in disposable income in the local economy, to which many Members have referred. That is only made worse by large public sector job losses.
Furthermore, the pay cap has also led to problems with recruitment and retention in essential public sector jobs, putting more pressure on our already overstretched services. Perhaps that is why a recent poll by the TUC revealed that 70% of the public support scrapping the pay cap. It would make sense, as research from the Institute for Public Policy Research demonstrates that a significant portion of the cost of increasing public sector pay
“would be returned to the Treasury almost immediately in the form of higher taxes and lower spending on means-tested benefits”,
which, sadly, many of our public servants rely on. It would also bring more money into the economy and thus create further jobs.
I pay tribute to the public sector unions, mainly Unison and PCS, for pressing the Government on this issue, and calling for an end to the pay cap, with an above-inflation pay increase for all public sector workers. I hope that the Minister will heed the results of the recent ballot by PCS of all its members, in which 99% said the pay cap must be scrapped and 80% said they would be prepared to strike if the Government would not back down.
Some of the people who were balloted are my former colleagues, whom I described in my maiden speech in June 2010 as committed to delivering good services. I think every Member here knows that that is true. I went on to say:
“As Members of this House, we are elected public servants and we should do all that we can to protect our colleagues across the public sector from Government cuts.”—[Official Report, 30 June 2010; Vol. 512, c. 902.]
Seven years on, I stand by what I said then, and ask the Minister to show due respect and appreciation for all public sector workers. Pay up now and end the public sector pay cap across the board.
Several hon. Members rose—
David Hanson (in the Chair)
Order. A number of Members have intervened, then left the Chamber. Mr Speaker takes it very seriously if people do not have the respect to stay for the rest of the debate if they have intervened. I hope that other Members who intervene will stay in the Chamber for the whole debate. It is extremely discourteous to all Members, particularly when we have 22 people wishing to speak.
Eleanor Smith (Wolverhampton South West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for bringing this subject to us.
I have received a number of emails from constituents highlighting the effect of the public sector pay cap on them. One of my constituents—a single mum of two, who is also a nurse working part-time shifts—has been struggling to make ends meet, and Christmas is fast approaching. She needs extra money but is unable to do extra work due to childcare costs. The cost of living is increasing, but her wages do not reflect that.
I was a nurse for 40 years—I was elected to Parliament in the June election—and during that time, like many other nurses I experienced the pay cut. Many of us would say that we got three-week, not four-week, pay. When it came to the fourth week, many of us who could do extra work would do it, although we were overworked already. People with childcare responsibilities could not do that.
I am not only talking on behalf of the nurses; I am also talking on behalf of the support staff, who are on even lower pay. They would work 70 hours a week, which is not legal under the working time regulations, but what else could they do to keep a roof over their head? I was approached by a GP on Sunday, who asked me to talk about the fact that he cannot get practice nurses in his surgery because the wages are too low.
That is what happened to us throughout that time. I ask the Minister to look at this matter. I am a Unison member, and on its behalf I want to ask whether the Government will guarantee that the new deal on NHS pay, including the Agenda for Change, will get additional funding, and will not be paid for through cuts to annual leave and maternity pay. I can tell him this now: nurses and staff will not go for that.
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.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing this important debate.
Seven years after the wage freezes and pay caps for public sector workers began, there is still no end in sight for millions of workers, many of whom are low paid and struggling to make ends meet. When the pay restraints were first introduced, workers like me were understandably not best pleased, but many grudgingly accepted them. Not in their wildest dreams—or should I say nightmares? —could they have foreseen that, seven years later, such conditions would still be forced upon them. The growth of the wealth of the very richest in our society has been matched by the growth of the number of people, including those in work, using food banks. It cannot be right that in the sixth richest country in the world, those who do some of the most important jobs in society feel themselves getting poorer every year.
Kayleigh, one of my constituents, wrote to me outlining her concerns. A newly qualified nurse, she loves her job and is passionate about delivering patient care, yet she finds herself questioning her decision to join the profession. She has spoken to colleagues who have been forced to seek a second job to feed their children. She has watched nurses leaving their jobs for low-skilled jobs in restaurants as the stress of being a nurse has become too much. She even spoke to one colleague who had to remortgage her home, as the rate of inflation had made it increasingly difficult to keep up to date with repayments. If young, passionate people like Kayleigh are considering leaving nursing, what does the future hold for our public services?
Mike Amesbury (Weaver Vale) (Lab)
In my constituency, as a result of the pay cap, a social worker with Halton Borough Council has put off their professional registration to carry out the essential job of being a social worker, and so is left at their desk. Does my hon. Friend agree that that is disgraceful?
Preet Kaur Gill
Absolutely. I totally agree that workers are having to put their professions on the line in that way, as is Kayleigh, but it is not just the effect on such individuals and their families—the impact on the wider economy is clear.
Research by the TUC shows that the long-standing pay cap has meant that, since its introduction in 2010, staff such as nurses, teachers and civil servants have spent £48 billion less on the high street. Across the public sector, there are massive issues with recruitment and retention of staff. According to the Institute for Public Policy Research, in December 2016 there were an estimated 40,000 nursing vacancies in England, a vacancy rate of 11.1%, and 12,000 vacancies for healthcare support workers.
That is no surprise. Why would people want to go into a profession in which they feel undervalued and have a real-terms pay cut every year? If we cannot recruit the nurses, teachers and local government workers we need to provide the crucial local services that our constituents rely on, the very fabric of our society is at risk. It is time to end the stranglehold on public sector workers, for the good not just of hard-working people such as my constituent Kayleigh, but of our economy and our society as a whole. It is time to scrap the cap.
Rachael Maskell (York Central) (Lab/Co-op)
Thank you, Mr Hanson, for calling me to speak in this important debate.
We have seen the cost of living soar by 22%, with the increase in the cost of utilities, food and travel exceeding that, so at the same time the pay gap is getting bigger and inflation is on the move. At the Budget, this Government were left exposed as not having an answer for all our public sector workers who have endured pension cuts, down-banding and cuts to their allowances. As union head of health, I represented people who had seen their wages decrease by a third. That is the reality of our public sector today, and it is having an impact on recruitment and retention, as we have heard.
In York, house prices are 9.5 times higher, and that is what people need to save for, although totally unaffordable. People are leaving our NHS, which has to go to agencies to put in safe staffing levels. That has pushed our health service into debt and into the process of capping expenditure. The Secretary of State for Health says that hospitals will have to find the money, but where from? We need the Government to wake up to the reality of what is happening to our public services—not just the NHS, but right across the public sector. Our public sector workers are so professional despite the pressure they are under, that they deserve a pay increase. Today we hear from the Joseph Rowntree Foundation that 13.9 million people have been pushed into poverty in the sixth richest nation on this planet—that is a complete disgrace.
I want to highlight one or two of the issues that have not yet been raised in the debate. First, I will talk about inequality in our pay system. We know that there is vertical segregation on the grounds of race and gender. In 2013, during the pay restraint, I was completely shocked that the armed forces had an advance on their pay of 1.5%—I do not begrudge them that, but everyone else received 1%. The police and prison officers, too, have had an advance in their pay that has not been awarded elsewhere. I highlight the fact that those are male-dominated professions, while nurses, teachers and those in other women-dominated professions, as well as those not even covered by pay review bodies and also predominantly women, have had no such increases. That shows an inherent problem of gender discrimination in the Government’s pay policy. I also emphasise that those who receive the lowest pay are the worst off.
With Agenda for Change, the pay scale that covers the vast majority of NHS staff, I want to highlight the disparity of pay. Although a fair system was introduced to address real problems in the pay system, since 2004 someone in band 1, on point 2 of the pay scale, has received an increase of £3,525, while someone on point 54 has received a £21,910 increase. That shows the growing disparity in pay. We need to ensure that we do not just add percentage increases to pay, which benefit people at the top of the scale. That is why the trade unions have come together this year to put forward a pay claim that involves a linear increase to ensure that those worst off in the pay system also get a fair deal. That is such an important issue. We also need to address the growing inequality between the different nations of England, Wales, Scotland and, in particular, Northern Ireland which now has real problems in the pay system as money is not being paid out.
We must also look at redressing the situation so that a percentage increase is seen as separate from the incremental scale—that is one of the points I really want to dispel the myth on. We have heard how pay progression is being mistaken for a pay increase. Agenda for Change is absolutely clear that incremental pay progression for all pay points within each pay band will be conditional on individuals demonstrating that they have the requisite knowledge, skills and competencies for their role. Forty-six per cent. of staff are at the top of the band, which is the rate for the job, but people acquire skills and knowledge as they move to the top of the band, so that is not a pay increase—it is a mistake by the Government even to pretend that it is.
Finally, I want to say: do not mess with the terms and conditions. Those have already been played with so many times, and the kind of things that the Government have asked of staff—such as addressing unsocial hours payments—predominantly impact on women. Do not go there—staff do not want the Government to go there and will not let them take away those crucial elements of pay enhancement for people who work through the night so that they can pay for more expensive childcare. I want to say to the Government: “You have the money and the ability to raise that money—pay it!”
Jack Dromey (Birmingham, Erdington) (Lab)
Workers have suffered the longest stagnation of wages since a royal prince was about to get married—Prince George, the son of Queen Victoria—when Disraeli and Gladstone were in No. 10 Downing Street and trade unions were illegal, 150 years ago. The hardest hit have been public servants, with a 4.4% increase since 2010 against a background of a 22% cost-of-living increase.
Who are the public servants we are talking about? The Unison home help I met last year who was buying Easter eggs—“Is the council paying for them?” I asked, to be answered, “No, I am buying them myself and taking them around to all the people I care for, because some of them never see anyone else from one month to the next.” Tracey the neonatal intensive care nurse who nursed little Liam, who died seven times, back to life. The headteacher, teaching assistant and teacher in Kingstanding who were rescuing children from desperate poverty by turning around their prospects. They took one particular young boy from the bottom of the class to the top, despite the fact that he came from a household with no carpets, no curtains and no cupboards, with clothes stored in bin bags—acute poverty, but the school turned his life around. The police officers who chased the armed bank robber and recovered for Lucy her children, who had been hijacked by him as he sped away from the police. None so noble as those who care, none so noble as those who save lives and nurse the sick back to health, none so noble as those who provide ladders of opportunity, particularly for the poorest in our society, and none so noble as those who put their life at risk to help save the lives of others.
Jack Dromey
Because of the pressure of time, I will not, so that more people can speak.
The reward of those public servants is rising demand, rising workload and falling living standards. That is the impact of not only pay restraint but major cuts to, for example, local government budgets, leading in turn to problems with increments, shift changes and fewer people being employed, so those left having to do more. In our constituencies we can all see the impact on them and their families, as they have to turn to debt advice, pawning household goods, taking out payday loans and food banks, such as the home carer I met in a food bank in my constituency—a proud woman with two kids who loved her job but could not make ends meet without going to the food bank.
If public servants are suffering, so too are public services, through the turnover of labour and the stress on staff—very often, staff complements are stretched to the maximum and those who work in public services are demoralised. There is an impact on local economies, because if public servants get a pay rise, they do not salt away their money into Cayman Islands bank accounts; they spend it in the local economy, creating wealth and jobs. There is a grotesque contrast between the way that public servants are treated and what has been revealed in the paradise papers. This is a Britain where we have a Conservative Government that stand back and allow tax dodgers to get away with it, and then the Prime Minister says during the general election campaign to a nurse that there is no such thing as a magic money tree. Yes, there is, and they grow on the Cayman Islands, Bermuda and Jersey, helping the wealthy to avoid their responsibility to society.
I am grieved because I am from a family of public servants: when my dad came off the roads he was a train driver on the London underground; my mum was a nurse; my Uncle Mick, who lived with us, was a street cleaner. They believed in public services, as the country believes now in public services and public servants, but public servants have been let down by a failing, uncaring Government. It is interesting that a monastic vow of silence has been taken by those opposite, who have been reluctant to get up and defend what their Government are doing. The unmistakable message from this debate is that they may stay quiet but we will not. Labour is on the side of public servants.
David Hanson (in the Chair)
A number of hon. Members have withdrawn from speaking, giving us a little more flexibility. Rather than a strict five-minute limit, hon. Members may speak for six or seven minutes.
Mike Hill (Hartlepool) (Lab)
It is a pleasure to speak under your chairmanship, Mr Hanson. I wish to declare an interest; I used to be employed by Unison, which brought forward the petition and also donated to my general election campaign, together with Unite and GMB.
The Government’s austerity agenda has not only done great damage to our public sector services but brought our NHS to the brink of collapse. Indeed, in Hartlepool, our local hospital is at risk of haemorrhaging services, which is unacceptable to the people. I know from experience that relentless cuts and redundancies have led to remaining staff being over-stretched and under extreme pressure. For more years than I care to remember, those same workers have suffered pay restraints and pay caps. In the light of inflation, that has meant, in effect, that they have suffered a real-terms pay cut. It is a sad indictment of the situation created by this Government that health workers and other public sector workers in my constituency are resorting to food banks.
Things have got so bad that Unison gives out school uniform grants and other welfare provisions for those trapped in in-work poverty, and local branches increasingly issue food bank vouchers to their members who are in need. It is unacceptable that this situation has arisen and that NHS and other public sector workers are struggling to get by on low pay. The pay cap has been cited as one of the reasons why nurses have been leaving the profession in droves, yet its main purpose—addressing Government debt—has failed. Since the cap was introduced, Government debt has grown by around 50%, to reach £1.7 trillion in May this year. Our hard-working NHS staff should not suffer the burden of propping up—
Mr Jim Cunningham
My hon. Friend has probably heard Ministers say how wonderful our public services are and that what staff and our emergency services do is wonderful. But does he agree that the best thing that the Government could do is to improve on the recommendations of the wages board for a big increase—not the one that the Government might be proposing? More importantly, does he agree that that the Government should put their money where their mouth is, and give those staff a decent increase?
Mike Hill
I absolutely agree with my hon. Friend. The Government’s words are hollow when they say that they will look at the pay review bodies but they have not committed to the recommendations of those pay bodies.
Our hard-working NHS staff should not suffer the burden of propping up the Government’s failed and farcical fiscal policy. They deserve a pay rise and they deserve it now.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank the 331 people in my constituency who signed the petition, and I commend the hon. Member for Warrington North (Helen Jones) on very eloquently opening the debate. I am grateful to the hundreds of local people who have emailed and written to me before the debate and I am pleased to be speaking on their behalf in calling for action on public sector pay.
It is important that, as we take part in this debate, we remember the backdrop against which it is taking place. We have the worst wage growth in 210 years, and public sector workers have seen their spending power reduced because of rising inflation. The average household has lost £7.74 per week due to higher prices of essential shopping items such as bread, milk and cheese. The Governor of the Bank of England has warned that households have slashed spending as incomes continue to be squeezed by a weak pound, which is almost certainly not helped by the Brexit shambles that is unfolding. We are witnessing the longest fall in living standards since records began. Under this Government, whose Members have been very silent in this debate, inequality has been exacerbated and, in the words of the Resolution Foundation, we are witnessing
“the biggest increase in inequality since Thatcher.”
This morning, I attended the Joseph Rowntree Foundation’s launch in central London of its report on the state of UK poverty in 2017. The report states that one in eight workers now lives in poverty. Essentially, that blows a hole in the argument that work is the best route out of poverty, especially if we are condoning embarrassing levels of poverty pay. The report said that 47% of working-age adults and the poorest fifth of the population now spend one third of their income purely on housing costs. The recent Budget was a missed opportunity for the Chancellor to end pay restraint for our hard-working public sector workers. The Chancellor should have followed the commitment of the Scottish Government, which will lay out its draft Budget next month. Our finance secretary Derek Mackay has already said that the Scottish Government will lift the public sector pay cap, even if Westminster—
Ben Lake (Ceredigion) (PC)
I agree with the hon. Gentleman that public sector workers across the UK deserve better than the current policy pursued by the UK Government. However, does he agree that in the interim, devolved Governments have a responsibility to do all that they can to mitigate the worst effects of the public sector pay cap, and to ensure that our public sector workers get a fair deal, regardless of where they are in the UK?
David Linden
I wholeheartedly agree with the hon. Gentleman. I very much welcome the engagement between the Scottish Government in Edinburgh and our trade unions on the public sector pay cap.
During the September recess, I undertook something that may be a bit unusual for an MP, called In Your Shoes, where I spent a day every week doing a different job: a day pulling pints and calling the bingo at the Tavern bar in Parkhead, a day with the Easterhouse citizens advice bureau, a day teaching children at Our Lady of Peace Primary School, and a day out with police officers in Baillieston. One of the last days that I did was at Easterhouse fire station. Over the course of the day, the guys at Easterhouse fire station were incredibly welcoming; they had me dressed up in all the outfits, going on the drills with them and using the ladders and hoses. After that, we went back to the fire station. I was grateful to the officers at Easterhouse fire station and the Fire Brigades Union representative, Thomas Hanlon, for their thoughts and comments on the challenges that they face. I was struck by the bravery of those guys, because when a building is on fire, they run towards it, as we saw happen at Grenfell tower. We MPs are on £76,000 a year, and the reality is that none of us would run into a burning building, but that is the reality of what those guys do. The Government will say that we are all in this together, but the reality is that we are not. We are not running into the burning buildings with those firefighters. The least that the Government can do is give them the pay rise that they deserve. Anything else is just lip service.
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.
Mohammad Yasin (Bedford) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing this debate, and the 147,000 members of the public—especially the hundreds from my constituency of Bedford and Kempston—who signed the petition that brings us here. I hope that they know their efforts are making a difference.
I have long argued that public service workers are well overdue a pay rise. The Government’s response to the petition is not good enough. They say:
“Public sector workers deserve to have fulfilling jobs that are fairly rewarded.”
They point us to 12 September, when they announced a move away from the 1% public sector pay policy towards a more flexible approach to pay. But those are just words. Where is the action?
The truth is that the Government are using the country’s debt—let us not forget that it has got worse on their watch—as an excuse not to give public sector workers the pay they should have. The Government were not worried about that debt when they managed to find £1 billion for the Democratic Unionist party or when they committed billions of pounds to funding Brexit. Public sector workers are bearing the brunt of the Government’s failed austerity policy, and that must stop.
The truth is that, far from respecting public sector workers, this Government are humiliating them. NHS staff were all but ignored in the Budget. Teachers and pupils were ignored. Firefighters were ignored. Police officers were ignored. Local authority workers were ignored. The decision on nurses’ pay was given to a pay review body. The Government refuse to take responsibility.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Will the hon. Gentleman give way?
Mohammad Yasin
Public sector workers should not pay the price for the Government’s incompetence. They are the backbone of society and will be supporting the public long after the Government are voted out.
Mohammad Yasin
If you had wanted to speak, you could have put your name forward.
Mrs Gillan
On a point of order, Mr Hanson. I need your advice. I was not able to put in to speak in this debate because I am not able to be here for the whole debate, but this matter was raised with me by two constituents and I came here to listen because I hoped that I would be educated. I have sat here and heard the Government being castigated. I wanted to intervene, and I was trying not to counteract your advice that we should not just intervene and leave the Chamber, but unfortunately the hon. Gentleman would not let me intervene. How do you think I can best make my point, other than through this point of order?
David Hanson (in the Chair)
I am grateful to the right hon. Lady for what was, in many ways, a non-point of order. She will know that the hon. Gentleman who has the floor is entitled to decide whether to give way. He has chosen not to give way. I did say that Members should not intervene and then leave, because I was concerned that some Members intervened and then walked straight out. If she wishes to intervene and a Member wishes to accept her intervention, that is fine. In order to progress the matter—we do have some extra time now because of Members withdrawing—Mr Yasin can continue.
Mohammad Yasin
Thank you, Mr Hanson. I have not finished yet. I am grateful for the patience of the right hon. Member for Chesham and Amersham (Mrs Gillan) and I am glad that a Government Member wants to speak, so I will take this opportunity to give her a chance to do so.
Mrs Gillan
I am genuinely grateful to the hon. Gentleman for giving way. I came here to learn more about this issue. Two constituents—one who earns £10,000 as a teaching assistant and another who earns £32,000 as an administrator—wrote to me because they had signed the petition. All Government Members value public sector workers; everyone sitting here is certainly here to learn. I wanted to ask the hon. Gentleman what his union’s proposals would cost and how it would advise the Government best to raise that money. It is a serious question, and I hope that he may be able to answer it.
Mohammad Yasin
You should ask your Minister how he will deal with these issues. If you care for the people, you should not ignore the workers, and you should not ignore the nurses—
Mohammad Yasin
I apologise. If the Government care for public sector workers, they should not ignore teachers and they should not ignore nurses. They should not ignore the 5.5 million workers in this country, and their families, who are struggling because of the cuts that the Government have made.
It is painful that only a handful of Government Members have turned up for this important debate. That shows that they do not care about our workers, who provide such a wonderful service to our country. As my hon. Friend the Member for North West Durham (Laura Pidcock) said, if those workers stopped work today, the country would collapse. The Government need to take care of these workers and listen to them, and they should stop cutting their livelihood.
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.
Alex Sobel (Leeds North West) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for so eloquently leading the debate. As a GMB member, I feel privileged to be able to speak in a debate on pay and pay inequality, because it is surely one of the most important issues facing the United Kingdom today. I have had hundreds of emails from Unison members and hundreds of postcards from members of the Royal College of Nursing on this very issue. In summer 2016, the Prime Minister promised to fight against what she called the “burning injustices” in British society. This weekend, the four key members of the Prime Minister’s Social Mobility Commission resigned, citing little hope that the Government could deliver a more equal society. What more damning indication is there that the Government are failing?
[Graham Stringer in the Chair]
It is clear that this country has a problem with wealth inequality. A recent report by the Resolution Foundation states that 1% of adults own 14% of the nation’s assets. At the other end of the scale, 15% of the British people own no assets at all. The reality now is that wealth inequality is hitting public sector workers—our social workers, police officers and firefighters—who are the very backbone of our society. That is largely down to the public sector pay cap: one of the most iniquitous policies the Government have come up with, and a policy not just of this Government but of the previous coalition Government with the Liberal Democrats—one might note that they are not in the Chamber.
In 2010, when the coalition Government was formed, the country was told it needed to make sacrifices to reduce the national debt. David Cameron’s exact words— I am sure we all remember them—were:
“we’re all in this together”.
Seven long years later, debt is still rising. The date for the eradication of debt, as my hon. Friend the Member for Crewe and Nantwich (Laura Smith) said, has been pushed further and further back; and all our public sector is in crisis, because of the harsh austerity economics of those two Governments. All in all, the cost of living has risen by about 22%, while public sector pay has not just stagnated but fallen back, in real terms.
The Government have created a system in which the people we rely on most cannot afford to live in 21st-century Britain. To me, that does not scream of a society where we are all in it together; I am sure it does not to the other Members in the Chamber, either—or perhaps that is not true of all of them. Is it not entirely reasonable for public sector staff to ask what their sacrifice has been for? Is it not reasonable for nurses to ask why more and more of them are having to take second jobs, or use food banks, to feed their families? Is it not reasonable for firefighters to ask why 27% of their colleagues have contemplated suicide because of the stress of reduced budgets and increased pressures? Is it not reasonable for teachers to ask why teaching staff and their families across the south of England are ending up homeless because their wages have stagnated while rents have sky-rocketed?
I recently spoke to one of my constituents, who has worked in social care for more than 20 years. He explained the effect that what is essentially a seven-year wage cut has had on his life and his family’s lives. He could have put a down payment on a house, paid for his child to go to university, or saved up for a more comfortable retirement. Yet, despite it all, he told me how they would have accepted a temporary pay cap, to protect the services that he has dedicated his life to. He is not unique; that is the norm for public sector workers, not just in Leeds North West but throughout the country, and I am proud of him and all public sector workers.
While such people have had to make money stretch further, the services they work in have been slashed and they are working twice as hard for less money to keep cash-strapped services from collapse. The Institute for Fiscal Studies has warned that the public sector faces a recruitment and retention crisis as a direct result of the pay cap. On any one day there are 90,000 vacancies for social care jobs in England. Just under 340,000 social care employees leave their job each year. Schools have been forced to increase money spent on advertising for teachers by 61%; that is money being wasted in the education system on recruitment rather than being spent on retaining excellent teachers.
Mike Amesbury (Weaver Vale) (Lab)
Would it make sense for the Government to reverse the ludicrous tax cuts for the incredibly wealthy and corporations, amounting to some £19 billion, to fund public servants and end the pay cap?
Alex Sobel
That is an excellent point, and if the right hon. Member for Chesham and Amersham (Mrs Gillan) had stayed in her place she would have heard her question answered by my hon. Friend. It is right: corporation tax rates have fallen consistently, but large corporations have not paid their burden of taxation. If they did, it would be to the good of all society, including their own workers and shareholders.
The Metropolitan police have had to take the extreme measure of asking retired police officers to return to work to help them cope with demand. The argument is not only a moral one—although it is a moral one; clearly the pay cap is a false economy, and maintaining it is costing billions. It is not just the recruitment crisis that is costing the country billions; the TUC has also shown that the pay cap has meant public sector staff spending £48 billion less on the high street since it was introduced in 2010, undermining private sector as well as public sector jobs and pay. I have a simple question for Conservative Members—those who are left: who will you turn to when there is no one to put out the fire in your house, when no one keeps criminals off your streets, and there is no one to care for you when you are sick, old or unable to care for yourself? The hypocrisy of the Government is staggering. Praise is lavished upon public sector workers, but is not reflected in their pay packet. Praise does not pay the rent, feed a family, or heat a home.
Faisal Rashid (Warrington South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful for the opportunity to contribute to this important debate. I thank my constituency neighbour, my hon. Friend the Member for Warrington North (Helen Jones) for setting out the petition and opening the debate with some excellent points. I thank the almost 150,000 people who signed the petition, especially the 326 signatories from Warrington South. It is further evidence of public support for ending the public sector pay freeze, and it is extremely important that we, as a Parliament and as public representatives, react to that.
It was widely reported on 12 September that the Government had lifted the public sector pay cap but, unfortunately, that was not the case. The pay freeze remains in place for the vast majority of public sector workers. The Government’s approach has been to cherry-pick some groups in the public sector for a so-called pay rise, which would still result in their wages being cut in real terms. It is important to note that the Government have so far failed to provide much of the additional funding that is needed even for such an incremental rise. In areas where funding has been discussed, such as in the NHS, there remains a lack of clarity. That is yet another example where the Government have been strong with words but weak on action; and we need action.
Liz McInnes (Heywood and Middleton) (Lab)
On that point, does my hon. Friend share my concern that when he was asked about funding the lifting of the pay cap for NHS workers, the Health Secretary merely said he would look at reforming terms and conditions to pay for the increase?
Faisal Rashid
I totally agree; and nothing happened.
The continuing pay freeze is putting immense pressure on public services. I have seen first-hand, in Warrington South and across the country, how seven years of neglect and under-investment have put unnecessary and unacceptable pressure on many public sector staff. I have also seen just how hard public sector staff have continued to work, in what are often extremely difficult circumstances.
The Joseph Rowntree report that came out this morning highlights the fact that poverty rates have begun to rise in the United Kingdom for the first time in two decades, and wage stagnation is at least partly responsible. That shows that even though we are living in a time of record employment, it is not leading to a reduction in poverty levels. That is certainly evidenced among public sector workers. Reports of nurses being forced to seek financial support and assistance, and of police officers struggling to make ends meet, have become almost commonplace. That is simply unacceptable.
Despite seven years of relative pay cuts, public sector workers have continued to prop up services and support communities with their professionalism, skill and determination. It is high time that we repaid them for that. They deserve to feel valued by society and by the Government. They deserve having the pay freeze lifted now.
Liz Twist (Blaydon) (Lab)
It is an honour to serve under your chairmanship, Mr Stringer. I declare an interest as a Unison member. [Hon. Members: “Hear, hear!”] Thank you.
I am glad to take part in the debate because of the huge number of people who have contacted me —constituents, many of whom are members of Unison, or are in the RCN, who feel strongly, and rightly, that they have been badly done by. It is high time that public sector workers had a decent pay rise. For too long—more than seven years—they have borne the brunt of austerity. Many of them have seen colleagues made redundant as the revenue support grant for councils, police, fire and rescue and other local services has been cut, and they have picked up the pieces—and, often, new responsibilities —to keep services going. At the same time, their wages have reduced in real terms, while their living costs, like ours, go up year by year.
It is no wonder there are recruitment and retention problems in the NHS and elsewhere in the public sector. In the NHS, demand has gone up, but staff continue to work to make sure patients are looked after. They respond magnificently in times of crisis; and we have had too many crises in the past year. That is not just first responders, nurses and doctors. It is all staff, from those who drive the ambulances to the porters, cleaners and technical staff who make sure our hospital buildings are safe, healthcare assistants and nurses, and the many other professions allied to healthcare such as radiographers, physios and lab technicians. I have been visiting a lot of hospitals recently, and I see how hard they all work, yet the Government want them to pay for their own pay rise by looking at their terms and conditions. That is outrageous. In local government, I see the staff who work hard keeping our streets clean, looking after those who need help and support, and keeping our vital services going. It is about time they had a decent pay rise, and that that pay rise was fully funded.
I will refer to one particular issue today, and ask the Minister to address it in his response. I take the opportunity to draw attention to a serious issue affecting NHS workers in Northern Ireland; I thank Unison for bringing it to my attention. While health staff in England, Scotland and Wales have received 1%—paltry as it is—in Northern Ireland they are still waiting for the 1% that the pay review body recommended back in April. It was revealed last week that £26 million has been found to fund the pay rise, but the Government say it cannot be allocated without ministerial approval, which is impossible, given the current deadlock in Northern Ireland. The Secretary of State for Northern Ireland has implemented rates bills and a budget, yet he says he cannot give NHS workers in Northern Ireland even the 1% they are already owed.
The Government should amend the Northern Ireland budget to give NHS workers that 1% and, may I say, more than that. I ask the Minister to make that commitment today. All our public sector workers in all sectors, right across the UK, deserve a real pay rise and one that is fully funded. It is high time that the folk who carry out our essential services were properly recognised and not taken for granted.
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.
Danielle Rowley (Midlothian) (Lab)
With more and more children falling into poverty, many of them in working households, does my hon. Friend agree that the Government need to think now and address work inequality and income inequality, and that scrapping the public sector pay cap would be a great place to start?
Bambos Charalambous
My hon. Friend makes an excellent point, and I agree 100% with what she has said: ending the pay cap would be a good start to addressing inequality.
Decent pay for a hard day’s work is an easy concept to grasp, but it does not fit with the Government’s view that austerity and stripping the state to the bone are the only way to ensure that privatisation happens hard and fast. Just over a week ago, the Chancellor had a big opportunity to ensure that public sector workers got the pay they richly deserved, but once again the Government showed their true colours and would only consider increasing pay for nurses, and nurses only, if it was linked to negotiation on their terms and conditions. It is shameful that the Government expect people to negotiate away their terms and conditions in order to get the pay rise they deserve.
The Government must put an end to the public sector pay cap with a fully funded real-terms pay rise for all those working in our public services. As my hon. Friend the Member for Crewe and Nantwich (Laura Smith) eloquently put it, we cannot afford not to lift the pay cap. Public sector pay increases generate tax revenues, reduce social security expenditure, inject extra value into the economy and create jobs. Unison research suggests that every 1% increase in public sector pay generates between £710 million and £820 million in increased income tax, national insurance and tax receipts, and means reduced spending on benefits and tax credits. It also adds between £470 million and £880 million to the economy and creates between 10,000 and 18,000 jobs. The Government need to scrap the cap, and do it now.
Matt Rodda (Reading East) (Lab)
Thank you for the opportunity to speak this afternoon, Mr Stringer. I declare an interest as a former civil servant and a member of the Association of First Division Civil Servants, GMB and Unite, and I thank Unite for their generous support to my election campaign.
I start by paying tribute to my hon. Friend the Member for Warrington North (Helen Jones), who spoke very well about the issues, for her important and comprehensive speech, which clearly set out the need for a new approach to public sector pay. I was particularly struck by one of her points, which I believe sums up the issue: the Government must stop treating public sector workers as the enemy. Our public servants deserve our support, our appreciation and, most of all, a decent standard of living. That really is not too much to ask in the 21st century.
The pressure on incomes is clear. On average, public sector workers have seen the real value of their wages drop by nearly £5,000 since 2010 and, if the current policy of austerity continues, they face the loss of a further £1,400 by the end of this Parliament. Indeed, some workers have seen a pay cut of around 15%, a significant sum for those who are mainly on modest incomes.
I am aware of time, so I will move swiftly to the impact of public sector pay on my constituency of Reading East. As my hon. Friend the Member for Warrington North said, there have been many harmful effects across the public sector; in Reading, that has been made worse by the high cost of living in the south-east of England.
Furthermore, because of high housing costs and other costs, which are similar to outer London, and the lack of any London weighting in towns like Reading or many other places in south-east England, public sector workers in my constituency have been hit particularly hard by this failed policy. Our schools, NHS, police, local government and many other services are being hit particularly hard by the pay cap. We have seen the loss of teachers and midwives, and shortages in many other key services.
One of the harshest and most damaging impacts of the policy is its effect on younger professionals. I should point out that, with starter homes local to Reading costing up to around £300,000 for a two-bedroom house, home ownership is quite simply slipping out of reach for many younger people in their mid-20s and early 30s. That is a travesty, and it will do untold damage to our services in the longer term. It is driving people out of towns such as Reading, and other nearby cities such as Oxford, and into much lower-cost areas, and it is fuelling deep problems in our services. It has not always been like this. Just 10 years ago, there were no such problems—or not to this extent—and a supply of key worker housing in the Thames valley area existed under previous Governments of both political colours.
Given the context of the housing problems in the south-east and similar regions, I believe that the pay cap is quite simply deeply unfair, and also unworkable, for both public servants and our country as a whole. The situation is getting worse, and I urge the Government to review the mistaken policy. The pay cap has lasted too long, gone too far and should not be allowed to continue. However, it continues at a time when the Government have money for certain things. They have £1 billion to pay off the Democratic Unionist party, £3 billion to prepare for a failed Brexit and huge sums to bail out the very wealthy, through failing to continue with the 50p tax rate and many other policies.
I urge the Government to rethink this policy. As someone once said, when the facts change, we should change our minds.
Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to speak in the debate. I had not intended to speak, but having listened to all the contributions from my colleagues, I felt it was worth making some remarks and perhaps focusing on some of the services in my constituency that have been most affected by public sector pay restraint. It is a pleasure to follow my hon. Friend the Member for Warrington North (Helen Jones), who opened the debate with facts and figures and opposed the ideological drive behind so much of what the Government have done in their seven years in office—not least holding down public sector pay.
I declare an interest as a proud member of Unite the union, and I am grateful for its support before the recent general election. I am especially privileged to speak in the debate as someone whose mother has served our national health service on the frontline for more than 40 years. That is something I am incredibly proud of. It is an honour to meet people who my family and relatives, who work in our public services, have spent their lives helping and supporting. That is some of the most valuable work done across our society.
I do not have great facts and figures, but I will mention a few services in my constituency. Merseyside police has lost 1,000 police officers and £100 million from its budget. The effects of that can be read in the pages of the Liverpool Echo¸ which show rising crime, criminals developing in confidence and ordinary people feeling insecure in their homes and on the streets. The Prime Minister had the audacity to claim that police budgets have been untouched and that police pay has increased, which led the Police Federation to say she has
“lost touch with reality”.
I could not agree more. The Police Federation puts the pay cut at 16% for our police officers. There have been cases in my constituency and across Merseyside of some of the worst violent attacks on our frontline police officers. To think that we cannot even afford these people a decent standard of living in 2017 is absolutely outrageous.
I recently visited Walton Prison, which is in my constituency. Under this Government, 7,000 prison officers have been cut—one in four—and the ensuing crisis in our prisons has led the Government to look to recruit 2,500 new prison officers across our prison network. This year, prison officers have been awarded a 1.7% pay rise. That is still a cut of £980 in real terms; they have faced such cuts every year since 2010. The evening before I visited Walton Prison, three new recruits had been violently attacked. One reason we cannot maintain safe standards and retain new staff in our prisons is because prison officers’ pay has been depleted and the worth and value of the job is not recognised by the Government. It is time for change.
Helen Jones
I know from staff at Risley Prison in my constituency that prison staff are now unable to take time off when necessary and that whole wings are locked up for half a day, meaning that prisoners cannot access education or work. Does my hon. Friend agree that, as well as that being unfair to the staff, it does not help us to reform prisoners—it makes it more likely that they will reoffend?
Dan Carden
Having seen that at first hand, I could not agree more. It is worth noting that the Prison Officers Association is lobbying Parliament tomorrow; I hope many colleagues can get along to that.
I must touch on Aintree Hospital, which is also in my constituency. Nurses there have faced a 14% pay cut since 2010, and one in four are taking jobs outside their employment as nurses to make ends meet and to pay the bills. The effect of the pay cap on our hospitals is to cost us more, as hospitals are having to recruit nurses through agencies at a much higher rate than if they were recruited through the hospital itself. The economics of this fall apart as soon as we put them under any scrutiny.
Some 70% of the public—or more, I believe—support the calling of the debate, and the reasons for that are clear. We have seen the worst squeeze in living standards for generations, the worst wage growth since the steam engine was created and the worst decade for productivity since the Napoleonic war. The damning statistics on wages and productivity point us towards the truth: we cannot cut our way to productivity and we cannot reduce workers’ rights and pay to increase productivity. We need to respect workers, give them decent standards of living and actually create decent places of work. We can do that, first and foremost, in our public sector.
Since the 1970s, the percentage of GDP taken as profits and not paid as wages has risen through the roof; the paradise papers showed examples of profits being extracted from our economy and the money vanishing. When we talk about what money we have to share around for our constituents—in their pay and in benefits—we are talking about a smaller and smaller amount every year.
I remind the House of where the Government started back in 2010. This is not a new problem, and the Government were warned about where we would get to. It was this Government who talked about strivers versus skivers. It was this Government who sought to pit public sector workers against private sector workers, telling them that they were against each other in the race for decent wages and decent living standards. It was this Government who sought to pit unionised workers against non-unionised workers.
We are getting towards the end of the race to the bottom that the Government have started us on.
Luke Graham (Ochil and South Perthshire) (Con)
Will the hon. Gentleman give way?
Dan Carden
No, I will not. We are starting to realise that the race to the bottom is one that we all stand to lose. The sooner Government Members realise that, the better off our and their constituents will be.
Graham Stringer (in the Chair)
We now move on to the Front-Bench spokespeople. I remind hon. Members that the Chair of the Petitions Committee, the hon. Member for Warrington North (Helen Jones), will wind up the debate after the three Front-Benchers have spoken.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Mr Stringer. As the Member of Parliament for Glasgow South West, which the House of Commons Library informs me has a bigger percentage of public sector workers in employment than any other constituency in these islands, as a proud member of Unison and former activist and treasurer for the Glasgow city branch, and—I refer to my entry in the Register of Members’ Financial Interests—as chair of the Public and Commercial Services Union parliamentary group, I very much welcome the debate. As someone who was a public sector worker for 25 years, I hope to bring stories of my experience in that field.
It has been an excellent debate, and I want to mention a number of contributions. The debate was led superbly by the hon. Member for Warrington North (Helen Jones), who discussed the plight of public sector workers, the impact of the public sector pay cap on the economy, which I want to come to later, and the fact that all nations and regions of the United Kingdom are affected. She also rightly mentioned the physically taxing nature and environment of public sector work. She referred to binnies, and it may be of interest to her that I found, when doing my research, that refuse collectors have suffered a real-terms pay cut of £2,064 a year, which I believe is a disgrace.
The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned the impact in Wales and the devolved Administrations, which I agree with. The hon. Member for North Tyneside (Mary Glindon), who is vice-chair of the PCS parliamentary group, mentioned quite rightly the PCS ballot and the complete dissatisfaction of civil servants in the UK. I hope to mention that too in my contribution. The hon. Member for Wolverhampton South West (Eleanor Smith), who is a former president of the trade union that I am a proud member of, mentioned the impact of the public sector pay cap on nursing. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson), in a typical tour de force, talked about the impact on the teaching profession. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) mentioned the impact on nursing.
The hon. Member for York Central (Rachael Maskell) said that this will increase the gender pay gap. I agree with that point and hope to mention it. The hon. Member for Birmingham, Erdington (Jack Dromey) gave another tour de force, with very powerful examples of public sector workers dipping into their own pockets to help users of public services. My hon. Friend the Member for Glasgow East (David Linden) talked about the impact on firefighters. The hon. Member for North West Durham (Laura Pidcock) quite rightly questioned whether the Government are comfortable with making people poorer. The hon. Member for Bedford (Mohammad Yasin) talked about the magic money tree, which I will come to. The hon. Member for Crewe and Nantwich (Laura Smith), a Unison comrade, questioned the idea that the country cannot afford a pay rise. Again, I agree with that and will come to it.
The hon. Member for Leeds North West (Alex Sobel) said that workers’ debt levels are on the rise, which is certainly the case. The hon. Member for Warrington South (Faisal Rashid) talked about the pressure on services. The hon. Member for Blaydon (Liz Twist), another Unison colleague who has replaced my good friend Dave Anderson, talked about recruitment and retention. That theme was picked up by the hon. Members for Enfield, Southgate (Bambos Charalambous) and for Reading East (Matt Rodda). Last, the hon. Member for Liverpool, Walton (Dan Carden) reminded us quite rightly that all of us have family and relatives who work in the public services.
That was in contrast to the lack of voices from the Government Benches, with one notable exception. I think we are all disappointed by that. They are obviously attending to affairs of state and constituency duties. We did not even hear the moderate voices of Conservatives from Scotland—a collection of individuals who have yet to realise that their hero, Alf Garnett, is in actual fact a parody.
Chris Stephens
I am more than happy to give way to Conservatives in a moment, but I want to develop this point. Cynics may believe that a political party that introduced in 1823 the Master and Servant Acts—legislation designed to repress working people and punish them for joining trade unions—would not be interested in issues affecting public sector workers, but I cannot believe that that would be the case.
Luke Graham
I thank the hon. Gentleman for giving way. He will appreciate that it was also Conservatives who introduced some of the first health insurance schemes and comprehensive education schemes in the last century. My specific point is that the pay cap was not an ideological point by the Conservative party; it was due to financial constraint at the time. As he knows, the pay cap was devolved in Scotland for a great number of years, so the criticism that he is levelling against the Westminster Government today should also be applied to the Administration in Edinburgh, who have held that pay cap, even though they have the power and the money to change it.
Chris Stephens
If the hon. Gentleman does not believe that the public sector pay cap was ideological, I really do fear for him and for his political analysis. Of course it was designed to be ideological. It was part of the cuts programme in the Budget. They kept boasting about the number—
Chris Stephens
In a second; I will just finish answering that point before we have a jack-in-the-box routine. It is good we have finally woken Conservative Members up.
Of course it was ideological—the Government kept talking about the savings it would bring to the Exchequer by imposing a public sector pay cap. I will talk about the effects on the devolved Administrations later on, but it might be very well for Conservative Members to read the petition itself. It says that the UK Government should be providing additional funding to fund the ending of the public sector pay cap and not allow local authorities and devolved Administrations to have to pick up the tab.
Alex Chalk
It is well known that Scotland now has tax-raising powers. If the Scottish Government want to pay their public sector workers more, why do they not just go on and do it?
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.
Luke Graham
I thought we got on so well! I thank the hon. Gentleman for giving way to me a second time. I supported the pay cap review, both in London and in Edinburgh, as did many Government Members, and my right hon. Friend the Chief Secretary to the Treasury has announced the lifting of the pay cap to allow flexibility. My question to the hon. Gentleman—perhaps he is coming to this—is: what should the percentage actually be, and can he give us a trailer of what will be announced in the forthcoming Budget at Holyrood?
Chris Stephens
The last point is well above my pay grade, but I will say this to the hon. Gentleman. It is not for me to determine what the percentage is. That should be negotiated. But the Government should not impose a cap of 1% and then say to individuals, “It’s either that or hit the cobblestones and take industrial action,” particularly given that they passed anti-trade union legislation—the Trade Union Act 2016—making industrial action even more difficult on a national scale.
There is a clear and sustained argument about the clear economic benefits of lifting the public sector pay cap. There would be a positive stimulus in the economy through increased household consumer spending. That would be likely to increase GDP and tax receipts, reducing the overall cost to Government still further. Estimates show that the effect of increased public sector pay would be similar to that of a decrease in income tax. The findings by the TUC and the Institute for Public Policy Research show that the significant portion of funding required to lift the public sector pay cap would in fact be returned to the Treasury almost immediately in the form of higher tax receipts and lower welfare payments. The initial cost per year in 2019-20 of uprating public sector pay in line with the consumer prices index for two years would be £5.8 billion compared with the cost had the cap remained in place. However, that drops to £3.55 billion once higher receipts from income tax and national insurance and lower welfare payments for means-tested benefits are taken into account.
It will be left to the devolved Administrations to take a different path. The Scottish Government have said that they will remove the 1% pay cap. This petition calls for the UK Government to fully fund a pay rise. I say again that it should not be left to a Department, a devolved Administration, a local authority or a health board to find the money from its own resources. Should the Government not look positively on this petition, I can guarantee the Minister that Scottish National party MPs will put pressure on the Government to ensure that they do that, and we will continue to campaign for public sector workers, not just in Scotland but across these islands.
Peter Dowd (Bootle) (Lab)
It is a pleasure to serve under your stewardship, Mr Stringer. Let me welcome Mr Dave Prentis, general secretary of Unison, who is sitting at the back of the room. His blood must be boiling at the complete lack of interest from the Conservative party in this debate. As a trade unionist for many years and someone who worked in the public sector, either in local government or in the NHS, I say that my heart goes out to those people who cannot afford to live despite the amount of work that they put in and their absolute commitment to public services.
I thank my hon. Friend the Member for Warrington North (Helen Jones) for achieving this debate, because we have been able to get a good feel for the situation and how our public sector workers are suffering out there. My hon. Friend the Member for Liverpool, Walton (Dan Carden) mentioned that the Police Federation had said that the Prime Minister was completely out of touch. That goes to the heart of one of the points that I want to make, but first I thank the 150,000 people who signed the petition—who took the time to put their name down. I thank them very much for that, and the trade unions that were backing the petition.
The Prime Minister is indeed out of touch with reality. The Police Federation was spot on about that. I will now ask people to use their imagination; I know it is a big ask for people to use their imagination in relation to the way the Prime Minister operates, but let me try to take them through it. Let us imagine that she is sitting there, with a smile on her face, reading the latest position paper from the Secretary of State for Health. All is well. The public services are well funded and the NHS is in rude health. The staff are all paid well; in fact, some of them are paid too much. There are no waiting lists for operations to speak of, or queues to see a GP. It gets better, in the Prime Minister’s mind. The Secretary of State for Business, Energy and Industrial Strategy reports that virtually everyone is in a secure, well-paid job, that the need for a national living wage is, for all intents and purposes, a thing of the past and that investment in our infrastructure is at historic highs. Of course the Secretary of State for Communities and Local Government, in the mind of the Prime Minister, reports that virtually the final brick for the 400,000th house to be built this year has just been laid.
Sustainable-trend economic growth is well above the OECD average, and productivity levels are going through the roof, as is wage growth. It seems improbable that things could get any better, in the Prime Minister’s mind, and then lo and behold, the Brexit Secretary pops his head around the door and tells her that the EU has agreed to all his demands, including tariff-free access to European markets, unbridled access to the single market and unprecedented immigration controls on EU citizens coming to the UK. He says, with only a scintilla of triumphalism, that the €70 billion divorce settlement cheque will be with the Treasury pretty soon, and the EU will pay the exchange control commission as well. Then he tells her that he is off to the Strangers Bar to have a drink with the Foreign Secretary and the Trade Secretary and she is welcome to join him.
This fantasy goes on. She apologises. She says she cannot go because she is waiting for a phone call from Donald Trump in which she plans to tell him in no uncertain terms that she is cancelling the state visit. She finally finishes off reading an email from the Secretary of State for Scotland informing her that Nicola Sturgeon told him that the SNP is disbanding because their claim for independence was simply a mistake and she is sorry for all the trouble caused. Then, with measured self-satisfaction, the Prime Minister rises from her seat, crosses the room, opens the wardrobe door, steps inside, pushes aside the fur coats and walks back into the world that we live in, the world in Westminster Hall, the world of reality. That is where she now is: the world of reality.
Over the past couple of hours of debate, many hon. Members have rightly paid tribute to the tireless work of our public sector workers, who go above and beyond the call of duty. However, these public sector workers, as has been suggested, do not need tribute from the Government; they need action. That is exactly what the Chancellor refused to do two weeks ago—absolutely no action whatsoever. I believe it is the Chancellor’s birthday today. He will not be getting many happy returns from public sector workers.
Some 5.4 million people work in the public sector, including friends and family members of mine, and of hon. Members across the Chamber, as has been alluded to. I would like to remind the Government what public servants do, because they seem to have forgotten. Public sector workers provide services that are crucial to the good running and order of the country. That has been touched upon. The armed services and the police protect our country and this House every day. My hon. Friend the Member for Warrington North alluded to that as well. They provide services that educate and look after our children, and care for our disabled citizens and our senior citizens. That was alluded to by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who said that there is no one as noble as he or she who cares—I think that is more or less the phrase. I have said this before, but it is worth repeating: we rarely hear from and do not see many of the services until something goes terribly wrong, such as traffic accidents, floods, public health emergencies and so much more.
This debate comes as we approach the Christmas holidays, which is a tough time for public sector workers. It is a difficult time for our police officers. Many will brave the elements to ensure we are safe over the holidays. What about them? It is difficult for our dedicated NHS staff, who will work long hours, back-to-back shifts over Christmas into the new year. They do not want our thanks. That is dead easy. They want our support for a pay rise, which they have not had for years. It will be a difficult time for all public sector workers, who now face the lowest pay in comparison to the private sector for 20 years.
Despite claims to the contrary, the public sector pay cap is alive and well. It will continue to be so while the Treasury refuses to offer any new money for public sector pay rises and expects overstretched Departments facing further cuts to find the funding themselves. The Chancellor did not even bother to mention the public sector pay cap in his speech. Instead, he signalled yet another attempt to divide one group of workers against the other by restructuring the NHS. Time after time, he sets workers against one another. Under these plans, the Secretary of State for Health will attempt to manipulate recruitment and retention payments, to deny most NHS workers a decent pay rise, and refuse to lift the cap. It is the classic case of dividing the public sector from the private: the nurse against the manager, the admin worker against the manual worker, the north against the south, or the British worker against the foreign worker. The Tories use the same old method time after time. The Chancellor, the Secretary of State for Health and the other departmental Ministers should think again, because they are defending the indefensible. It is as simple as that.
The pay cap disproportionately affects women, who account for two-thirds of the public sector workforce and are already disproportionately affected by austerity. I ask the Government to think about that. Public sector workers will continue to lose out. As has been indicated today, research conducted by the TUC shows that if the Government keep the cap in place until 2020, midwives, teachers and social workers will all see real losses of over £3,000 a year.
Mike Amesbury
Does the hon. Gentleman agree that it is a scandal that one of the few growth industries in constituencies such as mine—Weaver Vale—is food banks? There has been a 30% increase in the use of food banks, and many users are public sector workers and women with young families.
Peter Dowd
My hon. Friend is spot on. Yesterday I was at Tesco in Litherland collecting for food banks. I would like to thank every single one of those people—we have all been there—who gave a tin of soup, a tin of beans, some fruit, some cornflakes, washing liquid, all sorts of things for those people. Thanks to those people for the 1.1 million food parcels going through.
Alex Chalk
My constituents at GCHQ believe in their national security mission and are immensely dedicated and skilful public servants, but those skills are much sought after in the private sector too. As the Government move away from the 1% national pay cap, does the hon. Gentleman agree that the need to address pressures on recruitment and retention in this vital national security sector should be borne in mind when future improved pay rates are set?
Peter Dowd
Any public sector worker, whether somebody in the military, a nurse, a refuse worker, a teacher or social worker, the five-odd million of them all deserve the pay rise. If the hon. Member’s constituents in GCHQ need a pay rise, I will support them—will he? I am not sure he will.
Meanwhile, nurses, firefighters and border guards will face losing more than £2,500. The cap is not working. There is a situation where households will have one partner working in the public sector and somebody else in the private sector. It is typical: divide the public sector from the private sector. Homes do not work like that. As I said, if one person is working in the public and another in the private sector, should one subsidise the other? Should the wife subsidise the husband? Should the brother subsidise the sister? No. It is absolutely iniquitous and it should stop now. The Government’s continued support of the cap is economically nonsensical. The party of economic confidence, of business—the nonsensical party as far as I am concerned.
Chris Stephens
Now that the Conservatives have found their voice in this debate, does my hon. Friend agree that we should find the elusive Conservative who agrees that the public sector pay cap should be lifted?
Peter Dowd
Trying to find a Conservative who practically believes that—you are more likely to find, if you will excuse the expression, rocking horse dung, quite frankly. There is more chance of finding that.
Dan Carden
It seems that the Conservatives want to be seen to be softening the language on austerity and on pay caps, but in truth we see no action. Does my hon. Friend agree?
Peter Dowd
My hon. Friend, as ever, has hit the nail right on the head. It is all talk and no action.
Luke Graham
I thank the hon. Gentleman for giving way, he is being too friendly this afternoon. He asks for a Conservative, well there is one stood right here who, along with many Scottish colleagues, supported the pay cap reviews in London and in Edinburgh. It was announced in the Budget that, certainly from a UK Government perspective, according to the pay boards, they will have the flexibility to lift those pay caps. If they want the evidence, we are right here.
Peter Dowd
The voice of the lonely. That is what I would say: the voice of the lonely.
The IPPR and Unison have both provided research that demonstrates that lifting the cap would bring higher tax receipts and lower welfare payments. That has been suggested and indicated by other Members, and they are absolutely right. It would bring real money into the economy. We know that. Why do the Tories not accept it? Let me be clear, on cutting public sector pay, the Chancellor virtually stands alone. Ten years on from the international banking crisis, countries that instituted public sector pay freezes or pay cuts have all reversed them, including the likes of Germany and the United States. Once again, the Conservatives are left behind.
In their written response to the petitioners who triggered this debate, the Government said:
“We still need to deal with our country’s debts…to enable us to invest in our public services.”
They are not even doing that. Hon. Members should look at the Red Book: that is not being delivered. Again, they are the all talk, no action Government. They have not only borrowed more money than any other Government before, but have failed to invest in our public services and those who work in them. We all know it. The country will not run a surplus until 2030—batted off again—at the earliest, a full 15 years after the former Chancellor said the deficit would be eradicated.
So where are we? We cannot afford any rise for our public sector workers but, as has been alluded to, we can afford to relax the bank levy to the tune of the best part of £2 billion a year by 2022. We can also afford to relax corporation tax and other taxes for corporations worth the best part of £70 billion over the next five years. As has also been alluded to, we can afford to pay £3 billion for a botched EU Brexit that should have been sorted out months ago. That has cost the country because of the useless way the Government have dealt with it. We can afford, as we have found in the last two or three days, to pay out £2 billion to east coast line companies. We can afford that; just pick that up, it is no problem at all. We can afford to sell off the Royal Bank of Scotland at a loss of billions upon billions of pounds. The taxpayer picked up the bill for that, and it is the bank putting straight back into the hands of those who caused the problem in the first place. That is the reality, and as we come to the end of another miserable, cold, dark year under the Tories, we cannot afford to pay our public sector workers a decent wage.
I simply say, as I have said time after time and will continue to say: the sooner this Government get their marching orders, the better for all of us. I suspect the Government are in that position themselves, but I am not interested in the Government: I am interested in public sector workers.
The Exchequer Secretary to the Treasury (Andrew Jones)
It is always a pleasure to serve under your chairmanship, Mr Stringer.
I thank all Members who have contributed to the debate today. We have had 37 Back-Bench contributions or interventions. I have to say that there was remarkable knowledge from the hon. Member for Glasgow South West (Chris Stephens) about the 1823 Act—194 years ago; I am not even sure the Conservative party existed then.
Lots of points have been raised. Let me answer the one by the hon. Member for Blaydon (Liz Twist) about Northern Ireland. The decision and implementation is actually with the Northern Ireland civil service. I do not think that there are any decisions outstanding with Ministers, but of course the key thing is to get that Administration back up and running and hope the parties in Northern Ireland can find the common ground to achieve that.
Housing and housing challenges have been raised, which is entirely fair. It has been very tough for people all over the country to deal with housing costs, whether those relate to getting on the housing ladder or not. I have to say that I do not think that is an entirely private sector or entirely public sector issue. It applies equally to everybody right across the country and that is why housing was the centrepiece of the Budget.
Andrew Jones
I will get going first, and then I will come back to the hon. Gentleman.
Members also raised the paradise papers—the tax evasion papers. We have not actually seen those papers yet, because they would not be provided to Her Majesty’s Revenue and Customs, but the point remains. Should we be bearing down on anybody who is not paying their fair share of taxes? Absolutely, and that is why this Government have taken more action to do so than any other Government in history and have raised £160 billion from it since 2010.
Many Members have paid tribute to those in our public services, and I would simply agree. Within our society, public sector workers are among the most hard-working, talented and committed people. There are more than 5 million public sector workers right now, right across the UK. They carry out essential roles: they keep our streets safe; they teach our children; and they work day and night in our hospitals. At Christmas time in particular, they will be working when many others are enjoying time off with their families, and we should pay tribute to them for that and recognise their contribution. We should also recognise the contribution of those working overseas, who see their families even less frequently. The hon. Member for Warrington North (Helen Jones) said that they go the extra mile and deserve respect, and I entirely agree. But the right hon. Member for Warley (John Spellar), who I do not think is still in his seat, said that those on the Government side of the House see them as the enemy, and I am afraid that is just wrong. I do not think that anybody sees our public servants as the enemy.
Chris Stephens
Does the Minister believe that when a Government pay their own workforce decently the whole country benefits from the increased tax revenue generated and the increased spending it allows?
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.
Peter Dowd
In line 11 on page 4 of “Funding Britain’s Future”, Labour shows exactly how it would fund lifting the pay cap. Can the Minister be as explicit and comprehensive as Labour has been on this matter?
Andrew Jones
I am not entirely sure that the Labour election manifesto, which claimed that their policies were fully funded, was 100% accurate. Perhaps we could go back to some of the rather awkward interviews that the shadow Chancellor gave in the media over the weekend.
Chris Stephens
The Minister talked about the size of the pay bill. Have the Government done any research on its size and how much activity that has generated in the wider economy?
Andrew Jones
The hon. Gentleman asked whether the Government have done research on the size of the pay bill; I have just detailed the numbers. We are acutely aware of how public spending has an impact across the country. Any expenditure has an impact on the local economy as money recirculates, so of course that point is understood.
Andrew Jones
I am being very generous, but I will give way to a fellow north Yorkshire Member.
Rachael Maskell
I am grateful; I am looking forward to hearing about the Government’s generosity, because I want to know how much the Treasury is expecting public sector workers to receive in the total package, or the total envelope. How much—the figure?
Andrew Jones
I will come on to the process ahead. Despite the difficult economic circumstances from 2010, the Government have continued to invest in our public servants. We are helping them, alongside all others, to keep more of their money by increasing the personal allowance. That is a significant change. In 2010, the personal allowance stood at £6,475, but in the Budget only a few days ago, the Chancellor announced that in April 2018, the allowance will rise to £11,850. That means that public sector workers on a basic rate of tax will be £1,075 a year better off compared with 2010.
Helen Jones
Does the Minister accept, first, that most of the money spent on raising the tax threshold actually benefits the better-off? Secondly, does he accept that the combined effects of the Government’s tax and benefit changes, even when raising the tax threshold is taken into account, has been to hit low-paid families in work hardest?
Andrew Jones
I do not accept that. I have looked at the distribution analysis and what the hon. Lady said is simply not the case.
We have not just helped through the personal allowance. We have invested a further £100 million to recruit 2,500 extra police officers, and in July, my right hon. Friend the Education Secretary announced an additional £1.3 billion for schools to support the transition to the national funding formula. Let us go back to the NHS; in the Budget, the Government announced an additional £6.3 billion of new funding for the NHS. As I mentioned, we reconfirmed in the Budget the ending of the 1% public sector pay policy. That means that the Government are no longer pursuing a one-size-fits-all policy on pay for public servants.
Matt Western (Warwick and Leamington) (Lab)
This was before my time, so correct me if I am wrong; a few years ago it was voted through that Members of Parliament would receive a pay increase. If the principle was right then for MPs and it was seen to be appropriate, why is it not appropriate for all our public sector to receive a pay increase?
Andrew Jones
The hon. Gentleman is perhaps not absolutely correct about the process. That also predates my time in the House and goes back to the expenses crisis in 2007 and 2008. Any hon. Members who have been here a bit longer are welcome to jump in, but I think that at that point, Parliament basically gave all responsibility for its pay rises to an independent body. Since then, I do not think that it has voted on the matter. I have certainly never voted on Members’ pay. I recognise that that is a contentious point, but Parliament is no longer responsible for its pay.
David Linden
I accept that IPSA decided on MPs’ pay, but does the Minister not accept the absolute reality, which is that all of us are on at least a basic salary of £76,000 a year? He gets an extra allowance on top of that. Does he understand why members of the public watching this debate will find it absolutely bizarre to see a Minister earning such a high salary telling public sector workers that they should not be paid a basic rate?
Andrew Jones
Nothing the hon. Gentleman said about what I have said is remotely accurate—I have not said that public sector workers should not be paid a decent salary—so I am afraid I do not accept at all the point he makes. It is right that Secretaries of State have the responsibility to determine the right pay award for their workforces. That is because across the public services, each workforce is different, with different requirements, starting points, starting salaries and allowances, and each faces different recruitment and retention issues. Following the announcement, Departments will be able to fund appropriate pay rewards for their workforces from their existing budgets, just as we have done in the Ministry of Justice.
Liz McInnes
I want to make a point about IPSA and independent pay review bodies. NHS workers went on to Agenda for Change terms and conditions. One attraction of that was that it gave NHS staff access to a pay review body, but the Government have been overriding the recommendations of pay review bodies since 2010. The analogy just does not work: the Government have not overridden IPSA’s decisions, but they have overridden the NHS Pay Review Body’s decisions.
Andrew Jones
I draw the hon. Lady’s attention to the interview given by the shadow Chancellor yesterday in which he said that public sector pay reviews were always subject to negotiation. Perhaps he needs to have a conversation internally first.
Before any decision on pay is made, there is indeed a well-established process for the consideration of pay across the public sector. For local government workers, pay awards are considered by the National Joint Council for Local Government Services. Firefighters have the corresponding National Joint Council for Local Authority Fire and Rescue Services. The vast majority of the remainder are people employed in workforces with an independent pay review body. As part of the process, Departments will shortly submit evidence to the corresponding pay review body for their workforces.
Rachael Maskell
I must correct the Minister on what he has just said. Pay review bodies make a recommendation to Government, and the Government then do or do not accept it. There is no negotiation process in place.
Andrew Jones
I accept that—I was actually quoting the shadow Chancellor. Let me press on. The pay review bodies will consider evidence from stakeholders, including employers, Governments and unions, and they will make their recommendations in spring and summer next year. Secretaries of State will use the recommendations to inform the final pay awards in the normal way. The PRBs’ recommendations will recognise the wider economic context. The need remains for continued fiscal discipline, and Departments will take that into account when making any decisions.
Many Members have mentioned the NHS, which I want to spend a bit of time discussing. First, the Government are entirely committed to the NHS. Funding for the health service is at record levels. [Interruption.] Opposition Members may mock, but funding is in fact at record levels. They should be doing what we are doing, which is backing the service.
We know that pay restraint has been challenging and we are listening to the concerns of NHS staff and their representatives. We recognise that the NHS now faces greater pressures than at any point in its history, and the reasons for that are an ageing population, which is a significant challenge for western economies, and the greater demand that we are therefore seeing for NHS services.
Andrew Jones
I have given way already to the hon. Gentleman, so I will give way to the hon. Lady.
Catherine West
Does the Minister accept that there is a link between the current crisis in numbers of nurses in the NHS and the pay on offer, particularly given the huge student debts that many nursing graduates have? It is up to £54,000 for those at London Metropolitan University. Does he believe that there is any link between a starting salary of £21,500 and a huge student debt of £54,000 for nurses?
Graham Stringer (in the Chair)
I remind hon. Members who wish to intervene on the Minister that there are 10 minutes left. I am sure that people would like to hear from the Chair of the Petitions Committee after the Minister. Time is now beginning to get tight.
Andrew Jones
I was not watching the clock, so thank you, Mr Stringer.
I recognise that starting salaries and debt are clearly related for people making choices, but our NHS provides a magnificent career with long-term security and pay progression. The current average salary for a nurse is £27,635, which is very near the national average salary. Nursing presents a great career.
I mentioned earlier the pressures within the health service. That is why the Chancellor announced at the Budget that if the Health Secretary’s ongoing discussions with the health unions bear fruit, he will provide further funding for pay awards for Agenda for Change staff. That will, of course, follow the pay review body process in the spring. We cannot prejudge those discussions or the pay review body process, but we want the talks to succeed, and we share with NHS workers the common objective of a highly skilled, compassionate, productive workforce working to improve outcomes for patients. The Chancellor made his public commitment with that in mind.
I re-emphasise that the Government are committed to providing fair pay awards across the public sector. That is why we have the pay review body process, which ensures that pay for public sector workers is fair to all sides. We must also recognise the depth of public feeling on the issue, which the 150,000 signatures on the petition demonstrate. The 1% pay policy is ending, as announced on 12 September and reconfirmed in the Budget on 22 November. However, it is important to remember that we now face the established processes for determining those pay awards, and we cannot prejudge them. I cannot comment on a report that has not yet been written.
For that reason, the Government have not set out an explicit target for public sector pay, but I can provide an assurance that this Government will take the recommendations into account. We will continue to invest in our public services and ensure that our public sector workers continue to be fairly remunerated. They deliver a fantastic level of public service on which we all rely, and that will continue to be the case under this Government.
Helen Jones
It has been a great pleasure to listen to this debate. I thank all hon. Members on this side who have spoken. I feel sorry for the Minister, who is normally a reasonable soul, because he has been sent here to defend the indefensible. As hon. Members on the Government side have slipped away, I thought at one point that he would be left solely with his Parliamentary Private Secretary, chuntering from a sedentary position behind him. The hon. Member for Croydon South (Chris Philp) ought to learn that PPS’s are supposed to be, like Victorian children, seen and not heard.
We have heard from the Minister, once again, the same warm words for our public sector workers: hard-working, talented and committed. What we did not hear from him, significantly, was an agreement to fund a decent pay rise for them. Once again, the Government are deflecting blame. They say, “Yes, you can have a pay rise. Go away and negotiate it; we’re just not giving you the money for it.” That is the problem; that is what they have done all along. I say again that our public sector workers deserve better than that. They deserve far more than warm words. No one is asking for them to be paid an extravagant salary, merely a salary that enables them to live decently. That should not be too much to ask in 21st-century Britain, but it appears that it is too much to ask from this Government.
It is significant that no Conservative Members made a speech during this debate. They too must know that the policy is indefensible. They have public sector workers in their constituencies; they must have seen what is happening to them. They should not be complicit in this policy. They need to tell their Government and their Whips Office that this situation cannot continue. We on this side are clear that public sector workers ought to be able to negotiate a decent pay rise and have it funded; it is time for those on the Government side to realise that as well. Otherwise, their warm words about people in the public sector will be seen as so much hot air.
Question put and agreed to.
Resolved,
That this House has considered e-petition 200032 relating to public sector pay.