Wages

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 18th July 2017.

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Photo of Martyn Day Martyn Day Scottish National Party, Linlithgow and East Falkirk 12:00 am, 18th July 2017

What fiscal steps he is taking to help increase the average level of wages paid by employers.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

The key thing that we can do to increase productivity is to ensure that we invest in education and improve skills. We have more people going to university and doing apprenticeships, and we are investing in our rail and roads.

Photo of Martyn Day Martyn Day Scottish National Party, Linlithgow and East Falkirk

Unlike the Scottish Government, the UK Government voted for the public sector pay cut. Moreover, this Government’s so-called national living wage is not based on the cost of living. What new measures will this Government bring in to provide people with a wage that they can live on?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

We have made sure that basic rate taxpayers are paying £1,000 less tax by raising the personal allowance. We are also introducing the national living wage, bringing in a £1,400 rise in take-home pay for the lowest earners.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

The important thing for ensuring that people get a wage from an employer is to make sure that they have a job. Will the Chief Secretary to the Treasury welcome the record fall in unemployment to a 42-year low, particularly among young people, which is giving them much better opportunities in Britain than those available in most other European Union countries?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My right hon. Friend is right. We now have the lowest levels of unemployment since 1975, thanks to the economic policies pursued by this Government to improve skills and infrastructure, and to take sensible decisions on public sector pay.

Photo of Laura Pidcock Laura Pidcock Labour, North West Durham

As has been clearly demonstrated, the Government are celebrating falling unemployment without any critical analysis of the nature of the employment being created. Many residents of North West Durham are in work that exacerbates their financial difficulties because their pay is low, their terms and conditions are poor, and they do not have regular hours. Will the Minister update the House on the number of people who are currently working on zero-hours contracts? Will she also accept that looking at employment figures in a vacuum does nothing to help us to understand whether people are any more secure or any better off?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

Fewer than 3% of people are on zero-hours contracts and, as Matthew Taylor recognised, many people want that flexibility so that they can combine their work with the other things in their lives. We need to ensure that people have the skills to get better jobs in the future, and that is exactly what this Government are investing in.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

Will the Chief Secretary to the Treasury join me in welcoming the fact that 75% of the 2.8 million jobs created since 2010 are full-time jobs, and that zero-hours contracts account for just 3% of all jobs?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My hon. Friend is absolutely right. Is it not amazing that not one Labour Member has welcomed the fact that we have the lowest unemployment since 1975, or that we have lower youth unemployment? In fact, the Opposition model their policies on countries such as Greece, which has exceptionally high youth unemployment, and they take for granted the progress that we have made over the past seven years.

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

First, let me welcome any increase in jobs in our society, but when it comes to commenting on wages, does not the Chief Secretary to the Treasury agree that it ill becomes a multi-millionaire earning £145,000 a year, admittedly in a temporary job, and living in two grace-and-favour properties at the taxpayer’s expense to attack public sector workers—our hospital cleaners, nurses, teachers and firefighters—as being “overpaid”? Public sector workers’ pay has fallen on average by £4,000 in the first six years of this Government. One in five NHS staff are forced to take a second job, and teachers are facing a further cut to their salaries of £3,000 by 2020. Does she not think that the Chancellor should just do the right thing and apologise?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

Yet again, the right hon. Gentleman is not giving the House the full picture of what is happening with public sector wages. Last year, teachers’ pay went up by 3.3%. More than half of nurses and other NHS workers saw a pay rise of over 3%, and the armed services saw a pay rise of 2.4%. The cleaner he talked about was employed not by the public sector but by Serco. The right hon. Gentleman needs to get his facts right.

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

That is true—the Government privatised the jobs.

I note that the Chief Secretary did not refute the fact that the Chancellor said that staff were overpaid. The Chancellor tried to justify his attack on public sector workers by trying the classic divide and rule between public and private sector workers, citing public sector pensions. Is the Chief Secretary aware that those supposedly generous pensions across several professions pay on average the princely sum of just £5,000 a year, and that low pay has forced many public sector workers to opt out of their pension scheme? Eleven per cent. of those in the NHS have opted out; if that figure continues to rise, the whole scheme could be undermined. Will the Chief Secretary recognise the damage that the Chancellor is causing and lift the pay cap so that public sector staff can have some hope of a fair wage settlement—and, yes, a decent future pension?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

The right hon. Gentleman still has not acknowledged the truth of the figures that I cited—the 3% pay rise for over half of nurses and the 3.3% rise for teachers. He simply will not look at the facts. The reality is that public sector workers are, rightly, paid in line with the private sector to allow the public and private sectors to flourish so that we can create wealth in this country. In addition, public sector workers have a 10% premium on their wages in pension contributions, and that is in the Office for Budget Responsibility report.