I remind right hon. and hon. Members that there have been some changes to the procedure in Westminster Hall, and that even if Members have attended a Westminster Hall debate before under the new rules, there have been changes to the changed rules. In order to respect social distancing, I ask Members to sit at the seats with ticks against them. There are more people on the call list than seats on the horseshoe, so I will call Members to speak only if they were here at the start of the debate. If Members who have spoken wish to leave, or move to the seats at the back, they can; that is the only way to ensure that other Members can speak, because Members are not allowed to speak from the Public Gallery.
I also ask Members to respect the one-way system by coming in through the one door, and going out through the other, and to sanitise the microphones that are in front of them.
I beg to move,
That this House
has considered e-petitions 306845 and 328754, relating to financial rewards for government workers and keyworkers.
It is a pleasure to serve under your chairship, Mr Stringer, and an honour to lead for the Petitions Committee on this debate.
As we come to the end of any year, we all start to reflect on the events of the past 12 months, but 2020 has been such an unprecedented year for everyone. Throughout the year, the extraordinary contributions made by so many, particularly our key workers, have made our lives so much better throughout the pandemic. I put on record again my sincere thanks to all those who have worked hard and have given what was most needed, when we needed it most. Those people have been invaluable. However, it seems that despite warm words, the Government do not appreciate the work that so many have done for us. We clapped for them on our doorsteps, but it turns out that they are not worth paying properly in recognition of their dedication. As we can see from the number of signatures on these two petitions, and indeed the sheer number of petitions on this issue, there is strong feeling across the country on how we should reward people on the frontline.
During the summer, I had a phone call from my friend Mel’s brother, a local refuse collector and union rep. He wanted to tell me at first hand that his team had turned up throughout the pandemic, and continued to not miss a round. I am so proud of them, and so proud of the efforts that people have made to keep our country going. Swansea Council and local authorities across the United Kingdom can be very proud of their workforce and how they have adapted to the challenges they have faced. Although Rob Stewart, the leader of Swansea Council, is looking at different ways to reward staff, his hands are tied financially.
Former colleagues of mine in the teaching profession, in both England and Wales, who have kept schools open for key workers’ children, described to me their immense fatigue, and the pressure they are under. They are moving classrooms, carrying resources, and increasing their planning and preparation, in a job in which they feel deeply responsible for the learning and progression of our future generations. They are also on their knees. When the Welsh Labour Government tried to reward workers in care homes with a £500 bonus earlier in the year, the Chancellor of the Exchequer taxed them on it, with those claiming universal credit suffering a double whammy. These are the poorest paid people in the public sector, and they took those hits again and again—and it looks like the same will happen if the Scottish Government try to give a thank-you payment to their NHS staff.
“lost in admiration for the efforts of our civil servants, whether in DWP, HMRC or the Treasury. If we think about the furloughing scheme, everybody said it was impossible and far too complicated, and that we would never get that cash into people’s pockets, but they did it within four weeks. That is a fantastic tribute to the work of our civil service, and I thank them from the bottom of my heart.”—[Official Report,
Vol. 676, c. 38.]
Following the Chancellor’s spending review announcement that there will be a pay freeze for all public sector workers, I suspect that civil servants will not be feeling the Prime Minister’s “admiration” so much as the “lost” bit. This further pay freeze comes after public sector workers have already been punished by a decade of pay freezes and increased workload. I know; I was one of them.
I am sure that we will hear from the Minister about the difference between public and private sector pay, but we know that once workforce characteristics such as experience and educational attainment are taken into account, there is close to 0% difference in pay. Undoubtedly, we will hear about the need for fairness for those working in the private sector, and I wholeheartedly agree that they should be treated with fairness, but this is not, and should not be, a race to the bottom. We should be bringing pay in the private sector up to a standard that makes all “work pay”, as the Conservatives are wont to say.
The Minister will probably talk about value for money for taxpayers, but guess what? Public sector workers pay their taxes, too. If the Government do not think that the work that has been done by civil servants—nurses, the police, the fire service, work coaches, Border Force, refuse collectors, workers in the justice system, our armed forces, teachers and, indeed, all those who have faced the biggest challenge and have put themselves on the frontline in fighting this pandemic—is worthy of a pay rise, they should say so. And I will wait for the Government line to be trotted out about the poorest paid being rewarded. If they were being rewarded in any meaningful way, I would welcome that announcement, but as with all these things, the devil is in the detail. A pay rise of £250 for those earning under £24,000 a year is equivalent to just £4.80 a week, and that is before tax, so in terms of take-home pay, it is about enough for some mince pies, 2 pints of milk and some teabags—what a Christmas bonus for them!
Just one look at the civil service campaign “Here For You” shows what a resilient and adaptive workforce we have in our civil servants, including the defence equipment workers who have been overseeing the staffing of the Nightingale hospitals; the Driver and Vehicle Standards Agency, which has worked to get other key workers their driving test quickly; and those in the Foreign Office who repatriated thousands of British citizens from abroad. We cannot forget this. I personally thank them all, especially the workers in Her Majesty’s Revenue and Customs who got the furlough scheme up and running, and the Department for Work and Pensions staff—friends of mine—who processed thousands of universal credit claims. Some of them are already on low wages.
Public sector workers are not asking a lot; they just want their contribution to be recognised. They were undoubtedly grateful for our applause earlier this year, but that will not put food on the table, buy new school uniforms, keep the car on the road or enable them to get to work on public transport. Claps do not pay the bills. At the end of the day, we are here to represent them, and just from looking round Westminster Hall today, people can see who really cares about this.
I intend to start calling the Front-Bench spokespeople in approximately 40 minutes. I think I have 11 speakers, so I will start with a time limit of four minutes. If some people speak for less, that should just about do it, but if there are many interventions, I will have to reduce the time. I call John McDonnell.
Thank you, Mr Stringer. I thank my hon. Friend Tonia Antoniazzi, who eloquently introduced the debate, and covered most of the ground that most of us want to emphasise.
I want the Minister to realise that getting petitions on this scale reflects a depth of anger among those most affected—civil servants, of course—as well as their families and the whole community. That depth of anger is felt because these are the people who kept this country going for the last nine months. As my hon. Friend the Member for Gower said, the Department for Work and Pensions, which is round the corner from me, administered a million more universal credit claims. The Ealing HMRC office, just down the way from my constituency, which the Government are closing, administered all the claims to keep businesses going—the furloughs—so that companies were not bankrupted. Also, there is Heathrow. This morning, I was on the picket lines. Two immigration and border control staff died as a result of covid. Those are the sacrifices that these people have made, so no wonder there is that depth of anger.
That depth of anger is being felt because this comes after 10 years of pay freezes and pay cuts—six years of a 1% pay increase, then pay freezes on top of that. We have an epidemic of in-work poverty, affecting 4 million people. Some 70% of kids in poverty are in families where someone is in work. We are now talking about destitution in our country.
I give this warning to the Government: there is another pandemic coming—a pandemic of debt. Some 18 million people have incurred debts as a result of the pandemic in the last nine months. The Joseph Rowntree Foundation says that we have never seen this scale of debt before. StepChange has said that nearly 600,000 renters are borrowing to keep a roof over their heads. I was startled to learn that 100,000 people attempt suicide associated with debt every year. The Joseph Rowntree Foundation said that 60% of those on universal credit have gone for a loan in the last few months. Why? To keep a roof over their head, and to put food on their children’s plates.
I am fearful of what will hit us next. I, too, do not want to hear claptrap from Ministers about comparisons with private pay. The Library demolished that argument. I find it ironic that the Government privatised public services, and are now complaining about low pay in the private sector. There is a bizarre irony in the argument that Ministers use.
My hon. Friend Peter Dowd, who was the shadow Chief Secretary to the Treasury, is here with me. The economic illiteracy of this has not escaped us. It is almost as though John Maynard Keynes was never born. What we should not do in a situation like this is cut wages; that would cut demand in the economy. The argument will be that the Government are borrowing a lot. Of course we should borrow in this situation, to ensure that we pay wages to people on low pay, who spend their wages, which increases demand and ensures that we get out of the downturn as rapidly as possible.
My advice to the Minister is straightforward: the Government need to get back round the table with the unions and start negotiating a decent pay rise. Take a lesson from the Chancellor of the Duchy of Lancaster, who admitted before a Select Committee that having 200 bargaining units in the civil service was wasteful. Get back to one table, and one negotiation on fair pay for those who have given so much in the last nine months, just to keep this country’s head above water.
It is a pleasure to see you in the Chair, Mr Stringer. It seems that we are in a loop with the Government, as far as public sector pay is concerned. In 2008, the Government made another attempt to curtail public sector pay. Three trade unions—the Public and Commercial Services Union, Prospect and the FDA—expressed their dismay at the approach taken by the Government. At the time we said:
“It is high time the Chancellor recognised the human cost of his disastrous pay cap and commit to giving our dedicated civil servants the pay rise they deserve.”
We all remember that the coalition blamed the last Labour Government for not being prepared for the world financial crisis—“Labour’s banking crisis”, as they called it. They said that they had to get the public finances into shape, and public sector workers were the first on the list. They underwent a decade of pay restraint. Members will remember the silly comparison to fixing the roof while the sun shines. Well, the roof has well and truly fallen in—and public sector workers will have to pay for it to be fixed, according to the Government.
Here we are, in the worst crisis the country has faced, which took place on this Government’s watch. They were simply unprepared. Despite the hard work of the public sector, which my hon. Friend Tonia Antoniazzi referred to—it is made up of 5.3 million people, and the public sector pay bill is £190 billion—the Government have decided to pick on them yet again. Every 1% pay rise costs around £1.9 billion gross; after tax and national insurance, is about £1 billion.
Yet again we have an easy target and the same old strategy: set the public sector against the private sector, and set parts of the public sector against other parts of the public sector. It is such a cynical approach. Here is an idea: there are 1,200 tax reliefs, through which we forgo £400 billion, according to the Institute for Fiscal Studies. Have the Government bothered to look at any of them in detail, so that perhaps they can give the public sector the break that it deserves after 10 years of restraint? No. Very little work is being done. They cannot be bothered, because the public sector workers will pick up the bill for the Government’s incompetence.
Let us look at a few examples of how the Government could be a tad more imaginative. Capital gains tax relief for entrepreneurs’ qualifying disposals is £2.7 billion, although it is coming down. Tonnage tax is £100 million —my right hon. Friend John McDonnell often refers to that. The patent box is £1.2 billion, and research and development relief is £2.2 billion. There are £300 million-worth of fiddles in that. I will stop there, because it gets a little tedious. I have a very long list. The Government talk about incentivising people; they incentivise their mates all right. the Minister will tell us that there have not been any public sector disputes or pay problems. These people need a pay rise.
I rarely bring personal matters to this House, but I will make an exception today. My daughter Jennie would have been 32 years old today. She died in a cycling accident 10 weeks ago. She worked at the Royal Liverpool University Hospital—yes, in the NHS; in the public sector, as does my wife, her mother, and her friends, and as did I. She and her colleagues worked hard. They do work hard. I owe it to all those who work in the public sector to speak out for them today. Without question, they deserve a decent pay rise, full stop. In the light of the covid crisis, it is time for some of those on the tax relief bonus, as it is being called, to take their turn.
It is a pleasure to serve under your chairship today, Mr Stringer. I start by thanking my hon. Friend Tonia Antoniazzi for securing this important debate.
Before entering Parliament, I spent nearly my entire working life in the public sector. I can assure hon. Members and friends that during my 30-year local government career, morale was never worse than during the past decade. The austerity programme initiated by the coalition Government, coupled with pay restraint amounting to substantial cuts in real-terms pay, brought unsustainable stress to public sector workers and the services that they provide. Average public sector pay is still £900 lower today in real terms than it was in 2010. It was hardly a period of shining progress in the run-up to the biggest public health crisis in our country’s modern history. At the core of that unsustainability was the fact that the public sector was never required to deliver less—quite the opposite. The drive for efficiency, alongside the demand to deliver more with less, severely hamstrung the capacity of the public sector to deliver the changes that were promised. Although my direct experience was in local government, the same is true right across the public sector.
We cannot simply disregard the previous 10 years as though they never happened. They are the historical context for debates such as this one, as we look to the future. Right hon. and hon. Members will know that more than half of all key workers are public sector workers. The race to the bottom has seen Brand Rishi divide up the public sector; apparently, not all are born equal: some are awarded meagre pay increases, while the vast majority are not. There is even new language used; “pause” instead of “freeze” is one example. The public sector is under no illusions. The photo ops on the steps of No. 11 every Thursday evening were exactly that—photo opportunities, and nothing more.
During the summer, the Government went into a spin overdrive, announcing above-inflation pay rises for some of those public sector workers whose rate of pay is recommended by pay review bodies. The Government enacted those recommendations while leaving out those whose pay is not set by pay review bodies, namely local government workers, social care staff and thousands of junior civil servants. Whether workers received a pay uplift a few months ago or not, the entire public sector is now set to be hit again for at least the next 12 months, leaving millions of key workers, who continue to go above and beyond in our hour of greatest need, facing another lost decade. Enough, quite simply, is enough.
I could give many examples, but I will conclude by pointing out that the problems created by more than a decade of pay restraint in the civil service have been compounded by the lack of a coherent pay system, which has led to huge inequalities within and across Departments, with the gender pay gap standing at more than 11%. I ask the Minister two things. When will the civil service move to a national pay structure, to address these inequalities? When will all public sector workers be treated equally and be rightly acknowledged, with a substantial pay increase for the incredible work they do each and every day on the frontline?
In the time I have, I will talk about two particular groups of key public sector workers: prison officers and firefighters. Both are key Government workers. Prison officers in particular deserve our praise, recognition and respect for their bravery—as, indeed, do firefighters—not only during the pandemic but year in, year out. As hon. Members may well know, prison officers are banned from taking industrial action; it is a criminal offence even to suggest that they should, for example, start working to rule. In return for the loss of that most basic human right, the independent Prison Service Pay Review Body was established in 2001 to make recommendations on pay, which the Government agreed to follow in all but the most exceptional circumstances. To encourage people to join and stay in the Prison Service, the independent Prison Service Pay Review Body recommended a significant pay rise for band 3 offices on fair and sustainable contracts, with new, modernised terms, ending the effectively two-tier workforce.
Five months ago, the Government promised to consider that recommendation and to consult the recognised trade union, the Prison Officers Association, on its implementation. However, on Thursday last, the Government rejected the recommendation, claiming it was unaffordable, without having had any discussion with the Prison Officers Association. Prison officers are understandably angry and have accused the Government of nothing less than pay betrayal. I understand that the Prison Officers Association intends to launch legal action against this decision, and I hope it will receive the full backing of all hon. Members in this place today.
The Prison Service is clearly experiencing a crisis in recruitment and retention, especially of band 3 officers, the main operational entry grade into the service. The review body calculates the cost of new recruits leaving after less than two years’ service at around £30 million per annum, a wasteful and inefficient use of public money. That is why the pay review body recommended an immediate £3,000 uplift in pensionable pay, to try to stem the rising tide of resignations. The Government claim that is unaffordable. However, no exceptional circumstances have been cited to justify their decision, as is required. The Government have earmarked around £4 billion for a new generation of private prisons yet claim to have no money to pay prison officers. This is an abuse of power and an insult to people’s intelligence.
The situation is unfair and unsustainable, and our prisons suffer as officers vote with their feet and leave the service, taking with them valuable skills, knowledge and experience at a time when we need it most. The Government must think again, treat our prison officers with the respect they deserve, get round the negotiating table with the POA, and make a fair and sustainable offer.
I also want to mention firefighters. I chaired a meeting of the Fire Brigades Union parliamentary group this afternoon. Firefighters had a pay freeze in 2010 and 2011, followed by a 1% public sector pay cap imposed for six years from 2012 to 2017—
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend Tonia Antoniazzi on her powerful and eloquent opening speech. I am not sure that I will add anything unique to the debate, but some points bear repetition.
We owe a huge debt of gratitude to the people who have been delivering our public services during the coronavirus pandemic. Some of them are in public-facing roles that simply cannot be done from home, including social care workers, refuse collectors, firefighters and border control staff. They have been working hard, day in, day out. They have exposed themselves and their families to additional risks to help to keep us safe, secure and well.
Others who have been working just as hard are often invisible. They are among the unsung heroes of the crisis. I am thinking of the staff working at Her Majesty’s Revenue and Customs to administer the job retention scheme, or those in the Department for Work and Pensions coping with a huge influx of new universal credit claims. Their work has been just as essential in helping to protect jobs and livelihoods. They were often unprepared and under-resourced to deal with that new sudden demand, but they stepped up. Of course, there are many others. Their reward for that work is to be handed a real-terms pay cut. The Chancellor might try to use softer language, with talk of a pay pause rather than a freeze, but soft language does not pay the bills. Prices are set to rise by 1.4% next year, and many people will be even more shocked when they realise that their council tax bill will go up by 5%. Thousands of public sector workers will be worse off, including every single police officer, every single teacher and 90% of armed forces personnel based in England. As many hon. Members have said, for many of those workers, that is just the latest kick in the teeth, because public sector staff have already endured a decade of cuts in the value of their wages, with many seeing their buying power cut by almost a fifth between 2010 and 2020.
Government Ministers want to pit public sector workers against private sector workers, but it is all smoke and mirrors. Private sector wage growth has fallen behind this year primarily as a result of furlough, having previously run ahead. According to the Institute for Fiscal Studies, once we adjust for the different profile of public sector workers in terms of experience, education and other factors, there is no difference in hourly pay rates compared with the private sector. The truth is that such divisive language helps no one. We all lose as a result of the proposals. It is noticeable that not a single Back-Bench Conservative MP has dared to turn up and defend them.
In Nottingham, 23% of all employees work in the public sector, which is significantly higher than the average for the east midlands or Britain, although of course there are parts of the country where it is far higher still. When the pay of those workers is cut, they have less to spend in local shops and with local businesses. Freezing their pay harms the local economy and risks the jobs of the private sector workers employed in those shops and businesses. At a time when our local high streets are suffering real damage and small businesses do not know whether they will survive the pandemic, this pay policy delivers a further blow to confidence and risks further weakening a weak recovery.
The Minister should think again. We need action to save jobs, rebuild businesses and get the economy back on its feet. Instead of cutting real wages, the Government should be boosting them, particularly for the lowest paid. That is the right thing to do ethically and economically.
Unusually, there have been no interventions and some Members have not turned up, so I will increase the time limit for Back-Bench speakers to five minutes.
It is a pleasure to serve under your chairmanship, Mr Stringer, and I thank my hon. Friend Tonia Antoniazzi for securing this important debate. I want to talk about the workers who throughout this pandemic have delivered furlough schemes, processed millions of new claims for universal credit, and kept the courts, ports and airports open and our prisons safe and secure. When we as a nation applaud our key workers, those key workers are often forgotten. Worst of all, they have been abandoned by the Government.
Unfortunately, the words, “civil servant”, still conjure up visions of “Yes Minister” for many people—including, it seems, the Government. Nothing could be further from the reality. The truth is that civil servants have suffered years of real-terms pay cuts. The average civil servant on a salary of £26,000 is now worse off by £2,110 a year compared with 2010. Following the end of national pay bargaining, there are now over 200 sets of pay negotiations in the civil service and related areas. What that means in reality is that there are huge inequalities in the pay of civil servants, with many falling into poverty pay. In HMRC, 12,000 staff—around one in five—are paid at the minimum wage or just above. It is unacceptable to have Government workers forced into poverty.
Then we come to another group of workers who are often overlooked: prison officers. As my hon. Friend Grahame Morris has just said, they deserve not just our praise but our respect for their courage in the course of their work, year in, year out. Covid has made a dangerous job even worse. In my constituency, we recently heard of an outbreak at HMP Frankland, where more than 200 members of the prison staff were off with covid symptoms or were self-isolating. That puts enormous pressure on the remaining staff, yet just last week the Government rejected a key recommendation from an independent body to raise the salaries of people on the frontline. It is nothing less than a kick in the teeth for hard-working and loyal public servants. As hon. Members have pointed out, prison officers are banned from taking any sort of industrial action. I disagree with such a limiting of their basic rights.
The Prison Service Pay Review Body recommended a significant pay rise for band 3 officers. Without justification or reason, the Government claim that is unaffordable. Of course, we know where this all leads—prison officers will vote with their feet and leave the service they love. We will lose valuable knowledge and experience at a time when we need it most. As experience goes down, violence goes up, leading to more officers leaving and so on. It is a vicious cycle.
Civil servants do thankless work. They do not want applause; they want to be rewarded fairly for the work that they do. The Government should listen to the Public and Commercial Services Union and start to restore the real value of civil servants’ pay with a 10% increase. On prison officer pay, the Government should think again and listen to the Prison Officers Association and the Prison Service Pay Review Body. The demands are not excessive; they are simply about keeping key workers’ heads above water and giving them some decency, respect and fairness. Surely that is the least we can do.
It is a pleasure to serve under your chairship, Mr Stringer. I thank my hon. Friend Tonia Antoniazzi for her excellent speech when opening the debate. In fact, all the speeches that we have heard so far have been outstanding, and I associate myself with all of them.
I want to begin by thanking the 353 constituents of Enfield, Southgate who have signed the two petitions that have led to today’s Westminster Hall debate. I thank our public sector workers, who have provided such an incredible public service in our hospitals and social care sector, our local councils, our communities, our schools, our courts and prisons across the whole justice sector, and our jobcentres. I also thank all those working in the emergency services in every public sector that I have not had time to mention. These have been incredibly strange circumstances, and if it was not for their stepping up to help, we would have been in a much worse situation.
From speaking to public sector workers, I know that working in the sector is a vocation for many people, and they have a real desire to serve. That is despite a decade of cuts and austerity and the huge pressures that have been placed on people just doing their everyday job. I want to explode the myth that public sector workers are paid far more than private sector workers. That is simply not true. According to figures from the Office for National Statistics, after years and years of below inflation pay rises and pay freezes, public sector workers earn 3% less than private sector workers. We need to make sure that that is not forgotten. Rather than reward all public sector workers for their hard work, the Government have chosen to divide and rule, and give some public sector workers a pay rise while giving a slap in the face to others. That is clearly unacceptable.
The Government do not realise the huge amount of good will that public sector workers provide in doing their jobs under the most trying circumstances. Before becoming a Member of Parliament, I worked in local government, with some extraordinary people who would often go far beyond the call of duty, just to get the job done. That was after years of cuts, not only in staffing levels that made their work extremely hard but in resources as well.
In my borough of Enfield, I helped volunteers to deliver food parcels at the start of the pandemic. That was arranged and organised by Enfield Council’s amazing staff, who were not just doing their everyday job. They were seconded to do this as an additional job, to make sure that people who were in dire need got the food that they needed. It was an incredible achievement and they showed that they were stepping up to do that. I ask in all honesty, how can the Government justify not giving these public sector workers a pay increase? When the chips were down, our public sector workers did what they had to do to get us through this. It is only right and proper that they get the reward that they deserve, and not an appalling snub from the Government.
It is a pleasure to serve under your chairship, Mr Stringer. I thank my good friend, my hon. Friend Tonia Antoniazzi, for securing this important debate at a time when key workers have done so much on the frontline of the covid crisis to keep us all safe and our country moving. I draw attention to my entry in the Register of Members’ Financial Interests, in particular my trade union membership.
As a former retail worker on the shop floor for six years, it is important for me to mention shop workers. Shop workers are key workers. If there is one thing that the pandemic has demonstrated, it is that the shop workers, cleaners and transport workers who are working at the coalface of this crisis are key workers who deserve not only our respect but fair pay, terms and conditions.
We must therefore look again at what support we give them. Recent research by the Trades Union Congress suggests that 3.7 million key workers—that is 38% of all key workers—earn less than £10 per hour. That is not reflective of the service they provide and it is why we must raise the minimum wage to £10 per hour at the very least, as well as put an end to unfair youth rates.
Moving on to the civil service, my right hon. Friend John McDonnell made the point that the current system of having over 200 sets of pay talks is hugely inefficient. When will the civil service address that poor practice by implementing a coherent pay system that covers all its workers through one set of centralised negotiations? Research by the Public and Commercial Services Union, which has done so much to bring this issue to the fore and whose petition has now received more than 100,000 signatures, revealed that in the past decade, since the Conservatives entered Government in 2010, civil service pay has fallen in value by up to 20%, with the average civil servant now worse off by more than £2,100 every single year.
Not only is that unacceptable, it is a completely unsustainable position for those who are earning less, year on year. Instead of rewarding Government workers and local government staff for continuing to deliver council services during the most challenging circumstances this year, there was a deep sense of injustice that the Chancellor instead used his spending review to announce a public sector pay freeze. The Fire Brigades Union, which represents firefighters who put their lives on the line for us on a daily basis, subsequently criticised the Government for divide and rule tactics, which is understandable, given that the wealthiest corporations have been allowed to cash in on the pandemic without shouldering any of the burden.
There must also be a new deal for retail, distribution and home delivery workers, based around a real living wage as defined by the Living Wage Foundation—not the version this Government have appropriated—and guaranteed hours. As we have seen time and time again during this pandemic, it is imperative that we have meaningful statutory sick pay. The current provision is not fit for purpose and offers little support for those who are sick, having to self-isolate or look after loved ones.
A good route for the Treasury to raise revenue is by ensuring that businesses pay their fair share of tax, by tackling tax avoidance and the use of offshore havens once and for all. For example, over the past 20 years, Amazon paid just £61.7 million in corporation tax, despite its UK sales surging more than 26% to almost £14 billion in the past year alone. We cannot continue down a path on which businesses can afford to pay out millions to shareholders but plead poverty when it comes to paying decent wages to the staff members who create their profits and support our communities. As the Government stall on their support for workers, I urge all workers to join a trade union for the protection and dignity that they deserve.
It is a privilege to serve under your chairship, Mr Stringer. I congratulate and thank my hon. Friend Tonia Antoniazzi and the Petitions Committee for this debate. I also thank those of my constituents who contacted me about both public sector and key worker pay, including the 700 Jarrow constituents who put their names to both petitions.
As colleagues have pointed out, we cannot let this argument descend into one about levelling down; there should be fair pay in both the private and the public sectors. We should not let the debate become a tool for the Government to pit private and public sector workers against each other once again. Week after week at Prime Minister’s questions, the Prime Minister attacks the Opposition for caring about or focusing on the public sector alone. He recently said that there is a
“deep underlying Labour hatred of the private sector”.—[Official Report,
Vol. 684, c. 818.]
That is, of course, not the case, but how can public sector workers support private businesses if they cannot afford to buy their products or pay for their services? That simply makes no economic sense.
The pay freeze for public sector workers comes on top of an 11-year pay restraint. Ten years ago, the Government implemented a two-year pay freeze that was followed by a six-year pay cap of 1%. Since, average salary levels in the civil service have fallen in value by comparison with inflation. This point has already been made, but I will reiterate it because I think it is important: that means that the average civil servant on a salary of £26,000 is now worse off by more than £2,000 a year.
Hard-working civil servants in my Jarrow constituency simply cannot afford a further pay freeze and, frankly, they do not deserve it. A great number of the civil servants in my constituency are employed by the Department for Work and Pensions in Newcastle. Many of those who administer benefits are at virtually the same income levels as those receiving them. How is that situation sustainable?
We all recognise the huge economic impact that the pandemic has had, but public servants and key workers across sectors have kept the country running during this difficult time, and they deserve a pay rise, not a real-terms pay cut. Not only is the pay freeze unfair, it also makes no economic sense: research from the New Economics Foundation found that paying all pubic sector workers a real living wage and increasing public sector pay would boost GDP by between £1.1 billion and £2.1 billion, with an increased tax take of between £370 million and £700 million.
There must be no return to the austerity programme implemented in the aftermath of the crash. Ten years of a flatlining economy has exposed the economic illiteracy of austerity, and a significant uplift in pay should be central to the post-pandemic recovery across all sectors of our workforce. Yes, we need to thank public sector and key workers for all that they have done throughout the crisis and beyond, but, Minister, thanking and clapping them on doorsteps is not enough. They simply need a pay rise.
It is a pleasure to serve under your chairmanship, Mr Stringer. I am very pleased to have the opportunity to speak briefly in Westminster Hall. I thank and congratulate my good and hon. Friend Tonia Antoniazzi on securing this important debate, which reflects her long-held commitment to working people.
The people of Newport West work hard, look out for their neighbours and, where they can, help out—they never walk by on the other side. That is why so many of them have been in touch with me in recent weeks and months, urging me to call on Tory Ministers to act quickly. “Act on what?” some might ask. They do not want Ministers just to clap or say nice words; they want real action to show those who are keeping our country going that we really care and that we recognise their contribution in the most difficult of circumstances.
Like so many in this House and across the country, I have heard from constituents who want this place to do what our public sector and key workers have done for us in recent months: to go the extra mile and show that we care. Before my election to this place, I worked in our national health service for more than 30 years. Every day, I saw people working to keep our communities safe and our people alive. The least we can do is give something back.
As my hon. Friend the Member for Gower illustrated, public sector workers have endured a decade of severe cuts in the value of their wages, with many seeing the buying power of their pay packet fall by almost a fifth between 2010 and 2020. At the same time, the private sector has far outstripped the public sector, as private sector pay grew at between 2% and 2.5% per year during the six years of the public sector pay freeze and pay cap.
As my hon. Friend Bambos Charalambous stated, the latest Office for National Statistics analysis shows that, contrary to the myths, public sector workers earned 3% less than private sector workers in comparable jobs. These statistics show the importance of standing up for and siding with public sector workers in these tough times. Like other Opposition Members, I will be doing exactly that. It is important that we do that because the Government’s latest pay policy is set to heap further damage on public sector workers, as the forecast inflation rate for 2021 suggests that all public sector staff outside the NHS will see a decline in the value of their wages, whether they receive their £250 payment or not.
While the Government’s pay policy should be opposed unconditionally—I do so with the knowledge that many of my constituents do so, too—there are still answers that Ministers must provide. The rationale for the pay policy announcement was that the pay pause would protect public sector jobs. What measures and funding will the Government put in place to ensure that jobs are not lost and how is that objective being communicated to employers in the public sector? I look forward to the Minister’s explanation in her response.
I know that time is short, but I wanted to speak in this debate to show our key workers that there are some in this place who care. I join my hon. Friend the Member for Gower and many others in pledging to do all I can to stand with them and stand up for them in the opportunities that I have.
I am grateful to be called in this debate. I thank the Petitions Committee for prioritising such an important issue. I refer to my entry in the Register of Members’ Financial Interests.
We know that the petitioners have worked night and day to keep us safe over the past nine months. Although they have had plenty of claps and slaps on the back, the Chancellor’s statement came as a slap in the face, when so many looked at their pay statements at the end of the month and once again realised that they still could not make the bills pay and the balances match.
As a result, it is right that we debate public sector pay in this place, because Britain does deserve a pay rise. Although I welcome the pay rise for our NHS workers, we still do not have the remit, we do not know how that process will work, we do not know whether it will be capped by the Government and if so, to what extent, and we do not know whether the Government will fully fund it, or expect our cash-strapped NHS trust to dig deeper into the money it does not have.
One thing is for sure: we need to ensure that level of pay across the board. It is not only about our NHS workers. Our care workers, our local government workers, the people who have worked through the night trying to get people on to benefits as fast as possible, our teachers, our firefighters and our police all need that recognition. There are so many more I could mention. Curtailing their pay comes on the back of a decade of injustice in the pay system.
So many of those staff have been subject to reorganisation that has resulted in downbanding and loss of wages. We have also seen significant cuts to pensions and deferred wages for many of these workers. In the Chancellor’s statement we see history repeating itself. For a decade, the Government have not addressed the real economic crisis in our country; they have created another one, shifting the burden on to the lowest paid.
To give the lowest-paid in our country an increase of just 10p an hour is an insult after they have cared for people in their time of need over the last few months—not least those workers in care homes who have put their own lives at risk in order to support our communities. Those workers, who are mainly women and mainly black and ethnic minority, and disabled workers, are the people who are worst hit in our economy, so this is a real pay injustice, discriminating against people who are working.
The Government are always proud to talk about their national living wage, which is only £8.72 an hour. In 2015, the then Chancellor announced that by 2020 we would be on at least £9 an hour. We have not even reached that point. Of course, Labour made it very clear at the last election that we believe that we should start at £10 an hour, recognising that people have to live, survive and pay their bills, as opposed to having such pay restraint.
An increase would not be at huge cost to the Government; they could borrow and invest, which is what will make the difference to our economy. The TUC calculates that just a 2% increase would boost GDP by £1.1 billion to £2.1 billion—money that the Government could really do with at this time—and tax take would increase by up to £7 million. It is therefore not a zero-sum game: not just workers, but the Government gain.
Finally, because time is limited, we need to look again at how pay is arranged in our country. So many workers are not covered by any collective bargaining processes, and are, as a result, at the behest of their employers having additional money at the end of the year to pay them. It is completely unsatisfactory, and it is particularly the low-paid who are not part of collective bargaining arrangements.
I therefore call on the Minister to review what is happening across our pay system, and how it discriminates, to ensure that low-paid workers are not left out of pay deals. That is vital, as they are the people most in need. At a time when our economy needs such investment and our workers need to be acknowledged for all that they have done, I say to the Minister that it is time that British workers had a proper pay rise.
It is a pleasure to see you in the Chair, Mr Stringer.
The House of Commons Library tells me that the Glasgow South West constituency has the highest percentage of workers in public sector employment, so it is only fitting that I contribute to the debate. I refer colleagues to the Register of Members’ Financial Interests. I chair the Public and Commercial Services Union parliamentary group, I worked 25 years before arriving in this place in the public sector, and I am a proud trade unionist of 20 years’ trade union activity. I would safely argue that the best political education and lifelong learning that one can achieve is through being a trade union activist.
I thank Tonia Antoniazzi for leading the debate. I use the word “debate” advisedly because no one has justified the Government’s position. The history that others have referred to is important. In 2010, there was a two-year pay freeze and then there was a six-year pay cap of 1%. Other Departments maintained that pay cap.
Public sector workers and civil servants have, during the last nine months, performed heroics, and the general public seem to think so too, with more than 100,000 people signing the petitions. The point has been made that the devolved Administrations have provided pay for NHS staff—£500, as a thank-you payment—and frankly we have seen a disgraceful response from the Treasury, which wishes to take tax and national insurance off that payment. I really hope that the Treasury thinks again on that point.
I will confine most of my remarks to the civil service and what it has done over the past nine months, including administering millions of new universal credit claims for the Department for Work and Pensions and processing furlough payments in Her Majesty’s Revenue and Customs, all despite—this has to be emphasised—staff in a number of Departments not being provided with the proper equipment for homeworking during the crisis, including in the Department for Work and Pensions.
Colleagues made the point about the problems of low pay in HMRC. I emphasise again that the median salary in HMRC is the lowest across the civil service. Is that not ironic, given that a key role of HMRC is to chase all these rogues—the Googles, the Vodafones and all these other companies that have not been paying their tax for years—and try to collect that tax? Around one in five staff is paid the minimum wage or just above it, but there is also another issue. It is clear that pay delegation has also led to pay segregation by gender, and that the gender pay gap can only be reduced by increasing the pay of staff in the lowest-paid Departments and agencies.
It is really disappointing that not one Government Back Bencher is here to justify these policies; people watching will wonder why the Government have thrown in the towel in the middle of the debate. However, I can tell hon. Members that PCS members have been sharing emails they have received from Government Back Benchers in reply to their request to not go ahead with this public sector pay freeze. I think the politest term I have heard is “short and sniffy responses”. It seems that the position of many Government Back Benchers is that public sector workers should be thankful for their job security. Tory MPs could perhaps tell that to the 2,000 workers in HMRC facing redundancy at the end of the year and knowing that vacancies within that Department are not being offered to them but are instead being farmed out to agency staff, and God knows the cost to the taxpayer of the more than 100,000 civil servants who have lost their jobs in the past decade due to Tory austerity. The Prime Minister responded to me, as emphasised by the hon. Member for Gower, that he was “lost in admiration” for the work of the civil service during the covid crisis. I can only suggest that a pay freeze is an extraordinary way of showing that.
A public sector pay freeze is both counterproductive and economically illiterate, and it gets to the whole debate on the role of the public sector itself. Research before the pandemic consistently showed that 70p in every pound of public money ends up in the private sector economy, whether via grants, contracts or, indeed, public sector workers’ wages. We really need to end the notion that public sector workers, when they get a pay increase, hide it in a shoe box under the mattress. That is not how it works, I can tell you. When people get more money in their pockets, they spend it, and they spend it in the private sector. If we are serious about helping the private sector and about ensuring that the economic wheels turn, it surely stands to reason that public sector workers, as thanks for all the work they have done over the past nine months, should get a proper pay rise.
I hope that the Minister will tell us what progress is being made in ending the 200-plus bargaining units across Whitehall Departments. I hope that the Government —this political party of small government and efficiency—will tell us how they will enact that particular policy. Workers in Westminster Departments are moving to the Departments of devolved Administrations. Why? Because the devolved Administrations pay better wages.
There can be no return to the austerity programme that flatlined the economy. A public sector pay rise could start the post-pandemic recovery. Investment is required in the civil service to reflect the changed circumstances in which we now find ourselves. I and my SNP colleagues support the demands of the petition because they are morally just and economically sound.
It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend Tonia Antoniazzi for securing this important debate. It is important that we continue to support key workers as they have supported us through this difficult time for the whole country. She spoke about a number of things, but I will touch on her point about the Welsh Government trying to reward care homes and the Chancellor trying to tax them. She mentioned value for money for taxpayers. I agree that public sector workers pay their taxes too and deserve to be treated fairly.
I thank all hon. Members who have spoken to support key workers in their constituencies. I am disappointed that not a single Tory Back Bencher has turned up to speak. It is important that we speak for the individuals we seek to represent. The fact that not a single one has turned up speaks volumes.
Several hon. Members have made moving and passionate contributions that have highlighted the strength and passion of key workers across the country. My right hon. Friend John McDonnell talked about the 10-year pay freeze. People are hurting. I echo his point that the Minister should get back to the roundtable with the unions to negotiate a decent pay rise. I hope she takes that forward.
Like many others, my hon. Friends the Members for Bootle (Peter Dowd), for Jarrow (Kate Osborne) and for Newport West (Ruth Jones) talked about how important it is for public sector workers to get a pay rise. My hon. Friends the Members for Liverpool, Wavertree (Paula Barker) and for Enfield, Southgate (Bambos Charalambous) talked about their direct experience of working in local government. My hon. Friend the Member for Enfield, Southgate also talked about how he has been delivering food parcels.
My hon. Friends the Members for Liverpool, Wavertree and for Stockport (Navendu Mishra) talked about the pressures that civil servants are facing. A recommendation was made to move towards a national infrastructure for the recovery. I am interested to hear what the Minister says on that point. I echo the comments of my hon. Friends the Members for Easington (Grahame Morris) and for City of Durham (Mary Kelly Foy) about treating prison officers with respect. I have three prisons in my constituency and I know the amount of pressure that prison officers are facing.
My hon. Friend Lilian Greenwood rightly pointed out that council tax will go up, which will have an impact on key workers whose salaries have been frozen for some time. How is that sustainable? My hon. Friend Rachael Maskell talked about the cuts to pensions and how the story is essentially repeating itself. She said that the Government have not really addressed the economic crisis and the 10p an hour increase is an insult. She talked about how pay injustice has affected women, ethnic minorities and disabled people.
Freezing public sector pay was one of the coalition Government’s first actions in 2010. That was followed by a six-year pay cap of 1%. Over the past decade, NHS workers have lost an average of 15% of their wages as their salaries have failed to rise in line with inflation. On Friday, I heard from Royal College of Nursing members about the impact that that was having on them mentally, and the amount of pressure that they are under.
The average civil servant on a salary of £26,000 is now worse off by £2,110 a year. As hon. Members have mentioned, the Chancellor announced in his spending review that the 2.1 million public sector workers who earn less than £24,000 will receive a minimum £250 increase because of inflation. A £250 pay increase will result in a pay cut for any public sector worker earning less than £18,000. Once again, the Government have shown how much they value key workers by hiding a pay cut at the heart of their false promises.
Young people in my constituency of Erith and Thamesmead have been submitting portraits of key workers as part of my Christmas card competition. I asked them to write why the key worker they have drawn means so much to them, and one young person said to me:
“I have chosen to draw many different key workers…They have been pushing themselves every day so they can help us. They have put us first and we should be indebted to them.”
Does the Minister agree that we are indebted to key workers, given their hard work and sacrifice during this pandemic?
Freezing pay for public sector workers is not only insulting, but irresponsible. I am curious to know whether the Minister has given due regard to the impacts that the pay freeze will have. Has the Minister read the report by the TUC, which found that public sector pay increases could boost GDP significantly? That has been echoed by a number of Members in the debate. Does the Minister recognise that imposing a real-terms pay cut, when 1.8 million key workers already earn less than the real living wage, risks driving thousands into poverty? Can the Minister explain how she plans to tackle the shortage of over 80,000 NHS and care sector jobs at the same time as freezing public sector pay?
Over 1 million key workers face a real-terms pay cut next year. That includes 125,000 police officers, 500,000 teachers, 300,000 civil service staff and 125,000 armed forces personnel. By failing to reaffirm the Government’s manifesto commitment to ensure that teachers’ starting salaries reach £30,000 by 2022, the Chancellor has made it clear that he has no intention to back our public sector workers. Cutting universal credit, and giving the go-ahead for council tax rises in the middle of a pandemic, is pushing more people into poverty. The Government are making poor spending decisions that threaten to push our economy and public services to breaking point.
I want to conclude by quoting my hon. Friend the Member for Gower. Public sector workers are not asking for a lot. They just want their contributions to be recognised, and claps do not pay the bills.
Thank you, Mr Stringer. It is a tradition on occasions such as this to congratulate Tonia Antoniazzi on securing a debate on the issue of the day. Today, however, we should also congratulate the thousands of people who secured the debate by taking the time to express their support for key workers. On hundreds of occasions, Government Ministers have, in public and in private, expressed their gratitude and respect for what our millions of key workers have done, and I would like to do so again.
I would also like to express my condolences to Peter Dowd and his family on the death of his daughter. As a mother of three, I cannot even begin to imagine such as loss. We are divided by politics but united in our passion for public service, and I pay tribute both to him and to her for all her service.
We tend to think of key workers as nurses, teachers and police officers, whose efforts, as ever, have been invaluable. In the context of the pandemic, however, our understanding of who is key has rightly stretched far more widely, which is pertinent for the subject of the debate. Understanding who is key extends to local government, national Government, transport, utilities and communications. Importantly, many of the people on whom we have relied are in the public sector. John McDonnell said they are the people who kept the country going, but it is not just the public sector. Food retail workers, train conductors, farmers and lorry drivers—every one of them is a crucial link in the chain and deserves our thanks.
The substance of today’s debate is asking why we choose restraint when it comes to the way in which some of those in the public sector are financially rewarded. Hon. Members will know the answer. Many, in fact, have referenced fiscal policy since 2010. They should all know—if not, I am happy to remind them—that it was the difficult decisions we made during that period that have enabled us to borrow to fund such a significant package of support. Members have repeatedly said today, “We should borrow.” We are borrowing. A year ago, who would have believed that we would have spent £43 billion on people to be furloughed, £13.7 billion on the self-employed, and over £280 billion in total, in the space of eight months, on an unexpected pandemic?
No, I am afraid I am not giving way.
I am also happy to remind hon. Members that almost exactly a year ago, after nine years of Conservatives in Government and the very same fiscal policies that hon. Members have criticised today, the public chose to renew their faith and trust in this Government—not just with an increased share of the vote, but with a much increased majority. Since 2010, they had heard these arguments about what we were doing on fiscal policy over and over again, from many colleagues on the Opposition Benches who are not in the House today. We all believe in fair pay, but we disagree on where it is sent. However, I remind hon. Members that the public also want fiscal responsibility.
Good government is about making the right choices. To paraphrase the Chancellor, our health emergency is not yet over, while our economic emergency has only just begun. At a time like this, it is the responsibility—in fact, the duty—of Government to prioritise and target support where it is most needed, in a way that is fair and sustainable, that protects jobs and businesses, and that limits long-term damage to the economy. The hon. Member for Gower referenced many previous responses the Government have given on this topic. She may not like the answer, but the facts have not changed, and I am happy to repeat them here. Fairness has been a guiding principle.
I am not giving way. I have already said I am not; please stop asking.
As the Chancellor pointed out in his statement on the spending review, in the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Workers in the private sector have lost jobs, been furloughed, and seen their wages cut and their hours reduced, while those in the public sector have not. [Interruption.]
Thank you, Mr Stringer. For that reason, the Chancellor announced a temporary pause to pay awards for some public sector workers for the year 2021-22. Disappointing though I know this will be, this approach allows us to protect public sector jobs at this time of crisis and ensure fairness between the private and public sectors. Crucially, as I have said, we are targeting our resources at those who need them most. First, taking account of the NHS Pay Review Body’s advice, we are providing a pay rise to over 1 million nurses, doctors and others working in the NHS. Secondly, we are protecting those on lower incomes. The 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least—and I emphasise “at least”—£250.
In the spending review, we also accepted in full the recommendations of the Low Pay Commission—to increase the national living wage by 2.2% to £8.91 an hour, to extend that rate to those aged 23 and over, and to increase the national minimum wage. According to the commission, those rates will give low-paid workers a real-terms pay rise and protect their standards of living without significant risks to their job prospects. A full-time worker on the national living wage will also see their annual earnings increase by £345 next year. That is a pay rise of over £4,000 compared with 2016, the year in which the policy was first introduced. Taken together, these minimum wage increases will likely benefit around 2 million people and help make real progress towards ending low pay in the UK.
The risk with broader-brush measures, including income tax or national insurance policies—this particular point was not made today, but it is an important one to reiterate—is that it is difficult to define and limit who should benefit. The result could merely be to reward the better paid, at a time when the Government have already been forecast to be borrowing at record peacetime levels.
As a Government, we are committed to keeping taxes low in order that working people, including key workers, are able to keep more of what they earn. In April 2019, the Government increased the personal tax allowance to £12,500, meaning that the personal allowance is up by more than 90% in less than a decade, ensuring that more of the lowest earners do not pay any income tax at all. In April this year, we also increased the national insurance contributions primary threshold and lower profits limit to £9,500—a move that will benefit 31 million people. Add all that together, and changes to income tax and national insurance contributions between 2010-11 and 2020-21 mean that a typical basic rate employee in England, Wales or Northern Ireland is more than £1,600 better off a year.
I will conclude by saying that this Government and all the people of this country are grateful for everything that our key workers in both the public and the private sector have done and continue to do, but in the choices we make, we must chart a way ahead that is fair and sustainable and that gives us the best chance of a strong economic recovery. That is the thinking behind what we have done and it will remain the thinking behind what we do in the challenging months and years ahead, as I believe it should.
On a point of order, Mr Stringer. If I heard the Minister correctly, it was suggested that there were to be no job losses in the public sector, yet a number of us in the debate mentioned that there were 2,000 redundancies in HMRC. Mr Stringer, can you tell me how the record can be corrected—or has the Minister just cancelled the redundancy notices of 2,000 workers in HMRC?
I will, on behalf of the Petitions Committee, thank the Minister for the Government response. However, I am very disappointed, as are many of my colleagues here today, that she was unable to take any interventions from us in what is meant to be a debate. It is really difficult that the Government do not recognise the challenges that key workers face. It is evident that the Government are not hearing what people are saying when one petition has nearly 150,000 signatures and the other just over 100,000. It is striking to all of us that our constituents and many people and key workers across the UK do not recognise what has been said. In fact, I am only in this place because I was a teacher for more than 20 years and, since 2010, the public sector workers’ pay freeze has had a massive impact on so many people’s lives and the quality of their lives.
What is going to happen from
Does the Minister recognise that imposing a real-terms pay cut when 1.8 million key workers already earn less than the living wage risks driving thousands into poverty? That poverty, moving forward, is what I am concerned about. That we have to volunteer at food banks and deliver food hampers to people who just cannot put food on the table, at Christmas and throughout the year, is not good enough. That the Minister did not reaffirm the Government’s manifesto promises is an absolute disgrace.
I could go on and on, but I will not. My colleagues have not had the opportunity to have a proper debate in Westminster Hall, and that is extremely disappointing. I thank you, Mr Stringer, for your chairship, and I thank the petitioners, who tried to get their message across today but who, unfortunately, were not listened to, as we were unable to have a proper debate.
Question put and agreed to.
That this House
has considered e-petitions 306845 and 328754, relating to financial rewards for government workers and keyworkers.