Public Sector Pay 2024-25

– in Westminster Hall at 4:30 pm on 17 January 2024.

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Photo of Beth Winter Beth Winter Labour, Cynon Valley 4:30, 17 January 2024

: I beg to move,

That this House
has considered the public sector pay round for financial year 2024-25.

It is a pleasure to serve under your chairmanship, Sir Robert.

I start today by putting on the record my condolences, which I am sure everybody here will echo, to the family and friends of our dear comrade Tony Lloyd, the Member for Rochdale, after it was just announced—in the last hour or so—that he has very sadly passed away. He was a wonderful parliamentarian. I got to know him a bit and he was very caring, kind and supportive, and I am sure that other Members will have other stories that they wish to share. He was also a strong advocate on behalf of public sector workers. His loss is a very sad one for us.

I will move on to the subject of the debate. I am very pleased to have secured it and to have so many colleagues join me to discuss the process for setting public sector pay for 2024-25. I am also pleased that we are able to do so very early on in the process, because this is a vital issue.

How we pay our 6 million public sector workers, who deliver essential public services, must be taken seriously. Today, the Prime Minister talked up real wages rising for the fifth month in a row, but what he did not refer to is the fact that real wages had fallen for the previous 18 months in a row. That is because the real issue is that the past two years have seen a significant fall in the real-terms value of public sector pay, which has been part of 14 years of brutal real-terms pay reductions that have driven down living standards for working people.

I will use this debate to focus on three points. First, I will set out the need for greater transparency, representation and independence of pay review bodies, while acknowledging the support within the trade union movement for greater collective bargaining arrangements. Secondly, I will make it clear that this year’s pay settlement must deliver at least an inflation-proof pay rise to ensure that it does not worsen the cost of living crisis. Thirdly, after more than a decade of real-terms pay decline for public sector workers under the Tories, I will set out the need for Government to commit to the principle of pay restoration.

To begin, I will comment on the letter that was sent to pay review body chairs to initiate the latest pay round before December and I will make some remarks on the pay review body process. In their letter, the Government stated that

“It is vital that the Pay Review Bodies consider the historic nature of the 2023-24 awards and the Government’s affordability position that will be set out further in written evidence.”

For me, that statement exposes the lack of independence of the pay review bodies. Why did the Government’s letter not say instead that it is vital that the pay review bodies cover the rises in the cost of living and secure staff retention?

The timing of that letter has also been condemned, because 20 December—the date it was sent—was more than a month later than the previous year’s remit letters. The schoolteachers’ remit letter has been condemned by the main education unions for being circulated a month late. NASUWT said the letter was a stunt that will delay publication of recommendations before the general election, while the National Education Union said that it showed contempt for the teaching profession.

With regard to the NHS letter, Unison said that the Secretary of State for Health and Social Care must hold proper pay talks early this year or risk a repeat of disruption, and the Royal College of Nursing said that the Government

“has not honoured its commitment to improve how the process works.”

Where pay review bodies exist, it is clear that there are serious concerns within the trade union movements about how they function, about their effectiveness at delivering fair pay and, related to that, about their independence from the Government. Significant questions remain about who is appointed to sit on pay review bodies, including who appoints them, what they are appointed to represent, who sets the terms of the review processes and what the terms of those review processes are. I was staggered to find that, of the 44 individuals listed on the register of interests of members of the pay bodies, only two declare themselves to be part of a trade union. Should there not be a minimum employer and employee representation on the pay review bodies, and should there not be consultation with trade unions on representation?

The letters from the Government ask the pay review bodies to consider the Government’s affordability position. This year, the TUC agreed that there is a need for review bodies to ensure that they have greater remits that give better weight to all the evidence presented to them, not just to the short-term affordability of Government.

I hope that the Minister can answer a number of questions, including why the remit letters took over a month to go out, why the remit letters want a report in May of this year rather than April, whether the Government will meet with the trade unions early in the process, as unions have requested, and whether the Government will commit to PRB reform in relation to appointments, terms of reference and multi-year deals.

Secondly, on the importance of inflation-proofed pay rises this year, the Government letters that were issued last month included a reference to the fact that, in 2023-24, the pay review bodies recommended historically high pay awards. The most historic issue to set out with regards to public sector pay, however, is the scale of the fall in value over the past two years. That is compounded; it has been a sustained fall over the past 14 years. Month on month, annual inflation ranged between 6% and 11%. Those were the consumer price index calculations for 2022 and most of 2023. If we were to use the retail price index—there is merit in doing that, and the trade union movement advocate for its use—inflation for the past two years is higher: between 8% and 14% for the past two years. Again, that is before the recent dip. There has been a month-on-month increase in food and beverage prices of between 5% and 20% since 2022, which remains at over 9% in the most recent statistics; if we take that into account as well, then people will inevitably be suffering.

That is why the TUC routinely refers to the longest pay crisis in the past 200 years. Last year, below-inflation pay was delivered by the pay review bodies of between 5% and 7%.

Photo of Apsana Begum Apsana Begum Labour, Poplar and Limehouse

The impact of the staffing crisis in the Department for Work and Pensions is creating an

“epidemic of mental ill health”.

That is according to emails received by the Public and Commercial Services Union, which represents civil servants. Does my hon. Friend agree that the situation requires urgent interventions from the Government and that one of those urgent interventions needs to be to raise the pay of the 25% of PCS union members in the DWP who are currently paid below the real living wage?

Photo of Beth Winter Beth Winter Labour, Cynon Valley

I totally agree. The PCS union has produced a number of very comprehensive reports outlining the devastating impact that the cost of living crisis is having on the mental health and wellbeing of its staff. I recommend that the Minister and those on the Benches opposite read those reports.

This comes after a two-year pay freeze between 2011 and 2013 and the four-year pay cap of 1% from 2013 to 2017, which preceded the obliteration of pay awards by inflation over the past two years. The TUC has estimated that the average public sector worker is earning £177 a month less in real terms compared with 2010. That is based on ONS pay statistics. Unison and the NEU have briefed me on the real-terms reduction in the value of wages for their members. Teachers are getting £12,000 less in real terms since 2010; social workers £15,000 less; and paramedics £16,000 less. The key workers that keep this country going are being driven into poverty by this Government. Putting money in workers’ pockets is the way out of the cost of living crisis.

The Governor of the Bank of England repeatedly warned last year that pay rises were inflationary, but provided no evidence. Some organisations have challenged that statement. For instance, the Institute for Public Policy Research said,

“Tax-funded…public sector pay restoration…is not significantly inflationary”— again, I recommend that the Government Minister reads the documents. That is why in the past two years we have seen the most significant period of industrial action in 40 years.

The ONS states that over 5 million days of work have been lost to industrial action since the start of the current cost of living crisis. The Government’s response has been not to address the retention and recruitment crisis, but to curtail trade union freedoms by bringing in the Strikes (Minimum Service Levels) Act 2023. In Wales we have seen junior doctors on strike this week because of public sector pay cuts. Yes, they are administered by the Welsh Government, but the purse strings remain here in Westminster, which is responsible. I joined those junior doctors this week, as I have joined all public sector workers, as have all Labour Members here. Our solidarity remains strong with those workers.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

I wish to declare an interest as a practising NHS doctor. I gently remind the hon. Lady that it is beholden on the devolved parts of the United Kingdom—Scotland and Wales—to come to their own pay settlements with the trade unions. In Scotland, under the SNP, a settlement was put in place, which averted a strike by doctors. Why does she believe that things are different in Wales, and why could the Welsh Government not have averted a strike had they wished to do so?

Photo of Beth Winter Beth Winter Labour, Cynon Valley

I do not think the situation is different in Wales compared with Scotland. Both devolved nations have been starved of funds from the UK Government over the past 14 years. The Barnett formula does not work and we are owed in excess of £1 billion in Wales—I am sure it is far more in Scotland. I therefore beg to differ.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Defence), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade), Shadow PC Spokesperson (Foreign Affairs), Shadow PC Chief Whip

Just to answer that particular point, we are still waiting in Wales for the consequentials from the English settlements with junior doctors. Until we know how much money we are getting, it is difficult for us to decide on the rates of pay that we will award.

Photo of Beth Winter Beth Winter Labour, Cynon Valley

I fully agree. I will conclude because I am conscious that lots of people want to speak today.

My final point regards pay restoration. The TUC’s position is clear. As agreed by its affiliated unions, it wishes to see a commitment to funding pay increases for public sector workers that at least match inflation. More than that, it wishes to see above inflation pay rises that provide for pay restoration, and the Welsh Government have committed to that if they have the funds to do so.

Photo of Richard Burgon Richard Burgon Labour, Leeds East

My hon. Friend is making an incredibly important speech on the need to pay our public sector workers properly. Does she agree that the crisis in our public services will not and cannot be solved unless the people who work in our public services are paid properly? For example, band 2 NHS staff—including nurses—outside London are paid less than the real living wage. While that continues, how can our public services deliver the kind of service that people across this country need and deserve?

Photo of Beth Winter Beth Winter Labour, Cynon Valley

My hon. Friend makes a very strong point. I wholeheartedly agree. Pay restoration is the right thing to do. Last year’s IPPR report argued that restoring pay to 2010 levels would cost an additional £22 billion per year. How would we pay that? By increasing taxes. There was a debate earlier this afternoon on wealth tax. We have the funds to provide pay restoration and above-inflation pay awards if we choose to.

Before I wrap up, I have a few questions. Will the Government please commit to above-inflation pay rises for public sector workers? Will they commit to providing pay restoration over the long term? If not, how can they justify the permanent devaluation of the work carried out by public servants? Thank you very much—diolch yn fawr.

Several hon. Members:

rose—

Photo of Robert Syms Robert Syms Conservative, Poole

Order. I remind hon. Members that they should bob if they wish to be called in the debate. I think they are on about three minutes each.

Photo of Dawn Butler Dawn Butler Labour, Brent Central 4:45, 17 January 2024

I thank my hon. Friend Beth Winter for securing this very important debate.

It is interesting, isn’t it, that there are people who claim to work in the public interest and can make millions of pounds of profit while the Government do not bat an eyelid, but public sector workers who have asked for a pay rise in line with inflation are called greedy or unreasonable? ONS figures show that the average public sector worker is earning £177 less a month, in real terms, than in 2010.

This Government consistently and constantly vilify trade unions. Why? Because they are the aspirational vehicle for the working class. I proudly stand on the picket lines to support workers who are fighting for fair pay and better working conditions. It is strange, isn’t it, that the Government do not want unions fighting for their members, but are more than okay with creating VIP lanes, through which Ministers can recommend mates and Tory donors, so they can fill their pockets with public cash?

Every day, people are finding it hard to live. In the past two years, workers have faced the steepest rise in the cost of living for more than 40 years. Since 2010, the cost of living has risen by 73.2%, and over the past year, mortgage interest rates have risen by 48.5%. The Resolution Foundation says that annual repayments for those who are re-mortgaging are set to rise by £2,900. Rents have gone up as a percentage of wages. Food prices have risen by 23%, electricity by 39.4%, gas by 58.7%—I could go on. The value of an average public sector worker’s wages has declined by 25%. We should all be ashamed that that is happening on our doorstep and people cannot afford to live.

In contrast, dividend payments to shareholders have increased by 8% to £94.3 billion. We are living in a topsy-turvy Alice in Wonderland world. I remember what it said on the wall of the trade union where I used to work: “To make the rich work harder, you pay them more. To make the poor work harder, you pay them less.” It is about time we turned the tables and started appreciating public sector workers.

Photo of Olivia Blake Olivia Blake Labour, Sheffield, Hallam 4:48, 17 January 2024

I thank my hon. Friend Beth Winter for securing this debate. It is always brilliant to hear her talking about the important issue of low pay. I echo her comments about Tony Lloyd. He was a very principled public servant, not only as an MP for many years, but as a police and crime commissioner. My thoughts are with his family. He will be sadly missed.

The statistics on public sector pay and the associated graphs and figures all starkly outline the dire state of pay for those who dutifully work to serve our communities, but nothing paints a better picture than the experience of frontline workers themselves. I want to read an anonymised quote from a DWP worker. When they were asked about the conditions in their workplace, they said:

“Every day felt like drowning, getting upwards of 60 messages from claimants to deal with, on top of all the other work. I’ve been in my role for several years and this was the worst it has gotten. It worsened my mental health to the point of severe burnout, with constant headaches when I am at work and bad anxiety. At its worst, it pushed me to self–harm and heavy contemplation of suicide.”

That worker is not alone in those feelings. PCS recently published first-hand testimony from the workforce in the DWP. The reports in that document are shocking, and they almost all point to low pay as the source of the recruitment crisis in the DWP. No one wants to work for an employer that they feel undervalues them and the skilled job they do. It is ironic that we hear a lot about competition in the private sector, and yet do not see competitive pay in the public sector.

The link between poor recruitment and pay is also abundantly clear in the health service. Nursing, which has already been mentioned, has a vacancy rate of 10.36%. The number of district nurses has decreased by 44.4%. School nurses are down by 32.6%, learning disability nurses by 46%, and health visitors by 31.1%. Just the other day, I was in the Chamber debating provision and funding for special educational needs and disabilities. All the nursing staff I have listed are critical to delivering that service, so it is no wonder that SEND provision in the UK is broken. Pay is at the core of a lot of these recruitment crises.

It is the same story again and again. Last year, the TUC found that one in three public sector workers—1.8 million workers—has attempted to leave their profession and get a job in another field. As alluded to earlier, the crisis in health and social care is even worse; there, the proportion rises to 50%. Of all the workers the TUC asked, 52% cited low pay as a cause of their wanting to leave the sector.

The pay for our public servants reflects the esteem in which we hold our public services, and the value we place on supporting some of the most vulnerable members of our community. Given the Government’s measures on public services, those have clearly hit rock bottom. We should all reflect on that.

Photo of Ian Byrne Ian Byrne Labour, Liverpool, West Derby 4:51, 17 January 2024

It is an honour to serve under your chairship, Sir Robert. I thank my hon. Friend Beth Winter for securing this important debate, and for her excellent speech.

Many public sector workers have, as a last resort, had to take industrial action over their pay, pensions and job security. I have been proud to stand on the picket lines in Liverpool with teachers, nurses, doctors, junior doctors, civil servants and many other public servants. The Government should not have put the workers in this position. The wave of strike action follows pay offers that amounted to real-terms pay cuts, and comes at the same time as high inflation and the worst cost of living crisis that many of us have ever known. Since 2009, the value of the average public sector worker’s wage has declined by 25%, and the total cash value lost as a result of wages failing to keep pace with inflation is £65,000. That figure is staggering. Just imagine the difference that £65,000 could have made to people’s lives, and their local economies.

The Government’s brutal and unrelenting austerity has cut our vital services to the bone, and declining real wages have forced many who deliver those services into poverty. Let us be clear: austerity was a political choice; it was the wrong one, and so it will always be. Analysis by Feeding Liverpool shows that one in three people in my great city are experiencing food insecurity and hunger, and I know from speaking to many constituents that this includes teachers, nurses, civil servants and many more public sector workers.

On civil servants specifically, a PCS union survey of its members found that 35% had skipped meals because they had no food, 18% had to miss work because they could not afford transport or fuel to get there, 85% said the cost of living crisis had affected their physical and mental health, and 52% were worried about losing their home. What we are putting them through is staggering.

Declining public sector pay and conditions have also created a recruitment and retention crisis. It is utterly heartbreaking to hear from public sector workers in West Derby, such as teachers and nurses, who feel that they have no choice but to leave the career they have worked in their whole life, and care so much about, because of a combination of low pay, poor conditions, funding cuts, staff shortages and huge workloads.

Recent polling shows that two thirds of the public want the Government to invest any fiscal headroom in public services, such as schools and hospitals, and the people who serve in them. People have had enough of the Tory austerity programme. I completely agree with my hon. Friend the Member for Cynon Valley, who described so well the three key things that the Government must do next. First, there must be greater transparency around pay review bodies, along with greater collective bargaining arrangements in the trade union movement. Secondly, the upcoming pay settlement must deliver at least an inflation-proof pay rise. Thirdly, the Government must commit to a principle of pay restoration, and put right a decade of real-terms pay decline for public sector workers. They deserve nothing less, and our communities deserve nothing less.

Photo of Zarah Sultana Zarah Sultana Labour, Coventry South 4:54, 17 January 2024

It is a pleasure to serve under your chairmanship, Sir Robert. I too pay tribute to our colleague Sir Tony Lloyd, the hon. Member for Rochdale, who has sadly passed away. He will be remembered for his kindness, and his tireless commitment to his community and the Labour movement. My thoughts go out to his loved ones. I congratulate my hon. Friend Beth Winter on securing this important debate. Our NHS, our schools and all our public services are the backbone of our society. It is those 6 million workers, from hospital porters to teaching assistants, who keep services running. They keep the country running.

Public sector pay has been slashed in real terms since 2008. While costs have soared, wages have failed to keep up, leaving workers in Coventry South and across the country struggling to makes ends meet. Recent research by Unison shows that the average public sector worker’s wage in 2023 was worth £12,000 less than it was in 2009. The work of teachers, nurses, firefighters and social workers has not got easier in that time. In fact, workload, stress and burnout have only shot up. Why is a teacher today paid a quarter less than they were in 2010? Why have social workers, paramedics, housing officers and so many others had their pay slashed by more than 25%?

For more than a decade, the failure to pay public sector workers properly has pushed staff to breaking point. It has created workforce crises, dangerous understaffing and a wasteful reliance on agency staff. Last year, public sector increases of around 6% were eventually secured in most sectors, but with inflation still sky high, those once again amounted to real-terms cuts that have left workers worse off. It has to be stressed that those pay rises were not handed to workers by the Government; they were won by trade unions who campaigned tirelessly for many months, and who were forced to take days of industrial action to claw back pay in the face of huge real-terms cuts.

It does not have be like this. The Government could choose to remunerate workers fairly. They could commit to increasing pay, at least in line with inflation, for 2024-25. They could plan to restore pay to 2009 levels, so that all public sector workers can enjoy the same standard of living today, and tomorrow, as they did in the past. In the past decade, Britain’s billionaires have seen their wealth go up threefold. It now stands at an eye-watering £684 billion, so we know that there is enough wealth to go around, to fund our public services and to give workers a decent wage. Let us tax the rich. Let us get the very wealthiest to pay their fair share. Let us invest in our public services and give the public sector workers who we rely on the fair, inflation-proof pay rises that they rightly deserve.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Defence), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade), Shadow PC Spokesperson (Foreign Affairs), Shadow PC Chief Whip 4:57, 17 January 2024

Beth Winter made a very persuasive case, which I will add to. Public sector pay is crucial in Arfon and in Wales. According to a Bevan Foundation report on poverty in Arfon, which I commissioned and published last August, there were 11,300 public sector employees in Arfon in 2021—36.6% of all employees in the constituency. Public sector employment in the constituency is extremely important and is higher than elsewhere, and there have been many reasons for that. We have three major public health institutions—a local hospital, Bangor University and Gwynedd Council’s headquarters in Caernarfon—so that is why we have so many public sector workers. Arfon is twice as dependent on jobs in the public sector as the rest of Great Britain.

Public sector jobs have traditionally been seen as safer, better paid and pensionable. However, the median gross weekly pay of full-time workers living in Arfon is £20.10 a week less than a typical Welsh worker’s, and £58.80 a week less than the average worker’s in Great Britain. I would argue that this obviously has a bad effect on public services. There are particular issues in Wales, where, in many areas, we have a more dependent population because of age, illness, disability and the legacy of heavy industry. That is why we need proper funding to meet the needs of public services, and why the inadequacy of the Barnett formula is so acute.

To take the case of junior doctors’ pay, which I raised earlier, Plaid Cymru’s Health and Social Care spokesman, Mabon ap Gwynfor, said:

“The elephant in the room is that Wales is not fairly funded, meaning we’re unable to pay our public sector workers what they deserve.”

I have a question for the Minister, which I will repeat from earlier. Will there be a consequential effect on the settlement for Wales from the settlement with junior doctors in England, so that we have the wherewithal to pay the proper rate for the job? If there is to be a consequential, when will the Government tell us?

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 5:00, 17 January 2024

It is a real pleasure to speak in this debate. I thank Beth Winter for securing it.

First, may I say how saddened I am to hear that Tony Lloyd has passed away? I knew him for all my time here of some 15 years. He used to sit behind me in the Chamber, or I sat in front of him—perhaps that would be a better way to say it. We had many chats and much fun together. Along with others in this Chamber, I pass on my sincere sympathies to his family. He was a very good friend to Northern Ireland. We might have had some differences in how we looked at things, but I tell you what: no one can ever take away his dedication and commitment to Northern Ireland. I will sadly miss him on the Northern Ireland Affairs Committee. I put on the record the burden of his passing.

This is certainly a timely debate. In Northern Ireland tomorrow, our schools will be closed because the teachers are on strike. Public transport workers will join them. Anyone who wishes to travel to work will do so on roads that are not gritted, while road gritters go on strike and temperatures fall today and tomorrow in Northern Ireland. More than 150,000 public sector workers, across 15 unions, are set to strike. If we took this to the nth degree and all public sector workers went on strike, we would find a total shutdown in Northern Ireland.

Some people here may be getting ready to chime, “Pay sector awards are devolved.” Yes, they are, but I will make my case. It has to be remembered that Northern Ireland is grossly underfunded, as has been acknowledged by the Secretary of State and by central Government. We need an appropriate uplift in Government funding. I am invested in this deal to ensure the Barnett consequentials. This has been discussed at the Northern Ireland Affairs Committee and is one of the issues that we have taken forward. All the officials who attend have acknowledged that the Welsh system of funding, with great respect to Welsh colleagues here, would make us better off in Northern Ireland. If that has been accepted on the Northern Ireland Affairs Committee, it is only right that we should see a reflection of any uplift and increase.

I cannot speak on this motion without highlighting the fact that, unlike in the English system, we have been held to ransom not by strikes but our own Secretary of State, who is on record as acknowledging that an enormous budget increase is required. He has sourced part of that funding but is withholding the money that would give the public pay sector increase required. He has tied the release of the extra £3.3 billion, which has been well bandied about and talked about. We have pushed him on the issue. The ham-fisted blackmail attempt has been highlighted by my party leader, my right hon. Friend Sir Jeffrey M. Donaldson, who has said about the pay rise:

“There’s nothing to stop that from happening—you don’t need to have a functioning Stormont in order for the Secretary of State to use the temporary powers that he has given himself for that purpose. He has the power to set the budget. He has the power to deal with this issue, and we’re saying to the Secretary of State that he should get on and do that.”

Why should the Secretary of State do that? Because the Government here have already done it on three occasions. They did it for sex and relationships education, they did it for the Irish language Bill and they did it for the abortion Bill. If they can do it three times, they can do it once more and create the money—the £3.3 billion, which would pay for the whole increase that the workers want. I support them. A number of unions have gone on the record, including on a television programme last week. They said, “Let’s focus on who can make this decision.” They went on record to say that this is not a matter for politics, but for leadership. Where does that leadership come from? It comes from the Secretary of State for Northern Ireland. He can make that decision.

I put on record my support to others here and to my constituents back home. I have supported decent pay sector increases for hard workers in this place. Northern Ireland deserves no less support and action. I conclude by asking Members here to voice their concerns to Government in support of public sector workers throughout the United Kingdom of Great Britain and Northern Ireland, without whom we would be completely lost and much worse off. I support them in what they are doing. The thing about it this time is that the Secretary of State has the money to do it.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Justice), Shadow SNP Spokesperson (Immigration) 5:04, 17 January 2024

It is a pleasure to see you in the Chair, Sir Robert. Like other Members, may I start by paying tribute to the great Tony Lloyd? He was a good friend, a great man and one of the characters of this place. We will all miss him. I am sure that in the coming days we will all be paying fuller tributes to a great man and a friend to many.

I refer to my entry in the Register of Members’ Financial Interests, particularly to my position as chair of the PCS parliamentary group and as a member of the City of Glasgow branch of Unison, of which I am a former treasurer. Indeed, in the old days I was the one responsible for signing the many strike pay cheques to workers at Glasgow City Council.

This has been an excellent debate. We are all waiting with great anticipation to hear the Minister’s response, but I am sure some of us could write his lines for him. I hope we will not be subjected to this notion that it is pay rises that contribute to inflation, when we know that it is prices. I am sure that we will not be told about the huge cost to the taxpayer from pay rises, as if there is some notion that public sector workers put their pay rises in a shoebox and hide them under the bed.

As Ian Byrne correctly said, there is a good economic impact when we give public sector workers a pay rise. Before the pandemic, about 70p in every £1 of public money ended up in the private sector economy. If we give public sector workers a good pay rise, what do they do? They spend it, and they spend it in the private sector economy. I would have thought that the Government would welcome such behaviour by consumers.

Many Members, including Apsana Begum, have mentioned the PCS report. I have a copy in front of me; I know that I am not allowed to use props in this place, as Mr Speaker reminded us earlier today, but I have a copy for the Minister that he can read at his leisure. I have to say that it is a devastating report about the staffing crisis in the Department for Work and Pensions and how low the pay is for staff. The fact that huge numbers of staff in the Government Department that looks after social security have to rely on the very benefits of that system is something that the Government need to look at.

In this debate on public sector bodies, I hope the Minister will explain why there are so many bargaining units across Departments in the Westminster Government. There are 200 separate pay negotiations for the UK civil service. That is a completely and utterly ludicrous position. I would have thought that perhaps the party of small government would have one set of negotiations for civil servants across UK Government Departments. Can the Minister also explain why staff at the Pensions Regulator are currently taking industrial action? The Pensions Regulator is not complying with the Government’s own pay remit: it is offering less than the remit says.

Mercifully, there is a different story to tell for public sector workers in Scotland. We need only look at figures for the past year. Rail workers in Scotland are getting a pay rise of between 7% and 9%; in England, it is 4% to 6%. In the national health service last year, there was a 4% pay rise in England; in Scotland, it was anywhere between 7.5% and 11%. That is perhaps because we have a Government in Scotland who recognise Scotland’s values, recognise that public sector workers should be looked after during the cost of living crisis, and recognise that we should be thanking those workers in the public sector who kept the country’s wheels turning during the pandemic. I hope that the UK Government will respond positively to the many points that hon. Members have made this afternoon.

Photo of Tulip Siddiq Tulip Siddiq Shadow Minister (Treasury) 5:09, 17 January 2024

It is a pleasure to serve under your chairmanship, Sir Robert. I congratulate my hon. Friend Beth Winter on a passionate and well-argued debate, and I associate myself with her remarks about our friend Tony Lloyd. I first met Tony when I was an intern in Parliament nearly 22 years ago, I think. The way he was so nice to me sticks in my mind: he really showed the character of a public servant in being so nice to an unpaid, lowly intern. I am very sorry to hear that he has passed away. What a life he had—a real life of public service. My thoughts are with his family.

Working people have seen 14 years of low growth, stagnant wages and the highest tax burden in decades. What are they getting in return? On this Government’s watch, the average pay for workers is lower in value now than it was 14 years ago when the Government first came to power. The NHS, which we all love, is on its knees, with 7.5 million people waiting for treatment. Schools across the country face crumbling concrete as our children are forced into temporary classrooms.

My hon. Friend Ian Byrne and Jim Shannon talked about how public services are broken but it is their constituents who are paying the price. My hon. Friend the Member for Liverpool, West Derby described how his constituents are facing food insecurity and skipping meals. I think you would agree, Sir Robert, that in 2024 in the United Kingdom, that is absolutely unacceptable for our constituents.

Call me old-fashioned, but I believe that it is the Government’s responsibility to ensure that quality public services are provided for the common good of the country. The sorry state of our public services and their recruitment and retention crisis are a result of 14 years of this Government. My neighbour and hon. Friend Dawn Butler talked about the cost of living crisis in her constituency, the struggle that her constituents face, particularly in renting, and the fact that workers’ pay is now lower than in 2010. I believe that this is a direct result of the Government’s inability to grow the economy.

The Government like to talk about public service productivity, yet only yesterday the head of the National Audit Office, Gareth Davies, said:

“Parts of our infrastructure are crumbling…The public sector is finding it harder to retain staff…These factors and others have combined to leave public services with a productivity problem.”

Our constituents have suffered almost a decade and a half of stagnant public and private investment, and the cuts to public services are forcing them more and more into decline.

The Opposition would take a fresh approach to public services. We want to drive up standards in every state school, provide access to mental health support in every single school and recruit thousands of new teachers to ensure that their expertise is in every single classroom. We will get our NHS back on its feet with our plan to cut the waiting lists, and we will pay for it by removing the non-dom tax status. My hon. Friend Zarah Sultana said that people who can afford to pay should be paying their fair share of tax; I fully agree. We will clear the backlog by offering 2 million more appointments every year, seven days a week.

We recognise that the current crisis in public services cannot be addressed through additional money alone. That is why the next Labour Government will fully transform the NHS. We need a health service that prevents illnesses and keeps people healthy and out of hospital in the first place. We will move care closer to our communities, guarantee mental health treatment where and when people need it and, most importantly, end the 8 am scramble to get a GP appointment. The next Labour Government will also use technology to overhaul every aspect of NHS delivery and deploy the power of artificial intelligence to spot diseases quickly.

We want to reform the outdated national curriculum to transform our schools with a greater focus on children’s creativity, speaking skills and the confidence to shatter the glass ceiling at source. Across our public sector, we want to provide a more dynamic, joined-up and strategic approach to government. We want to focus on Britain’s long-term national renewal. We understand that delivering fair and effective public sector pay and repairing and reforming our public services will require a strong and secure economy. That is why we set ourselves the ambitious mission of securing the highest growth in the G7.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

The hon. Lady is making a number of points. On the specific issue of public sector pay, which is what this debate is actually about, could she please outline the Labour Front-Bench position? Does she agree with Opposition Back Benchers that public sector pay should go up this year by at least the rate of inflation, if not higher, and that there should be a long-term pay settlement of that type for the public sector?

Photo of Tulip Siddiq Tulip Siddiq Shadow Minister (Treasury)

I support the view that we have to make sure that we treat our public sector workers better. If we were in Government, Labour would ensure that the pay review bodies give greater weight to recruitment and retention issues. That is what we will consider when we are in Government—whenever the current Government decide that they want to call an election, so that we can put our views to the country. I notice that the hon. Gentleman is smiling, but the Government still have not given us a date; I will allow him another intervention if he can give me a date, but I do not think he will.

We will deliver a proper industrial strategy and higher investment, because we believe that if we can grow the economy, we can pay people properly. We want to cut planning red tape and get Britain building. We will transform our labour market with stronger workers’ rights. We want to get the economy growing again. We want to increase tax receipts and improve our public finances, so that we can invest in our public services and boost wages.

In contrast, the current broken economic model has driven down people’s wages and undermined their security. The Government have failed to deliver growth and have weakened our public services. My hon. Friend Olivia Blake made a powerful speech about the recruitment and retention crisis, and about how public services are in a state of collapse. That is not what we want to see in our constituencies. We want to get the economy firing on all cylinders; we want to repair our public services, so that they work for communities; and we want the public sector workforce across the country to work properly. I want to hear what the Minister has to say about the fact that the economy is broken. What is his plan to grow it, so that our constituents can have a better life in the future?

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury 5:16, 17 January 2024

I thank Beth Winter for securing this debate and for her opening remarks. I echo her comments and those of many others about a dear friend of the House, Tony Lloyd, and his passing. As was evidently the case with so many other Members, ever since I came to the House, he was unfailingly kind to me. But he was not just kind; he was also knowledgeable and thoughtful, and he knew a huge amount about governance, about Manchester, and about this House and how it works. He will be sorely missed, particularly by Opposition Members.

I am grateful for this opportunity to set out the Government’s appreciation of our public sector workforces and the spirit of public service that lies behind the vital work that they do up and down the country.

Before I get to the meat of my remarks, let me say that many comments have been made in this debate about how, as a result of inflation, the real spending power of wages decreases. That is completely correct; it is true. That is why halving inflation has been the Prime Minister’s No.1 priority since he took office, and we have focused so strongly on doing that. Having more than halved inflation—although we have not yet finished the job—we are now able to pay our public sector workers more. I will explain that a bit further.

As Members know, pay for most frontline workers is set through an independent pay review body process. These independent bodies consider a range of evidence when forming their recommendations. It is important to note that the process is independent of the Government, but Members should be in no doubt that this Government wholeheartedly appreciate the public sector workers who play a vital role in delivering our world-class public services.

Photo of Richard Burgon Richard Burgon Labour, Leeds East

I am listening very carefully to what the Minister is saying. Why does he think that nursing staff are leaving the profession in droves? Does he agree that it is because they are underpaid and overworked, or does he think there is some other reason? If he thinks there is some other reason, could he enlighten the House on that now?

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

Although this a debate about public sector pay, I will say this in relation to nurses: we have more nurses now than we had at the beginning of the Parliament. There are problems with the retention and recruitment of nurses, which we are addressing, but those problems are receding and those who leave do so for a range of reasons. We are working with the Health Secretary and across Government to ensure that we retain high-quality staff across our public services. Pay is of course part of that consideration, as it is for us all.

The Government strongly believe that dedication to public service should be appropriately rewarded, which is why for the 2023-24 pay round we accepted the headline pay recommendations of the public sector review bodies in full—for the armed forces, teachers, prison officers, the police, the judiciary, medical workforces and senior civil servants. What precisely does that mean for those professions? To answer, I will give three clear examples.

First, it means that policemen and policewomen received a 7% uplift that rightly recognises the risk that those brave men and women take at work. Secondly, teachers, who have been mentioned today, have received a 6.5% uplift and an increase in starting salary for newly qualified teachers to £30,000—significantly above the median wage in this country—which helps to ensure that we can continue to attract the brightest and best to safeguard our children’s education. Thirdly, NHS consultants, doctors, dentists and GPs have received uplifts of 6%, with junior doctors receiving an enhanced pay increase that averaged 8.8%.

Alongside those headline pay awards, we have since agreed offers with the unions representing senior medical workforces, including consultants, which covered reforms to their pay structures. The junior doctors strike has come up in this debate, as one would expect. We were in talks with the British Medical Association’s junior doctors committee, but they unfortunately chose to walk away. I am saddened by the strike because, frankly, it is having an impact on all our constituents. Nobody in this House should want the strike to continue. We urge the junior doctors committee to reconsider its decision, call off the strikes and come back to the table so that we can make further progress. Its demand of a 35% salary increase is unreasonable, and I hope the committee is reflecting on that and will come back to the table as soon as possible.

The pay settlements I mentioned appropriately reward the key role that staff play in safeguarding public health and the health of our NHS.

Photo of Beth Winter Beth Winter Labour, Cynon Valley

The Minister has spoken a lot about the pay increase, but in preparation for the debate we received a number of submissions from trade unions, including the RCN, Unison and the NEU, which made two points that the Minister has not addressed and on which I will table questions. The first was regarding the independent review bodies’ concerns about terms of appointments and reference terms for multi-year deals. I did raise that specific question, but the Minister failed to respond.

The unions’ second point was the pay restoration argument. The figures are staggering, but I will just pick out a couple: nurses have seen a 27% decline in the value of their pay since 2009; social workers have seen a decline of 28%; and all that the junior doctors—who the Minister just mentioned—are asking for is pay restoration back to those 2010 pay award levels. Surely they are entitled to that, and it is not too much to ask. The strikers I was with on the frontline on Monday were having to cut heating and food; they were struggling. They do not want to be on the picket line. All they want is pay restoration. I really hope the Minister addresses that issue.

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

Median pay in the public sector in 2023 was 9% greater than in the private sector, which is broadly in line with the gap between the two sectors over the past decade, so I do not fully accept the situation described by the hon. Lady. To repeat the point I made at the beginning of my remarks: inflation does erode the spending power of wages, which is why it is so important to focus on bringing down inflation.

Let me address another point that the hon. Lady made—as did the hon. Member for Liverpool, West Derby—about health in Wales. As everybody in the House knows, health is fully devolved in Wales; the Welsh Government set health worker pay in Wales, just as the Scottish Government do in Scotland.

Let me answer the question about when the devolved Governments will know their final budgets, which was asked by either Chris Stephens or Jim Shannon: they will do so following the conclusion of the supplementary documents process, which I believe is published after the Budget. That information will come.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

The Minister might also remind the Chamber that the Welsh Parliament has had its own income tax-raising powers since 2019. I do not think that is on dividends or savings, but there are other mechanisms available in Wales to meet funding commitments that the Welsh Government may wish to make. Indeed, they may wish to make commitments with the unions to end the strikes in Wales.

I have one question for the Minister. I believe in the importance of the pay review body process, which, as he has rightly said, is independent. If the pay review bodies make a recommendation this year for public sector pay, will the Government adhere to that recommendation?

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

What I can say at the moment is that the Treasury will look at and seriously consider it. We hope to accept it in full, but I cannot make a commitment now. Obviously, I have not seen the recommendation.

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

I will, but I am running short on time.

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

I thank the hon. Member for his point.

Having described the commitments we have already undertaken on public sector pay, I will outline the next steps we plan to take on this important issue. The Government have now asked the independent pay review bodies to consider and make recommendations on the pay of the workforces for the 2024-25 financial year. The Government hope to strike a balance on pay awards this year. On one hand, those awards should provide a fair, reasonable and proportionate offer for our public sector workers. At the same time, it is paramount that they deliver value for the taxpayer, particularly given the wider economic situation and the implications for the public finances.

Members will be eager to know what the pay award is going to be. Additionally, I know that for many people beyond this Chamber, particularly public servants and those who work for unions, the decision is important and keenly anticipated. I hear them, as do the Government and the Treasury. Given the recent economic picture, we understand that the outcome of the pay review process is not just academic or intellectual; it has real-world impacts on real people, including through mortgage payments, rents, schooling and healthcare. It is about how people plan their lives and how they take care of their loved ones. We hear their concerns and are considering the pay award carefully. The pay review process is independent and will take time. At this early stage, I hope people grant us their patience while we allow the process to take its course.

In conclusion, I thank the hon. Member for Cynon Valley and all Members who have spoken for playing their part in this valuable, interesting and important exchange of views.

Photo of Beth Winter Beth Winter Labour, Cynon Valley 5:28, 17 January 2024

I thank everybody who has contributed to the debate, our trade unions and, most importantly, all public sector workers. They do amazing work under very difficult circumstances, and they deserve proper pay awards. I will table parliamentary questions, because I do not think the Minister has answered one of the seven questions I asked today. I will follow up with a letter to him, and hope that he will address those questions. Diolch yn fawr.

Photo of Robert Syms Robert Syms Conservative, Poole

I thank all Members for being brief and succinct so that everybody could get in.

Question put and agreed to.

Resolved,

That this House
has considered the public sector pay round for financial year 2024-25.

Sitting adjourned.