Public Sector Pay Policy

Debate between Dan Poulter and Oliver Dowden

Tuesday 5th June 2018 Westminster Hall

[Oliver Dowden]

Forgive me; I thought I made that very clear at the beginning. When we inherited such an enormous deficit, we had to constrain public expenditure. Given that public sector pay accounts for a quarter of public expenditure, public sector pay had to play its part. That is why we initially introduced a freeze, followed by a 1% cap from 2013 to 2017.

Those were difficult decisions, and I genuinely pay tribute to all our civil servants who had to live within that constrained pay deal. However, it is worth making a few points in relation to that. The first is that the median civil service salary has increased by 15% since 2010, which is actually the same as in the private sector. Indeed, it is greater than other parts of the public sector.

Many hon. Members also raised the gender pay gap, which is important. Clearly, more progress needs to be made, but again it is worth looking at the figures. The pay gap for full-time employee civil servant salaries is 7.2% for the mean salary and 11% for the median. That compares with 13% and 15.4% in 2008, so we are making progress, but I do not deny that we need to progress further.

[Dr Poulter]

Adjusted for age, sex and other determinants, the pay gap is actually about 3%. I am sure my hon. Friend will want to clarify that point.

[Oliver Dowden]

I thank my hon. Friend for that helpful intervention; I am absolutely sure that he is correct.

Inequality was also raised, but again let us look at the actual figures. Income inequality is down since 2010, and is lower than at any point under the last Labour Government, so let us start with the facts of the situation. Not only that, but we have helped the lowest paid. For example, when the freeze was introduced, we ensured that anyone earning under £21,000 received at least a £250 increase in their pay.

In addition, as many of my hon. Friends have mentioned, we introduced the national living wage, the effect of which has been to benefit more than 2 million people, leaving them more than £2,000 better off since its introduction. As a result, figures from the last two years show that the lowest paid in our labour market received pay rises almost 7% above inflation, and many of those who benefited were our lowest-paid civil servants. Indeed, the overall picture shows the salaries for junior grades of civil servants remaining comparable to private or public sector equivalents, and in total remuneration both administrative assistants and administrative officers—the lowest paid in the civil service—are paid more than their private and public sector equivalents in London.