Coronavirus Grant Schemes: Fraud

Jim Shannon Excerpts

Tuesday 18th January 2022 Commons Chamber

[John Glen]

As a former arts Minister who visited many of those organisations in the hon. Lady’s constituency in years past, I recognise the enormous contribution that creative industries make there and across the country. Of course, the grants we gave through the Department for Digital, Culture, Media and Sport, the recovery fund, and the support through local authorities got to many of those organisations. I stand here today not with a sense that nothing could have been done better, but recognising that there was a balancing act between speed of delivery of support to businesses, and complexity, with the delays that would inevitably have ensued. I am contrite about our not getting everything right, but I am also clear about the real dilemma that we faced at the time.

[Jim Shannon (Strangford) (DUP)]

I think everyone in this House recognises that Government stepped in and helped; I know my constituents recognise that, and we want to put that on record. HMRC stated in November that its taskforce was expected to recover some £1 billion in fraudulent or incorrect claims over the past two years and referred to some 23,000 investigations that had been opened. Only 25% of the money will of course be returned, so can the Minister clarify how that came to be, and what lessons have been learned for any future financial claims?

[John Glen]

As ever, I thank the hon. Gentleman for his question. I set out in my previous answers the dilemmas with respect to speed of delivery. However, HMRC has done a fantastic job in designing the schemes and standing them up quickly under enormous pressure. We will continue to work closely with HMRC and take its advice as we make decisions on how to tackle enduring fraud risk. More broadly, lessons can be learned about the design of future schemes.

Downing Street Garden Event

Jim Shannon Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

I cannot prejudge the investigation, but of course it is a source of considerable personal regret that anyone should suffer that imposition, inconvenience and distress, of which many examples have been given in the House. Of course that is a matter of personal regret. It is not appropriate to prejudge the investigation that is in progress. However, if the hon. Lady is asking me to express my regret about the tragedy that has befallen all those families who have suffered loss, and what have been grotesque invasions of their family life, I do so, unreservedly.

[Jim Shannon (Strangford) (DUP)]

In Northern Ireland last week, we reached the milestone of 3,000 deaths due to covid, which means that 3,000 families who followed the rules are grieving today. Those 3,000 who died included my mother-in-law, who died alone.

Will—[Interruption.] Will the Paymaster General confirm that there will be a full and complete disclosure to enable the police service to ascertain that all was done decently and within the regulations on that date and at that time? I am sorry, Mr Speaker.

[Michael Ellis]

I am very sorry for the hon. Member’s loss. He has asked me if the results of the investigation will be made public, and they will be.

Household Energy Bills: VAT

Jim Shannon Excerpts

Tuesday 11th January 2022 Commons Chamber

[Rachel Reeves]

That is levelling up in action, filling in the potholes at the Lord’s manor.

On this side of the House we want to keep bills low, which is why Labour is bringing forward this vote to reduce VAT on home energy bills to 0% for a year. It is why we would spread out the price increase that is about to hit bill payers because of the collapsing energy firms, and it is why we would help the squeezed middle, those on lower incomes and pensioners by increasing and expanding the warm homes discount to 9 million people. Our plan would save households £200 from their bills, and up to £600 in total for those who need it most. We would pay for this with a windfall tax on North sea oil and gas profits. These companies have profited massively because of exploding prices, so much so that some in the industry have referred to soaring energy prices as a “cash machine” for producers and their shareholders.

[Jim Shannon (Strangford) (DUP)]

I welcome the hon. Lady’s proposals but, although I welcome and support the green energy push as the only way forward, does she agree that the Government should, in these extreme circumstances, consider removing the green tax during the current fuel crisis to bring down prices and thereby prevent the £750 bill increases that each household will receive this year?

[Rachel Reeves]

I welcome the hon. Gentleman’s concern for reducing gas and electricity bills for his constituents and all our constituents, and we are willing to consider anything that can be done to keep bills low this year. Our proposals would take £200 off everybody’s bill and £600 off the bills of those who need support the most. Labour thinks it is only right that cash from the companies that have done well from this price spike should go back to hard-pressed families, yet this Government seem to think differently. In fact, the Education Secretary said on Sunday that he thinks that oil and gas companies are “struggling”, even when they are expected to report “near record” incomes this year. Struggling—really? The people struggling in our country right now are those seeing their bills going up and up.

Charter for Budget Responsibility and Welfare Cap

Jim Shannon Excerpts

Monday 10th January 2022 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I say respectfully to the Minister that I want to speak on the welfare cap and endorse the comments that others have made, using cases from my own constituency of Strangford. I see the issues very clearly. To be fair to the Minister, I absolutely understand the rationale behind capping the amount that the state spends on welfare. We cannot hold on to what we do not have in our hand, and we cannot give what is not ours to give. We do have to be responsible, but we also need to ensure that the funding that we are allocating to NHS reform and to the latest stages of the covid battle is adequate, while keeping an eye on the amount borrowed, which is beyond belief in my opinion. The hon. Member for North East Bedfordshire (Richard Fuller) said that it is hard to understand just how much money has had to be borrowed.

However, at the same time, it must be said that people are struggling and that they need more help, and that is what I am going to say on behalf of my constituents of Strangford. For many people, the withdrawal of the covid lifeline of the £20 uplift to universal credit has left them in a precarious situation. I can see that. I know that. Let me provide the evidential base for what I am saying; others have done so and I want to do the same. I know because the number of referrals to the food bank in my constituency has doubled. I spoke to the guys there just last week. I asked whether I was right in saying that the number of people applying to the food bank this year was greater than ever before. The answer was yes. I can see that statistically from my office. I can also see the levels of hardship and poverty to which the hon. Member for Glasgow East (David Linden) referred. People are struggling. They are the working poor. They are the people on low wages who are finding it incredibly difficult to make ends meet. I see families whose income has stayed the same and yet, in Northern Ireland, they are facing increased costs due to the Northern Ireland protocol. Let me give Members an idea of the prices that are being asked and where they are going—where they were before and where they are now.

One local business in my town is renowned for bargains. It carries a range of £1 products. The business owner informed me that his range of 600 £1 products now cost between £1.15 to £1.29 each. That is for bleach, dishcloths, toilet rolls—the things that people need every day. These are not luxury items; they are the essentials. The owner informs me that he has not made 1p more on these products. His income is up because prices are up, but his profits are down because people cannot afford to be buying his goods. The impact is felt even in a pound shop where the products are sold for only £1 or thereabouts.

There has been a 15% rise on groceries alone. Add into this a 30% gas rise and a 20% electric rise, and the problem is clear. This is why it is right and proper for this Government to review the welfare spending cap and then lift it due to the dire circumstances that working families and those who are ill and vulnerable find themselves. The right hon. Member for Hayes and Harlington (John McDonnell) referred to those who are disabled. Things are hard enough for those who are able-bodied, but it is even worse for the disabled.

I wish to pose a question to the Minister—I do it respectfully and he knows that. This is a genuine question and not a political point. Will the rise be sufficient to make a meaningful difference to families on the poverty line? Is the increase proposed today enough to do the job and to do it right? The cap set at the spring Budget 2020 was restated following some methodological changes. In 2024-25, it was set at £126.8 billion, with a margin of 3%. The new aim is that the cap in 2024-25 will be £138.3 billion, with a margin of 2%. Will that be enough for those who need it?

I know that all families in Northern Ireland are bearing the brunt of the intransigence of Brussels in its refusal to do the right thing and allow us to trade with the rest of the UK. This is not the debate on the Northern Ireland protocol, but its effects are felt in my constituency. There can be no discussion about people on the brink of the poverty line without acknowledging the effect of the protocol on the finances of every person who buys anything in Northern Ireland. This is about every mother unable to purchase gifts on Amazon and paying astronomical amounts for Christmas presents for their children as they were outside delivery areas, and every business owner paying more for products to cover the cost of the procedures. All those people show that Northern Ireland is much poorer financially for the protocol, as well as culturally.

I support the uplift of the welfare cap. I am no smarter than everybody else, but I understand the issue because my constituents tell me. I understand the reservations of those who do not want to borrow more, but we must get our local businesses back to earning and paying tax, which covid has removed. Wages for the working poor mean disposable income that is spent in the local economy, and people having enough to heat their homes and clean them. There is work to be done on the economy of this nation to encourage business and enterprise to tap into the global market. In the meantime, we must have enough money to spend on our vulnerable and needy. I have never seen anything quite like this year, and if this measure is needed as a first step, we must take that step today.

Covid-19: Government Support for Business

Jim Shannon Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

I thank the hon. Lady for her question. The Government worked very closely with the sector in the determination of the parameters of the live events reinsurance scheme—I was involved in it myself—over late summer. That £800 million scheme will give events across the country confidence, but I obviously recognise that that needs to be kept under constant review, as all the measures do.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his answers to the questions and, clearly, for the commitment to financial support to help businesses, but may I ask him a question on behalf of travel agents and tour operators, which are again taking a very specific hit, not simply from cancellations but from frightened people being afraid to book for the future? Will he explore urgently a financial aid scheme alongside the one that is so clearly needed for the hospitality industry as a whole?

[John Glen]

Throughout this pandemic, we have received representations from many sectors, we have introduced a range of interventions to deal with the challenges, and we will continue to engage with sectors across the economy, including travel operators, which have been reflected a number of times in the concerns of Members across the House this morning.

Co-operatives and Mutual Societies

Jim Shannon Excerpts

Tuesday 14th December 2021 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I have spoken in these debates in the Chamber and in Westminster Hall as well. First, I thank the hon. Member for Wycombe (Mr Baker) for setting the scene so well. He brought the issue to Westminster Hall some time ago and I spoke then, and I mean it honestly when I say that his presentation has been absolutely on the button.

I have often said that co-operatives, mutual societies and indeed credit unions are a phenomenal help to so many families throughout Northern Ireland—I obviously want to give a Northern Ireland perspective to the issue. I want to speak about the co-operatives in my constituency and the Newtonards Credit Union branch, which has been the salvation of many people I know in a difficult time.

I commend my hon. Friend the Member for East Londonderry (Mr Campbell) and concur with his comments on LV= mutual, which the hon. Member for Wycombe also referred to. It is really important that those at the ground level of the co-operatives, mutuals and credit unions have some say in where they go. My local credit union has mentioned that it would do more for people if it was given the opportunity to do so.

I was happy read an article last week on affordable social housing in Northern Ireland that gave examples of how things can progress. In it the Northern Ireland Communities Minister indicated that the role that credit unions and others can play should be further explored. She said:

“If we are to achieve our objectives it is likely that a wider range of sources for financing will be needed such as charitable trusts and foundations, credit union loans, capital markets: from the sale of long-term bonds and developer contributions.”

The benefits of housing co-operatives, community-led housing and self-build initiatives

“will also need to be explored further”.

She is absolutely on the button, and she is right in what she says.

In a debate on affordable housing we had in this Chamber last week, I mentioned the good work of community-led housing and self-build initiatives. The good that could be done must be more widely investigated throughout the United Kingdom, and I urge the Minister—he always responds in a constructive way to our requests—to work collaboratively with the devolved Administrations to unlock further the best-kept secrets of credit unions. He has spoken about credit unions before, and we have had conversations about them both outside and inside the Chamber.

A lovely article in the Financial Times succinctly sums up what co-operatives, mutuals and credit unions are really about:

“The history of non-profit lenders has been intertwined with civil rights movements in the UK and abroad since the second half of the 20th century, as campaigners, religious groups and philanthropists sought to help marginalised groups gain greater access to financial services… Credit unions act like community-focused banks, using deposits from members’ savings accounts to fund low-cost loans with interest rates capped at 1 per cent per month in Northern Ireland and 3 per cent per month in the rest of the UK—about 43 per cent APR.”

In the past, I was fortunate to have one of the Minister’s colleagues—he was then a Minister but he is not now—visit Northern Ireland and particularly the credit unions. His input on that visit was incredibly helpful. We visited the credit union in Newtownards and met the man in charge, George Proctor. He has built up the membership—both adults and young people—phenomenally and it has become a major go-to when it comes to being a voting member and being able to borrow money whenever people need it.

The credit union sector is large and has grown in recent years. There was about £1.6 billion in outstanding loans at the end of 2020—up 19% since 2016—but the sector also faces challenges in keeping up with regulations and changing customer expectations of services such as online banking. The number of UK credit unions fell by more than a fifth in the same period, as smaller unions closed and were taken over by larger groups. Although the numbers are down, the clientele has kept steady and has risen. Credit unions are an essential component in any rural area and town, as they offer people the ability to save money, to borrow money, when needed, at a small interest rate, and to repay that money at an affordable rate, with no stress. Suddenly, the boiler breaking down three weeks before Christmas does not result in a nightmare but can be quickly and efficiently dealt with by using local credit unions.

I am fortunate to have 13 registered credit unions and co-operatives in my constituency, and I will name each one for the purposes of Hansard: Downpatrick Co-operative Marketing Ltd, Northern Ireland Fish Producers’ Organisation Ltd, the Ballynahinch Credit Union Ltd, Portaferry Credit Union Ltd, Newtownards Credit Union Ltd, Newtownards Royal British Legion Club Ltd, BDS Credit Union Ltd, Ards Saturday Market Traders’ Co-operative Limited, Comber Community Credit Union Ltd, Strangford Down Ltd, Northern Ireland Horse Board Co-operative Society Limited, North Eastern Lobster Fishermen’s Co-operative Society Limited, Ballywalter Youth and Community Co-operative, and Comber Earlies Growers Co-Operative Society Limited. All of those, at different levels and with different financial resources, represent a large number of people.

[Mr Gregory Campbell]

My hon. Friend is itemising the co-operatives in his local area, which can be replicated across the United Kingdom. Does he agree that as long as these groups, whether they are mutuals, co-operatives or credit unions, can demonstrate their professionalism and their adaptability in the modern marketplace, are to be supported? They need to see the wider community rally behind them and get involved with them for the better future of all of our communities going forward.

[Jim Shannon]

I thank my hon. Friend for that intervention. Yes, I do agree. When we look at the breadth of the market, and who these organisations represent, it indicates support that goes above and beyond. There are cattle market co-operatives, farmers’ co-operatives, fishermen’s co-operatives, plus a few reasonably sized credit unions. The agricultural co-operatives, the credit unions and the market traders co-operative—bringing all those people together, as my hon. Friend said—are examples of co-ops that help to sustain an independent rural community and a way of life. They are an essential component of these communities and a lifeline for them.

These organisations are undoubtedly able to do more, when we consider that the Financial Conduct Authority estimates that 28 million people—more than half of UK adults—have some element of financial vulnerability. In February 2020, up to a third of adults had less than £1,000 in savings, and one in 10—about 5.6 million people—had been paying a high-cost loan with an annual interest rate above 100% at some point in the preceding 12 months. What co-operatives, mutuals and credit unions do is enable their members to borrow at rates that they can afford to pay back. It is not like going to a payday loan company or others in the community who take advantage of people in their time of vulnerability. What these organisations offer is critical for the future.

Perhaps the Minister can give us some indication of any discussions he may have had with credit unions or co-operatives in Northern Ireland. I know I asked that earlier on, but it is always good to get a perspective here, in Westminster, where we are all under the great Union flag of the United Kingdom of Great Britain and Northern Ireland together—we are all part of that.

There is an issue with lending, and it is my firm belief that credit unions could be a way of dealing with this issue. Further, more investment and help should be given to allow credit unions to push their products and abilities into more communities as a viable savings and loans option. With that, I will conclude by thanking the hon. Member for Wycombe for introducing this debate, and I look forward to the comments from the shadow Ministers and the contribution from the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard).

[Dame Angela Eagle (in the Chair)]

I intend to call the Front-Bench speakers no later 10.28 am.

--- Later in debate ---

[Luke Pollard]

I am grateful to my hon. Friend for that. Long before I had grey hair and was elected to this place, I wrote an article for the Co-operative party about co-operative insurgency—the idea that a harder, bolder form of co-operation could also come out of a purposeful building out of a co-operative shareholding in business models. To follow my hon. Friend’s idea, it is not only about creating a co-operative or mutual from day one; it can be about mutualising a business model. Even a small, co-operatively held component of a big publicly listed company could help drive and direct an ethos and culture change within that business, which could produce better outcomes for staff and the overall business model.

However, I am afraid that not all is well in our co-operative sector in Plymouth. Our Plymouth credit union is on the verge of closure, which I worry will deny access to finance for people on the margins of finance and society in particular. The City of Plymouth Credit Union’s office is opposite my office, on Frankfort Gate, and at the end of the week, the queues that come out of that credit union show a number of individuals who always face challenges—not only economic and financial challenges but challenges elsewhere. We must also be aware of the closure of credit unions. I do not know what will replace the provision the Plymouth credit union gives to some of those most marginalised people, but we need to find an alternative. The basic bank accounts that the Treasury has been promoting via businesses will not be enough to replace the service provided by Plymouth credit union, and I encourage the Minister to look at what happens when credit unions fail.

[Jim Shannon]

I thank the hon. Gentleman for his excellent contribution. As I said in my contribution, when some of the smaller credit unions closed they were amalgamated with larger ones. Is that a possibility for the credit union that he is discussing?

[Luke Pollard]

I thank the hon. Gentleman for his intervention. I hope that it will be, but I fear it may not. The challenge is that the future is very uncertain, especially for smaller credit unions that do not have the financial backing of a larger credit union. The social benefit that they provide is considerable, and it is worth the Treasury looking at that.

My final point is a challenge to those people who speak about co-operatives and mutuals, like myself and everyone in this place. Often the debate around co-operatives and mutuals is an urban-themed one; as an MP for a city, most of my examples have been urban themed. However, there is enormous potential in telling the story of the success of the mutuals and co-operatives in our rural and coastal communities. In our rural communities, we see an amazing penetration of successful co-operative businesses, providing support at scale not only for rural housing and, in particular, agriculture, as we heard from the hon. Member for Strangford (Jim Shannon), but for fishing. Greenhook Fishing in Plymouth is our brand-new co-operative. It is pioneering sail-powered fishing in Plymouth, and is bringing back the Plymouth Hooker, a fantastic old-style fishing boat. It also provides opportunities for people who have left prison and veterans to be re-trained in new skills, not only in boat construction but in fishing.

Greenhook Fishing is following a model that is present in many other coastal communities and rural communities —of co-operatives being successful, getting on with it and never identifying as a co-operative. My challenge to those who speak about co-operatives is that we should talk up rural and coastal co-operatives as well. I am very pleased that the Co-operative party has started a new commission around rural co-operatives, to feed into Labour’s rural review, that will make the case for further investment in rural co-operatives as distinct from urban co-operatives and the challenges that they face. The future is bright for mutuals and co-operatives, and I look forward to hearing the Minister’s response.

Dormant Assets Bill [Lords]

Jim Shannon Excerpts

2nd reading
Monday 6th December 2021 Commons Chamber

[The Economic Secretary to the Treasury (John Glen)]

I beg to move, That the Bill be now read a Second time.

Over the past decade, the dormant assets scheme has released more than £800 million to tackle systemic social challenges and to support the communities that need help most. This Bill is estimated to unlock £880 million of additional funding to ensure that the dormant assets scheme can continue to support innovative, long-term programmes addressing some of our most pressing social and environmental challenges. The scheme is led by industry and backed by the Government. Its aim is to reunite owners with their financial assets; where that is not possible, the money supports vital social and environmental initiatives across the UK.

Consumer protection is at the heart of the scheme. Dormant assets remain the property of their owners, who can reclaim any money owed to them in full at any time. However, only a small percentage do so, meaning that the rest of the money lies dormant. The scheme responds to the imperative to put the money to better use.

The Bill marks the completion of a five-year review in collaboration with industry leaders, including an independent commission and a public consultation. The scheme’s success is down in no small part to the commitment and drive of the banks and building societies that have led the charge on unlocking dormant assets for the public good. However, it is only right that the scheme continues to grow and evolve.

Currently, only assets from dormant bank or building society accounts are eligible to be transferred into the dormant assets scheme. The Bill will enable Reclaim Fund Ltd, the scheme’s administrator, to accept a broader range of asset classes in the sectors of insurance and pensions, investment and wealth management, and securities. Of course, there could be even more dormant assets to unlock in future. The Bill will therefore introduce a new power to provide the flexibility to expand the scheme through regulations.

I stress that the four core principles that underpin the scheme—voluntary participation, reunification first, full restitution and the additionality principle—will remain unchanged by the Bill. The Bill will require the Secretary of State to

“carry out periodic reviews of…the operation of the dormant assets scheme and…any use made of the powers”

to extend the scheme.

[Jim Shannon (Strangford) (DUP)]

There are many worthwhile projects that local communities would like to bring forward. How can they feel that they are part of this project and gain advantage from dormant bank accounts?

[John Glen]

I thank the hon. Gentleman for his intervention. There will be a consultation; I or the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will come to it later.

The Bill makes provision to reflect Reclaim Fund Ltd’s establishment as a Treasury non-departmental public body and names it as the scheme’s only authorised reclaim fund. In addition, the Bill includes a new power for the Treasury to designate additional authorised reclaim funds in future. To guarantee consumer protection, the Bill’s money resolution will enable the Government to cover the liability, in the form of a loan, for reclaims should any authorised reclaim fund face insolvency.

The Bill will amend the approach to distributing dormant assets funding in England, aligning it with the model used in the devolved Administrations, who have powers to focus funding through secondary legislation, provided that it is within the parameters of social or environmental purpose. In England, the Dormant Bank and Building Society Accounts Act 2008 restricts the English portion of funding to youth financial inclusion and social investment. The Bill will enable the current restrictions to be removed from primary legislation and put into secondary legislation so that the scheme can respond to changing needs over time. The Bill will require the Secretary of State, before making an order, to publicly consult on the social and environmental focus of the English portion of funds. No changes to the existing restrictions can be made until and unless a new order is laid.

After 10 years of operation, it is right that we carefully consider how the scheme can deliver the greatest impact once it has been expanded.

Community Debt Advice Services

Jim Shannon Excerpts

Wednesday 1st December 2021 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Ms Bardell. I congratulate the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) on setting the scene and thank her for that. This is a massive issue, not just in the hon. Lady’s constituency, but in my own. In our office, we deal with those who have extreme financial difficulties every day and every week. I will give a couple of examples, without mentioning any names.

In Strangford, the CAB, Christians Against Poverty, church groups and other groups provide community debt advice services; those are the groups that I work with on most occasions. There has been an increase of at least 30% in gas, electricity and oil prices in Northern Ireland, and cold weather and an extreme winter are predicted. Food prices are up by as much as 20% in some places and there is the additional pressure of Christmas, with the expectation that many families feel forced to live up to. We all know about that because we talk to our constituents. When children see something at school that their friends have, there is almost an onus on the parents to make sure their children get the same thing. That is not a criticism; it is the nature of how we live in our lives, but it adds a huge burden to low-income families, with recent reports citing that families will spend an average of £300 per child. That does not include spending on other family members.

For me, Ms Bardell, Christmas is a time to enjoy being with family. I have three boys who are 32, 30 and 28, three daughters-in-law and five grandchildren, so for me Christmas is time to spend with my grandchildren. The good thing about being a grandparent is that at 7 o’clock at night I can give them back. We have all had those joys as parents; when they have a tantrum, or they get a bit tired but they do not want to go to bed—or they do want to go to bed.

[Margaret Ferrier]

A lot of people are not aware that Christmas spending is something that can be accounted for in income and expenditure forms when dealing with debt. Does the hon. Gentleman agree that the need for better awareness when dealing with debt does not mean losing that quality of life as well?

[Jim Shannon]

We do not want to lose quality of life, but we do need to deal with the reality of life. The hon. Member for Makerfield (Yvonne Fovargue) outlined in great detail the issues that most families feel—and address. It is easy for me to talk about time with the family, because it is my wife Sandra who chooses the Christmas gifts. She is better at it than me, and knows what the children want. The money we spend is disbursed as she sees fit. However, for other people, it will be a juggling exercise between buying Christmas presents and being able to afford the oil and electric bills. That is the issue and that is why I am here to speak on behalf of those constituents who are under great pressure.

The security is not there for many families. Rather than seeing disappointed faces on Christmas morning, people make purchases and live with the debt for months to come. Last week, in my local press back home, there was an indication that this year in particular, the issue for those who have maxed out their credit cards is that they will turn to payday loans. I have forever cautioned against that, because the reality will be extreme. There will be a pain-free two weeks, but then there will be a very painful month after Christmas. I have extreme concern for those people.

[Yvonne Fovargue]

Is the hon. Gentleman as concerned as I am about the rise in buy now, pay later debts? These are increasing exponentially; one advice agency said that 34% of people are now coming to them with buy now, pay later debts.

[Jim Shannon]

I certainly am concerned. I am going to give two examples of those who have had extreme difficulties. There are many groups in my constituency that do great work; Citizens Advice is one of them. I have dealt with Citizens Advice ever since I became an elected representative, first, as a councillor in 1985, then as a Member of the Legislative Assembly and now as a Westminster MP. I have a good working relationship and regular contact with Christians Against Poverty; they are inundated with people who have decided to make this new year the one when they get on top of their finances. Last year, CAP helped over 16,000 people with debt; they shared in the success of 2,500 becoming debt free—wow, it is a big day for people when they become debt free. It is so important. They helped almost 1,500 people through a covid-19 emergency appeal. Christians Against Poverty in my constituency are based at Thriving Life Church in Newtownards. I think probably all the churches have a help and advice service, similar to what Christians Against Poverty do. However, Thriving Life Church does particularly incredible work.

While I was sitting in this debate, I thought of one example—I am conscious of time and I want to be fair to other Members. On occasion I have had to contact Pastor Cotter of Elim Church, Newtownards, to deal with some personal debt issues that he has been able to help with. His ability to work through the mechanics of the mathematics and make sure that people get out the other side is incredible. The hon. Member for Kingston upon Hull West and Hessle said in her introduction, and it cannot be emphasised enough, that this drives people to the very edge of desperation. I have seen that. Christians Against Poverty facilitate, through some 1,200 churches across the UK, help and advice to those families and individuals who have got themselves into difficulties with their money. Many of these are working people; they are the working poor. These are the people we are here to represent. They are people who have incredible financial difficulty, who are squeezed most by the removal of the tax credit bonus, and who are suffering most with the universal credit differences.

I am going to give another, desperate example. I know one young women in my constituency whose disability living allowance was turned down. Over the 7 months of her appeal process, she found herself in over £4,000 debt, through maxed-out credit cards and payday loans—she was absolutely in over her head. I know that this is not the Minister’s responsibility, but there must be some way of hurrying up the process. It eventually found in her favour after seven months, but that was seven months of excruciating worry where she was pushed to the point of suicide. This is no exaggeration, but by the time she came into my office she was sobbing her heart out, mortified and suicidal. I was so grateful that my staff knew who and where to send her—where she would receive help and compassion and where there would be no judgment.

People who max out their cards are scared, fearful, apprehensive and extremely worried. That is why Citizens Advice, Christians Against Poverty and other groups are so important, and that is why we as elected representatives make those points on behalf of our constituents. My constituent needed CAP’s help, and that is why I believe that CAP and other community debt organisations are essential in today’s climate. Not only do they help to take the stress of the phone calls and letters but they future-proof finances. In other words, they sort out people’s issues today as well as giving them advice for the future—it is important that they do not later fall back into debt—and teaching finance coping mechanisms. They go through day-to-day finances with savings schemes and allocate money for small treats—people need the small treats for their children and families that many of us take for granted, such as a cinema trip or the Chinese at the weekend—as they understand life and have the expertise and knowledge to teach others a better way of handling the stress and pressure of life.

Christians Against Poverty and other community debt advice providers save lives and prevent the break-up of family units with their support and help. I thank CAP in Newtownards, based at Thriving Life church, for all that it does. Community debt centres are lifelines, and we have a responsibility to ensure that they have funding available to help to cover the costs of their free services, which save lives and improve people’s quality of life. As we come towards Christmas, I remind people that there is a way to come to terms with crippling debt: take that first step of acknowledging your problems and seeking the help you need. People want to help you, and your MP will want to help. Do not wait for the new year to come. Do it now, and have your Christmas unburdened by the stress of debt that is weighing you down. Help is available—just ask. People are there who could help you.

[Several hon. Members rose—]

--- Later in debate ---

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Ms Bardell. I start by thanking my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) not only for securing this debate, but for becoming a formidable champion for debt and welfare advice services up and down the country.

We are in the middle of a perfect financial storm. Increasing taxes, soaring inflation, the gas price crisis, the end of furlough, the removal of the universal credit uplift—the list goes on. As a nation, our finances are being squeezed more tightly than ever before, and what we have to show for it is an increase in personal debt. At least 7 million adults are currently behind on at least one household bill. The Bank of England has told us to expect a sharp increase in defaults on household and business loans, as well as a coming sharp rise in the cost of energy over the winter.

Perhaps it is unsurprising, then, that the newly-crowned most popular show ever on Netflix revolves around the central theme of crushing personal debt. We should make no mistake: whether through malnourishment, fuel poverty or, most commonly, poor mental health, debt does kill. It killed Jerome Rogers, who died by suicide aged just 20, having accrued debts of only just over £1,000 stemming from two unpaid £65 traffic fines. It disproportionately kills renters, the young, those on zero-hour contracts and people of colour.

But there is help at hand. Some of it comes from our own offices and the hundreds of dedicated caseworkers who work so hard for MPs, dealing with the broadest range of issues imaginable in what can often be a fairly thankless task. We all thank our staff for the work they do. Pre-pandemic research from the CAB found that more than three quarters of MP caseworkers had dealt with issues pertaining to bailiffs, and still more are dealing with a case load characterised more and more by personal debt and the issues it causes.

MPs’ offices, however, are not debt advice centres. Our staff do not have the time and, although I am lucky that my senior caseworker is also an experienced debt adviser, most of us are unlikely to have specifically trained staff in our offices. When I heard that MaPS was proposing a rise in funding for debt advice services, initially I thought I would be pleased, especially given that the predicted amount would rise by 60% by the end of the year; but my concern, like that of everybody else here, is that most of the funding is set to go to a handful of national services offering advice over the phone or online.

That change in funding strategy will have the impact of cutting face-to-face debt advice by possibly as much as 50% to 60%. I thank Unite the union for its campaign to support the retention of and possibly an increase in funding—it is defending not only its workers, but people in the most awful circumstances, and going above and beyond the remit of a trade union into broader social campaigning.

In Leeds, the decision will mean that at least three out of the four MaPS-funded services will lose advisers. For the benefit of those familiar with Leeds, that means that the Ebor Gardens Advice Centre is set to lose all its debt advisers, as will St Vincent’s Centre, and Better Leeds Communities will also lose half its advisers. To add insult to injury, Leeds City Council was not consulted prior to the recommissioning, and I am sure none of our other local authorities were either.

All those services are based in the constituency of my right hon. Friend the Member for Leeds Central (Hilary Benn), but they cover the whole city—a city with eight constituencies and 800,000 people. The important thing to remember is that those centres are not just there for debt and welfare advice; they are multi-purpose community centres. If someone goes in to see a debt adviser and does not have any food to feed their children, the centre will give them a food parcel. If someone is suffering from crushing mental health problems, they will be taken down the corridor to the counselling service. If someone has had nothing to eat that day, they will be taken downstairs to the café. Sorry—I am getting slightly emotional because I have a lot of experience with these organisations. I am thinking about people I know who have been to them. If someone needs to go to court, a person from the centre will physically go to court with them, hold their hand and support them through the process—an absolutely awful experience for anybody who has to go through it.

Those multi-service community centres cannot be replaced by a screen or a phone. The Minister really needs to think about that. We are not just talking about the fact that people will not have a service that can deal with their debt; they will not get support at all. Many, many people who face debt crises already have suicidal thoughts. We will see a big increase in suicide rates, pressure on A&E and the inundation of hospitals and mental health institutions, just for the sake of saving a fairly small amount of MaPS funding.

Those organisations, and so many like them up and down the country, do vital and essential work. Experienced debt advisers can be the difference between shelter and homelessness, between happiness and despair, for many people. They change and save lives. Once they are gone—once they have left the profession—it is very hard for them to come back. These are not well paid jobs.

[Jim Shannon]

It is a vocation.

[Alex Sobel]

Absolutely, it is a vocation—a passion. Debt advisers want to help people. They want to save lives. When they leave the profession, they are very well qualified to work in many other areas, including financial services, where they will be paid much more. Once they’re gone, they’re gone.

Every community needs specialist debt advisers who are available to those who need them. I am sure that, as MPs, everyone in the Chamber can appreciate that people need face-to-face support for many different reasons. That is one reason why we hold surgeries for our constituents, but we cannot be the last emergency service; we need these specialist services. I therefore ask the Minister today to stop the procurement exercise and retender it with a priority on face-to-face debt advice, as well as online and phone advice, so that we get the services people need and avoid a potential crisis in this country with severe loss of life.

Civil Service Pay

Jim Shannon Excerpts

Monday 29th November 2021 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

In raising this important issue, I refer the House to my entry in the Register of Members’ Financial Interests, and to my position as chair of the PCS parliamentary group.

May I begin by saying a few words about a personal matter? Today would have been my grandfather’s 99th birthday. My grandfather was a keen supporter of the Scottish National party, and, indeed, voted for it every time it featured on the ballot paper. He was a great influence on me, in ensuring that politics was discussed and debated. I want to pay tribute to my grandpa, and to thank him for everything he did for me. I hope that he is proud of me. He was of course a public sector worker too, and I am sure he would approve of the fact that I am raising the issue of public sector pay this evening.

The covid-19 pandemic has presented the United Kingdom with its biggest national crisis in decades. Workers in the civil service and its related areas have risen to the challenge, and have rightly been lauded as heroes by the Government. Plaudits, however, are not enough. Those workers have faced over a decade of pay freezes and pay caps which have seen their living standards fall by about 20% in real terms.

I am sure we will hear the Minister say that austerity is necessary in order to manage public finances, so let me start by putting that myth to bed. Austerity has done enormous harm to the public finances through the strangulation of living standards, investment and economic growth. It is a policy widely recognised by every reputable economist as a complete and utter failure, and workers in the civil service have been hit particularly hard by that failure. A study by Dr Mark Williams of the University of Surrey in 2018 found that average annual growth in median pay in the civil service had been up to 1.9% below inflation since 2010; that the erosion of pay in the civil service had been greater than in the rest of the public sector and that it had fallen up to 11.4% behind the rest of the public sector since 2010; and that women had been particularly hard hit, with the gender pay gap standing at 12%.

Let us not attempt to explain this away with false comparisons with workers in other sectors, or with references to the national finances and the economy. In my view, Ministers constantly change their position on this issue when it suits them. If borrowing is up, they say that they cannot afford pay rises, and if inflation is going up, they say the same. Despite the squeeze on living standards, private sector wages are going up, but they simply ignore that comparator. The Government need to stop doing this, and start taking responsibility for the welfare of the staff.

I happen to believe that the Government’s approach has been a disaster, particularly for workers on low pay. They cannot claim to want a high-wage civil service while Departments scramble around on an annual basis to find the funding to raise pay levels to the minimum wage. During the pandemic, they laud civil servants as heroes, but their pay policy makes them paupers. There is little doubt that civil servants have become the poor relations when it comes to pay in the public sector, and it is frankly disgraceful that the Government should treat their own workforce in this manner.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing forward this debate. He has a substantial amount of time in which to put forward his case. Does he agree that middle-income families who receive no help from the Government in any shape or form need to have a pay rise to help with the substantial cost of living? Does he also agree that Ministers must be mindful, when rightly uplifting pay levels, that they should increase the cap for child benefit at the same time? If there is one thing they could do to help the middle-class, it would be to increase the cap for child benefit.

[Chris Stephens]

I thank the hon. Gentleman for his intervention. He will know the importance of the role that the civil service has played in Northern Ireland in developing the peace process and helping the Northern Ireland economy. I am sure that, like me, he will pay tribute to civil servants in Northern Ireland for that. I agree with his point, and he will hear later some examples of what the pay freeze has meant for civil servants and the real pressures that they are under. I hope he will intervene again when we come to that.

To add insult to injury, in November 2020 the Chancellor of the Exchequer announced a pay freeze for those workers for 2021. In my view, that was totally unacceptable, and it is high time that the Government properly recognised the contribution that their workforce make to society, particularly in an atmosphere of rising inflation and falling living standards. It was therefore welcome to hear the Chancellor’s recent autumn Budget announcement on the lifting of the pause on public sector pay. That announcement was accompanied by a statement that the normal process of independent reviews and recommendations would be resumed.

However, as the Chancellor should know—I am sure the Minister does—the civil service does not have a pay review body. The question therefore arises as to what mechanisms will be used to determine civil service pay, and I am now going to ask the Minister my first question. Assuming that the Chancellor is sincere about the pause being lifted, can he confirm that there will be no fetters on pay bargaining in the civil service this year, and that there will be no arbitrary cap on pay awards contained within any civil service pay remit guidance?

That brings me to the importance of pay coherence and coherent pay policy. Ever since the financial crash in 2008, and more recently during the pandemic, the Government have insisted that we are all in it together and we must be united in our efforts to overcome the difficulties we face. However, they continue to foster a divisive approach to pay arrangements for their own workforce through the delegated pay system. This needs to change if the Government’s words are not to ring hollow.

Against that backdrop, I highlight PCS’s long-standing objective of securing a return to national bargaining on pay and terms and conditions covering all workers in the civil service and related areas. The delegated bargaining system has created a wholly unacceptable situation where workers doing broadly the same job at broadly the same grade suffer huge disparities in pay. Similar inequities exist in relation to annual leave and working hours arrangements. The delegated system is also unnecessarily costly, time-consuming and inefficient as a result of the replication of the same process across every bargaining unit, where one set of negotiations would suffice.

On this issue, again, the Government always change their position. They claim they cannot direct Departments that have delegated authority on pay, yet they persist in centrally mandating things that Departments must do. For example, they instructed all Departments last year to pay £250 to staff earning below £24,000 a year. It is therefore demonstrably the case that the Government are the single source from which all civil service pay arrangements emanate.

Another example is that, under freedom of information, we know the departmental permanent secretaries got together in February 2018 to agree the joint position across all Departments that there would be a pay rise of 1% to 1.5% for public sector workers. I find it extraordinary that there are 200 separate pay negotiations across UK Government Departments but one pay policy.

In recent years PCS has entered a number of pay reform agreements within Departments that have put right some of the structural discrimination and inequities that exist. In the Home Office, the Department for Transport, Her Majesty’s Revenue and Customs and the Ministry of Justice, agreements have been reached on pay reform that have secured good negotiated outcomes for all concerned. PCS will rightly be continuing to press for an expansion of this approach, and it should be encouraged by the Government.

Last year, alongside its national pay claim to the then Chancellor of the Duchy of Lancaster, PCS submitted single sectoral pay claims to chief operating officers of parent Departments at delegated level. As a step change towards national bargaining, PCS indicated that it stood ready to engage and to start discussions on how sectoral claims may bring a greater degree of coherence to current pay arrangements.

These proposals sought to reduce the number of bargaining units at sectoral level from 55 to just 13, with scope for further rationalisation over time. Indeed, PCS indicated it was prepared to discuss business cases in respect of workforce reform that may enable funding to be provided to address the structural inequities. Astoundingly, given the Government’s rhetoric on their commitment to efficiency in the public sector, there has been almost no progress on that concrete proposal that would deliver the efficiency they claim to desire.

PCS rightly intends to repeat this approach in 2022, and I seek an assurance that the Government will grasp the opportunity to improve efficiency in pay bargaining across the civil service. Will the Minister confirm that he agrees with the former Chancellor of the Duchy of Lancaster, now the Secretary of State for Levelling Up, Housing and Communities, when he told the Select Committee on Public Administration and Constitutional Affairs on Thursday 10 December 2020 that

“trying to tackle some of the balkanisation of the process of pay, reward, recruitment and so on—creating what has been called in a vogue phrase “one civil service”—is a very good thing”?

Will the Minister also confirm that he will turn those words into action by engaging in a proper way with the civil service trade unions to achieve greater coherence on pay across the civil service, including a full exploration in all delegated areas of the business case processes for pay reform? In addition, will the Cabinet Office proactively assist delegated areas in developing successful business cases? Will steps be taken to involve the trade unions properly in the task and finish group on pay delegation and related matters, which has been established in Whitehall, but about which the unions have so far neither been informed, nor consulted?

That brings me to the impact of the civil service pay policy. At Prime Minister’s questions on Wednesday 17 November, the Prime Minister said:

“I think that actually the Department for Work and Pensions, under the Secretary of State for Work and Pensions, my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), has performed outstanding service. It has performed miracles. Among the things that it has achieved is helping to get millions of people effectively back into employment, in spite of all the difficulties that we have faced. We now have unemployment running at virtually record lows, in spite of all the difficulties we have faced in this pandemic and as we come out of furlough. That is largely thanks to the work of the DWP.”—[Official Report, 17 November 2021; Vol. 703, c. 579.]

In response to those words of praise, the PCS trade union received more than 50 emails from individual DWP workers about the toll that more than a decade of real-terms pay cuts have taken on them. Some commented that they felt embarrassed to be a government worker, and that they have had to ask friends and family for handouts, and have even turned to food banks. Many are seriously considering leaving the DWP, not because they do not like the job, but because they cannot afford to stay. The following are just some examples of comments received by these government workers for whom the Prime Minister had such high praise. These describe in devastating terms the impact that continued pay restraint is having on civil servants and their families, and what a real pay increase would mean for them.

[Jim Shannon]

One issue I recognise in my constituency, from my weekly or even daily dealings with some workers, is that workers in the DWP do an extremely stressful job. They are looking after the financial affairs of others, and are trying to guide people through the system and help them. Does the hon. Gentleman agree that the hard work they do in the DWP must be reflected in the wages they receive?

[Chris Stephens]

Yes, I agree with the hon. Gentleman on that. I am sure he will be fully supportive of, and will recognise, some of the statements from DWP workers who responded to the Prime Minister’s words earlier this month. As one DWP worker put it,

“I have been coming into the office during the whole of the pandemic and I am now totally disheartened and angry that DWP put so little value on the work that the staff do. Now there is a great improvement in the jobs market staff are leaving all over the place... The powers that be have to do the right thing and award us a decent wage rise otherwise there will be very little experienced staff left.

I never thought when I took up this position that I would ever have to send an e-mail like this one letting people know how hard it is to make ends meet in 2021.”

Another said:

“I have worked for DWP for nearly 17 years, those years of which I felt proud to work for my government. Now I feel embarrassed. I work hard, as I always have. I have two children to bring up and can honestly say I’m on the breadline. My family suffer financially, with the rise in cost of fuel bills, food...everything has gone up but our pay....absolutely disgusting. Our government doesn’t look after its own workers but expect us to be loyal and perform an outstanding job...which we always do.”

Another DWP worker, a single parent of two, said:

“My son works as an apprenticeship who receives more wages than me. I have considered using the food bank but not keen in letting them know where I work as ashamed my employers can’t seem to look after their own staff. I have used a food hub before as no details were given. When I receive my wages at the end of the month there is nothing left by the 1st of every month. I am unable to save so no holidays. I am unable to save for Christmas so everything goes on credit card which I ran up nearly £2,000 of debt.

I have worked for your company since 2008 and have never felt the struggle that I do now. Food prices have rocketed and gas and electric have also gone up, how do you expect families working for a government organisation to cope when you don’t give them the wages to reflect the price rises now. I am ashamed to be working for the DWP.”

A DWP worker for almost 20 years said:

“Having a pay freeze has meant that I have to choose between having my heating on or feeding my family. Yes these struggles are real even for the Hard Working Civil Servant!...As a mum I have concerns for my children’s wellbeing when I have to tell them that they cannot go to the after school clubs or go out with their friends because I can’t afford it. They are suffering mentally taking on my worries as well when I tell them that I can’t get them a birthday or Christmas present that they deserve. I have had to take on a 2nd job in the evenings so that I can afford these for my children leaving me less time to be with them. A Civil Servant should not HAVE to work two jobs to pay bills and live…Having a pay rise would alleviate a lot of my worries. It won’t make me rich but my family would be able to live without the worry of deciding to put the heating on, have a substantial healthy meal or afford to put clothes on our backs. We shouldn’t be made to beg for help from various charities.”

A Department for Work and Pensions administrative officer said:

“I’m not quite at the stage of having to choose between heating and eating but I fear that I may be in that position in the near future. Add to that the state of our pensions and I fear that I may never be able to retire. I really don’t know how I am supposed to save towards my retirement on what I am paid…Boris Johnson said a little while ago that employers must pay better wages so when is he going to follow his own advice and pay us a wage that we can actually live on and save for our future?”

Another DWP worker said:

“Personally I am struggling on my pay to make ends meet and really dreading the next Gas/Electric bill. My water rates have also gone up and food prices are just getting ridiculous even though I shop as cheaply as I can using certain low-price supermarkets. I am single and my son lives with me just so I can afford my rent and even that is a struggle…It would be really helpful to receive a decent pay rise given that inflation is certainly rising and before long I will not be able to meet my cost of living. Staff in DWP deserve to be recognised properly for all our hard work during 2020 making sure the people of our nation who urgently needed help with money received it. All staff worked tirelessly to ensure the nation’s needs were met so not are we only helping them back into employment we were there when they weren’t and needed us the most.”

Another administrative officer, who works in the Child Maintenance Service, said:

“I cannot name any colleague who is not feeling that we have been demoralised by the government’s total insensitive behaviour following the Government announcement of a Public Sector pay freeze in November 2020. Did not every DWP employee rise to the challenge during covid ensuring payments for children still were upheld and our colleagues in the benefit office maintaining benefit payments to the people whose lives were thrown into turmoil?...At 61 years of age I am now financially worse off than I have ever been. This morning my gas and electric supplier…sent me a letter stating last year my annual bill for gas and electric was £900.00 and they are increasing my direct debit now because with the rise in energy prices they are estimating it to be £1900.00 this year. Please tell me, ministers who voted for the pay freeze for your loyal civil servant of over 20 years, how am I going to pay this bill?”

[Jim Shannon]

The hon. Gentleman referred to the Child Maintenance Service, with which my staff and I have regular contact. One problem that we have when we take child maintenance complaints through the system is changes of staff. Why are there changes of staff? Because the remuneration that the civil servants in that department need is not there. Does the hon. Gentleman feel, like me, that a civil servant wage is necessary for staff in that department we are to retain staff and have continuity of staff in respect of complaints—in other words, if we are to ensure that when people make contact, they can speak to the same person they spoke to the first time?

[Chris Stephens]

I could not have put that better myself. The hon. Gentleman, representing his constituents in Northern Ireland, will certainly be aware of the importance of Child Maintenance Service payments, and of payments for those who are not in work and who rely on universal credit. He is right that civil servants have performed miracles, given the huge numbers of people who were on universal credit during the pandemic, and I know he agrees that they should be properly remunerated and given a decent wage rise for their wonderful efforts.

A civil servant of 39 years has said:

“I currently work for the DWP. The Prime Minister and other politicians always give us credit for the work that we do and for how we have coped through the pandemic, delivering our services. We have been called miracle workers. It would be great to see that reflected in a decent pay rise. I am lucky if I get an extra £5 a month every year when we get our pay rise. With the costs of electricity, gas, food, and travel all going up, my family are really struggling to make ends meet.”

A civil servant of 42 years told me:

“I have been in the civil service for 42 years and have never found it so difficult to manage financially. I am still working from home and have to sit in a room with thick clothes and one small electric heater as I cannot afford the heating bills. I am disabled and I cannot see the future at all. After giving my whole working life to the service of others, making a difference to our DWP claimants’ lives, I would appreciate a wage that enables me to keep up with rising living costs. My wage has reduced in real terms for decades now, and with rising costs it will reduce again. I’m 62 with many health conditions and cannot consider taking a second job. I feel really abused and forgotten by my employer who I have shown only loyalty and commitment particularly during the pandemic.”

Another DWP worker has said:

“I have always been proud to work for the Department of Work and Pensions and consider it to be a great place to work. Family and friends expect it to be a well-paid job as we are ‘working for the Government’, so I always feel disloyal when asking to borrow money or not being able to afford a day out or having to buy small presents for birthdays and Christmas. I want my children to know that you reap what you sow, and that if you work hard you see the rewards. Sadly, at this time, I do not feel that this is the case for me.”

A DWP worker who was forced back into the workplace has said:

“With increasing fuel and food prices, I am finding it incredibly hard to survive financially. I am widowed, I live alone and am unable to make ends meet. Furthermore, I have to find £200 a month to travel to work, as face-to-face appointments are now being forced and we are no longer allowed to work from home. It would appear I have to resource my own ‘miracles every month’, whilst being in a very demanding role. Moreover, my health and wellbeing are currently suffering. I am by no means alone, and have many colleagues in the same position.”

A full-time work coach, a mother, has said:

“I am relying on my child benefit to cover electricity and gas for my family next week, until I receive my next pay in almost two weeks’ time. This is due to rocketing energy prices, rocketing fuel costs and childcare costs that I need to cover. My wages are simply not enough to cover all of these costs and I am left struggling every month. I have been with the Department since 2006 and have never known it to be this bad.”

Another employee in the Child Maintenance Service has said:

“My wage has dropped to just above the minimum wage and my workload complexity has increased. I’m worried sick about the basics: affording heating; paying travelling-to-work costs; and trying to pay the overdraft. In the meantime, as a frontline worker, I have to stay positive and professional whilst dealing with the emotional and financial issues of the public. I don’t treat the public with platitudes the way that I am by successive Governments.”

As the hon. Member for Strangford made clear, it is an emotional job. These staff have to deal with many of the public’s emotional and financial issues. That, to me, says it all when it comes to the question of why a pay rise is necessary.

An administrative officer in DWP has told me:

“I joined DWP last year during the first wave of the covid-19 pandemic and received a salary of £21,262. My monthly salary is £1,442.65. My monthly expenses including rent and bills is £1,265, leaving me with less than £180 to cover my work travel and food expenses.”

Another child maintenance officer—for over 23 years—said:

“I am stuck on an income that doesn’t even cover my bills which are rising every year. Is anyone going to help the staff who have been loyal to the Child Maintenance Service for years? I actually love my job, but am so disappointed with the pay. We deserve more.”

A civil servant who joined DWP in 2016, who said that they were paid significantly higher in their previous Department, has said:

“I am stuck on an income that doesn’t even cover my bills which are rising every year. Is anyone going to help the staff who have been loyal…for years? I…love my job but am so disappointed with the pay, we deserve more.”

A DWP worker who is nearing retirement age says:

“I am retiring in May 2022 so the pay freeze has seriously affected my pension. I will be on a lower pension for ever and ever and there’s no compensation. I really have lost out as have a lot of my colleagues in the same situation.”

Another DWP worker says:

“I am struggling to keep a roof over my head, feed and clothe my daughter and have not bought clothes/shoes for myself in over a year. Without support of family would honestly be in real state. My 75 year old father supports me from his pension which is not great either.”

A work coach says:

“As a Work Coach we have put ourselves and our loved ones at risk throughout the entire pandemic by interacting with many customers to ensuring they received the upmost support…Myself and my colleagues have helped countless people transition from the national lockdown and from losing their jobs into finding new light in a brand new sector of work. The DWP have worked long hours to ensure our customers are getting the support they need. We ourselves sacrificed time with our loved ones to ensure our Nation got back to its once thriving self and all we have received was a thank you and a pat on the back! Actions speak louder than words and never more so in our current climate…Needless to say the world around us is increasing in price dramatically. A pay rise would reflect the rise in living costs and allow us to keep up with the rapidly increasing inflation.”

Those are just some examples from one Government Department, but civil and public servants are experiencing the same difficulties right across Government services. Employers are experiencing recruitment and retention problems because of this, and staff continue to face very real hardship. There is also a clear economic case to end pay restraints and give a real-terms increase to civil servants. The benefits of a real-terms increase would outweigh the costs. Before the pandemic, about 70p in every £1 of public money ended up in the private sector economy, whether in grants, contracts or, crucially, the wages of public sector workers. The pandemic can only have increased that 70p figure.

In my experience, workers and civil servants do not have Cayman Islands accounts to put their wages in, and neither do they place their wages in a shoe box and hide it under their beds. No, they spend their money in the private sector economy—in the high street and the hospitality sector, buying additional presents for their family or spending more putting their clothes in for dry cleaning. Not only do they keep the economic wheels of the country going in their work; they do so with their hard-earned wages.

The realities of the examples provided by those who work in the civil service, the compelling moral case and the undeniable economic case can only begin to be rectified by funding for real-terms pay increases across the civil service and related areas for this coming year. I therefore look forward to hearing the Minister’s response.

Northern Ireland Protocol: EU Negotiations

Jim Shannon Excerpts

Thursday 18th November 2021 Commons Chamber

[Mr Speaker]

Finally, but certainly not with the least of questions, I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

Thank you, Mr Speaker. You are most kind. The good wine always comes last.

I thank the Paymaster General for his answers to the urgent question. Back in July, the Government published a paper in which they stated clearly that conditions to trigger article 16 had already been met. He referred to M&S, which has indicated this week that extra costs and extra bureaucracy on products crossing the border will cost it £9 million. Speaking as the MP for Strangford, who has got his feet clearly on the ground and knows what is happening and what the people are saying, I want to put it on the record that some businesses face going to the wall as a result. The Prime Minister repeated that assertion recently. He said that time was of the essence and that, if the current negotiations with the EU failed to arrive at an agreed outcome in a short period, the Government would move and must move immediately to take decisive action to remove the barriers to trade between Great Britain and Northern Ireland. I urge the Paymaster General to do just that: initiate article 16 and remove the barrier.

[Mr Speaker]

I like hearing from the hon. Gentleman, but his questions have to be shorter. If he wants to make speeches, I am sure that he will catch the eye of somebody in the Chair later.