Financial Reward for Government Workers and Key Workers Debate

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Department: HM Treasury

Financial Reward for Government Workers and Key Workers

John McDonnell Excerpts
Monday 14th December 2020

(3 years, 5 months ago)

Westminster Hall
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John McDonnell Portrait John McDonnell (Hayes and Harlington) (Lab)
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Thank you, Mr Stringer. I thank my hon. Friend the Member for Gower (Tonia Antoniazzi), who eloquently introduced the debate, and covered most of the ground that most of us want to emphasise.

I want the Minister to realise that getting petitions on this scale reflects a depth of anger among those most affected—civil servants, of course—as well as their families and the whole community. That depth of anger is felt because these are the people who kept this country going for the last nine months. As my hon. Friend the Member for Gower said, the Department for Work and Pensions, which is round the corner from me, administered a million more universal credit claims. The Ealing HMRC office, just down the way from my constituency, which the Government are closing, administered all the claims to keep businesses going—the furloughs—so that companies were not bankrupted. Also, there is Heathrow. This morning, I was on the picket lines. Two immigration and border control staff died as a result of covid. Those are the sacrifices that these people have made, so no wonder there is that depth of anger.

That depth of anger is being felt because this comes after 10 years of pay freezes and pay cuts—six years of a 1% pay increase, then pay freezes on top of that. We have an epidemic of in-work poverty, affecting 4 million people. Some 70% of kids in poverty are in families where someone is in work. We are now talking about destitution in our country.

I give this warning to the Government: there is another pandemic coming—a pandemic of debt. Some 18 million people have incurred debts as a result of the pandemic in the last nine months. The Joseph Rowntree Foundation says that we have never seen this scale of debt before. StepChange has said that nearly 600,000 renters are borrowing to keep a roof over their heads. I was startled to learn that 100,000 people attempt suicide associated with debt every year. The Joseph Rowntree Foundation said that 60% of those on universal credit have gone for a loan in the last few months. Why? To keep a roof over their head, and to put food on their children’s plates.

I am fearful of what will hit us next. I, too, do not want to hear claptrap from Ministers about comparisons with private pay. The Library demolished that argument. I find it ironic that the Government privatised public services, and are now complaining about low pay in the private sector. There is a bizarre irony in the argument that Ministers use.

My hon. Friend the Member for Bootle (Peter Dowd), who was the shadow Chief Secretary to the Treasury, is here with me. The economic illiteracy of this has not escaped us. It is almost as though John Maynard Keynes was never born. What we should not do in a situation like this is cut wages; that would cut demand in the economy. The argument will be that the Government are borrowing a lot. Of course we should borrow in this situation, to ensure that we pay wages to people on low pay, who spend their wages, which increases demand and ensures that we get out of the downturn as rapidly as possible.

My advice to the Minister is straightforward: the Government need to get back round the table with the unions and start negotiating a decent pay rise. Take a lesson from the Chancellor of the Duchy of Lancaster, who admitted before a Select Committee that having 200 bargaining units in the civil service was wasteful. Get back to one table, and one negotiation on fair pay for those who have given so much in the last nine months, just to keep this country’s head above water.