Financial Reward for Government Workers and Key Workers Debate

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Department: HM Treasury

Financial Reward for Government Workers and Key Workers

Kate Osborne Excerpts
Monday 14th December 2020

(3 years, 5 months ago)

Westminster Hall
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Kate Osborne Portrait Kate Osborne (Jarrow) (Lab)
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It is a privilege to serve under your chairship, Mr Stringer. I congratulate and thank my hon. Friend the Member for Gower (Tonia Antoniazzi) and the Petitions Committee for this debate. I also thank those of my constituents who contacted me about both public sector and key worker pay, including the 700 Jarrow constituents who put their names to both petitions.

As colleagues have pointed out, we cannot let this argument descend into one about levelling down; there should be fair pay in both the private and the public sectors. We should not let the debate become a tool for the Government to pit private and public sector workers against each other once again. Week after week at Prime Minister’s questions, the Prime Minister attacks the Opposition for caring about or focusing on the public sector alone. He recently said that there is a

“deep underlying Labour hatred of the private sector”.—[Official Report, 25 November 2020; Vol. 684, c. 818.]

That is, of course, not the case, but how can public sector workers support private businesses if they cannot afford to buy their products or pay for their services? That simply makes no economic sense.

The pay freeze for public sector workers comes on top of an 11-year pay restraint. Ten years ago, the Government implemented a two-year pay freeze that was followed by a six-year pay cap of 1%. Since, average salary levels in the civil service have fallen in value by comparison with inflation. This point has already been made, but I will reiterate it because I think it is important: that means that the average civil servant on a salary of £26,000 is now worse off by more than £2,000 a year.

Hard-working civil servants in my Jarrow constituency simply cannot afford a further pay freeze and, frankly, they do not deserve it. A great number of the civil servants in my constituency are employed by the Department for Work and Pensions in Newcastle. Many of those who administer benefits are at virtually the same income levels as those receiving them. How is that situation sustainable?

We all recognise the huge economic impact that the pandemic has had, but public servants and key workers across sectors have kept the country running during this difficult time, and they deserve a pay rise, not a real-terms pay cut. Not only is the pay freeze unfair, it also makes no economic sense: research from the New Economics Foundation found that paying all pubic sector workers a real living wage and increasing public sector pay would boost GDP by between £1.1 billion and £2.1 billion, with an increased tax take of between £370 million and £700 million.

There must be no return to the austerity programme implemented in the aftermath of the crash. Ten years of a flatlining economy has exposed the economic illiteracy of austerity, and a significant uplift in pay should be central to the post-pandemic recovery across all sectors of our workforce. Yes, we need to thank public sector and key workers for all that they have done throughout the crisis and beyond, but, Minister, thanking and clapping them on doorsteps is not enough. They simply need a pay rise.