Financial Reward for Government Workers and Key Workers Debate

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Department: HM Treasury

Financial Reward for Government Workers and Key Workers

Mary Kelly Foy Excerpts
Monday 14th December 2020

(3 years, 5 months ago)

Westminster Hall
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Mary Kelly Foy Portrait Mary Kelly Foy (City of Durham) (Lab)
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It is a pleasure to serve under your chairmanship, Mr Stringer, and I thank my hon. Friend the Member for Gower (Tonia Antoniazzi) for securing this important debate. I want to talk about the workers who throughout this pandemic have delivered furlough schemes, processed millions of new claims for universal credit, and kept the courts, ports and airports open and our prisons safe and secure. When we as a nation applaud our key workers, those key workers are often forgotten. Worst of all, they have been abandoned by the Government.

Unfortunately, the words, “civil servant”, still conjure up visions of “Yes Minister” for many people—including, it seems, the Government. Nothing could be further from the reality. The truth is that civil servants have suffered years of real-terms pay cuts. The average civil servant on a salary of £26,000 is now worse off by £2,110 a year compared with 2010. Following the end of national pay bargaining, there are now over 200 sets of pay negotiations in the civil service and related areas. What that means in reality is that there are huge inequalities in the pay of civil servants, with many falling into poverty pay. In HMRC, 12,000 staff—around one in five—are paid at the minimum wage or just above. It is unacceptable to have Government workers forced into poverty.

Then we come to another group of workers who are often overlooked: prison officers. As my hon. Friend the Member for Easington (Grahame Morris) has just said, they deserve not just our praise but our respect for their courage in the course of their work, year in, year out. Covid has made a dangerous job even worse. In my constituency, we recently heard of an outbreak at HMP Frankland, where more than 200 members of the prison staff were off with covid symptoms or were self-isolating. That puts enormous pressure on the remaining staff, yet just last week the Government rejected a key recommendation from an independent body to raise the salaries of people on the frontline. It is nothing less than a kick in the teeth for hard-working and loyal public servants. As hon. Members have pointed out, prison officers are banned from taking any sort of industrial action. I disagree with such a limiting of their basic rights.

The Prison Service Pay Review Body recommended a significant pay rise for band 3 officers. Without justification or reason, the Government claim that is unaffordable. Of course, we know where this all leads—prison officers will vote with their feet and leave the service they love. We will lose valuable knowledge and experience at a time when we need it most. As experience goes down, violence goes up, leading to more officers leaving and so on. It is a vicious cycle.

Civil servants do thankless work. They do not want applause; they want to be rewarded fairly for the work that they do. The Government should listen to the Public and Commercial Services Union and start to restore the real value of civil servants’ pay with a 10% increase. On prison officer pay, the Government should think again and listen to the Prison Officers Association and the Prison Service Pay Review Body. The demands are not excessive; they are simply about keeping key workers’ heads above water and giving them some decency, respect and fairness. Surely that is the least we can do.

--- Later in debate ---
Kemi Badenoch Portrait Kemi Badenoch
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No, I am afraid I am not giving way.

I am also happy to remind hon. Members that almost exactly a year ago, after nine years of Conservatives in Government and the very same fiscal policies that hon. Members have criticised today, the public chose to renew their faith and trust in this Government—not just with an increased share of the vote, but with a much increased majority. Since 2010, they had heard these arguments about what we were doing on fiscal policy over and over again, from many colleagues on the Opposition Benches who are not in the House today. We all believe in fair pay, but we disagree on where it is sent. However, I remind hon. Members that the public also want fiscal responsibility.

Good government is about making the right choices. To paraphrase the Chancellor, our health emergency is not yet over, while our economic emergency has only just begun. At a time like this, it is the responsibility—in fact, the duty—of Government to prioritise and target support where it is most needed, in a way that is fair and sustainable, that protects jobs and businesses, and that limits long-term damage to the economy. The hon. Member for Gower referenced many previous responses the Government have given on this topic. She may not like the answer, but the facts have not changed, and I am happy to repeat them here. Fairness has been a guiding principle.

Mary Kelly Foy Portrait Mary Kelly Foy
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Will the Minister give way?

Kemi Badenoch Portrait Kemi Badenoch
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I am not giving way. I have already said I am not; please stop asking.

As the Chancellor pointed out in his statement on the spending review, in the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Workers in the private sector have lost jobs, been furloughed, and seen their wages cut and their hours reduced, while those in the public sector have not. [Interruption.]

Kemi Badenoch Portrait Kemi Badenoch
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Thank you, Mr Stringer. For that reason, the Chancellor announced a temporary pause to pay awards for some public sector workers for the year 2021-22. Disappointing though I know this will be, this approach allows us to protect public sector jobs at this time of crisis and ensure fairness between the private and public sectors. Crucially, as I have said, we are targeting our resources at those who need them most. First, taking account of the NHS Pay Review Body’s advice, we are providing a pay rise to over 1 million nurses, doctors and others working in the NHS. Secondly, we are protecting those on lower incomes. The 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least—and I emphasise “at least”—£250.

In the spending review, we also accepted in full the recommendations of the Low Pay Commission—to increase the national living wage by 2.2% to £8.91 an hour, to extend that rate to those aged 23 and over, and to increase the national minimum wage. According to the commission, those rates will give low-paid workers a real-terms pay rise and protect their standards of living without significant risks to their job prospects. A full-time worker on the national living wage will also see their annual earnings increase by £345 next year. That is a pay rise of over £4,000 compared with 2016, the year in which the policy was first introduced. Taken together, these minimum wage increases will likely benefit around 2 million people and help make real progress towards ending low pay in the UK.

The risk with broader-brush measures, including income tax or national insurance policies—this particular point was not made today, but it is an important one to reiterate—is that it is difficult to define and limit who should benefit. The result could merely be to reward the better paid, at a time when the Government have already been forecast to be borrowing at record peacetime levels.

As a Government, we are committed to keeping taxes low in order that working people, including key workers, are able to keep more of what they earn. In April 2019, the Government increased the personal tax allowance to £12,500, meaning that the personal allowance is up by more than 90% in less than a decade, ensuring that more of the lowest earners do not pay any income tax at all. In April this year, we also increased the national insurance contributions primary threshold and lower profits limit to £9,500—a move that will benefit 31 million people. Add all that together, and changes to income tax and national insurance contributions between 2010-11 and 2020-21 mean that a typical basic rate employee in England, Wales or Northern Ireland is more than £1,600 better off a year.

Mary Kelly Foy Portrait Mary Kelly Foy
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Will the Minister give way, with 15 minutes to go?

Kemi Badenoch Portrait Kemi Badenoch
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I will conclude by saying that this Government and all the people of this country are grateful for everything that our key workers in both the public and the private sector have done and continue to do, but in the choices we make, we must chart a way ahead that is fair and sustainable and that gives us the best chance of a strong economic recovery. That is the thinking behind what we have done and it will remain the thinking behind what we do in the challenging months and years ahead, as I believe it should.