Neil Gray
Main Page: Neil Gray (Scottish National Party - Airdrie and Shotts)Department Debates - View all Neil Gray's debates with the Cabinet Office
(5 years, 11 months ago)
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Luke Graham
That is right. We need to look at pay, but we need to look at overall packages as well, including pensions and other rights and responsibilities that both public and private sector employees benefit from. I am really clear that the public sector should always be as competitive and attractive as the private sector in both pay and packages, and I certainly do not argue that there should be any decrease in that.
Neil Gray (Airdrie and Shotts) (SNP)
The hon. Gentleman appears to be outlining a case for the end of public sector pay restraint. Will he advise us what he feels the Government could do to ensure that Departments are able to fund the pay rises that my hon. Friend the Member for Glasgow South West (Chris Stephens) talked about? Might that include the Treasury investing in those Departments?
Luke Graham
Yes, that is the point I am making. Recommendations will be forthcoming as part of the delegated pay reviews. I will come to the NHS shortly, but some of the NHS pay increases that were put forward have been funded. I am sure that the Minister will talk about funding in further detail.
Luke Graham
I am a Back Bencher, not a Minister, so I am wary of committing the Government, but yes. My point is that where pay increases are recommended, the Government should fund them. Given that inflation is now increasing after a period in which people had to make sacrifices and we had to have more financial control, it is only fair that we ensure that there are sustainable pay increases across Departments and the different sectors of public life to reflect the increases in the private sector.
As real wages grow across the United Kingdom—much like the economy as a whole—I am glad that some hard-working public sector staff are reaping the benefits of the UK Government’s new, more flexible approach. For example, the pay rises of between 6.5% and 29% over the next three years in the NHS in England represent great progress. I welcome the fact that pay increases will be larger for lower-paid staff and smaller for those on the highest salaries. The hon. Member for Glasgow South West mentioned that those increases compare with increases of 3% plus 1% in Scotland.
We should be really clear, because sometimes we do not get the full story on Scottish issues. We speak in favour of some of the pay increases, but it is clear that the increases have been between 6.5% and 29% in the NHS in England, and 3% plus 1% in Scotland, as the hon. Gentleman said. We all face challenges—I just wish the Scottish National party would be more honest about those challenges.
Luke Graham
I will, but let me complete this point.
It is right that pay increases have been directed more at people who are just about managing and at those on lower incomes. They should benefit those who really need a pay rise. I note that the devolved Administration in Scotland mirrored the UK Government’s 1% pay policy when it was in place, and I am glad that public sector workers in Scotland will now also receive increases. I hope they are as generous as the ones afforded by the UK Government.
Luke Graham
We have to be very careful about making generalisations. On a case-by-case basis, especially for some lower-income workers, that 1% differential does not apply. I would be more than happy to talk to the hon. Gentleman elsewhere and go into that level of detail.
We are talking about pay, but the other side of the equation is tax. I am disappointed that the SNP Administration in Edinburgh have decided to increase income tax in Scotland. Anyone who earns more than £26,000—slightly below the average wage in the United Kingdom—is now a so-called high earner and has to pay more income tax than their English and Welsh counterparts. That includes teachers, nurses and doctors. Importantly, it also includes armed forces personnel stationed in Scotland, who now pay more tax than any other British armed forces personnel stationed around the world.
Luke Graham
I will let the hon. Gentleman intervene, but I will come back on that point.
Neil Gray
I am sure the hon. Gentleman understands and appreciates that the terms and conditions of armed forces personnel ensure that there is an even playing field between different areas of deployment. That means that if there are spikes or drops in taxation or any other cost of their employment, they do not have to suffer those themselves. They will get the pay rise, but they will not have to suffer the tax rise.
Albert Owen (in the Chair)
Order. Mr Gray will respond to the debate from the Front Bench, so he will have protected time. I ask him to be a bit more disciplined and allow Back Benchers to have their time, too.
Neil Gray (Airdrie and Shotts) (SNP)
I am in awe at my constituency neighbour, the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), for enabling us to have more protected time for the Front-Bench speeches, given what you said earlier, Mr Owen. It is a pleasure to take part in the debate with you in the Chair, and I must add my congratulations to those given by others to my hon. Friend the Member for Glasgow South West (Chris Stephens) on securing this debate, and on his detailed and passionate speech. My hon. Friend’s advocacy in this place and his previous trade union role, as has been acknowledged in the House already, make him ideally suited to lead such a debate. My wife is a local authority primary school teacher and is therefore impacted by public sector pay policy, although, thankfully, not that of the UK Government.
My hon. Friend the Member for Glasgow South West made a valid point regarding the ability of the UK Government to adhere to the Equal Pay Act 1970 when they are engaged in 200 pay negotiations, and the hon. Member for Solihull (Julian Knight) expressed his alarm at such a notion. My hon. Friend also highlighted the incredible statistics on low pay in the Department for Work and Pensions—the irony is not lost, I am sure—and the proportion of staff receiving tax credits. The fact that those workers will now be under additional universal credit conditionality from their own employers represents an incredible state of affairs.
A public sector pay rise, as outlined by my hon. Friend, is helpful for the economy and the private sector, as well as providing workers with the ability to enjoy a fruitful existence. When we add the fact that we are living through the worst decade for pay growth in 210 years, that is a major concern. My hon. Friend also touched on low pay and the situation in Scotland, and the more generous Scottish Government pay offer. He made a good, detailed and passionate speech, and I commend him for that.
I was reprimanded by you, Mr Owen, for jousting during the speech of the hon. Member for Ochil and South Perthshire (Luke Graham). He made a point about the need to end pay restraint. Of course the Scottish Government were the first in these isles to lift the pay cap and fund the pay offer to the workers for whom they are responsible, and the hon. Gentleman appeared to support my call for the Treasury to fund Departments to bring about an end to the 1% cap. I look forward to his next appearance at Treasury questions when he will make that strong point to the Chancellor. He also spoke about the 6.5% pay offer to the NHS in England. That, of course, is spread over three years—a point that has already been made from the Labour Benches. I am sure that the hon. Gentleman was not trying to suggest that that offer is comparable to the 3% being offered on an annual basis in Scotland. My point about the 1% pay differential between England and Scotland is that it includes those in band 1—the lowest paid as well as those in higher brackets.
The hon. Member for Easington (Grahame Morris) made a good speech, advocating for the Treasury to fund an end to 1%. He also talked about the apparent temporary nature of the pay cap. He was right to say that where the UK Government, not the Scottish Government, have responsibility, the pay cap is in effect still in place.
The hon. Member for Solihull also made a good speech. He was right to say that civil servants in Whitehall and across these isles are incredibly talented and do a fantastic job. He also appeared to acknowledge that pay restraint should have been temporary—and should have ended. I challenge him, as I did the hon. Member for Ochil and South Perthshire, to challenge their Treasury colleagues to fund UK Departments to end the 1% cap.
The hon. Member for Barnsley East (Stephanie Peacock) spoke from experience, as a former teacher and also given the impact of public sector pay restraint in her area. What she said was absolutely right. My constituency neighbour, the hon. Member for Coatbridge, Chryston and Bellshill, made a typically impassioned, if pithy, speech, and we were grateful for his contribution.
As has been alluded to, we have made a far more generous offer in Scotland to our fantastic public servants. We look to reward them for the work that they do for us all. To tackle low pay, the Scottish Government have committed to paying the real living wage of £8.75 an hour, as opposed to the UK Government’s minimum wage premium of £7.83 for over-25s and their minimum wage of £7.38 for those between 21 and 24, £5.90 for those between 18 and 20, and £4.20 for under-18s. This year they have also offered a graduated pay rise starting at 3% for workers earning up to £65,500. That rise will benefit three quarters of all public sector employees in Scotland.
Luke Graham
I praise some of the devolved Administration’s moves to make sure that there is correct funding for people on lower incomes, but does the hon. Gentleman recognise that the national living wage was brought in by a Conservative Government and it would not exist otherwise? As well as criticising, he should give a little praise, too.
Neil Gray
My problem with the so-called national living wage is the fact that it is not national, because it is not available to under-25s, and it is not a living wage, because it does not get near the real living wage. Its branding was clearly an attempt to make it look as though it were the real living wage; that is massively problematic. I acknowledge that it is a large pay increase for some, but not all, of those on the minimum wage. It is important for the UK Government to acknowledge the fact that under-25s in particular are still being penalised.
Julian Knight
While the hon. Gentleman is being so generous and giving such fulsome praise, will he also be generous in recognising that the Government and the coalition Government raised the personal allowance to such an extent that the very lowest incomes have risen considerably?
Neil Gray
I have already stated—this is probably for another debate—that interventions in the tax system are not the most efficient way of targeting people on low incomes. A far more efficient and effective way of targeting them to ensure that they have a proper quality of life would be to increase the rates of the work allowances of universal credit and tax credits. [Interruption.] I think we have said enough on that, and perhaps it is a debate for another day.
The Scottish Government have protected public sector jobs and services for the people of Scotland by delivering on our promise of no compulsory redundancies and an affordable public sector pay increase that reflects the cost of living. It is difficult to compare the pay offer with that in areas for which the UK Government have responsibility, because there is not the same universal pay offer as there has been in Scotland, as outlined by my hon. Friend the Member for Glasgow South West. We see a piecemeal approach from the UK Government, because Treasury Ministers have consistently and belligerently refused to fund a public sector pay rise for all UK Government Departments. That means it is up to individual Ministers to find the money to pay for awards from existing, squeezed budgets.
While this Government rightly praise our emergency services for their response to the likes of Grenfell or the various terror attacks, and they rightly and routinely praise NHS staff, teaching staff, prison officers, Jobcentre and tax office staff, and other public sector workers, they do not match that praise with fair reward. Hopefully, in the summing-up speech, we might finally find some movement from the Minister. The UK Government must follow the Scottish Government’s progressive lead when they publish their civil service pay guidance. They must fully fund an expansion in public sector pay, rather than just lifting the 1% restriction. If the UK Government agree that our public sector workers deserve a pay rise beyond 1%, they need to put their money where their mouth is, as the Scottish Government have done, and fund it.
Oliver Dowden
My hon. Friend is absolutely right, and in a moment I will come to the fact that we have actually lifted the 1% pay cap across the board.
However, I will make one further point on the measures the Government have taken to help the lowest paid—and, indeed, all workers. I am referring to the increase in the personal allowance. When we came to power in 2010, the personal allowance—the tax-free allowance—stood at £6,475. It now stands at £11,850. That is near enough a doubling, and it means that any basic rate taxpayer will be more than £1,000 better off compared with 2010. Through a combination of ensuring that we have a national living wage and tax cuts, we have ameliorated many of the impacts of the necessary public pay constraint, which we had to introduce. In addition, we have frozen fuel duty, saving the average driver £850 compared with pre-2010 plans.
Neil Gray
The Minister has stated that the Government have ended the 1% pay cap, but he has not yet argued for the Treasury fully to fund that for Departments, so perhaps he can explain this point to the House. If he advocates an end to the 1% cap, what percentage pay rise does he think would be acceptable to our public sector workers, and will he argue with his Treasury colleagues to see that properly funded for all Departments?
Oliver Dowden
The hon. Gentleman talks about the Treasury paying for it. The Treasury does not have any money of its own. It gets money only in three ways: it taxes people, borrows or cuts spending elsewhere. We need to be honest about where the money will come from to pay for any rise.
I will come on to it in a moment, but briefly, we set this out in the spending review; we budgeted for a 1% pay rise across the board. We have now removed the requirement for a 1% rise. That creates two further opportunities. The first is that there will be flexibility, if further efficiencies can be found, to further increase pay, above 1%. In addition, if there is a significant change in working practices that can justify a significant pay rise, a full business case can be made, and that will allow the funding of a larger pay rise.