Financial Reward for Government Workers and Key Workers Debate

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Department: HM Treasury

Financial Reward for Government Workers and Key Workers

Peter Dowd Excerpts
Monday 14th December 2020

(3 years, 5 months ago)

Westminster Hall
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Peter Dowd Portrait Peter Dowd (Bootle) (Lab)
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It is a pleasure to see you in the Chair, Mr Stringer. It seems that we are in a loop with the Government, as far as public sector pay is concerned. In 2008, the Government made another attempt to curtail public sector pay. Three trade unions—the Public and Commercial Services Union, Prospect and the FDA—expressed their dismay at the approach taken by the Government. At the time we said:

“It is high time the Chancellor recognised the human cost of his disastrous pay cap and commit to giving our dedicated civil servants the pay rise they deserve.”

We all remember that the coalition blamed the last Labour Government for not being prepared for the world financial crisis—“Labour’s banking crisis”, as they called it. They said that they had to get the public finances into shape, and public sector workers were the first on the list. They underwent a decade of pay restraint. Members will remember the silly comparison to fixing the roof while the sun shines. Well, the roof has well and truly fallen in—and public sector workers will have to pay for it to be fixed, according to the Government.

Here we are, in the worst crisis the country has faced, which took place on this Government’s watch. They were simply unprepared. Despite the hard work of the public sector, which my hon. Friend the Member for Gower (Tonia Antoniazzi) referred to—it is made up of 5.3 million people, and the public sector pay bill is £190 billion—the Government have decided to pick on them yet again. Every 1% pay rise costs around £1.9 billion gross; after tax and national insurance, is about £1 billion.

Yet again we have an easy target and the same old strategy: set the public sector against the private sector, and set parts of the public sector against other parts of the public sector. It is such a cynical approach. Here is an idea: there are 1,200 tax reliefs, through which we forgo £400 billion, according to the Institute for Fiscal Studies. Have the Government bothered to look at any of them in detail, so that perhaps they can give the public sector the break that it deserves after 10 years of restraint? No. Very little work is being done. They cannot be bothered, because the public sector workers will pick up the bill for the Government’s incompetence.

Let us look at a few examples of how the Government could be a tad more imaginative. Capital gains tax relief for entrepreneurs’ qualifying disposals is £2.7 billion, although it is coming down. Tonnage tax is £100 million —my right hon. Friend the Member for Hayes and Harlington (John McDonnell) often refers to that. The patent box is £1.2 billion, and research and development relief is £2.2 billion. There are £300 million-worth of fiddles in that. I will stop there, because it gets a little tedious. I have a very long list. The Government talk about incentivising people; they incentivise their mates all right. the Minister will tell us that there have not been any public sector disputes or pay problems. These people need a pay rise.

I rarely bring personal matters to this House, but I will make an exception today. My daughter Jennie would have been 32 years old today. She died in a cycling accident 10 weeks ago. She worked at the Royal Liverpool University Hospital—yes, in the NHS; in the public sector, as does my wife, her mother, and her friends, and as did I. She and her colleagues worked hard. They do work hard. I owe it to all those who work in the public sector to speak out for them today. Without question, they deserve a decent pay rise, full stop. In the light of the covid crisis, it is time for some of those on the tax relief bonus, as it is being called, to take their turn.