Public Sector Pay: Proposed Strike Action

[Sir Edward Leigh in the Chair]

I beg to move,

That this House has considered the matter of proposed strike action in response to public sector pay announcements.

It is a pleasure to serve under your chairmanship, Sir Edward. We are deep in a cost of living emergency 12 years in the making, which is about to be made even worse by this Tory Government. I sought this debate because of the perilous situation resulting from the cost of living crisis. Poverty is already increasing, and current and future decisions by the Government will make it even worse. The number of trade unionists in public sector work being balloted for industrial action over pay now exceeds 1 million. That is because the Tories are holding down their pay and driving industrial action, and would rather suppress industrial action than end the conflicts through a fair pay award.

I want to make three fundamental points. First, public sector pay has been eroded in real terms for 12 years through this Conservative Government’s austerity measures, which have destroyed morale and damaged recruitment and retention. Secondly, the proposed public sector pay settlement in this cost of living crisis is the worst so far and will reduce living standards significantly. Inflation is at over 10%, and the cost of energy, food and fuel is higher. Reports in today’s The Times and The Daily Telegraph suggest that a real pay settlement will be even worse next year and will anger public servants more—rightly so. Finally, there is an alternative to more austerity and the suppression of industrial action, which is to fund a fair, inflation-proofed pay rise through a fairer taxation system.

This summer has been described as the summer of solidarity. There has been major strike action in the postal and telecoms sectors and on the railways, with a great degree of public support despite the impact. We are now seeing a huge escalation of that, with widespread balloting for industrial action in response to meagre public sector pay offers across universities, Departments, hospitals, schools and fire stations.

Last week, 60,000 University and College Union members in higher education met the Trade Union Act 2016 threshold and confirmed that they were ready to defend their pay. Some 150,000 Public and Commercial Services Union members will conclude their ballot at the end of this week. In health, the Royal College of Nursing is now at the end of a historic first UK ballot of 300,000 nurses, and we have seen the start of pay ballots of another 400,000-plus members of Unison, GMB and Unite, which all conclude at the end of this month.

My hon. Friend is making such a powerful speech. Does she agree that, regardless of whether they are railway workers, health workers, BT and Openreach workers, education workers, teachers or support assistants, it is our fight? It is about a fair day’s pay for a fair day’s work: genuinely levelling up.

I completely agree. Their fight is our fight.

Such a low pay offer will inevitably lead to disillusion. We are already seeing the detrimental impact of low pay on the NHS workforce. Essential public sector services will struggle to recruit and retain staff, and workers will be drawn to the private sector in the hope of higher wages. Does the hon. Lady agree that Ministers must urgently undertake a full impact assessment before finalising any decisions on a full pay offer?

I thank the hon. Lady, and I will come to that later.

Let me return to my speech. In education there is an unprecedented situation: two major education unions, the National Education Union and NASUWT, voting together alongside the National Association of Head Teachers. In the fire service, over 30,000 members of the Fire Brigades Union are doing the same.

Why is that? The latest statistics show average regular pay growth of 6.2% for the private sector and 2.2% for the public sector—both below inflation, but one much further below it than the other. We are now talking about a potential 1.5 million public sector workers being balloted on the Tories’ low pay agenda.

I apologise: I will not be able to stay for the entire debate as I have another commitment in the House. My hon. Friend is making a powerful case for why, in all justice, public sector workers should not be the the most penalised, and they will obviously agree with her. Another consequence is that, as the TUC recently highlighted, there will be labour shortages in vast parts of the public sector, as workers decide they can get more pay in the private sector. Who can blame them? However, in terms of public policy, that will be a real problem.

Yes, and we all welcome the TUC coming to Parliament tomorrow for the day of action.

Early in the new year, there could be significant co-ordinated strike action, and the TUC is planning for such action. It is absolutely right to do so, because the Government are creating public sector poverty to balance their own books. We must understand why people are being forced to strike. Because of the burden of low pay in the context of the worst cost of living crisis in living memory, trade unionists in the public sector have no option but to consider industrial action. They are being forced to take action to survive. The Tories’ plan to suppress industrial action does not ease the financial burden on households.

I will briefly go through my three key points. First, the background to the current situation is the erosion of public sector pay over 12 years. When David Cameron came to power in 2010, his first speech in Downing Street referred to “difficult decisions”, and we heard the Prime Minister use the same line last week. The TUC has called the 10 subsequent years a “decade of lost pay”. Nurses and paramedics will see their pay shrink by £1,100 and £1,500 respectively this year.

It is worth reflecting on the human cost for workers on the ground, because behind all the figures are real people. One PCS member has said:

“To try and survive the cost of living crisis, I keep my lights off at home, live the vast majority of time in just one room and don’t use my central heating. I’ve already taken every conceivable cost-cutting measure I can.”

It is absolutely appalling that, in this day and age, somebody is forced to do that through no fault of their own. It is a damning indictment of the impact of 12 years of austerity that imposed pay freezes on our hard-working public sector staff. Those who sacrificed so much during the covid pandemic to keep our sectors running have been left badly exposed in the cost of living emergency.

Secondly, in this year’s pay review body consultations, unions were unequivocal in demanding an inflation-proof pay rise and stating that the Government’s offer was a significant real-terms pay cut for key workers. On teachers’ pay, the NEU was clear that Government evidence to the pay review body failed to explore the impact of pay cuts on

“teacher recruitment, retention and morale”.

On NHS pay, the RCN said that the pay announcement

“makes it harder, not easier, for them to cope with the rising cost of living.”

I thank my hon. Friend for this critical debate; I notice there are more civil servants in attendance than there are Government Members, which is shameful.

I want to pick up on the human cost that my hon. Friend mentioned. In 2011, on my first day in the job as a young parliamentary candidate, I stood on a picket line with Unison members in the mental health services. They were not just striking for pay, but because they were warning the public about the cuts coming to mental health. We have now had a decade of failure. I look now at GMB ambulance workers who have said that a third of the deaths that they see are because of delays caused by bottlenecks in the NHS—caused by the cuts. Does my hon. Friend agree with me that we cannot let the Government blame strikers, public servants or even climate activists for the deaths that occur because of what they are doing on their watch?

I thank my hon. Friend for that powerful comment. I fully agree.

How will we pay for pay awards? The time has come for the Government to seriously look at establishing the infrastructure and valuation systems to levy taxation on wealth. There has been increasing interest in wealth taxation in recent months and years. The Wealth Tax Commission has given a rigorous academic base to understand how we could levy either a one-off or annual wealth tax. Tax Justice UK argued last week that the Government could raise up to £37 billion a year through a number of taxes on wealth, including equalising capital gains with income tax rates to raise £14 billion a year.

The Institute for Public Policy Research and Common Wealth think-tanks’ latest research on taxing share buyback profit transfers found we could raise £11 billion. The Wealth Tax Commission simulator suggests that around £18 billion could be raised through an annual wealth tax of 2% on wealth over £5 million. It is clear that the resources are there; the Government must examine and use them.

To conclude, this pay settlement is an attack on living standards, on top of a decade-long attack on people. There is an alternative that means we have to look at new revenue streams that tax wealth to increase public key worker pay. If the Government do not act to ensure a proper settlement on public sector pay and a progressive, fair taxation system to pay for it, living standards and livelihoods are going to get worse for the people that we all represent.

We have arrived at this crisis, and are experiencing it acutely and in an unequal way, due to policy choices—choices driven by political decisions and priorities. Society cannot thrive if we do not get our priorities right. My priority is the living standards of my constituents in Cynon Valley and every single person throughout the United Kingdom. I will continue to support all actions to make that happen, and stand shoulder to shoulder proudly with workers. Diolch yn fawr.

If everybody is to get in, you need to limit your comments to five minutes, please. I call John McDonnell.

Thank you, Sir Edward. I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing the debate. I want to talk specifically about the industrial action taking place in north-west London.

Industrial action across the country is about weekly and daily pay. In my constituency and elsewhere, there are real issues in north-west London around the payment of sick pay. I also welcome the Barnet Unison members to the Gallery today. They are now on their 11th day of all-out strike action. This is the only dispute of all-out action that Unison has endorsed and supported in the union’s recent history. The workers—the Unison members—are employed by Barnet Homes group, an organisation completely owned and managed by Barnet Council. By the way, it is managed by a CEO on an annual wage of £202,000, with bonuses on top.

The dispute is about a low-paid worker who was injured at work, but Barnet Homes refused to pay the first week of sick pay. That was an outrage. People were furious about the treatment of this worker, so his colleagues decided to seek negotiations to respond, to see whether they could get an appropriate response from the management. Management refused and made offers that were completely unacceptable, some of them nonsensical. The workers consulted, discussed, balloted and came out for industrial action, not just for one day but for all-out action.

Hon. Members here who have been on industrial action will know the consequences of that for individual incomes, particularly for low-paid workers. It is an act of courage. I want to pay tribute to the Unison members here today for the courage they have shown in taking action to protect a vulnerable colleague.

I will say this: the message from here today and across the House is that the council and Barnet Homes need to get back round the negotiating table, with a serious settlement to this dispute. I also want to say to Barnet Homes, “Start respecting your workers. Start respecting what they do.” I express my solidarity with the Unison strikers today. If this debate does nothing else, I hope it shames Barnet Homes and the council, if necessary, into settling this dispute.

It is a pleasure to follow on from the right hon. Member for Hayes and Harlington (John McDonnell). I congratulate the hon. Member for Cynon Valley (Beth Winter) on securing the debate and bringing this issue to the Chamber. I should also declare my membership of Unite.

In having this debate, we need to think about how we ended up in this mess. When the Minister gets to her feet later and talks about the difficult choices the Government must make, she must do so reflecting on the fact that they have been in power for 12 years. They have been in control of the economy, and the economic chaos that has been unleashed in the UK recently is a result of the Thatcherite economic experiment undertaken by the former Prime Minister and Chancellor. Working people will now have to pay as a result of the botched mini-Budget, which had to be abandoned, with a new fiscal statement coming on 17 November. As we watch the new Chancellor of the Exchequer start to unpick the mini-Budget, it still astonishes me that, through all the turmoil, one thing that has still not been unpicked is the lifting of the cap on bankers’ bonuses. The idea that the Minister will stand up in this Chamber at quarter to 4 and say, “We need to make difficult choices but, by the way, bankers can continue to have excessive bonuses to encourage them to incentivise risk,” should give the Government food for thought.

When approaching this debate, we should always remember that the right to withdraw labour is a fundamental human right, and it is enshrined in section 44 of the Employment Rights Act 1996—it appears that plenty of Conservative Back Benchers are exercising their right to withdraw their labour by not turning up to this debate, and we extend our solidarity to them in that regard. With this Government, we are beginning to see—we will see this with the Transport Strikes (Minimum Service Levels) Bill—that there will be a continued attack on working people and trade unions. This will not necessarily be popular with Labour colleagues here, but the challenge for the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) is not to play these games with the Government, no to get as close as possible to them and not to go for that middle-ground vote. He should be brave, stand up for workers and not just try to be a pale imitation of the Tories. We know that the Government are determined to attack workers’ rights. We heard only recently that the new Secretary of State for Work and Pensions has talked about ways in which the Government can try to water down rights for those on maternity allowance.