My Lords, you might say that securing growth in productivity is the most important issue we face—it is certainly the most important economic issue. This is because in the long run the overall rate of growth in productivity is reflected in the rate of growth in the economy, and from economic growth virtually everything else flows. We are debating public sector productivity today, but many of the same problems are found in the private sector.
I acknowledge that there are a few utopians who might think that this is a mercenary view of life, but a very large majority of us want to be better off personally and to benefit from improvements in the provision of public services—education, transport, healthcare and defence, for example. Better services need money, and a bigger economy provides more money via taxes. The best measure of our economic prosperity is probably GDP per head, and on this the recent history is disquieting. GDP per head in the UK has scarcely risen since the start of the financial crisis in 2007 and it is among the worst in the OECD.
It reflects the fact that productivity suffered a huge hit during the financial crisis, partly because of the importance of financial services to the UK economy. After a modest recovery, matters deteriorated again during Covid. As the IMF said in May:
“Although the UK has done better than peers in terms of total hours worked, the drop in labor productivity growth, the key driver of living standards—from around 2 percent pre-GFC to around ½ percent thereafter—has been noticeably bigger than in other advanced economies”.
Although the IMF refers to labour productivity rather than productivity, the two measures are closely related.
Part of our problem is cultural. Many—probably most—of us do not think of efficiency much of the time. In particular, there is a wilful disregard in the body politic for the costs of bureaucracy and monitoring. Like other noble Lords, I take part in the debates in this House on legislation. I have taken careful note in recent years and I regret to say that virtually every amendment to a Bill that we discuss would, if accepted, have the effect of increasing the cost of doing things, reduce efficiency and/or hit growth and dynamism. SIs and guidance can be even worse. Do noble Lords pause to consider whether the cost of the amendments they advocate is proportionate to the benefit hoped for? I fear the answer is often no.
The truth is that much of what government does affects the private sector, so the public sector contributes in two ways to the productivity problem: in what it does to others, such as in the huge build-up of financial, energy and environmental legislation in recent years, and in what it does in the way it organises itself.
We need to limit our interventions to matters where it is really needed, such as safety. We have too big a rulebook and that means a bigger, less efficient state. We need to change the culture. If I were put in charge, I would require a new productivity and growth assessment, like the equality assessment, on every proposal for a new policy, an SI or a Bill. Indeed, it should replace the equality assessment, which has had its day. Productivity assessments could be short, but a requirement for them would make our civil servants and lawmakers view changes through productivity spectacles. I would be interested in the Minister’s thoughts on this. It could make her and her Treasury colleagues new allies in the pursuit of value for money.
My Lords, I congratulate the noble Baroness on getting this debate because it is an important subject, as she said, and one that affects all services and the way that the state works for individuals, although I have to say that her speech sounded a bit like a post-mortem on Tory government for the past nine years. Never mind—we will leave that aside for the moment.
I was a corporate economist in the transport and freight sector, but it did not need that level of economist —more like GCSE and A-level—to understand that one of the most important areas for productivity is consistent investment. I will concentrate on that. As we know, the United Kingdom has one of the lowest rates of investment in the economy as a whole in the G7. In fact, I think it was bottom of that league for 27 of the past 30 years. When we come to public investment it is slightly better in that, in the past couple of years, Germany and Italy have been worse than us, but we still have a very bad track record there indeed.
One of the areas that particularly struck me when I prepared for this debate was the rollercoaster nature of public sector investment. The reason is that investment, which should be long term, as it is for us as individuals in our household expenditure, is decided by the Treasury year to year, effectively, so we have these big swings. In 1988-99 public investment was almost zero, in 2020 it got up to 3.5%, and currently it is about 1.6% of GDP. Those ups and downs were because of short-term decision-making. We can see some of those examples. I worked for a short period in a public corporation. It was small enough that it was not affected by Treasury decisions, but other nationalised industries at that time could not predict their own investment to meet their corporate planning because of week-to-week and year-to-year Treasury decisions.
We have seen some of that in the public investment in HS2. Good or bad, the fact that we are now left with a high-speed railway going from north London to Birmingham is clearly not good public investment. In school buildings and hospitals we have seen high maintenance costs because we have not regularly invested in time-expired buildings. Indeed, in public housing, which has more or less stopped since the Thatcher Government, we again are in a situation where we have a negative effect downstream on family life, schooling, health and all those areas because of a lack of public investment. As I understand them at the moment, through the work of the Institute for Fiscal Studies, under the plans public investment will go down by 7% per annum over the next five years—unless the Minister would like to tell us at the conclusion of this debate that the fiscal rules are going to change, and how they will change.
My Lords, if the noble Baroness, Lady Neville-Rolfe, is looking for any answers that I might have about how to increase productivity in the NHS, she might be a bit disappointed. However, I will give my views.
NHS productivity has long been a focus of politicians and policymakers. Any debate about challenges facing the NHS ends up with a discussion about productivity—mostly about how to increase it. Several recent reports from official organisations and think tanks demonstrate the wide interest in the subject. I will refer to one or two of them, particularly one detailed report from the King’s Fund
In my view there are four key issues when looking at productivity in the NHS. The first is how productivity in the healthcare sector has changed over time. Secondly, what has driven the recent fall in productivity? The third is the limitations of official productivity data. Fourthly, and lastly, is productivity going to increase and what needs to be done for it to do so?
Looking at how productivity has changed, the ONS data shows that over the past few decades NHS productivity increased faster than that of other public sector services, such as education and social care, and even the wider economy. However, in 2021, health sector productivity fell by 23%. In 2021-22, it had a slight recovery but was still down 7% from pre-pandemic levels. The recent NHS England data, which focuses mostly on the acute sector, shows that it is still down by 11% compared to pre-pandemic.
A number of different factors have driven this recent fall. Investment has already been mentioned—capital investment in buildings and technology, as well as outdated equipment and buildings not fit for purpose. There is a low ratio of managers with the competency to manage the flow of patients to administrators, who end up increasing bureaucracy and waste. NHS staff sickness has led to experienced staff leaving the service and new staff replacing them—and we have had a considerable increase in staffing. Less experienced staff are not fully trained, hence the process slows down. Industrial action and more sick patients with multi- morbidity, requiring more complex care, requires greater resources. Compared to my day, today’s complex cancer surgeries, for instance, could take as long as 10 to 14 hours per patient. That requires a lot of resources.
My Lords, I am grateful to the noble Baroness, Lady Neville-Rolfe, for securing this debate and introducing it so effectively. With her experience of both the public and private sectors, she is well-qualified to point to where there might be scope for improvement. The figures she quoted for public sector productivity are indeed dire, but as the noble Lord, Lord Patel, has pointed out, it is not simple to measure public sector productivity.
I will not dwell on how notoriously difficult this task can be in the diverse sectors that we are looking at this evening—even within the health service, as we have heard, it is very difficult, and in the private sector, where the profit motive is a simple one in relative terms, there is still dispute over how effectively productivity can best be measured. Instead, I want to highlight two areas in which I think relatively simple changes could secure significant improvements in productivity for this country.
The first area is education, where I feel that an emphasis on traditional outputs—exam results in particular—is not producing the workforce that we require. That is not simply because the system is not producing enough computer scientists or engineers. The dramatic cutback in arts education, and particularly music, fails to acknowledge the need for a modern workforce to be creative and flexible in its thinking. We know of the close link between mathematics and music, for instance, and playing in an orchestra or band is a great education in being a team player, which is what is required in the modern workplace.
It is physical flexibility which causes me even more concern, however. A report from NHS England published late last month showed that 19% of 11 to 15 year-olds were obese. The problem, like the children, grows as they progress through school. Between two and 10, the average for obesity is 12% but by the final year in primary school it hits a horrifying 22.7%. These figures are based on 2022 research and had barely changed since 2019.
One aspect of the great productivity mystery and great productivity debate that I want to draw to the attention of the House is the relationship between productivity and the growing practice of working from home, which I think deserves close scrutiny. There is no divine right which says you can work from home. That does not exist in the public sector or in the private sector. I am personally—it is a personal not a political view—greatly concerned that there is a newly forming class divide, and I choose my words carefully, between people who can work from home and people who just cannot. It seems to me not particularly socially desirable and certainly not always necessarily for the economic best, helping productivity, in the private sector, let alone the public sector. I know of no evidence yet on this.
This is not some sort of Adullamite cave-dwelling view of someone who does not like the great technological leaps forward that spur our social and working interactions for the good. They are vital to all of us, and distance stuff can help all of us. But looking at the Civil Service or the health service, for example, which I value, it is clear that many do not have the opportunity to work from home. Cleaners, security and caterers just have to be there. Hospitals could not function without them. They could not work without support staff, nor could the nurses or physicians, nor could the surgeons operating away.
My question is: is the working from home by an increasing number of managers and policymakers in NHS England and Whitehall departments always a good thing? I do not believe it necessarily is. Does it help, hinder or is it neutral in its effects on productivity, which seems to be lagging behind the undoubted leaps forward in technology that I applaud? This is fertile ground for the Office for National Statistics to get on and have a good look at the economic effects on productivity of working from home.
I believe very much in face-to-face contact—it is a good productivity driver where I work. Those chance meetings in corridors and over coffee spark ideas which are so hard to choreograph, let us say, on one of those rather wooden Teams meetings; I am also terribly worried that I am going to say something daft and it will be recorded and played back to me later. It is very good for new entrants to have lots of personal contacts, but it is also good for people who have been around for a bit to be knocked around by some of those new entrants and to be challenged.
My Lords, in following the noble Lord, Lord Patten, I have to reflect on the experience of commuting, whether that is stuck behind the wheel of a car in a traffic jam or having your face stuck in someone else’s armpit on an overcrowded, delayed train. I really could not think of anything less productive than those experiences, which of course not allowing working from home forces people into every day.
I thank the noble Baroness, Lady Neville-Rolfe, for securing this debate and both your Lordships’ Chambers for timing perfectly the finish of the previous two debates, which has allowed me to run between the Moses Room and the defence review and this debate—an extremely efficient use of my time this evening.
I want to begin with a very quick overview of the state of public services in the UK. They have had 14 years of austerity and I am going to draw on an Institute for Government report from October 2022, ‘Austerity’ in Public Services: Lessons from the 2010s. It points out that our public services are fragile because of austerity. Austerity meant that the pay of workers was pushed down and the number of staff slashed so that people had to work harder. That was not a viable position, this report and I conclude. Very many people are now simply worn out. They are overtired. Many people have left. Huge amounts of experience, knowledge and skills have been lost. There were very few easy and genuinely effective efficiency savings to be found, and what there were have been found.
We saw situations, as happened with policing in prisons, where there were slashing efficiency cuts, but then money had to be put back in because the institutions had fallen apart. That meant that experienced staff left, and new, little-trained, inexperienced people came in, and that was really bad for productivity. Austerity is wildly inefficient. Of course, that is not the fault of the public sector but of politics. If we are talking about the productivity of the public sector, maybe we have to look very close to home for reasons why there might be issues.
My Lords, I join other noble Lords in congratulating my noble friend Lady Neville-Rolfe on securing this debate and for her masterly introduction. Public sector productivity, or the lack of it, is holding back the UK’s overall productivity growth and thereby putting a damper on our economic growth. In the time available, I will not concentrate on the soaring numbers of civil servants, the clear issues with working from home—which was addressed by my noble friend Lord Patten—or the inflationary public sector pay deals which have shockingly been awarded in return for zero productivity. Instead, I want to focus on two areas: state-owned economic activity and the NHS.
We are only a hundred days into this new Government, but there is one clear direction of travel—we can expect more state-controlled economic activity. The Government are already laying the foundations for renationalising the railways, the energy system operator has just been brought into the public sector and GB Energy is being set up with £8 billion in order to take an active role in energy generation. I doubt that the Government’s ambitions will stop there, but they need to learn the lessons from history.
Before 1979, we had a lot of nationalised industries and, the record shows, third-rate productivity at best; they were a real drag on the UK economy. There were several attempts to impose economic and financial frameworks to solve this problem, but they failed. The one thing that did eventually work was privatisation, which unlocked considerable efficiency gains, and I am especially proud of what we achieved in the 1980s and 1990s. Now, the Government are heading in the other direction with little apparent regard for efficiency. I was struck when the noble Baroness, Lady Blake of Leeds, who is the Minister here today, introduced the Second Reading of the Passenger Railway Services (Public Ownership) Bill two days ago and, in her opening speech, did not even mention productivity or efficiency. As the activities of the state increase, the greater will be the impact of low or negative efficiency on the whole economy, and the Government cannot afford to rest on hopes that it will all be different this time.
My Lords, I am very grateful to my noble friend Lady Neville-Rolfe for introducing the debate and I am acutely conscious of the expertise and experience that others have brought to bear.
I will begin with a point raised by the noble Lord, Lord Patel, and the noble Baroness, Lady Wheatcroft, about the difficulty of measuring productivity. Of course, that is absolutely true, but as a rough guide for a ballpark figure I looked at what the OBR had to say. It produced a report in 2022, which found that in the private sector productivity was back to 1.6% above where it had been on the eve of the pandemic, but in the public sector it was still down by 7.4%. If we carry on losing productivity in the public sector at this rate, we will suffer a further 20% decline within a decade, which the Centre for Economics and Business Research says would be the equivalent of £73 billion per year of extra spending. Think for a second about that: £73 billion per year. Think of the rows we have in this Chamber about the relatively trivial sums involved in the winter fuel payments or VAT on school fees.
Why is that happening? There are structural reasons why there is greater productivity when there is a profit motive; I think we all accept that. But why is the gap widening? What has changed recently? I think my noble friend Lord Patten was exactly on the button. About a year after the pandemic, when everything was supposed to have got back to normal and when my right honourable friend Jacob Rees-Mogg was a Minister, he was presented with a fait accompli by his officials. They said that he absolutely had to sign the lease on a building for a government agency or an arm’s-length agency in central London. He said, “Why do they need to be in this expensive place?” and they said, “Oh it is absolutely vital, Minister. It is actually walking distance from here: let’s go and have a look”. Of course, he found that there was nobody there. Hence, he began the campaign of dropping his—I thought rather polite—calling cards saying, “Sorry you weren’t at work”, which of course created a furious backlash from the Civil Service trade unions. But there are jobs that require you to be there.
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I am afraid that the figures for public sector productivity are even less positive than those for overall productivity. As the graph in the excellent Library Note makes clear, public sector productivity is significantly lower than in 1997, with the modest increase in the 2010s entirely eliminated by Covid and with the NHS a particular concern. I look forward to hearing from the noble Lord, Lord Patel, on what can be done. I believe working from home has also been a productivity sapper, with almost comic inefficiencies. As we heard from Guy Adams of the Mail recently, only 17% of the Business and Trade civil servants were coming in to work in their glorious Old Admiralty Building.
What else can be done? I am leaving to one side the obvious points, such as improved skills and education and the timely application of capital, so that I can make less obvious points from my own experience in business, the Civil Service and as a Minister in four departments, including the Treasury.
The first change needed is better management. The public sector needs fewer layers with simpler, flatter structures and wider spans of control. In the Cabinet Office when I was a Minister, one-third of staff were one on one. Government is also top-heavy. When I was at Tesco, I noticed that our considerable success was achieved without the CEO having a large private office staffed by people with their own agendas. This helped with clear focus and direction and a deep understanding of the business. It also limited the office politics. The contrast with Downing Street could hardly be greater.
I come back to the management of the public sector. There is a need for focus, which I think the Government are seeking with their new missions, but also for more delegation. For example, the Institute for Government has found that allowing nurses to self-roster reduces turnover. Other key areas where the public sector could learn from commerce are to mandate more comprehensive induction training for outsiders, who often fail in the Civil Service but bring vital skills, and training on easing out poor performers fairly. This seems likely to be even harder under Labour’s new employment rights Bill.
We also need a culture and working methods that help us to avoid mistakes. This includes both big things, such as HS2, the failings of the Post Office, and infected blood, and smaller things, such as letting some of the wrong people out of prison last month or setting the heating systems incorrectly in public buildings. We need to learn how to get things right first time because it avoids waste and mistakes. AI is making that easier—for example, on diagnostics from hospital scans. Equally, in my book it is okay to take risks and fail, but only if you learn from the experience. At the top of Tesco, we spent a lot of time in stores modestly carrying out routine tasks, observing what went wrong and seeing how policies and retail productivity could be improved.
We have a very big canvas for improvement. A recent paper by the University of Exeter Business School discusses the fact that virtually the same services were and are provided in similar NHS organisations and how this duplication allowed substantial efficiency improvements to be identified and made, amounting to £1 billion. The authors argue persuasively that the same approach could be used elsewhere in the thousands of organisations in the public sector. It is a great pity that, in awarding £9.4 billion to the public sector in above-inflation pay rises, the Government failed to impose productivity requirements on public sector workers. I know from experience that restrictive practices are hard to tackle and easier to remove with the warmth of a pay rise.
Public policy also effects productivity in the private sector. I said earlier that legislation often includes measures which reduce productivity unnecessarily. I turn to another current example: net zero. A lot can be done with small steps that have wide application, such as the transition to LED bulbs and putting porches on to retail stores, which quickly pay for themselves in lower energy bills. However, some of the measures to counter global warming now being taken by this Government—in particular, shutting the North Sea early—will hasten net zero neither in the UK nor globally. It will, however, ensure that the UK’s net exports are reduced, and it will reduce overall UK productivity, thereby making us all poorer, most notably the workers on oil rigs, as their trade union has pointed out. This is all for no rational reason. Public regulation will have reduced the productivity of the private sector and made it more difficult to deliver the growth and wealth we need for the future.
Improving productivity is a subject I feel passionate about because it can unlock great benefits. To be honest, it is rather a big subject for a short debate, but I am very keen to hear other ideas, build up alliances and ensure that the need to increase productivity is properly considered in all public sector decisions. I thank all those who are kind enough to speak and especially look forward to hearing from our new Minister.
I have little more to say except that, as I said, there seems to me, from my GCSE economics, to be a simple solution here. We should have consistent levels of public investment, year-to-year, so that the economy can move forward and the private sector can understand what the Government will invest and what they will do, and then crowd in private investment as well. We need, through our planning, to make sure that we have the skills and the capacity to actually meet those investment areas. We need to decouple the Office for Budget Responsibility from investment decisions. Clearly, we also have to make sure that we critique public investment very strongly and invest in the right areas. Lastly, I am one of those people who reads the National Infrastructure Commission report quite regularly, and I see absolute sanity in that report. I would like to see a much closer relationship between government and that commission, to make sure that investment is right and moves forward effectively over a longer time period.
There are limitations to official data. Not all data is captured on the new way of delivering care, particularly in the community. Different organisations use different metrics. Data is collected for the acute sector but not for community settings, which skews the numbers. There needs to be consensus on what data should be collected to measure productivity across the whole healthcare sector.
Is productivity going to increase? There are several initiatives, including the financial package of £3.4 billion announced in the last spring Budget, to build capacity in technology. The NHS productivity plan aims to save £35 billion by 2029, with yearly increases in productivity of 1.9% to 2.2%, and one hopes that that will happen. However, without addressing the capital funding backlog of £11.9 billion for more investment in social care, to improve patient care and to provide better support for hard-pressed staff, none of this will happen. It will be challenging to increase productivity to that level. Post-Covid, for reasons that are not obvious, productivity continues to decline. For example, out-patient appointments per consultant are down 7%, and surgical activity is down 12%, as has been identified in the Darzi report.
It is right that politicians focus on the productivity of the health sector but, as experience has shown, there needs to be some realism about how easily and quickly it can be achieved. We need also to recognise that, in healthcare, quality matters more than quantity. We need high-quality care delivered with the resources available and not more quantity, as some may think. I look forward to the Minister’s answers.
Childhood obesity leads to adult obesity and, as we know, obesity is a massive cause of ill health and thus a major contributor to keeping people either out of the workplace or not at their most effective. It seems to me that an important measure of productivity for the education system should be its effectiveness in producing healthy children—those who are physically fit and ready to join the workforce. This does not mean every child having to do dreaded cross-country runs or team sports, but maybe being physically active by dancing, swimming or doing yoga would be an important start. Physically healthy pupils will be more receptive to education. Does the Minister agree that schools would improve their productivity and the eventual ability of the workforce if they provided more exercise for pupils?
Also, I want to suggest a way in which productivity might be enhanced across much of the public sector, empowering individuals within it. Only today, I was talking to a staff nurse at a major London hospital. He was struggling to cope with an appointments system which had changed for the umpteenth time. “They are always changing things and we are always the last to find out,” he said. It is a refrain that I have heard repeatedly, particularly in dealings with the NHS but also from local council employees and civil servants.
The private sector acknowledges the importance of empowering employees—although sometimes more in theory than in practice. Nevertheless, empowerment is a proven way of motivating a workforce, and a motivated workforce is inherently a more effective one. The “us and them” of British culture persists far more in the public sector than in the private sector. There is undoubtedly a need for investment in technology but, as we heard repeatedly this afternoon, there is not a great deal of cash to be handed out. I am hopeful that the fiscal rules will be changed for investment purposes but, even without that, empowering the staff in the public sector would deliver cheaply and effectively.
Only this week, we have news that Lloyd’s of London is a bit panicky about so few people being there not just on Fridays but on Mondays, and the Lloyd’s market is one of the gems in our economic panoply around the world; I have no interest in that. More and more people in the private sector are like Sir Jim Ratcliffe of Ineos, that great engineer and businessman, who has now blown the whistle and is getting his people back to the office, particularly in the regions, which are very important to us all. I wish him luck with that— and when the whistle blows for Manchester United, in which he is an investor, which may be more challenging than getting his workforce back.
This needs a good, long look by the Government. Again, it is not a party-political thing. The Government have four or five years, I believe, in which they will have to get productivity up. I know of no evidence of serious government study on the effects of working from home. We do not want it to be embedded so that, by the end of five years, people just think there really is a divine right to do what they want and work how they want.
A second issue that has been driven by ideology and politics is privatisation, financialisaton and marketisation. I recall marching in 2014 with the 999 Call for the NHS campaign on part of its Jarrow march against the privatisation of the NHS. Many of the people on that march were NHS staff, and they could tell the story of the past couple of years where they had had three or four different job titles, three or four different bosses, and had worked for three or four different organisations, and yet they had been seeing the same kind of patients in the same office every day. All of those things take vast amounts of time, energy and stress and lead to people getting frustrated, giving up and leaving, and all of it was driven by political decisions and political ideology. Why do we have a productivity problem? Let us look closer to home. We need a better quality of governance and politics.
Finally, on health, we have a terrible quality of public health. In the working-age population, we have a huge number of people suffering from long Covid and all sorts of chronic conditions who struggle into work every day and do their best. We need to find ways to get a healthier society, as the noble Baroness, Lady Wheatcroft, just mentioned; this is about taking a systemic approach to our society.
I want to devote my final minute to one simple idea. No one idea is a panacea, but here is one way forward: a four-day working week as standard with no loss of pay. The noble Baroness, Lady Neville-Rolfe, who secured this debate, might like to know of an article published by the World Economic Forum which states—with invisible but clear exclamation marks—that a four-day working week as standard, with no loss of pay or extension of hours each day, “actually increases productivity”. The article also notes:
“Work smarter not harder has been the mantra of management consultants”.
I do not want to suggest a Stakhanovite, Amazon-warehouse type arrangement where everyone comes into the office, puts their heads down and is forced to act like a robot. Ultimately, however, we need to think about not just the productivity of our public services but the productivity of our society. A healthy society that cares for people and has time for family and community, which a four-day week would provide, would be a highly productive society.
My other topic is the NHS. Because the NHS gobbles up about 40% of public expenditure, overall public sector productivity will be a problem if the NHS is not fixed. Measuring productivity in the NHS is very difficult, as the noble Baroness, Lady Wheatcroft, has already said, but it seems generally agreed that the NHS has not even returned to pre-pandemic levels of productivity; it is treating fewer patients but has far higher staff numbers. Before the pandemic, the ONS measure, which includes a flattering quality adjustment, had the NHS as the best performing bit of the public sector, but not anymore. It is vital that the Government grasp this issue.
The last Government’s productivity plan for the NHS involved £4 billion being spent on technology transformation. The current Secretary of State has talked about creating a digital NHS. Another lesson from history is that all previous attempts at large scale technology-led transformation in the NHS have failed. There are lots of reasons for this, including the complexity of the NHS and insufficient management skills and capabilities.
More importantly, transformation will not happen unless the whole of the NHS buys in; it cannot be optional. The NHS has to want to change, not just in the upper echelons of NHS England, but in every GP surgery, every ward and every support service. If that does not happen, it is not worth investing a single pound in a grandiose transformation plan.
In my view, the NHS has to stop finding excuses for low productivity—lack of investment, burnout in the workforce, strikes and so on—and turn its attention to the basics of delivering world-class efficiency. I wish that I had confidence that this will happen.
Like the noble Baroness, Lady Wheatcroft, I used to work in newspapers. In fact, for a while I worked for the noble Baroness. I am sure she will agree that there were jobs, even then, long before the pandemic, that obviously could have been done from home. If you are doing the sudoku or writing the pets column or something, there is absolutely no reason to come into the office. It struck me even 20 years ago as slightly wasteful that people were doing that. But, equally, there were an awful lot of jobs, particularly the editorial jobs, where you really had to be there talking to people. How many of the civil servants absent from their desks are in the second category? I think there are rather a lot.
I think we can all see the impact on productivity. I was certainly struck by it when I walked around the cavernous, echoing and rather beautiful corridors of the Old Admiralty Building when I was involved with the Department for Business and Trade. It is extraordinary how immediately the impact is felt of people not being there for meetings, not talking about things and not sparking ideas off each other in the fallow times.
The point I really want to make—I will make it very briefly in deference to the Minister’s throat—is that this is a choice. There are problems the Government cannot avoid, such as the ageing population and the changing ratio of workers to pensioners, but this is a choice. You can give large pay rises to public sector workers, but you are then left with less money to grow the rest of the economy. What you cannot do is keep giving these pay rises at the same time as increasing their numbers.
There were two very large increases in the Civil Service that both had a temporary and contingent cause. One was the repatriations of powers after Brexit, which required people to do them at home because they were no longer being done in Brussels. The other was the pandemic, which required more people to be brought in for testing and for vaccination and so on. Both of those bumps are now in the rear-view mirror. Under the plans of the previous Government, numbers were supposed to fall back towards where they had been and there was a scheduled loss of 66,000 personnel. That was quietly reversed as almost the first thing the new Government did.
There was a time when the arguments were about economics and taking from the haves to give to the have-nots. What we cannot have is simply an argument about taking from the private sector to give to the public. Private sector workers already have worse pension deals. They are already required to be in the office more and they already work longer hours. We cannot keep squeezing the revenue-generating bits of the economy to fund increases in the revenue-consuming bit.