That 3% rise for NHS staff in England

Lib Dems have been quick to respond to pay rise of 3% to NHS staff in England. Munira Wilson is our Health & Social Care Spokesperson and here she is challenging the Government in the Commons BEFORE the pay rise was announced:

Only a hour later she was tweeting:

Ed Davey added his thoughts:

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  • John Marriott 22nd Jul '21 - 11:04am

    It might smack to some as heresy; but I would NOT award a catch all increase to NHS staff. Not all work on the front line. Most enjoy generous conditions of service and occupational pensions, which are not currently available to many working people. Surely, that has got to count for something in the scheme of things.

    I would award 10% to those on the front line, which should include Care Home workers, and 5% to the rest. That would cost a good deal less than the ‘Test, track and trace’ (or whatever it’s called) fiasco. We can afford it. Politicians should stop trying to ride on the coattails of those, who have put their lives in danger and cut out the hyperbole.

  • A welcome statement from Munira Wilson, supported by Sir Edward Davey. However, a word of caution. The best predictor of future behaviour is past behaviour.

    The last time Liberal Democrats had a hand on power (Sir Edward in Cabinet, Sir Danny the Treasury, Sir Nick in the Quad, Sir Vince at Business) a pay freeze was imposed on the public sector (many of whom were Lib Dem voters). It included the NHS.

    ‘The Independent’ reported in 2017 :

    ‘Public sector pay cap: NHS staff real income cut by almost £2,000 over seven years of wage squeeze. The pay of ambulance staff is down £5,286 in real terms and for midwives it is £3,504 lower’. Ben Chu, Economics Editor, Thursday 21 September 2017 15:22.

  • Russell Simpson 22nd Jul '21 - 12:22pm

    Average public sector pay is higher than in the private sector (the gap is even more when pensions are taken into account). The gap has grown during the pandemic. The 3% pay rise is a cost of living adjustment and not the only pay rise many in the NHS will get. The much derided 1% was actually above CPI when it was mooted. The pandemic is a one off so any reward to front line staff should be a one off too, ie a bonus. I preferred the Libdems when they were in govt and had to deal with the real world.

  • Brad Barrows 22nd Jul '21 - 12:47pm

    @Russell Simpson
    You wish to compare average pay in the public and private sectors…perhaps you should be comparing comparable jobs to get a fairer indication of relative pay levels. The fact that many public sector jobs are difficult to fill due to the relative attractions of private sector employment should tell you something. I personally know of several examples in my own field: a school janitor who moved to being a warehouse manager and more than doubled his wages; a Physics teacher who felt he had to return to work in industry because he didn’t think it fair that his family should lose out due to him being a teacher; a Depute Head Teacher who moved to become a training manager for a firm for a considerable hike in salary. I expect Tories to be prejudiced against the public sector, but not people on a Liberal Democrat website.

  • Munira makes an important point that the 3% pay rise for nurses is largely a cost of living increase with inflation currently running at 2.5% and rising. The nursing unions have been arguing for a 12.5% increase based on cuts in real wages arising from a long period of public sector pay freezes or below inflation awards over the past decade. Doctors, Teachers and police continue to be subject to a pay freeze.
    The remit of the pay review board (PRB) is set by the government. In line with the UK government’s spending review, the formal remit letter underlined the need for the PRB to consider the difficult economic context and the affordability of any pay award for NHS staff.
    The issue of public sector pay and public spending overall is tied to views on the likely path of inflation and the economic debate around which is currently the stronger force impacting on the economy – inflation or deflation including the deflationary effect of historically high levels of private sector corporate and household debt.
    The Guardian has published a piece that argues that deflationary forces have been the stronger since 2008 but that may be about to change:
    “it’s far from clear that wage earners actually lose from inflation. There is no one-to-one relationship between inflation and consumption. As he puts it: “If it is wage increases that lead to price growth, then these increases will not reduce living standards.” In other words, yes, prices are up, but so are wages. And depending on what you consume, and how much debt you carry, that can be a net positive since inflation erodes the real value of debts.
    Finally, even if it was a wage-price spiral that ignited the inflation of the 1970s, that simply couldn’t happen now. Forty years of labour market and product market reforms have, outside of a handful of monopoly firms, killed the ability of both to push on prices without losing market share. Chuck in the effects of adding 600 million people to the global labour pool over the past 30 years and we can see why deflation, rather than inflation, has been the lot of the world since at least 2008.”

  • Jack Nicholls 22nd Jul '21 - 1:54pm

    Just a thought – without disagreeing with the broader point at all, I’m very wary of opposition parties buying into the government’s politics of earned pay rises and virtue-based reward, varying only on the appropriate amount. NHS staff – among many others – have been simply amazing over the last 18 months, but they were amazing already, including when under-resourced. They were amazing when they delivered my friends’ babies. They are amazing every Friday night in A&E. They are amazing on cancer wards. They were amazing when they saved my life 3 times in 1984-5. It’s arguable they deserve a pay rise after covid, but a better argument is that they deserve an above-COL pay rise as a simple matter of right. Anything else runs the risk of supporting the implicit position of the government, which is that pay rises should be a post-hoc catastrophe bonus, like paying military personnel more after a war (not that we are yet in the ‘after’, but still). Public servants have a right to afford to live, whether there is a pandemic or not. 🙂

  • Russell Simpson 22nd Jul '21 - 2:27pm

    @Brad. Although high skilled employees are better paid in the private sector, the situation is reversed when you take pensions into account. The 3% is an award by an independent review body. You don’t even see Labour criticising it. I’m not sure what you base your assumption that I’m prejudiced against the public sector on. There’s a lot of voters out there (not least the 40% of Conservative voters who voted Remain) who will be attracted to a party that can distance itself from a far right Conservative party and a socialist Labour party.

  • For those expressing the view that, in the words of Kid Curry, “That’s a good deal” might want to reflect on the government’s clarification regarding the deal…

    …Downing Street has said that no extra money will be available to the NHS to fund the 3% pay rise for most staff announced yesterday. A No 10 spokesman said the pay rise would be “funded from within the NHS budget”,….

    I don’t know where the ‘NHS savings’ to pay for this offer will come from but I’m sure Mr. Simpson will enlighten me..

  • @Joe Bourke – “Munira makes an important point that the 3% pay rise for nurses is largely a cost of living increase with inflation currently running at 2.5% and rising.”
    but she fails to make the point that the 3% was the independent pay review figure. Yes the government were stupid in initially offering only 1%, but if you disagree with the 3%, you need to ask whether the independent pay review process is working or not.

  • Brad Barrows 22nd Jul '21 - 2:58pm

    @Russell Simpson
    I don’t know how up to date you are with public sector pensions but a new teacher in Scotland – let’s say a P.E. teacher – will have to work until they are 68 before they can retire without financial penalty. So if illhealth or physical inability to continue to teach PE forces retirement at age 63, the financial penalty will be over 20% of accrued pension. And don’t forget that that teacher will be paying up to 11.9% of salary towards their pension.

  • Jenny Barnes 22nd Jul '21 - 2:59pm

    “I don’t know where the ‘NHS savings’ to pay for this offer will come from”
    probably from reductions in staffing levels as burnt out staff leave and there are no replacements..

  • Brad Barrows and Jenny Barnes make strong points, and…. it is encouraging to see Sir Edward Davey’s conversion to paying carers a decent rate….. but there is a silence on how to do it.

    As a former Convenor of Social Care in Scotland I know the system of privatising to a for profit the care sector (pursued by Thatcher/Blair, and the Coalition throughout the UK) meant that it operates on the basis of private competitive tendering from for-profit providers pursuing a chase for local government contracts.

    A provider offering a service at £ 11 per hour is more likely to get a contract than one tendering at £ 12 per hour. How/why ? Because Carers’ pay is reduced to make the difference, especially when local government is under pressure for cuts from successive governments, especially post 2010.

    The market (beloved on the right in all political parties) works ….. but in a race to the bottom in terms of quality for those who do the real work – the low paid good souls who change the sheets, bathe, wash, cook and support the old and infirm suffering the almost inevitable consequences of old age. Underpaid undervalued staff by definition offer a diminished service to those most in need.

    Lib Dems should remember and reflect on the words of John Donne in 1624, and apply to themselves :
    “any man’s death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bells tolls ; it tolls for thee.”

  • Russell Simpson 22nd Jul '21 - 3:13pm

    @Brad. I’m not sure what your anecdotal evidence is supposed to prove. My point is that public sector is already paid more than private sector (7% according to ONS). 3% was the award from an independent body. Government has accepted it. So has Labour. Not sure why libdems are criticising it.

  • George Thomas 22nd Jul '21 - 3:31pm

    According to Steven Swinford, Political Editor at The Times, A 3 per cent pay rise for NHS staff is likely to be funded from an increase in national insurance that was intended to pay for overhauling social care.

    So we’re left with:

    i) Some NHS staff will get a pay-rise but excluding junior doctors,
    ii) Carer’s, police, teachers, prison officers won’t get a pay rise which will result in effectively a pay-cut,
    iii) Much needed overhaul of social care is pushed back, and
    iv) Young people who have sacrificed their “hot years” will be responsible paying for it.

    We can’t trust the Tories to spend money. It’s a good headline but is it a good policy?

  • Barry Lofty 22nd Jul '21 - 3:58pm

    If the view of Steven Swinford from the Times is correct I suppose this government will have calculated that the recipients of social care will have less impact on the anti Tory vote by the next election than other claimants, but I suppose I am being my normal cynical self?

  • Steve Trevethan 22nd Jul '21 - 4:29pm

    Might it be that this, ostentatiously below worth and below need, pay «offer » again destroys a foundation of Neo-liberal economics theory by showing that, in real life, pay is profoundly affected by power, influence and dogma?

  • Russell Simpson,
    Lot of the private sector are paid more than the public secton, a lot ofo thers are not. Currently I believe coming out of the pandemic, wage rates up 9% latest figure.
    I am baffled by what is happening with the government, no rise for teachers, no rise for police, err why not, yet Health Care 3% and Local Government have offerred their staff 1.5%, rejected by the Union. It is just a general chaos that seems to have descended on the Government, we do need a new P M.

  • Brad Barrows 22nd Jul '21 - 4:56pm

    @Russell Simpson.
    I’m not sure what your ‘public sector is paid more on average than private sector’ point is supposed to prove in relation to a particular group of public sector workers. My point that there are only two ways to calculate what a public sector job is worth – either by comparison to a similar/equivalent job in the private sector (ie, one that requires similar skills and qualifications) or by judging whether the pay is sufficient to attract the number of people required for those posts. On both those measures, public sector pay is below what it should be – and in the particular case of the NHS, particularly so.

    I trust the Liberal Democrats will be making this point forcefully, irrespective of what Labour happens to say on the matter.

  • mark Seaman 22nd Jul '21 - 7:01pm

    As various Governments have moved out most of the lower paid jobs that used to be in the Public sector (Security&Cleaning etc), it would be very suprising if average Public Sector pay was not higher than the Private. Many Civil Servants both former and current would likely have some very choice words for anyone who thinks that they were/are overpaid, when their real terms pay fell significantly from at least the 90’s onwards under many govenrments including the Coalition 🙁

  • Nonconformistradical 22nd Jul '21 - 7:12pm

    “For those expressing the view that, in the words of Kid Curry, “That’s a good deal” …..”
    Are you sure it wasn’t Hannibal Heyes who said that?

    Anyway this isn’t a good deal. This government is treating public service front line staff very badly – freezing pay in some cases, below inflation rises in others… while apparently their (politically) good friends have the most influence when major contracts are being doled out….. It all stinks.

  • …Downing Street has said that no extra money will be available to the NHS to fund the 3% pay rise for most staff announced yesterday. A No 10 spokesman said the pay rise would be “funded from within the NHS budget”,….
    So clearly that “lets fund our NHS instead” on the side of the Brexit bus was a lie…

  • John Marriott 23rd Jul '21 - 9:05am

    This is government under the slogan ‘make it up as you go along’. People seem to like it as, according to some polls, the Tories are still enjoying a double digit lead. Mind you, yet again, it might be the lousy opposition that’s playing a big part here.

    Personally, this shows to me just how gullible many people can be. It’s ‘bread and circuses’ yet ago. It worked in Roman times, so why not now? Did they really believe that, come 19 July, everything would be hunky dory?

  • Barry Lofty 23rd Jul '21 - 9:38am

    John Marriott @ How right you are John, this country is “up the creek without a paddle” in my opinion.

  • Nonconformistradical 22nd Jul ’21 – 7:[email protected]…Are you sure it wasn’t Hannibal Heyes who said that?

    You’re correct..

    However, it was ‘Kid’ Curry who said what many NHS workers must be thinking:

    “There’s one we thing we gotta get”..”Out of this business!”

  • Peter Martin 23rd Jul '21 - 10:35am

    The consensus of opinion in the country used to be something like ‘yes we would like to pay nurses more but where is the money going to come from?’ There is now a much greater awareness that Government doesn’t first raise some money from taxation and then spend it back into the economy. It’s now apparent to (nearly) everyone that the process is the other way around. The spending comes first and the taxation then follows as MMT economists have long tried to explain . This realisation in turn has led to fears of increased inflation.

    This is why Joe B has, somewhat surprisingly, quoted an article by economist Mark Blyth, whose opinions are close to MMT, who doesn’t believe inflation to be a problem in the near future. Inflation is a worry to everyone but particularly the right because it upsets the status quo. Inflation is bound to be more of a concern to anyone who is sitting on a money pile, whether that be bonds or cash, than someone else who has recently borrowed. They would naturally like some more interest to be paid out too. That’s why the push for tighter monetary policy is coming from the right.

    The right also would have liked everyone to carry on thinking that pay rises for nurses, and other deserving groups, were only going to be possible if everyone else paid more taxes. If the pay rises are simply going to be to cover rising prices there’s of course no need for tax rises even under a neoliberal interpretation of how the economy works. The government’s revenue will rise broadly in line with inflation even when tax rates are held constant. For example something that sold for £120 last year will have included £20 VAT for the government. If it sells for £126 this year, the government will receive £21. A 5% rise all round.

    Those on the right are uncomfortable generally that the pay of nurses, teachers etc is even a topic of general discussion. It raises too many awkward questions of what it should be and what is ‘fair’. Lib Dems are fond of this word. But is it fair that it is the pay packets of medical staff which are squeezed to prevent inflation when we can all think of many others, much less deserving, who have done very nicely for themselves in recent years?

  • Jenny Barnes 23rd Jul '21 - 11:07am

    “We send the EU 350million a week – let’s fu** our NHS instead”
    must have been the thinking.

  • Peter Martin 23rd Jul '21 - 11:48am

    I notice Lib Dems can’t help linking the present Covid problems to Brexit!

    If only we’d stayed in the EU and been a part of their super successful vaccination scheme! If only we’d had that £50 billion (is that the correct figure?) ‘remain dividend’ we would have had if we hadn’t left!

  • Steve Trevethan 23rd Jul '21 - 11:49am

    Here is an article which shows clearly that H. M. G. can afford to pay nurses more and nearer to their market value.
    Nurses are essential for national health and survival.
    The “reasons” for not paying them properly are not valid.

  • Peter Martin 23rd Jul '21 - 12:12pm

    @ Steve,

    Richard is fond of saying things like ” the government can never run out of money. In an instant, whenever it desires it, the government can always have the money it wants….. ” and this of course is literally true. However he creates the impression that the basic inequalities of society can be rectified by an application of MMT economics.

    It is certainly helpful to understand how the economy works, but no economic theory, and that includes MMT, is ever going to be able to tell us how to equitably divide up what we produce, or how the power should be shared, in a way everyone will be able to agree upon.

    Richard is an odd sort of person. On the one hand he is fiercely critical of any arbitrary imposition of fiscal constraints on Government accounts but on the other hand he is equally fierce in his defence of the EU which imposes much tighter fiscal constraints on its own members than we’ve ever seen from even a Tory government. It tried to do the same to the UK even though we didn’t sign up to the euro.

    I’m banned from his blog now for having pointed out the contradiction there!

  • @Peter Martin

    Germany – 2nd vaccine doses administered 49.3m (1st 50.4m)
    UK – 2nd vaccine doses administered 36.5m (1st 46.4m)

    Germany – covid deaths 7 day average – 14
    UK – covid deaths 7 day average – 45

    Germany – cumulative covid deaths – 91,416
    UK – cumulative covid deaths – 128,823

    (Source: Bing)

    (OK – we are about 10% ahead on percentage of population – but Germany is doing about double the daily number of vaccinations that we are currently so will probably catch us up on a percentage basis soon).

    “The UK has lost out on more than £110bn of services exports as a result of the 2016 Brexit referendum, according to a new study from Birmingham’s Aston University.”

    “The vast majority of British banking institutions expected Brussels to not grant equivalence, which would have restored access to EU markets after Brexit, and have moved thousands of jobs and more than £1 trillion of assets from London to European capitals.

    “January also saw Amsterdam overtake London as Europe’s share trading capital as €8bn of trading a day switched to the Netherlands capital during a matter of weeks.”

    Haven’t we done well!!!! Um… not!

  • No one really knows for sure what will happen with inflation in the coming years. The best guide we have is the central bank whose job it is to forecast inflation and manage price stability. Part of that job is forward guidance on policy and managing inflation expectations. At present, the US Fed Reserve and Bank of England guidance is that they expect above target inflation to be transitory, as it was for from 2010 to 2013 in the aftermath of the monetary and fiscal response to the 2008 financial crash.
    Ultimately, however, central banks have to respond to persistent excessive inflation (or deflation) with tightening (or loosening) of monetary policy. As this US article writes:
    “We are in a very risky spot for higher prices right now, because of three mutually reinforcing factors: monetary stimulus (“quantitative easing”), fiscal stimulus (trillions in spending prompted by the coronavirus emergency), and the interruption of the actual production of goods and services during the epidemic, exacerbated by supply-chain disruptions and higher costs for some raw materials resulting in part from Donald Trump’s misguided trade war with the nefarious, scheming Canadians (among others).”
    “…the question before policy-makers is whether the inflation we are seeing is sticky, meaning that higher prices are likely to stay with us for a long time rather than being a short-lived blip. Sticky inflation is a problem because it can stick around even when economic growth slows or stagnates, a condition that persisted in the 1970s and gave us the term “stagflation.” Nobody much enjoyed stagflation.”
    The UK equivalent of the NAFTA shock or the US trade war with China is Brexit. When furlough ends in September and the £20 supplementary covid Universal credit is withdrawn , higher consumer prices and rents can become a real problem for many. When the stamp duty holiday ends there should be a much needed stabilisation in the housing market. As the economy recovers, government borrowing should start to reduce but higher inflation means higher debt service costs on inflation indexed bonds, even without increasing interest rates. As the National Review article concludes “a responsible government needs to be prepared to manage this situation as it develops”
    Given the remit of the pay review board and the pay freeze for other public sector workers, the recommended 3% rise this year is probably around the right level topped up with merit awards as Nurses progress through the pay scale.

  • As a simple soul, could Michael 1 explain what his meanderings have to do with the 3% NHS pay award….. or do we just have to guess through a glass darkly ?

  • @David Raw

    As I noted at the top of my comment I was responding to @Peter Martin’s comment that we EU countries like Germany were doing badly on vaccinations – not true – and also that Brexit has cost us £110bn in lost exports .

    Sorry not to be clearer!

  • Steve Trevethan 23rd Jul '21 - 3:57pm

    Might we be facing two questions?
    1) What is the best size of pay increase for nurses and co?
    2) Is our current H. M. G. telling the truth about not being able to award a high value group an appropriate pay rise?
    The first is open to discussion.
    The answer to the second seems to be that H. M. G. is not telling the truth

  • Steve Trevethan 23rd Jul ’21 – 3:57pm……….The answer to the second seems to be that H. M. G. is not telling the truth””

    Under standing order No.43 I must ask you to immediately leave this site for the rest of the day..

  • Steve Trevethan 23rd Jul '21 - 6:17pm

    Most certainly!
    It is an honour to be associated in any way with M. P. Dawn Butler who so wisely spoke truth to power in the everyday language of voters!

  • Nonconformistradical 23rd Jul '21 - 6:38pm

    “t is an honour to be associated in any way with M. P. Dawn Butler who so wisely spoke truth to power in the everyday language of voters!”
    Perhaps she might have got away with using that Churchillian but far from everyday language expression “terminological inexactitude”

  • Peter Martin 23rd Jul '21 - 7:50pm

    @Michael 1

    The EU isn’t just Germany. Germany had enough clout to set up it’s own vaccine supply channels without having to rely on a cumbersome centralised EU procurement scheme.

    The big problem for the EU will be after the pandemic when the accounts are due to be settled. The sensible thing to do is to not count the beans and and then add another layer of unrepayable debt to previous layers of unrepayable debt.

    If the EU is to survive this has to stop and all previous debts written off. ‘Cos they won’t be repaid anyway!

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