Police Pay

14:30:00

John McDonnell (Hayes and Harlington) (Lab)
As hon. Members will see from the monitor, the House is debating the Criminal Justice and Immigration Bill and the withdrawal of trade union rights from the Prison Officers Association, and the debate in this Chamber is about police pay, so it is clearly a day for dealing with contentious political matters. I understand that there will be a Division in 15 minutes, before which I shall make a brief introduction.

I am aware that a number of Members on both sides of the House put their names forward for this debate—I was fortunate enough to have my name pulled out of the hat to start the debate—and that demonstrates the seriousness of the concerns over police pay on both sides of the House. I have taken an interest in police matters for a number of years, largely because my brother was a police officer for 30 years—from police cadet to chief superintendent. He retired a number of years ago. I therefore have an understanding of the job. However, I am also the secretary of the Justice trade unionist group, which brings together all unions whose members work in the justice system. Although the Police Federation is not a trade union and therefore not a formal member of the group, it regularly sends us observers to keep us informed on policing issues and, more recently, on the development of negotiations on the latest pay settlement.

The Justice trade unionist group has supported individual police officers and the Police Federation in expressing its deep concern over the unilateral imposition of the latest pay settlement by the Government. It also supported the federation’s concern over the deferment of the pay award from the regular date of 1 September to 1 December. This debate therefore takes place in a climate of considerable concern in the House and anger among serving police officers and their families about the Government’s intervention in this year’s pay settlement. That anger has been expressed in correspondence that has filled Members’ mail bags in recent weeks from long-serving police officers, their families, retired officers and trade union officials.

David Taylor (North-West Leicestershire) (Lab/Co-op)
My hon. Friend referred to the scale of concern. I am sure that my e-mail inbox is similar to others. Concerns over police pay have been the fifth most frequently expressed to me over the past 10 years—debt and climate change were among the top-four issues. The key point that comes out of the many dozens of e-mails that I have received is that this is about trust, although there is also talk about recruitment, retention and morale. What is the meaning, if there is still one, of binding arbitration if neither side is bound by it? Surely, we must tackle that before anything else. In a typically robust performance in Question Time, the Prime Minister rightly pointed out our strong record on inflation and how it is under control. If that is so, why are we picking a fight over £30 million?

John McDonnell
It is a matter of trust, which has been reflected in statements by the chair of the Police Federation, Jan Berry, to the Home Affairs Committee—I am grateful to the Chair of that Committee, my right hon. Friend the Member for Leicester, East (Keith Vaz), for being present for this debate—and she referred to the

“anger and discontent of police officers who have been betrayed by the Government”.

In another statement on this issue of trust, she said that

“by not honouring the deal, the Home Secretary has betrayed the trust of all UK police officers”.

That is how strongly the representatives of serving police officers feel. However, it is not only police officers who are concerned, but chief police officers. Ken Jones, who is president of the Association of Chief Police Officers, stated:

“I would not underestimate the tensions and feelings people have in terms of feeling let down. Cops”—

his word, not mine—

“are pretty exercised and angry over this”.

And not just serving police or chief police officers are concerned; employers are also concerned. I am interested in some of the statements made by the employers’ side of the joint negotiating body and representatives.

Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I concur totally with what the hon. Gentleman has been saying about the volume of e-mails that we have all received on this issue. From my perspective, it was the No. 1 issue on which I received e-mails and letters last year. However, not only police officers are concerned; many of my constituents, who have nothing to do with the police, are equally outraged about what they feel is a betrayal over police pay.

John McDonnell
The anger and concerns are widespread. However, it is rare, in a breakdown in industrial relations, that the employers’ side also makes representations on behalf of the principle of adherence to a deal. The chair of the Metropolitan Police Authority, Len Duvall, wrote to the Home Secretary in a letter that was unanimously agreed by the MPA—again, cross-party. The letter stated that

“the government has not acted fairly regarding arbitration for this annual pay award”—

the point that my hon. Friend made. It continued:

“This has led to an unacceptable relationship between employer and employee. The situation has led to needless antagonism.”

The employers’ side—let alone the employees’ side—feels that it is undermining relationships within the service. In my view, that is impacting upon morale. Our concern must be over the delivery of service.

The Home Affairs Committee unanimously—again, cross-party—agreed to write to the Home Secretary. That letter, written by my right hon. Friend, the Chair of the Committee, stated:

“We feel that it is incumbent on the government to honour the recommendations of the independent tribunal”—

this refers back to the point made by my hon. Friend the Member for North-West Leicestershire (David Taylor)—

“This is a question of trust. We are therefore unanimous in asking you to change your mind and accept the recommendations in full.”

It is extraordinary to have that broad range of virtually unanimous opinion in condemnation of a Government’s actions and a call for the Government and, in particular, the Home Secretary to act.

Bob Spink (Castle Point) (Con)
Before the hon. Gentleman moves on from the issue of morale, does he accept that policing in this country is conducted with, and through, public consent? The police do not walk around with guns and batons flying. That requires a tremendous amount of good will from the police, which in turn requires a high level of police morale. The Government are putting that and the whole basis of policing in this country at risk for a measly £30 million. Can that be right?

John McDonnell
All of us who have been involved in policing affairs over the past 30 years, particularly in the 1970s and ’80s, have accepted how remarkably policing in this country has been transformed as a result of that consent—whether it involved communities seeking reforms in the police, their attitudes and delivery of their service or the creative response from the police themselves. On that basis, we thought that we were moving forward—indeed, I believe that we have moved forward considerably—but this breakdown in trust threatens those gains. That is a running theme in all of the comments and representations received on this matter.

Let us talk about why that breakdown has occurred. Let us be specific: it is a breakdown in trust in the Government and in the Home Secretary in particular. There are straightforward answers. As my hon. Friend said, the Government have reneged on a system of settling police pay awards that has existed and worked effectively for almost 30 years. It came as a shock that this of all Governments have intervened to undermine the system, which has worked so effectively. On that basis, serving police officers, their representatives, and others now, have interpreted the Government’s move as an act of bad faith.

I was a member of the Greater London council in the early 1980s, but I remember how, in the late 1970s, when I was a trade union official, the system came about because of concerns that police pay had fallen behind the general development of pay in this country. Some Members will recall the recruitment and retention problems in particular forces and across the board. As a result, the Edmund-Davies inquiry was established under a Labour Government—the Callaghan Administration—to resolve the problem of police pay once and for all, taking the negotiation of police pay out of a process of disharmony to try to establish an objective system that would enable us to increase morale and improve recruitment and retention overall.

At that time, there was a recognition—cross-party recognition, I think—that an objective system was needed to set police pay. We developed an index; we derived an indexation process; 1 September became an annual settlement date; and each year we went through—yes—negotiations, but negotiations based upon the parameters of the index, and, even after arbitration, the assurance that the agreement would be honoured. It provided fair settlements and a generally accepted fair system.

David T.C. Davies (Monmouth) (Con)
I very much agree with the hon. Gentleman. Does he agree that, as a result of the issue, we could face the same recruitment and retention problem once more? Is he aware, as I am, being a serving part-time special constable, that large numbers of experienced and trained officers are seeking employment in Canada, Australia and other Commonwealth states, where they feel that they will be much better treated?

John McDonnell
I shall address that matter later, but there is an air of complacency that, just because there are a large number of applicants for individual vacancies currently, the situation will go on for ever. There is also complacency about the quality of recruitment being maintained for ever.

For me, and generally for the people involved in the police in this country, the Edmund-Davies process was acceptable, because it recognised that the police were unlike other workers: they did not have the right to strike, and therefore they did not have the same negotiating powers as others. The process was transparent, and it had an element of independence due to arbitration. On that basis, generally, it was—yes, I use the word again—trusted. We know what has happened this year. The process started as usual, and the Police Federation was considering an initial claim of 3.94 per cent.

14:43:00

Sitting suspended for a Division in the House.

14:58:00

On resuming—

John McDonnell
I was describing what has happened in this year’s negotiations. As I said, the process operated as usual. The federation and the staff side were looking for a settlement of 3.94 per cent., which was slightly inflated to take into account changes in the index. The employers’ side wanted a settlement of 2.325 per cent., so the matter was referred to conciliation, as is often the case. There was a failure to reach agreement, so the negotiations went to arbitration.

Arbitration recommended 2.5 per cent., payable from 1 September in the normal manner. Arbitration is not binding on the Home Secretary, but in the history of the process, since its foundation 30 years ago, no Home Secretary has refused to honour a recommended award. There lies the problem. The cause of anger is the Home Secretary’s unilateral intervention, refusing to pay the full award on 1 September and deferring the matter until 1 December. Many found that extraordinary and incomprehensible, and certainly many found it reprehensible.

Why did the Home Secretary make that intervention? It was not about saving money. We are assured that police authorities have already budgeted for the award, and we know from statements made by the employers’ side that that is exactly the case. On 18 December, the Home Affairs Committee took evidence on police pay from Mr. Steve Green, the chief constable of the Nottinghamshire police. He advised the Committee that he could have paid the full award without budgetary difficulty and that the money for it was contained in his budget. We have heard the same from the Metropolitan Police Authority and other police authorities around the country.

Mr. David Drew (Stroud) (Lab/Co-op)
I congratulate my hon. Friend on securing this important debate. What he has just said was exactly the case in respect of the Gloucestershire police authority. It had allowed for 2.9 per cent., so 2.5 per cent. was a quite acceptable and—dare I say?—conservative judgment in its implications. I do not understand the notion, in much of the correspondence that has come to MPs, about how important the £40 million saved will be to police authorities.

John McDonnell
It is interesting that the Association of Chief Police Officers said in its statement that it found the award fair, affordable and budgeted for. Therefore, this is not about saving money. Is it about diverting resources away from other areas? No, the award does not come at the cost of existing plans to recruit more officers, as some Ministers and others have alleged. Chief constables have denied that the resources saved will be used on further recruitment. It is not part of any manpower planning process and is not likely to be. Therefore, what is the main reason? The Prime Minister explained it to the Liaison Committee before Christmas:

“It is to bear down on inflation in our national economy so that we do not have the problems that we cannot react to global financial conditions by cutting interest rates at a time when inflation is rising.”

It is, he said,

“part of the national interest.”

However, there are problems with this argument, including the amount in question. We are talking about £30 million to £40 million. I fail to understand how that amount of money, which is relatively trivial in the overall Government budget, can have the dramatic effect of increasing inflationary pressure.

Keith Vaz (Leicester, East) (Lab)
I thank my hon. Friend for raising this very important subject and for relying on the evidence given by the Select Committee. He makes a point about saving money. Ministers have suggested that that money could be used to recruit x number of additional police officers. Does he not agree that that is virtual-reality stuff? We will not get additional police officers from that £34 million. It is money that has already been budgeted for that should be paid out.

John McDonnell
I am not aware of any police authority that will use that money for large-scale additional recruitment. I have been involved in police budgeting for nearly 25 years. I was the chief executive of the Association of London Authorities and the Association of London Government who negotiated the police settlement with the Metropolitan Police and central Government. From my experience and from police authority reports, it looks as though any savings will be transferred into balances. They may be used in future years, but most probably to cushion potential problems, such as declines in grants from the Government. Therefore, this is not about substituting police pay for police officers.

I have to say as an aside that, if the Prime Minister is concerned about inflationary pressures and he identifies £30 million to £40 million as having a major inflationary impact, I am amazed that he made no comment over the Christmas period about City bonuses, which have ranged from £6 billion to £13 billion annually over the past few years. They are having an inflationary impact on our economy, particularly in London and the south-east.

Mr. Jim Devine (Livingston) (Lab)
I congratulate my hon. Friend on this important debate. I am sure that he shares my view that it is obscene for individuals to receive bonuses of £50 million and £60 million each, as was reported in the press just before Christmas. That distorts not just house prices in the south-east, but society as well.

John McDonnell
It puts into context the concerns that have been raised by Government about the inflationary pressures of this relatively trivial amount, and it demonstrates a misjudgment by the Prime Minister about the nature of the inflationary pressures for the future.

Daniel Kawczynski
We all realise that the inflationary pressures are a red herring. My understanding is that, in Scotland, the police have been given their full pay award. I presume that the Scottish Parliament is equally concerned about inflationary pressures.

John McDonnell
Let me not incite the Scottish debate at this stage; others may want to do so at a later stage.

Another argument is that paying the award on 1 September would set a precedent and open the floodgates for other public sector claims. To be frank, the precedent was set anyway. Some hon. Members will remember that the decision was made last June or July to give the Army its full pay settlement and not stage or defer it in this way. The Prime Minister, then the Chancellor, sought to defer the payment to the Army, but the then Prime Minister intervened and resisted attempts by the Treasury to defer that payment. Therefore, there is a precedent. Will it open the floodgates? Other public servants have either settled or have had a pay award imposed upon them. This pay round has neared its end and is unlikely to incite others to make extortionate pay demands, as some Ministers have suggested.

As regards the contribution to inflation, I do not think that the evidence bears out the argument that public sector pay incites inflationary pressures. A report by an independent body was published last year for the Council of Civil Service Unions. It drew attention to the fact that wages follow inflation and not the other way round. It cast doubt on whether public pay has any significant impact on inflation. No link was identified between public sector pay demands and inflation in the wider economy. In fact, it drew upon evidence from the Bank of England, which said that it would be concerned about inflationary pressure only if earnings across the economy exceeded 4 per cent.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP)
Given the correct and cogent argument that the hon. Gentleman is making, does he feel that the Scottish Government have done the right thing in awarding the police their full pay award, as was expected throughout the UK?

John McDonnell
I do not want to incite a Scottish debate on the matter. This is not a comment on Scotland, but when arbitration and a settled system of negotiation has worked well for nearly 30 years, I would expect anyone who wants future industrial relations in this country to be harmonious to abide by that process and therefore to honour agreements and arbitration.

I can quote other sources on inflationary pressures. The Senior Salaries Review Body drew upon the evidence provided by the Bank of England that said that inflationary pressures from the public sector would need to be taken into account only if they went over 4 per cent. The Government’s own Office for National Statistics demonstrated that inflationary pressures at the moment do not come from pay but from increasing housing costs, petrol and oil price rises and the increasing cost of household goods, energy and food. It does not cite increases in public pay itself. It is therefore surprising that the Prime Minister and the Chancellor have tried to argue that inflationary pressure is coming from the relatively trivial sum of £30 million, saved from a deferred police pay settlement.

With a background in economics, I have to say that there is another argument. When we are looking at a downturn, we should not be looking at depressing demand. When we are looking at a prospect of increased unemployment and an unwillingness to spend because of high levels of personal debt and insolvencies, what is needed is steady, consistent and reasonable wage settlements that assist the economy by maintaining consistent demand within the economy.

The problem of the coming period is not the inflationary but the deflationary pressures that might arise. Several of us feel that the Prime Minister, the Chancellor of the Exchequer and others might be fighting the battles of yesteryear, rather than those of this year, which is one of deflation, not inflation.

Why have the Government acted in this way? What are the real reasons for their actions? What evidence and sources can we draw on? One source is a leaked memo from an adviser to the Home Secretary entitled “Police Pay—The End Game”, which was cited in the press some time ago. It was written by Mr. Stephen Kershaw, the director of the police reform and resources directorate, on 29 June. He wrote:

“Asking the Treasury to let us do so”—

that is, pay the full award—

“risks damaging our bid for significant extra money for counter-terrorism. There is no real business case for a generous pay rise for the police this year.”

On the evidence of that memo, serving police officers have been caught up in negotiations between the Home Secretary and the Treasury about the Home Office budget. In such instances, we would normally expect the Prime Minister to intervene as an arbiter to ensure fair play, consistency in Government policy and the full payment of the arbitration award.

The other evidence on which we can draw is the attitude of the Government themselves—we can draw on briefings and statements from Ministers and the parliamentary Labour party office to find out what has happened to their attitude to police pay. The argument in those briefings and statements is that the police are paid well enough and have, in fact, done too well in recent years, and reference is made to their having received wage increases of 39 per cent. over the past 10 years. I have looked in detail at those figures, however, and they are misleading. They refer to increases in basic pay, not average increases. Annual surveys of housing and employment show that serving police officers and sergeants have suffered a detriment in recent years of anything up to 16 per cent.

Most of us can explain anecdotally what has happened to the ability of serving police officers in our constituencies to achieve a decent standard of living. I am of course proud of what the Government have done to improve wages, but serving police officers in my constituency will not get into the housing market, because the average price of a home is anything between six and 10 times their salaries. Many of them are therefore unable to live in the very communities that they seek to serve.

The Government have also argued that recruitment is not a problem, so why should they pay the police the full award? They argue that there are six applicants for every job, but that does not recognise our long-term recruitment needs, the need for good-quality, well-motivated recruits or the fact that we need to maintain morale to retain decent staff.

Mr. John Leech (Manchester, Withington) (LD)
I congratulate the hon. Gentleman on securing the debate. As he rightly said, the issue is not recruitment, but retention. A lot of good police officers who have served for many years have got to the end of their tether and now want to find other forms of employment, because they no longer feel valued. If we lose those experienced officers, we will have to recruit and train new officers, and a big cost is associated with that. Retention is a big issue in all police forces.

John McDonnell
That is a valid point, and the Government must take on board the fact that retention is largely based on people’s morale, how they feel about the job and how they are treated by their employer. Anything that undermines that morale or breaks the relationship of trust between employee and employer undermines our ability to retain staff in the jobs that we need them to do.

The real reason for what has happened over the past six months is that serving police officers have been caught up in what we learned this week is the Prime Minister’s strategy of imposing a long-term pay policy on the public sector. He decided to send an early message to the police, and thereby to the Prison Officers Association, the Public and Commercial Services Union and all the other trade unions in the public sector, that a three-year pay cycle and pay policy would be imposed on them. There is a calculated strategy of imposing a pay policy by taking on the police first. That fits in with the political strategy.

It has been calculated that the only way to cope with the economic downturn that we now face is to reduce public expenditure and public sector pay in the hope that we can get the economic cycle back in sync with the electoral cycle. The strategy is this: control wages in 2008, attempt to stabilise the economy in 2009 and hope that there are signs of growth in time for an election in 2010. That is a flawed strategy in a period when we have deflation, rather than inflation; it will alienate people at the beginning of the cycle, and we will never restore their morale and confidence. Police officers rightly feel that they have become political footballs in a much larger long-term political strategy. It is no coincidence that this dispute has occurred at the same time as the three-year wage settlement strategy has been announced.

There is a cost to the Government’s strategy. It will alienate a body of public servants who have served the Government well by reducing crime, delivering public safety and being creative and flexible in responding to the policies that the Government have introduced. The Government’s strategy has angered officers who regularly put themselves in harm’s way to protect our community and it is undermining morale, destroying trust and creating anger where we should have a sympathetic response.

There has been much talk over the past year about the military covenant between the Government and those in the military who serve us, but there is another covenant: the policing covenant. Police officers accept that they will have to put themselves in danger on occasion. They present themselves on duty whenever they are ordered to, and there are restrictions on their private lives and on their families. They are prevented by law from going on strike and joining a trade union, and they are accountable for their actions both on duty and off. In return, the covenant says that the Government should treat those officers fairly when it comes to their pay and conditions and should respect their views. Successive Governments have abided by that covenant over the past 30 years, and it has been widely supported in the community. As a result of the Government’s intervention in this pay round, however, the covenant has been broken and put at risk. If we are not careful, the whole system could sustain long-term damage.

I sought this debate to urge the Government to think again. It is not too late to reopen the dialogue with the representatives of the Police Federation and others, and there may be an alternative approach. Let me make this offer for the Justice trade unionist group: we are willing to offer our good offices and our services to bring all sides together to discuss the opportunities for compromise, so that we can overcome the problem and seek a way forward. I appeal to the Government to take up that offer in the best interests of police officers, the police service and their own standing. I ask them not to put at risk the good will of the police service. Even at this late stage, they should show some understanding, concern and creativity and work with us—if necessary, on a cross-party basis—to resolve the problem that we face.

Several hon. Members
rose—

Mr. Edward O'Hara (in the Chair)
Order. Colleagues who catch my eye might wish to note that the winding-up speeches must now start at 3.45 pm.

15:19:00

Sir George Young (North-West Hampshire) (Con)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on his good fortune in securing this debate and on the moderate way in which he made his case. Before Christmas, he and I, along with half a dozen colleagues, met the Police Federation, and we agreed to request this debate. I am therefore delighted that his name came out of the hat. When the Minister responds, I hope that he will not use the abundance-of-recruits argument as a defence. If that argument were applied to ministerial salaries, he might find his standard of living somewhat depressed.

In Hampshire, there is real anger with the Government. The chairman of the Hampshire branch of the Police Federation wrote to me on 17 December:

“I cannot explain to you the anger and sense of betrayal that the 3700 officers I represent are expressing at the moment as a result of the decision of Jacqui Smith. The manner in which the Home Secretary has managed this whole process is being seen as underhand and disingenuous…Never before has a Home Secretary reneged on an agreed pay award.”

He went on to refer to

“the principle of honouring the findings of the independent tribunal which the staff associations agreed to be bound by.”

As a former member of the police parliamentary scheme, I have seen at first hand what officers do, and I believe that they are entitled to every penny of the proposed increase. When Parliament removes from employees a right that is available to nearly everyone else, it must ensure that those employees are fairly dealt with by their employer, particularly if the employer is the Government, who are in turn accountable to the House of Commons.

Let us examine briefly the arguments deployed against paying the settlement in full. The Government Departments on the official side said that they did not support the proposal on the grounds that

“the offer will not produce an outcome consistent with the UK government objectives including achievement of the CPI inflation target of 2 per cent. and affordable and sustainable pay awards.”

However, there are exceptions to the 1.9 to 2 per cent. ruling. Hospital doctors will get a flat £1,000, worth 3 per cent. for the newly recruited. Permanent secretaries are going to get a flat 2 per cent. next month. Larger rises of 9.2 per cent., as the hon. Member for Hayes and Harlington mentioned, were awarded to about 13,000 of Britain’s lowest paid squaddies, in a move applauded by military chiefs, who had campaigned for that. A further 6,000 members of the armed forces will benefit from rises of more than 6 per cent. All other ranks and officers will get a 3.3 per cent. increase, with the exception of the most senior. I mention that not to begrudge those groups their increases, but simply to make the point that 1.9 per cent. is not a hard and fast rule, and there have been many exceptions.

The other leg of the argument is the consumer prices index inflation target. The impact on next year’s council tax bills will be exactly the same, whether the payment is staged or not. It is necessary to meet the full increase, so there will be no saving in the impact on the retail prices index. Nor does staging affect the headline rate, which remains the same; it just becomes the headline a few months later. Nor will this year’s council tax bill be reduced retrospectively by any saving. The money will simply be spent on something else. As the hon. Member for Hayes and Harlington said, most authorities have pencilled in the increase, and have the resources to pay it, so the argument that somehow it would push up costs does not hold water. If it is true that there was a trade-off in the public expenditure negotiations along the lines of “If you, the Home Office, show restraint on pay, we will give you extra money and another part of your bid,” that blows out of the water any deflationary argument that the Government might deploy.

Mr. MacNeil
We are essentially talking about inflationary pressure. Does the right hon. Gentleman agree that the unexpected extra £3 billion that the Chancellor is pulling in from fuel duty is a greater inflationary pressure on society than the £30 million he might give to police in England and Wales?

Sir George Young
The hon. Gentleman makes a good point: the rise in the fuel price has given the Chancellor money for which he did not budget, so to that extent resources are available that he can deploy in that context, with little impact on his original forecast. I think that the Government have the worst of both worlds. They have betrayed an important group of employees for zero impact on inflation.

My final point is that the Government have made a political mistake. Previous Home Secretaries—particularly the somewhat larger ones—would have had a confrontation with the Chancellor of the Exchequer, and would not have agreed to the demand to stage. That would then have escalated into the Cabinet. At that point I suspect that Tony Blair and the Cabinet would have sided with the Home Secretary; the increase would have gone through and the Government would have avoided the pickle that they are in. We are paying the price for the Prime Minister still believing that he is Chancellor, and the absence of substantial counterweights in the Cabinet. My view is that if the present Home Secretary had dug in her heels and threatened to resign over this she would have won. She would have been unsackable in the first few weeks after her appointment had she made an issue out of it. The Government have made a political and economic mistake that I believe they will live to regret.

15:24:00

Mr. David Drew (Stroud) (Lab/Co-op)
I have three observations to make. I have rehearsed with my hon. Friend the Member for Hayes and Harlington (John McDonnell), whom I again congratulate, the issue of police authorities. One would have thought that they at least would have been among the happier stakeholders in this apparently disastrous decision, yet they must now deal with very unhappy—not to use stronger terms—police forces.

My first substantive point is that, from what was happening last year, when I had the opportunity to chair a meeting with the Police Federation, like my hon. Friend this year—it is good to hear that other hon. Members were able to get to the meeting—and given that it appeared then that confrontation was going to arise, I do not understand how this was not a disaster waiting to happen. To be fair to the fed, which is fairly well known as a pretty tough negotiator, it made it abundantly clear to those of us who attended the meeting a year ago that it was prepared to consider new structures on pay. Pensions and conditions were a different matter, but pay was on the agenda. I know that the Government set up the Booth inquiry to consider how to start the process, but, as we have learned from today’s debate in the House, kicking away the legs of the stool on which we are basing the edifice of how the negotiations are going to proceed will not lead, as my hon. Friend said, to an overwhelming feeling of trust. I am worried that we are not in a good environment in which to start to get things right for next year—because the negotiations for next year’s pay settlement are about to start, and my right hon. Friend the Minister may wish to say something about that. I worry that we have caused immense damage.

My second point is that if the e-mails, letters, phone calls and individual meetings that I have had are anything to go by, people are very angry. Hon. Members who have worked in the public sector sometimes underestimate the reaction of the public sector; we expect it to be able to take such things. The reaction has been such that it will take at least a generation of police officers—notwithstanding what may come out of future arrangements—to rebuild trust. It is easy to make party political points, and I will make points about the Government, but this is not just about party politics; it is about people’s general distress about the political process.

Mr. Neil Gerrard (Walthamstow) (Lab)
I apologise for not being present at the debate from its beginning, but I was in the main Chamber, where an amendment that I had tabled was to be debated. My hon. Friend mentioned his e-mails and letters, and I think that many other hon. Members have had the same experience. Can he think of another occasion when he has had so many communications from serving police officers? I cannot.

Mr. Drew
Not only can I not think of a comparable occasion involving police officers; I cannot even think of a parallel with teachers, health workers or others in the public sector, such as probation officers, to mention a category relevant to criminal justice, when there has been such a depth of anger in the reaction to what is seen as a great injustice.

I can comment on recruitment, because—I declare an interest in this respect—for the past two years and more my son has been trying, in two different police areas, to enter the police force. It is not a substantive matter for this debate, but it is unjust to use the idea that people want to join the police, so the pay can be deflated. I could spend a long time explaining some other issues in relation to that process, but it is wrong to use that argument to justify keeping people’s pay down. Given the age profile of the police force at the moment, we need lots of new recruits, and it will not do us any good to try to depress pay, let alone to make it apparently less worth while entering such an important job, which we would be silly not to value greatly.

My final point is about something that my chief constable said to me last week; I hope that he does not mind me talking about it. He said that the way in which the police negotiating board has operated recently is very disappointing. Arbitration might be the appropriate backstop, but if it is entered into as it was in this situation, and as it has been before, as being the only way forward, and then the Government decide not to meet the arbitration award in full, there is much feeling that the whole area of pay negotiation is entirely wrong. Given what I have been told about the process and the police negotiation body, about the lack of preparation and unwillingness to listen to individual police authorities, I worry that this was a disaster waiting to happen. It is not appropriate for the Government, as a party to arbitration, to fail to fulfil the arbitration process. There are a number of issues to consider, and I hope that my right hon. Friend the Minister will give us some sense that even if we got it wrong this year, things will be improved in the future. Otherwise, there will be even more hurt, and that is unacceptable.

15:31:00

Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I, too, congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing this important debate. I shall keep my comments brief, because I know that hon. Friends and other colleagues wish to speak.

May I begin by praising Shrewsbury police for their tremendous work? I have always found them to be extremely dedicated and hard-working. Shropshire is a rural community and, as many hon. Members will know, it is not easy to police rural areas, because there is a large area to cover. Shropshire police are extremely courageous and professional. One of the worst things to happen to my community in the two-and-a-half years in which I have been an MP took place last year. A serving police officer was shot dead in Shrewsbury, and that had a profound impact on the whole town: I have never seen our community come together as strongly as it did then. It has not been mentioned that policemen and women put their lives at risk on a daily basis to protect us. That is why so many of us are angry about, and feel insulted by, the below-inflation pay award. West Mercia police authority is one of the worst funded authorities in the whole of England, but it achieves one of the best results, which shows just how dedicated and hard-working our officers are.

Like the hon. Member for Stroud (Mr. Drew), I have received an inordinate number of e-mails on this issue. Two Sundays ago—I was at home looking after my baby daughter, and I happened to be working that afternoon—I received 89 e-mails on it. I rarely receive 89 e-mails on any single issue, even over a long period of time, but I received that number in just one day. So far, I have received more than 230 e-mails and letters on the matter. I reiterate that it is not only the police who feel strongly about this. Many councillors and people in our community have approached me about it.

The Scottish police have received their full pay award. I mentioned that earlier, but the hon. Member for Hayes and Harlington clearly did not want to be dragged into the West Lothian question. As someone who believes passionately and fundamentally in the Union—this is where I disagree with the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil)—I must put on the record how appalled and outraged I am about the matter. The fact that different police officers on the same grade in the same country can be given different pay is appalling.

Mr. Devine
The hon. Gentleman should realise that in the run-up to last year’s election, the Scottish National party stated that it would recruit 1,000 extra police, but it has now reneged on that pledge.

Daniel Kawczynski
The hon. Gentleman knows that the debate is about police pay, not police numbers. He is throwing me a red herring.

We all know about the huge increases that everyone has to face with petrol prices, oil for heating homes and council tax going up: everything is going up above 2 per cent. A below-inflation pay rise will simply make police officers’ lives more difficult. A lot of people come to see me in my surgery about personal debt, which is a serious and growing problem. It is increasingly difficult for police officers with young families to make ends meet, and the pay award does nothing to help them. I  conclude by putting this on the record: I shall not vote for any MPs’ pay award above 1.9 per cent., because I cannot look any of my constituents who are police officers in the eye and say, “You will stick to 1.9 per cent., but I should have more than that.” That would be totally inappropriate.

15:36:00

Mr. John Leech (Manchester, Withington) (LD)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing the debate, not least because I applied for a debate on the same subject. Having been unsuccessful in securing it, I am pleased to have the opportunity to discuss the issue.

I pay tribute to, and thank, Alan Cooper, the chief superintendent from south Manchester, who has just moved to a new job. He has shown real commitment to south Manchester and will be sorely missed in our community. However, I wonder whether someone of his calibre would have chosen not to remain in the police force if he had been faced with last year’s debacle some years ago. Would he have gone down another path of employment if he had felt, earlier in his career, that he was not valued? How many more Alan Coopers will we lose in the coming months and years as a result of the breakdown in morale among the police?

Everyone knows what a tough job the police face every day. They receive little credit when things go right and are roundly criticised when things go wrong. They are effectively never off duty and face restrictions on where they can live. In Greater Manchester, we have experienced cuts in police officer numbers, even though Labour Governments have increased the number of offences since 1997 by more than 3,000, thus giving the police more work to do. For the job that they are asked to do, they are not well paid; indeed, they are poorly paid.

Before Christmas, I was invited to a meeting of the Greater Manchester branch of the Police Federation at which members were invited to question a panel that included the chief constable, Michael Todd, and the chair of the police authority, Councillor Paul Murphy. Given concern at the time about the impending pay review by the independent arbitration panel, I expected police pay to be the No. 1 issue, but it was not—it was the last issue on people’s minds. Serving police officers were more concerned about policing the streets of Greater Manchester than about their salaries. The big issues raised that evening were the future of the dog-handling service in Greater Manchester and concerns about the Government’s drive to replace police officers with police community support officers.

The police are committed and dedicated to their jobs. They have agreed to be bound by independent arbitration, and the Home Secretary’s decision not to honour the agreement is a kick in the teeth for every serving police officer. Will the Minister explain what the point of independent arbitration is if the Home Secretary does not abide by its decision? Will he also give us his opinion on the question of why the Government believe that the police are not worth their pay rise? When I met union representatives from the Greater Manchester branch of the Police Federation, with my Liberal Democrat colleagues from Greater Manchester, they made clear the impact of the situation on the morale of serving police officers, and said that more and more officers were considering leaving the service. They pointed out that Greater Manchester police could afford to pay the full increase proposed by the independent arbitration panel, as it had been budgeted for in the GMP budget. They also highlighted the fact that civilian staff and community support officers will receive a bigger percentage increase than police officers as a result of the Home Secretary’s actions. Perhaps the Minister can tell us if that is fair. The Labour Government should be ashamed of the way in which they are treating our police, who deserve better.

15:40:00

Nia Griffith (Llanelli) (Lab)
My hon. Friend the Member for Hayes and Harlington (John McDonnell) made an excellent and comprehensive speech. I agree with my hon. Friend the Member for Stroud (Mr. Drew) that it is not just this year that police pay is an issue. There were considerable concerns last year, when a decision was made at the last minute. The police were concerned about how things were handled then. This year, of course, the issue is the failure to honour the recommendation of the police arbitration tribunal.

We all fully understand the need for restraint in pay settlements if we are to keep inflation down. We also understand that the police are in a special position of responsibility. The very nature of their role in maintaining law and order requires absolute loyalty and, therefore, they are not in a position to resort to strike action. For that reason, it is essential that police pay is determined by an independent body that can make appropriate comparisons and a recommendation that is fair and objective. We would all expect the outcome of the police arbitration tribunal to be binding. It may not be legally so, but there is a long tradition of accepting such recommendations. That is why the police are angry. It is not just the police who are angry. Many members of the public have expressed considerable concern that the Home Secretary has refused to honour obligations by not accepting the recommendation.

I have the good fortune to enjoy an excellent relationship with my local police force, which tries hard to make neighbourhood policing a reality. They have supported me in surgeries with local residents, and they willingly tackle the problems that residents raise. They play a proactive role in deprived communities by tackling the causes of crime. In addition, they have duties dealing with all manner of difficult and dangerous situations. The Home Secretary’s decision will undermine the good will on which much of the implementation of such strategies depends. I draw the Minister’s attention to the olive branch proffered by Jan Berry, who said that it is not too late to make amends. I urge the Minister and the Home Secretary to reconsider their decision on police pay. I urge them to have the courage to acknowledge the fact that their first decision was ill advised, and to give full consideration to accepting the recommendation of the police arbitration tribunal.

15:42:00

Tony Baldry (Banbury) (Con)
As the secretary of the all-party police group, I am glad to be able to take part in this debate, which is not just about police pay but about pay for various key groups in the public sector: police officers, teachers, nurses and prison officers. The Government want to give the impression that this is all about inflation, and that there are echoes of Jim Callaghan. I was a parliamentary candidate back in the days of the Callaghan Government and the Lib-Lab pact, when inflation was an eye-watering 21 per cent. Today, it is 2.1 per cent., so the Government action in capping pay for public workers has nothing to do with inflation but everything to do with their urgent need to balance the books. If, as anticipated, the economy continues to slow down, the underlying state of the Government’s bank balance and finances will become even more obvious.

My hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chancellor, put it very clearly yesterday when responding to the Prime Minister’s suggestion of three-year pay deals. He stated:

“The real reason for today’s pay announcement is that, thanks to Gordon Brown’s economic incompetence, Britain’s borrowing boom now has the largest budget deficit in Europe. The government has run out of money—it is as simple as that.”

The people who will pay most for the Government’s financial incompetence are key public sector workers. The Chancellor’s proposed three-year pay deals will affect only the 5.5 million workers on the public payroll. There might be some justification for that if public sector pay were racing ahead of private sector salaries, but that is no longer the case. The most recent figures on the record show that private pay is rising faster than public pay, and the Government have broken various implied contracts with public sector workers.

Mr. Paul Goodman (Wycombe) (Con)
On pay, does my hon. Friend agree that the Thames valley force has a particular retention problem, and that the Government would be well advised to review the rate at which the south-east allowance is paid?

Tony Baldry
I entirely agree with my hon. Friend. It strikes me that recruitment and retention will not be helped by the Government’s action.

There is a covenant: in return for employees not taking industrial action, or being prevented in some instances by statute from take industrial action, the Government have put in place various independent pay review bodies. Independence must surely mean just that—independence—and it must be inherent in any such process that both sides accept the outcome and recommendations of any independent pay review body or arbitration service. It seems that the Government have decided unilaterally to accept the recommendations of independent pay review bodies only if they do not breach whatever arbitrary, overall target the Government have decided to set for public sector pay. That is simply a crude cap on public sector pay.

Moreover, I am afraid that the Government speak with a forked tongue. Yesterday, the Home Secretary promised that any three-year deal with the police would be implemented in full. If that is the case, why can she not honour the proposed independent review pay award in full? In effect, staggering the pay rise for police officers reduced a pay award of 2.5 per cent. to 1.9 per cent. It is little surprise that the Police Federation called on the Home Secretary to resign. The total cost of honouring the police pay round in full is some £30 million. I cannot help but note that the National Audit Office found that the Home Office wasted £33 million in my constituency alone on an aborted proposal for an accommodation centre for asylum seekers at Bicester. Not a sod was turned nor a brick laid, yet somehow the Home Office ended up spending £33 million. Police officers are being short-changed because of the incompetence of Home Office Ministers. Why on earth should they believe the Home Secretary when she says that the Government would implement in full any three-year settlement when the Government have chosen not to honour an existing public sector pay claim?

It is not just police officers. Nurses’ pay increases were staggered to make their pay increase worth 1.9 per cent., and an independent recommendation to award prison officers a 2.5 per cent. pay rise in April was rejected by the Government and replaced with an offer of 1.9 per cent. That is a breach of compact and covenant by the Government. It is bad personnel management and bad human relations, and it is miserably unfair that key public sector workers should be treated in that way.

15:47:00

Tom Brake (Carshalton and Wallington) (LD)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on expressing his concerns—in fact, our concerns—so clearly. I echo the praise that has been expressed by several Members and, I am sure, thought by all Members for the essential role that police officers play in keeping us safe. I feel sorry for the Minister, who, clearly, is extremely isolated. No one has spoken in favour of the proposal. There will simply be the Minister responding, and he will have to speak on behalf of the Government.

Mr. MacNeil
Does the hon. Gentleman agree that the Minister has perhaps been unfairly treated in that the wrong Department is represented here? Perhaps the Treasury should be answering our questions.

Tom Brake
I am sure that the Minister will do a good job of defending himself and, indeed, the Treasury.

All Members have been bombarded with comments by police officers, their families and other members of the public who are concerned about the issue. I shall quote briefly from two e-mails that I received:

“I have been a police officer for over 10 years now but feel my time of policing the streets is coming to an end. I am not on my own by a long way in this… Morale is at a real all time low in the service… This dispute is not about the £200 we lose and in fact take a pay cut but the way this government is eroding everything it touches.”

Another e-mail from a constituent in Wallington states:

“Has she”—

the Home Secretary—

“forgotten the unique status of police officers who have forfeited the right to strike in order to serve the public? In the absence of this right, we don’t even have arbitration that is binding on the Home Secretary… I wish to convey to you the sense of outrage that this action has created throughout the police service.”

I am sure that other Members can quote similarly concerned and alarmed e-mails and letters from their constituents.

A final comment that I should like to put on the record concerns at least 10 Ministers whom I understand are also apparently deeply unhappy with the decision. I do not know whether the right hon. Member for Leicester, East (Keith Vaz), who chairs the Home Affairs Committee, will want to reveal the names of the Ministers who have expressed concern about the settlement, but it is clear that, even within the Government, there are people who are concerned about the decision.

Liberal Democrats were astounded when the Home Secretary decided not to honour the independent recommendations of the police arbitration tribunal, and it was disappointing to learn about the decision through a leaked document. We believe that the pay award should be backdated, so that it represents the agreed 2.5 per cent., not the 1.9 per cent. that the Government intend to pay. We are happy to put that spending pledge on the record. Often, the Government deploy lists of alleged spending pledges that we have not made, but we are happy to pledge that £30 million to £40 million and to put that on record.

Keith Vaz
Will the Minister give way?

Tom Brake
I am not the Minister yet, but I shall give way.

Keith Vaz
I am sorry I called the hon. Gentleman “Minister”, but I am sure that one day he will be. He is not simply making a spending pledge, but a spending pledge that is already in a budget.

Tom Brake
I thank the right hon. Gentleman for pointing out that I do not even have to make the spending pledge, because the money is already there—I withdraw the pledge.

The fact that the Police Federation is considering balloting its members on the right to strike demonstrates how inept the Home Secretary’s handling of the situation has been. Again, people will have seen the press reports. There is growing support in the ranks of the police to have the ability to take industrial action and concern about what they describe as disgraceful Government tactics. We can understand their anger, because the Home Secretary says that she is happy to accept the 2.5 per cent. award, but goes on to refuse to backdate it, so it is no surprise that they are so concerned.

In her statement of 6 December 2006, the Home Secretary set out her reasons for dismissing the tribunal’s recommendations, and it is worth asking the Minister some questions about that. Specifically, in her statement, the Home Secretary said:

“The index suggested by the PAT for the 2007 award could inform discussion and negotiation of the police officer pay award for next year.”

Will the Minister explain exactly how the tribunal will inform discussion, when that will happen and what of the outcome? In the same statement, the Government said that they

“will consult, in the near future, on proposals for implementing the necessary changes to the police pay machinery.”—[Official Report, 6 December 2007; Vol. 468, c. 95-96WS.]

Will the Minister set out in more detail what that might entail?

It is our view that the Home Secretary should honour the panel’s decision and, indeed, issue an apology for the way in which the matter has been dealt with. The Prime Minister’s involvement in the affair has been unhelpful. He stated that it was

“in the national interest”

that the payment is not made. However, it is equally clear that he has sought to distance himself from the matter by saying that, at the end of the day, the decision was taken by the Home Secretary. He went on to say:

“People should look at the bigger picture…and the future of the British economy.”

Perhaps he might reflect on the fact that, occasionally, we also need to look at the smaller picture and the detail of Government proposals.

As hon. Members will be aware, early-day motions on the matter have been signed. I am pleased to say that a majority of my colleagues signed early-day motions 494 and 512, and the Minister cannot have failed to notice that a large number of Labour Members signed them. They describe the settlement as “unacceptable” and say that it will make police recruitment more difficult and that refusing to agree to the settlement is petty and needless. The Minister needs to respond to that.

The absence of any support for the proposals indicates that he has a challenge on his hands. It is clear that the trust between the Government and police officers has been broken because of the Government’s refusal to honour the arbitrated pay settlement. The Home Office can begin to repair the damage immediately—various offers of mediation have been made—or it could do so at the stroke of the pen by signing up to the deal. Police officers could then concentrate on what they do best: making our streets a safer place. Will the Minister tell us whether the Home Office is big enough to acknowledge that it has made a mistake and to go against the man with the clunking fist, so that it can allow the pay deal to go through?

15:54:00

Mr. David Ruffley (Bury St. Edmunds) (Con)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing the debate, which is of such vital interest to the police service and, indeed, to the wider public.

Let us remind ourselves why the Home Office is in such a mess. The Government claim that their plans to extend three-year pay deals are an attempt to tackle inflation, but the fact is that the Government are running out of money. They have been forced to increase their borrowing to cover their costs. In March 2006, they said that they would borrow £30 billion in 2007-08. In March 2007, that estimate was increased to £35 billion, and in October, it increased again to £38 billion. The Institute for Fiscal Studies estimates that the Government will borrow £42 billion this year.

I am not sure whether the Government have a credible pay policy that we can believe in. We hear of three-year deals, but hon. Members will have heard that before from the Prime Minister when he was Chancellor of the Exchequer. In September 2000, he spoke to the TUC about the need for long-term pay agreements and multi-year pay deals, which the Treasury repeated in December 2000. In June 2006, he called for a three-year pay freeze when he addressed the CBI, but none of that came to pass, so I do not know what is the evidence for believing that he will deliver such measures in three year’s time.

The biggest sufferers and victims of the incompetent handling of the pay negotiations have been our policemen and women. They have suffered especially because of how the arbitration was handled: it was cack-handed, cynical and verged on the dishonest. The police feel that their noses have been rubbed in it, and we agree. The situation has been made more offensive in particular because Home Office Ministers have made no acknowledgement whatever of the special nature of police officers’ service to the public. Not only do they have a no-strike agreement and must submit themselves to restrictions in their personal lives when off duty, but they show great bravery and courage. As lay people, most of us would not have the guts to confront violent crime, drug crime and so on. They deliver amazing reassurance to the public day in, day out.

The sense of outrage is focused particularly on the fact that the police side said up front that they would abide by the police arbitration panel’s decision, whatever it might be. It is a shock to many of us that the Government did not honour their side in that implied agreement. The Home Secretary has broken trust, and it is virtually impossible to imagine her restoring it. Unfortunately, she was the Chancellor’s poodle when she should have been a strong defender of the police and standing up for them.

We have heard about the Kershaw minute of 29 June—an exercise in cynicism that is staggering even by Westminster standards. It was topped by the Home Secretary’s letter on 30 November to the Chancellor. This is almost beyond belief. She stated:

“We will have the moral high ground in moving away from the former…index”.

It gets worse:

“The Tribunal’s findings provide a transitional public sector-facing index, which looks likely to generate decreasing settlements.”

The arrangements for awarding police pay were good post-1979, in recognition of the particular work that officers do and the fact that they cannot take industrial action. If the official Opposition were running the Home Office, we would not have got into such a position. A Conservative Government would have treated the police fairly and honourably and would have given them the respect that they so clearly deserve. In 2006, for the first time, the Government did not honour those arrangements.

It is worth noting that the period since 1979, as my hon. Friends will agree, covers the 18 years of the last Conservative Government, during which they honoured the police pay agreement every single year. It would also be fair to say—I hope that the Minister takes this on board—that some of the years under the Conservative Administration were years of very tough financial restraint, but that did not stop the Conservative Government making police pay a high priority.

It is a matter of the deepest regret, certainly among Conservative Members and the public beyond, that the same priorities that we saw to, abided by and adhered to in our 18 years of government do not appear to be governing the priorities of the current Administration. We say, therefore, that the time has come for all politicians of good will to look closely and urgently at the need for new arrangements to make arbitration binding for those public servants who abide by no-strike agreements.

16:00:00

The Minister for Security, Counter-Terrorism, Crime and Policing (Mr. Tony McNulty)
This has been a very informed debate. I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on initiating it and on the measured tone of his remarks overall. I want to discuss principally his speech in some detail and then come, as and when I can, to the interesting points made by other hon. Members.

It would be remiss of me if I did not start, whether it is appreciated or otherwise—the hon. Member for Bury St. Edmunds (Mr. Ruffley) is entirely wrong on this—by making it clear that we understand as a Government, and I certainly do, having been the Minister responsible for the police for nearly two years, the very special job that they do in defending our communities up and down the country day in, day out and week in, week out. It is quite low and remiss of the hon. Gentleman to suggest that Home Office Ministers have not made that abundantly clear over time. He was wrong—I am sure that it was a slip of the tongue—to suggest that somehow no deal was done or a deal was done in bad faith last year, and I will return to that point shortly.

At least one hon. Member mentioned the notion that there is a grand tradition going back 30 years that, every time this matter has gone to arbitration, the decision of the arbitration body has been met in full. Over the past 29 years, this matter has gone to arbitration—this is, ironically, one of the strengths of the Edmund-Davies system—once. The notion that there is a fine tradition, going back years, of arbitration decisions being met in full is simply not true. That once was last year. The arbitration panel said 3 per cent., and 3 per cent. was paid in full.

I am not detracting from some of the substantial points that hon. Members have made or from some of the substantial points that many authorities, serving police and certainly the Police Federation have made, but let us have the real debate on real issues and not something else. I guarantee that, if the hon. Member for Bury St. Edmunds is ever in government at some future time, he will be here explaining why Edmund-Davies is no longer sufficient, as the arbitration panel did, and that we need to move to a new indexation system for police pay. That system is now called, rather clumsily, the PAT index—the police arbitration tribunal index—and my right hon. Friend the Secretary of State has made it clear that it can and should be the basis for this year’s pay award, to answer a point that was made. Hon. Members should remember that we are talking about this year’s pay award, not the first award of the 2008 pay round for the public sector, but principally the last award of last year.

The point made by the hon. Gentleman for Baldry—[Laughter.] I apologise. The hon. Gentleman now knows clearly who he is—[Hon. Members: “Banbury.”] Banbury; that’s right. The hon. Gentleman’s point about this matter going wider and our being, in his terms, nasty to a whole series of public sector workers throughout last year’s pay round was entirely unfair, for reasons that I will illustrate in a moment.

Keith Vaz
We will have the chance to repeat this debate to some extent tomorrow afternoon, when we consider the Home Affairs Committee’s report on police funding. Although I accept the point that the Minister is making, I think that hon. Members are making the point that, over the past 30 years, certainly since Edmund-Davies, all previous Home Secretaries have honoured the agreements that have been made and have not done what the current Home Secretary has done, which is to ask the Treasury’s permission first. That is the point. We have to look back to the time of Edmund-Davies to find a dispute of this kind.

Mr. McNulty
One does not; one has only to go back to last year, when the tribunal’s decision was met in full. My point was simply about the notion suggested by some, but not all, hon. Members that at any time over the past 30 years when this matter has gone to arbitration, binding on both sides—as hon. Members have expressed, but not the Home Secretary—the Home Secretary has accepted the decision in full. I am thinking of both the police negotiating body’s recommendations and any tribunal’s recommendations to the Home Secretary. The matter has not gone to arbitration in any case other than last year. That is by the bye, anyway.

People have said, quite fairly, that recommendations are simply made to the Home Secretary, even under Edmund-Davies, and I accept what people say about the broader spirit of this. I accept what my hon. Friend the Member for Hayes and Harlington said in the middle of his speech about the federation certainly being minded to sit down with the Government to discuss a whole host of issues beyond pay and—to quote, I think, my hon. Friend—to move considerably forward on a whole range of issues, pay notwithstanding. I congratulate the federation on that.

However, I do not accept that the decision on last year’s pay will have come as a shock. I was rebuked in March last year for saying in a written ministerial statement that the first part of Booth’s report that recommended an indexation more closely aligned to the public sector than Edmund-Davies would somehow curtail the ability of the police negotiating body to make its deliberations. The previous Home Secretary, my right hon. Friend the Member for Airdrie and Shotts (John Reid), was rebuked when he wrote to the police negotiating body saying that it was directed, as were its standing committees, to reach agreement on deliverable options for the award. He said:

“Agreed options will need to secure an outcome consistent with the achievement of the CPI inflation target”—

the 2 per cent. target referred to in the previous paragraph—

“the government’s wider objectives as set out above, and the further modernisation of police pay arrangements. Options for discussion should include, but need not be limited to, staging or otherwise modifying the award”,

as happened with most pay review body recommendations this year. That relates to the point made by the hon. Member for Banbury (Tony Baldry) about last year’s pay round.

So a clear indication was given in April 2007 to all involved in the negotiating body, on both the staff and official side, that staging was at least a consideration. There is a notion that this came out because of what had gone on with all the other public sector pay awards that had been announced, but it is unfair to suggest that staging was never going to be an item on the agenda.

None the less, the decision is not easy and is not taken lightly by the Home Secretary or the Government, including any other Ministers dealing with other members of the public sector. I disagree with my hon. Friend the Member for Hayes and Harlington—but I do take the forewarning—about us being anywhere near the conditions that prevailed in the 1970s. I admit that I was still at school then, but I have read detailed accounts from many observers of how we got to a stage at which the police service—police forces—were in a really parlous state because of a range of factors, such as low pay, recruitment, morale and retention.

I disagree firmly with my hon. Friend’s notion that we are complacent and think that such conditions will never come back again. It is a serious warning and one that I take very seriously in my role. I do not take the position—I think fairly outlined to the arbitration panel and agreed by it—that recruitment and retention are certainly not areas of concern. I do not demur from the notion that they might be concerns if we do not remain alive to the issues. The point about six applicants for every one job happens to be a matter of fact that the arbitration tribunal agreed to.

Kelvin Hopkins (Luton, North) (Lab)
Will the Minister give way?

Mr. McNulty
No.

I do not agree, either, that all those other elements comparing the police to other parts of the public sector were complacent or dismissive of what the police service does, for reasons that I have outlined. The Home Office simply put its case in numbers to the arbitration panel. I would say to hon. Members who have not read the outcome of the arbitration panel that all aspects, pretty much, were agreed to by the arbitration tribunal, as was the principle, at least, of the new index. That is important, too.

There is no complacency at all. The Police Federation, entirely fairly, asked for 3.9 to 4 per cent. As my hon. Friend the Member for Hayes and Harlington suggested, it said, fairly in its terms, that 1.03 per cent. of that would cover what it regarded as a transition to a more level playing field: effectively, the additional cost to its members of a transition from Edmund-Davies to a new index. The arbitration panel, not the Home Office, said clearly that it was not convinced about the 1.03 per cent. element in terms of a level playing field; nor were the Government.

If people read in full what the arbitration tribunal said, putting to one side temporarily the decision about whether to pay last year’s award in September or December, the Government’s case for the wider transition and the future, which my hon. Friend mentioned, was well made. In that context, my right hon. Friend the Home Secretary said that, for this coming round, she would like to consider making the index the basis for a multi-year agreement that we hope will cover two or three years, rather than simply a further year. As the body of the letter says—if hon. Members have not got it, I shall make sure that they get it—if such an agreement is possible and real progress can be made, she believes that future settlements could be implemented in full. Her writing that letter and describing the context of this year’s pay round is important, because the next pay round starts very soon, as I think the hon. Member for Bury St. Edmunds said. Certainly, the early discussions on the pay round start soon.

Inadvertently, I think, the hon. Member for Manchester, Withington (Mr. Leech) said—although it cannot be the case—that police authorities have, with a degree of comfort, budgeted in full for the arbitration panel’s pay rise and do not have to make cuts and so on in policing budgets. That description was afforded not just by the hon. Gentleman, but by other hon. Members.

Mr. Devine
Will the Minister give way?

Mr. McNulty
No.

One cannot have it both ways. Assuming a level of pay increase, which is important given that 85 per cent. plus of the authorities’ budgets comprise wages and salaries, is different from budgeting for it. We cannot have both. The hon. Member for Manchester, Withington is entirely wrong.

I have never said, in terms, that somehow the £40 million equates to 800 new police officers. I have said, in terms, that it equates to 800 police officers that may not be retained—[Interruption.] Seriously, that may be so, given the concern still expressed to me, even after 6 December, by a range of police authorities about how tight and difficult their budgets are. One cannot have that both ways either, although some hon. Members have mentioned it. The issue was whether we could get to a stage where as much as possible was put into police grant, and we have managed to get that to an average of 2.7 per cent. this year, not least for a range of the issues concerned.

Hon. Members will know—it is not necessarily for me to say, but I shall anyway—that the elements involved in keeping inflationary pressures down in relation to the police are not just about the amount, whatever the size. As the hon. Member for Banbury mentioned, this must be considered in the context of a significant element of public expenditure across the whole sector, including teachers, lecturers, the Army, civil servants and a range of others. About £40 million, £50 million, £80 million or £100 million from each of those adds up to a considerable sum and to considerable pressure.

I hope that, in the context of the letter that my right hon. Friend the Home Secretary wrote yesterday, we can move forward on the 2008 agenda and deal deliberately and productively with next year’s pay round.