We will now move to the short debate and I will call on David Rowlands to speak on the topic he has chosen.

If Members are leaving the Chamber, can you do so quickly and quietly, please? David.

I'm sure Members will be pleased to hear that my dissertation will be short and to the point. It is a well-recognised fact that organisations with a large pay gap between the highest and lowest workers experience more sickness absence and staff turnover than those with more equitable pay differentials.

Exaggerated pay gaps also impede the recruitment of staff, particularly to middle management positions. So, while such pay gaps are frequently opposed on moral terms, there is undoubtedly an economic and business case to be made for more equal pay distribution within organisations. It can also be said that large wage differentials have a demoralising effect on staff, who frequently feel they are undervalued in their particular role. This in turn can have a detrimental effect on the organisation as a whole.

Whilst it must be acknowledged that differentials are quite rightly set to reflect seniority, skill sets and responsibility, these are usually achieved by the setting out of differing pay bands and pay spines, all of which are calculated to ensure a fair and equitable pay system. The problems arise when these differential are exacerbated by percentage rises in salaries, often on an annual basis. If we take, for instance, two employees, one on a salary of £20,000 per year and another on £100,000 per year, and apply a percentage rise of, say, 2 per cent. The first employee gets an additional £400 per year, whilst the second gets an additional £2,000 per year. This clearly increase the pay differential of the two employees—in this case, by some £1,600. Obviously, if there is an annual pay rise of this order, over time, the differential becomes quite substantially increased. It therefore seems quite absurd that this sort of percentage pay rise is the system favoured by Labour-run local councils, given that it is patently unfair to those on lower salaries. One also wonders why trade unions are not challenging this practice, which clearly leaves lower-paid workers at a disadvantage. It is also true that women tend to be in the lower paid category and, so are further discriminated against under this system. 

Given the Labour Party's oft-stated call for the fairer distribution of wealth, why is it that they, and the trade unions, are content to see percentage pay rises persist in local authorities and, indeed, in all Government institutions? Some years ago the opposition parties on Torfaen borough council put forward a motion to end this sort of salary distribution, in favour of a flat-rate wage increase. It was passed unanimously, yet, strangely, was never implemented, which, of course, begs the question, 'Why?' We therefore call upon all local authorities and, indeed, all Government organisations to desist from the use of percentage pay rises and introduce the far more equitable system of an across-the-board flat pay rise.  

Thank you.

I call on the Cabinet Secretary for Local Government and Public Services to reply to the debate.

Thank you very much, Deputy Presiding Officer. I will start, with your consent, by making a declaration that I am a member of Unison in case any of these matters touch on those issues. Can I say that I clearly will wish to recognise the hard work of everybody working in local government at all levels? Local authorities across Wales are responsible for services to some of our most vulnerable people as well as services that all of us rely upon and sometimes take for granted. We are all aware of the hard work that is undertaken throughout local government across the whole of the country. I think, Deputy Presiding Officer, that it is probably fair to say that most Members in this Chamber on all sides will also recognise that this is a Government that is committed to ensuring that the most vulnerable employees, the lowest paid employees, are always those where we seek to make the greatest focus.

Let me say this: we are focusing on senior pay today, but others are more concerned about a continued squeeze on pay for the majority of lower paid local authority workers, which is being driven by austerity. I want to recognise in this debate about rising salaries in local authorities that there remains a squeeze on local authority pay, on public sector pay more widely, which is being driven by the United Kingdom Government’s austerity policy and that affects lower earning workers the most.

The Welsh Government has done and will continue to do everything it can to protect the public services from the worst aspects of austerity, but our ability to do this has clearly been eroded by cuts to our own funding by the United Kingdom Government. And let me say this, Deputy Presiding Officer: it’s worth making the point now that, in the medium and longer term, for me as local government Minister, one of the most serious issues facing us is not simply excessive pay—although sometimes that can be an issue, I accept that—but the potential for very significant cuts in the future as a consequence of public spending reductions following the disastrous Brexit policy and the disastrous negotiations taking place, led by the United Kingdom Government.

We already know—we already know—that austerity has failed Wales. We already know that our own budget is substantially lower than it was in 2010—the equivalent of £800 million less to spend on public services in Wales every year—and there are no indications that the current Chancellor of the Exchequer is about to change course and end austerity economics. I think, Deputy Presiding Officer, that it’s fair to say that, across Wales, what people really want is a general election in order to remove the UK Government from power and put in place a Government that is committed to ensuring fairness for the many and not the few.

But let me also say this: this Government is not going to take lessons from a party that comes to this Chamber when it can be bothered in order to argue the case for deregulation, for lower wages, to take away workers’ rights and workers’ protections, to take away—

Will the Member take an intervention?

—the protections that were put in place by a Government here and a Labour Government in the United Kingdom. I will give way.

Thank you. I don’t think that in any way you have addressed the whole thrust of this debate at all. You’ve made it a tirade against the Tory Government. You’ve not addressed the fact of what I’m trying to point out, which is that the Labour Government are quite happy to allow this huge disparity of wage increases to carry on. I’ve pointed out the figures. You haven’t addressed those at all. Would you please address my point?

I think I have addressed the figures and I’ve said already that we have £800 million less to spend on public services and public service workers every year in Wales as a consequence of the failed policy of austerity and, of course, we’ve heard voices from the other side of the Chamber that think that austerity has to go further still. So, I hesitate to take seriously some of the points that are being made this afternoon.

But in responding to this, as a trade unionist, somebody who, throughout his life, has been a member of a trade union, I believe in collective bargaining. I believe that Governments—and I’m proud that this Government has a fair work approach to how we deal with these matters, which ensures that we do negotiate with trade unions, we negotiate with friends and colleagues. And what we do is ensure that the voice of trade unionism is at the heart of the decisions that we take. Let me also say this: as somebody who has served in different roles in this Government and on the backbenches, I hope that this place will always be somewhere that recognises the importance of trade unionism in ensuring that workers, wherever they happen to work, whether its local authorities or elsewhere, have the best deal available to them. And it is effectively organised and recognised trade unions that remain the most important issue in ensuring that pay structures, whatever those pay structures happen to be, are fair and provide the protection that the most vulnerable and lowest paid require.

Deputy Presiding Officer, in closing, let me say this: it is important that we are able to pay our workers the fair wage and the salaries that they require. I was very proud, this week, to hear the announcement from the health Secretary to ensure that salaries in the health service are being increased in Wales, and we are more than matching the increases that are being seen across the border. I hope that local authorities will be able to deliver on a fair wage and fair increases for the lowest paid workers, and I will continue to work, as a Minister in this Government, with colleagues in the trade union movement to ensure that we protect not only the wages and salaries and conditions of workers across and throughout the public sector, but that we pay tribute to them, we do not take them for granted, we value them, and that we ensure that public service workers are at the heart of our approach on local government and public services into the future.

Thank you. That brings today's proceedings to a close. Thank you.

The meeting ended at 18:06.