Regional Pay (Public Sector)

Gregory Campbell Excerpts

Tuesday 10th January 2012 Westminster Hall

[Jonathan Edwards]

My hon. Friend makes an excellent argument. Indeed, following the autumn statement, he tabled an early-day motion on the topic, which I think has been supported by about 18 Members to date. I urge those Members who support the campaign on this issue to sign that early-day motion at the very least.

Public sector workers are facing real-term cuts and that is before we consider the impact on the private sector. In many places, the private sector is reliant on the trade generated by the public sector and the money circulated through public sector employees. In constituencies such as mine, where more than 30% of people work in the public sector, there is a direct correlation between their wages and the cash circulating in the local economy.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing the debate. Surely, his point about the direct correlation between socio-economic difficulties in geographical areas—particularly those that are some distance from the south-east such as Wales, Northern Ireland, Scotland and the north of England—and the high dependency on public sector employment is key. Many of those areas have only managed to get through the recession at the moment because of their high dependency on the public sector. If we were to go down this route now, we would find that the problem would be multiplied even more.

[Jonathan Edwards]

The hon. Gentleman makes an excellent point. We should be considering not depressing the public sector in those areas where the economy is weakest, but improving the private sector.

Since the general election, we have heard a lot about the UK Government’s ambition to geographically rebalance the economy. They have the full support of my party, including the national insurance holiday proposals for small businesses, which I think shows the Treasury’s intent, despite the evidence showing a lack of success. The policy indicates that the Treasury, at long last, realises that countervailing measures are required to address the so-called north-south economic divide. We will, however, need a far more comprehensive approach than we have seen to date. My fear is that this policy on regional pay goes in a completely different economic direction.

One of our major criticisms of UK Governments of whatever colour in the past 30 years has been that the emphasis has been far too concentrated on one small geographical part of the state. Successive Governments have been guilty of allowing regional and individual wealth polarisation at an incredible rate. The average gross value added per person in inner London is 10 times that of workers in the Gwent valley. Inner London is the richest part of the European Union, whereas the communities that I represent—only a few hours down the M4; longer on the train—qualify for the highest form of European convergence aid. Such are the imbalances in the British state that it is now by far the most unequal of all EU member states. Considering the unification legacy in Germany, that is a damning indictment of all successive Governments.

Far from addressing that record of shame, these proposals will further depress those economies that are in desperate need of investment. It is no surprise to anyone that the fiscal consolidation pursued by the UK Government will hit the poorest parts of the state most. The statement by the Prime Minister that we are all in this together is rivalled in its degree of preposterousness only by the previous Prime Minister’s assertion, when Chancellor, that he would abolish boom and bust. My country has the lowest average gross weekly wages in the whole UK. On average, workers in Wales earn approximately £519.40, compared with £629.10 in the south-east of England and £826.40 in London. Take away the consistency of public sector pay—a point made by many hon. Members in interventions to date—and those discrepancies will be far worse.