Regional Pay (Public Sector)

Debate between Hywel Williams and Helen Goodman

Tuesday 10th January 2012 Westminster Hall

[Hywel Williams]

The hon. Lady makes a fine point. As so often with the policies of this Government and at times, I fear, of her own Government previously, there is no apparent understanding that the system is such that if we cut off a large branch, the tree itself will be affected. I agree with her entirely.

[Helen Goodman]

The hon. Gentleman is absolutely right. In the north-east, the proposal has the potential to take between £500 million and £1 billion out of our regional economy every year, and yet the switch in capital to our regional economy under the Chancellor’s autumn statement was 0.1% or £4.1 million, which is completely unbalanced.

[Hywel Williams]

Indeed. The hon. Lady’s point is pertinent to the debate.

When cuts were made to wider public sector budgets, the effects were largely on the public sector, of course, but also on the para-private sector—companies that have contracts with the public sector—which is integral to local economies. Similarly, those whose livelihoods depend on services to those in employment will be at risk from the proposals. As well as the local economy, a whole host of small companies that service the public sector in our regions will be affected.

I have great sympathy with Labour Members—I am pleased to see some of them here today—but I appreciate that they will be fighting the proposals with one hand tied behind their backs. It does not please me to make the point about the introduction of regional pay by the previous Government, but the Labour Government promoted the idea. They floated it in 2003, and they introduced it in the Courts Service in England and Wales in 2008, when it was not entirely successful. The Public and Commercial Services Union has told me that regional and local pay in the Ministry of Justice has not been a success, and that with the introduction of local pay in the Courts Service in 2007, there were problems with regional pay zones in the Ministry of Justice. The policy created inequalities and tensions, and it was ultimately unsuccessful and had to be reformed. I hope that lessons have been learned, but I worry that the wrong ones might have been learned.

I conclude by saying that the effect of regional pay will be far-reaching and negative and that it will not improve the private sector. There is a strong likelihood that it will lead to institutionalisation of low pay in some places, and it will certainly make it much more difficult to attract new workers, as my hon. Friend the Member for Carmarthen East and Dinefwr has said. The Treasury must reconsider its stance, and I will certainly contribute to the debate as it develops, as will my hon. Friend and my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd).

I apologise if my final point sounds light. I am pleased to see that Conservatives in Wales are represented here. The comments of the hon. Member for Montgomeryshire (Glyn Davies) were interesting. I appreciate that Scottish Tories may have problems in mustering manpower. It has been said that there are more pandas in Scotland than Tory MPs, and if the London Conservative and Liberal Democrat Government push the regional pay issue through, Tory MSPs in Edinburgh will be rarer than polar bears on the Clyde.