Regional Pay

Jessica Morden Excerpts

Wednesday 20th June 2012 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

In the short time available, I want to talk about regional pay in Wales and my constituency.

Over recent weeks, we have been led to believe that the coalition is cooling on the idea of regional pay and that we might be heading for another U-turn. I hope so, but I welcome the chance to reiterate just how unfair, divisive and damaging such proposals would be for constituencies such as mine. If there is to be a change of heart, the message clearly has not got through to the Wales Office, which this morning mounted a valiant defence of regional pay in the Welsh Grand Committee, although the Secretary of State for Wales told us off for calling it regional pay; she said we should call it “local market-facing pay”—she had obviously read the crib sheet. Having listened to the Minister’s definition, which was as clear as mud, I am none the wiser.

Whatever it is called, it is fair to assume that it would not be good news for public sector workers. The direction of travel is clearly downwards. The First Minister for Wales, Carwyn Jones, was spot on when he said it was code for cutting pay in Wales. Wales has 399,000 public sector employees, but the Secretary of State admitted this morning that she would not be fighting their corner on this issue, despite the fact that her party opposes it in the Welsh Assembly—in fact, all parties in the Welsh Assembly are united in opposition to it.

Let us not forget that these are nurses, teachers and police officers who already face two years of pay freezes and job cuts and who will have to endure a further pay cut of 1%, not to mention the Government’s pension reforms.

[Mr Burley]

rose—

[Jessica Morden]

We are pushed for time, and if I give way, I will prevent someone else from getting in, so I will kindly say no.

We have had 9,000 public sector job cuts in Wales, and there are 39,000 more to come, according to the TUC. The stock argument for the Government’s proposal is that it would allow the private sector to grow by enabling it to compete with the public sector for staff. This is clearly nonsense in constituencies such as mine, where any move on regional pay would hurt the economy, including the private sector.

[Phil Wilson]

rose—

--- Later in debate ---

[Jessica Morden]

I will give way to my hon. Friend, because he will not get a chance to make a speech, whereas the hon. Member for Cannock Chase (Mr Burley) has already spoken.

[Phil Wilson]

I hope that the hon. Member for South West Norfolk (Elizabeth Truss) understands that Opposition Members know about globalisation and its effect on the private sector. Hitachi, a big global company, is coming to the north-east of England, but it is not considering local pay; it is considering sectoral pay rates and skills, and looking across the train-building industry. It is not looking locally.

[Jessica Morden]

I thank my hon. Friend for his intervention. I am sorry he has not had a chance to make his contribution. He is exactly right.

The TUC has estimated that a 1% reduction in public sector pay could result in £97 million being taken out of the Welsh economy. In constituencies such as mine, the public and private sectors are inextricably linked, and money taken out of the public sector hurts the private sector. Members should not just take our word for it; over the past few weeks, the Federation of Small Businesses in Wales has come out in opposition to regional pay. We saw this firsthand in Newport, when the Government were forced to concede over closing Newport passport office with the possible loss of 300 jobs. The Government conceded then that the closure would have a huge impact on our local economy, and many small local businesses were right at the heart of the campaign to keep the passport office open, because they knew full well that their livelihoods depended on it.

There are 23,000 public sector workers in Newport. It has a lot of public sector jobs precisely because of the previous Government’s policy, following the Lyons review, of moving jobs from the south-east to rebalance the economy. As a result, our major employers, as well as the NHS and the local authority, are the Office for National Statistics, the Prison Service and the Intellectual Property Office, to name but a few. This has been a boost to our city and is a real success story. As an ONS worker said to me recently, however, does paying him less mean that the private sector in Newport will suddenly be clamouring for statisticians? We both thought not.

Of course, regional pay is plain unfair. I have a border constituency. If I have two teachers in my constituency, one working in Caldicot, the other in Bristol, with the same skills and experience but paid differently, that is clearly unfair. Let us remember that these people are not hugely well paid—they are often on wages of about £20,000—and would find it difficult to move jobs if this measure was implemented.

Finally, comparing private and public sector pay is not comparing like with like. There are more people with higher qualifications in the public sector than in the private sector, and women, who make up 64% of the public sector work force in Wales and 87% of part-time workers, have very much benefited from the previous Government’s efforts on equal pay. I ask the Government please not to target these women and roll back progress on them. Regional pay, local market-facing pay, or whatever the Government want to call it, will be a race to the bottom on lower pay, and create higher unemployment and more business failures. It is a real pity that we do not have a Secretary of State for Wales willing to stand up and say that.