Regional Pay

Kelvin Hopkins Excerpts

Wednesday 20th June 2012 Commons Chamber

[John Pugh (Southport) (LD)]

I thank the hon. Member for Dumfries and Galloway (Mr Brown) for that introduction; I am not used to it.

The battle over regional and local pay is one, frankly, that in the current circumstances the coalition could do without. It would be a battle—a gruelling, energy sapping and pointless battle between and within parties. Even the Labour party is divided on its proposals for regional welfare. Opposition among the Liberal Democrats to the underlying principle and philosophy behind the suggestions is now widespread. We are not against the collection of evidence, but the evidence means that we are against the proposals. Shortly I and a number of colleagues will submit evidence that we hope will convince further. There was no problem recently getting 22 Liberal Democrat Members to sign a letter to The Times opposing regional pay, and of course those numbers were limited because our ministerial colleagues could not be asked to participate.

The politics of the proposal are lethal and divisive. It pits region against region, abandons the principle of equal pay for equal work, and treats the low-paid and local differently from the high-paid and mobile. The economics of it are nonsense, too, being bolstered largely by clichés and prejudice from the usual suspects—the Institute of Directors to name but one.

[Kelvin Hopkins (Luton North) (Lab)]

It is refreshing to hear some common sense from the Liberal Democrats. The hon. Gentleman might be aware that a survey reported by the CBI suggests that 94% of private sector employers are concerned, above all, about markets and consumer demand for their goods and services, and the proposal would reduce consumer demand.

[John Pugh]

That is certainly true, and a lot of UK national firms—building societies, banks and the like—do not have regional pay structures.

No one can dispute that reducing public sector pay in low-wage areas necessarily reduces the money spent, and therefore demand, in those areas. No one can dispute that putting relatively more money into the pockets of public sector workers in high-wage areas increases the money in circulation in those areas, and thus demand. Ultimately, economic division will be cemented in and, frankly, a good reason would be needed for doing that.