Regional Pay

Debate between Rachel Reeves and Aidan Burley

Wednesday 20th June 2012 Commons Chamber

[Rachel Reeves]

I am sure that the 10,300 public sector workers in Stourbridge will be pleased to hear that the hon. Lady wants their pay to be cut.

Paul Callaghan CBE, the Sunderland technology entrepreneur and owner of the Leighton Group who was recognised in the recent Queen’s birthday honours list for services to the north-east, has said:

“I’m very concerned about the negative impact on the North East economy of regional pay rates.”

He went on to say that the

“freezing of regional public sector pay must reduce demand for local goods and services, further dampening an already depressed economy. I have seen no credible research to show that this move will have anything but a negative impact on both the region’s private and public sector.”

James Ramsbotham, the chief executive of the North East chamber of commerce, has said that

“the Government should be working towards making the economy more equal across the regions and not entrenching further disparity by reducing spending power in the North-East.”

The chief economist of the Welsh Government, in reviewing the impact of public sector pay rates on businesses in Wales, said that

“there is no credible academic evidence or research to indicate that crowding out has been happening in practice.”

[Mr Aidan Burley (Cannock Chase) (Con)]

I am glad that the hon. Lady read my quotation in The Daily Telegraph this morning. As she has read out a couple of quotations, perhaps I may read one back to her:

“location-based pay systems offer increased flexibility and a systematic approach to addressing recruitment and retention issues at a local level.”

That is from Unison’s policy paper “Location-based pay differentiation”, which was published in September 2011. Does she agree with Unison, which I understand is a donor to her constituency party?

[Rachel Reeves]

The hon. Gentleman should speak to the 9,500 public sector workers in his constituency. That number is substantially larger than his majority.

What families and businesses in these parts of the country need is not an even tighter squeeze on the wages of the people who are keeping their public services running, but a Government with a proper plan for jobs and growth who will work actively with businesses to get investment flowing into the sustainable, competitive, high-value industries of the future. That is what we need to improve living standards and economic opportunities in every part of the country.