Regional Pay

Debate between Rachel Reeves and Chris Ruane

Wednesday 20th June 2012 Commons Chamber

[Rachel Reeves]

I thank my right hon. Friend for that intervention. Indeed, a 1% pay reduction for public sector workers in the south-west would cost that region £140 million a year.

If the Government were to achieve their objective of reducing pay to what they say is the equivalent in the private sector, a real-terms cut in pay, year after year for a decade or more, would be needed. It is no wonder, then, that people are worried and are calling on the Government to come clean on what their plans really are. It is no wonder that people think this is a deliberate attack on public sector workers and on the parts of the country that have already been hardest hit by the recession.

[Chris Ruane (Vale of Clwyd) (Lab)]

Regional pay was mentioned this morning in the Welsh Grand Committee, when I quizzed the Secretary of State for Wales about it. The terminology that Government Members are using is not “regional pay” but “local-facing pay”. I asked for an explanation of what local-facing pay was, but got no response. Does my hon. Friend agree that if local-facing pay is introduced, there will be sad faces in Wales and happy faces in Buckinghamshire?

[Rachel Reeves]

The problem is that the Government are being a bit two-faced, with one person saying one thing and another saying something else.

The reality is that we are in a recession made in Downing street and it is hitting some parts of the country particularly hard. I quote from a recent report by the Institute for Public Policy Research on the state of the northern economy:

“The double-dip recession has hit the North hard, with unemployment rising and business confidence falling. This lack of confidence among employers has maintained the hiring freeze across the North, implying that upward pressure on unemployment is likely to continue for the rest of the year.”

The difficulties faced by workers and businesses in many parts of the country as a result of the recession that this Government have landed us in are being made all the more desperate by the Government’s short-sighted decision to dispense with policies and processes put in place by the Labour Government to support more balanced development across the UK. This is a Government who got rid of regional Ministers, shot down regional development agencies, and cut back on vital regional investments such as the loan for Sheffield Forgemasters. The only regional policy that they have left is regional pay, which will take more money out of some of the most deprived areas of the country.