The FT reports that a growing number of Liberal Democrat MPs are speaking out against plans to regionalise public sector pay. In his Autumn Statement Chancellor Osborne called on Pay Revew Bodies to examine the case for localised pay, a move which could take effect as early as 2013-14: http://m.ft.com/cms/s/0/cdefeb62-3f8b-11e1-ad6a-00144feab49a.html
Coalition MP's are sharply divided between Tories supporting measures which will drive down wages in areas of high unemployment and Liberal Democrats concerned at a widening of regional inequality between the South East and the rest of the UK.
The FT quotes Adrian Sanders, Liberal Democrat MP for Torbay, who said the idea “must be resisted” because it would “make everyone poorer in the peripheral parts of the UK, especially in the far south-west. There will be an impact that lower public sector salaries will have on a local economy, and the knock-on effect they have lowering private sector pay, further reducing the amount of money circulating”
