Public sector should challenge north-south Pay divide, not reinforce it

Today’s Guardian reports that in next week’s Budget the Con Dems will be announcing the introduction of regional pay rates, initially in some central government departments, and that ‘the Treasury intends to spread the reforms beyond the civil service across the public sector in the years ahead as staff come out of the public sector pay freeze’

Regional pay would produce many more losers than winners. Of the 12 regions and nations of the UK, only two - London and the South East - have earnings above the national average. For the majority regional pay holds the threat of a fall in wages:
http://www.guardian.co.uk/society/2012/mar/16/public-servants-poorer-regions-lower-pay?mobile-redirect=false

Working people in the UK are facing an unprecedented attack on our living standards. Average wages increased by only 1.4% last year – way below the rate of inflation. In contrast, inflation was over 5% for most of 2011. RPI has now ducked under 4%, but it remains the case that working people are getting poorer every month in real terms. Wages are not keeping up with prices.

In the public sector, workers have experienced a significant fall in real wages. Local government workers have endured three years of pay freezes, and have now learned of the Government’s intention to limit any increase in the next two years to just 1%. In the NHS, all but the lowest paid are facing a two-year pay freeze.

Regional pay now holds the prospect of cuts in money wages for public sector workers across the UK.

The Chancellor has written to the independent pay review bodies covering the NHS, teachers, prison officers and senior civil servants asking them to consider how they could make pay more responsive to local labour markets. They are to report by July 2012.

Regional pay would not only produce many more losers than winners. It would reflect the injustices in the labour market. The public sector should challenge the north-south divide in pay, not reinforce it.

The Labour Party supposedly opposes moves toward regional pay, yet its feeble concession to the Con Dem’s of a regional cap on welfare benefits was a political mistake which is already being exploited by Tory proponents of regional pay:
http://conservativehome.blogs.com/thinktankcentral/2012/02/ed-holmes-of-policy_exchange-are-labour-ministers-being-consistent-on-regional-pay-and-benefits.html

The Chancellor’s interest in regional pay must be seen in the context of falling real wages in the public sector and the wider economy. Regional pay is another tactic to attack our living standards.