29 October 2012

Academics condemn regional pay proposals


Thomas Bridge

Regional pay proposals would heighten geographical inequalities and cause nationwide economic damage, leading academics have warned.

In a letter published in The Times, 60 academics have warned that government plans to end national pay bargaining would reduce consumer spending power and undermine businesses in less prosperous areas of the UK.

In the letter, the academics state there is ‘no convincing evidence’ to support chancellor George Osborne’s claims that regionally determined pay would boost the economic performance of local economies.

Such a policy could ‘aggravate geographical economic and social inequalities, the letter claims.

Calling on the Government to instead reinforce provincial growth, the letter urges ministers to avoid policies which would ‘undermine regional economic and social development’.

The signatories include professor of politics at Northumbria University Keith Shaw, John Tomaney professor of urban and regional planning at University College London, and Richard Hyman, professor emeritus in industrial relations at the London School of Economics.

Shaw said: ‘This proposal will depress public sector pay in regions outside of London and the South East and, in areas such as the North East, could lead to a spiral of decline that would serve to further widen the ever-growing north-south divide.’

Tomaney added: ‘I have serious concerns that the full impact of what has been discussed in terms of regional or local public sector pay has not been appreciated by the Government. Reducing wages and spending power in the poorest regions can only widen divisions and harm any economic recovery.’

Responding to the letter, Trade Union Congress (TUC) general secretary Brendan Barber said: ‘This is yet more evidence that the Government’s plans for regional or local pay are not just unfair, but ill-thought out. The chancellor should take the views of these many academic experts seriously and put a stop for once and for all to these flawed and counterproductive proposals.’



Your comments

Academics are in part funded by PRIVATE research. Regional pay deducts from local spending power of private sector services. Micheal Dewar's often repeated argument fails to mention most public sector pensions are very small (under ?5k) which then require state subsidy so people can survive. A quarter of the deficit 'crippling the country' comes from bank nationalisation and related issues. Facts please!

Stephen Horscroft, local government, Cornwall Co7uncil, Added: Tuesday, 6 November 2012 10:49 AM

While I appreciate that there is currently a link between pensions and salary the article is about regional pay.So Michael your comment is not really relevent to the discussion. We do already have regional pay to attract staff to major cities in both sectors. So do I assume that colleagues in the private sector will also be seeking pay cuts to reflect imagined local costs?

Cynic (experienced optimist), Added: Tuesday, 30 October 2012 01:55 PM

Could it be that these same academics are part of the bloated public sector of this country? Do we think they could be trying to protect their pensions? Or are we to assume that they have the country's interests at heart. If the latter then they are the exception to the rule that the public sector are only interested in one thing; their gold plated pensions. Well, academics, what do you think of the pension deals that are crippling the country? Are they sustainable? No need to answer that.

Michael Dewar, Added: Tuesday, 30 October 2012 12:36 AM

Where national pay rates dont work we have London Weighting!

Patrick Newman, ex local government, Stevenage, Added: Monday, 29 October 2012 04:24 PM

MPs and peers wouldn't take a pay cut - there's a Harvey Nicholls in Leeds as well.

Fat cat, West Midlands, Added: Monday, 29 October 2012 04:18 PM

I might feel a little better towards it if regional MPs and Peers took a pay cut too.

Peter Morris, Added: Monday, 29 October 2012 03:48 PM



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