Wales slams ‘flawed case’ for regional public sector pay

9 May 12
The case for varying public sector pay on a regional basis is ‘deeply flawed’ and would be ‘economically damaging’, according to Welsh Finance Minister Jane Hutt.
By Vivienne Russell | 9 May 2012

The case for varying public sector pay on a regional basis is ‘deeply flawed’ and would be ‘economically damaging’, according to Welsh Finance Minister Jane Hutt.

Hutt yesterday published a paper on regional and local market pay, which will be submitted to the Treasury and the independent pay review bodies.

Her move follows Chancellor George Osborne’s confirmation in his March Budget that the UK government was considering regionalised pay in the public sector. The review bodies have been instructed to look at the issue.

Hutt said her paper disproved Treasury claims that the public sector pay premium in Wales was 18%, saying it was considerably lower. Relatively low average pay in Wales could also be explained by the lack of ‘top end’ private sector jobs in the country, which help to push up average earnings.

She added that any attempt to remove the differential between  public and private sector workers would hit women and the low-paid particularly. ‘This would be completely contrary to Welsh Government policy, which seeks to protect the most vulnerable, including the low paid, and to promote equality by reducing, not increasing, the gender pay gap,’ she said.

The finance minister also drew attention to large, multisite private sector companies that do not have complex, regional pay systems. She added that there was no clear evidence that relatively high levels of public sector pay in Wales ‘crowded out’ private sector employment.

‘A policy of regional public sector pay would be economically damaging and socially divisive,’ she said. ‘Driving down pay in our most disadvantaged communities at a time of economic stress and exacerbating pay gaps between men and women would be bad for Wales and harmful to the UK as a whole.’

All the political parties represented in the Welsh Assembly have expressed opposition to imposition of regional pay in Wales. Hutt said she hoped parties could continue to work together to persuade the UK government ‘not to proceed further down this disastrous path’.

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