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'Regional pay' issue could see further strikes; Fear proposal will create 'unemployment ghettos'.

Byline: William Green

THE Government will today be challenged to explain plans that critics claim will hit the pay of public sector workers in the North East and create unemployment "ghettos".

Chancellor George Osborne's intention to dump national pay bargaining across the public sector will come under fire in a debate amid warnings it will be the biggest industrial issue of 2012.

A review looking at how to make pay more "responsive" to local labour markets will be delivered to the Chancellor in July, with the possibility of any changes being introduced in 2013-14.

Critics fear such an overhaul would see the pay of workers outside of London and the South East falling behind, which could hit the regional economy hard given its heavy reliance on the public sector. The coalition Government has insisted the plan is not about cutting anyone's pay or saving money, but will stop the private sector being squeezed out and create a more balanced economy.

Neil Foster, policy and campaigns officer at the Northern TUC, said: "This is yet another attempt by George Osborne to pick the pockets of public sector workers in the North.

"It would be profoundly unfair if a North East nurse or teacher with the same skills and experience as their Southern counterparts were now paid less for doing exactly the same job. Effectively the Government would be taking significant sums out of the region's economy and handing it to constituencies in the leafy shires.

"This will squeeze our living standards even further and have a knock on-effect for the North East economy by reducing local spending power."

Ian Lavery, Labour MP for Wansbeck, said: "I am totally opposed to regional pay. People need to pay paid across the board across the country. It is just another attack on hard-working people in Labour heartlands." Plaid Cymru MP Jonathan Edwards, who secured the Westminster Hall debate, said: "Public sector regional pay is a more explosive issue than pensions and will very probably be the biggest industrial issue of 2012.

"The Chancellor wants to reduce public sector pay across countries and regions in the UK because he believes that it keeps private sector pay low in those areas.

"He is looking down the wrong end of the microscope and should instead be seeking to support private sector industries to increase their wages."

The plans would create a "downward spiral" with public sector workers having less money, if they had a job at all, to spend and impacting on the local private sector, said the Welsh MP. He also said: "These proposals will institutionalise low pay in those regions and create employment ghettos where people will not wish to move because workers there will be forced into low pay and low ambition.

"With the ongoing public sector pensions dispute still unsolved, regional pay proposals will increase Government-union tensions and likely lead to further industrial action this year."
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Publication:The Journal (Newcastle, England)
Date:Jan 10, 2012
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