The Government said in its autumn statement that it was considering bringing in regional pay. I am against this idea and said so in the House of Commons in a debate called by the Labour Party.
Conservative MPs were against the national minimum wage when it was introduced in 1998. Any attempt to undermine the national minimum wage through regional pay would be very bad news for people in Sefton. Many people on the minimum wage already struggle and to cut this further would be to go back to the days of £1 an hour security jobs and poverty pay in many areas. The minimum wage protects some of the poorest working families and any attempt to undermine it should be resisted. The same is true for regional pay for nurses, teachers and police officers and this is what the debate considered in parliament.
Most business people I know want to pay well because they know that if they look after their staff, their staff will do a good job and help their businesses to thrive. If we apply the same principle to the public sector, paying people well and treating them well are both critical factors in delivering good public services, but undercutting pay, making it easier to fire people, and cutting 40,000 public sector jobs in the North West are all decisions that sap morale and make people more fearful, making it less likely that services will be delivered well.
It is also less likely that people will spend money when they are fearful, and that will harm the private sector businesses whose customers work in the public sector. The government has discussed cutting pay in Sefton and it has discussed removing vital protections for working people. It has already made deep cuts to jobs. It is no wonder that people across Merseyside are terrified about the prospects for their jobs and for their families.
Many of my constituents work in the public sector and would like to know why regional pay is being proposed. For staff and their families in the North West of England, regional pay would most likely mean that they would be paid less than colleagues elsewhere. There would be several consequences of such a change.
The likelihood is that we would see regional inequalities made worse. Where unemployment is already high and where the recession has hit communities hardest, the introduction of regional pay would make matters worse. Lower pay in the poorest areas is what regional pay means, and the consequences are that the best performing staff would be able to earn more elsewhere. That means that it would be harder to recruit and to retain staff where they are most needed.
Lower pay means less money going into the economy, again where it is most needed. Less money from lower pay means less money being spent in local businesses already struggling under the pressure of being in deprived areas suffering from a made in Downing Street recession.
Public sector jobs help to create private sector jobs. Indeed, there is research suggesting that every pound spent on public sector pay generates up to £1.50 elsewhere in the economy. When we consider the implications of regional pay, I start to see it as yet another way for the Government to make matters worse, not better, in the areas that need the most help.
Lower pay for poorer regions will make it harder to attract the best staff and to keep them. It will mean less money for the staff and their families in already poor areas, and it will take more money out of the hardest hit local economies.
The Government should have nothing to do with regional pay. They should continue to work with the staff who do a good job serving our communities up and down the country. They should support those staff to ensure that they can continue to deliver excellent services, not undermine them by sapping their morale with such crazy suggestions.