Tory/Lib Dem Coalition

Regional pay

In fact I tacked this issue on to the end of a brief post about the Budget recently, but no one bit, so I thought I’d set aside my husband’s suggestion for a timely post on ‘Why I’m converting to Islam’, and give you all another chance to discuss the exciting issue of regional pay differentiation.

Rob Marchant, a Labour blogger, makes an interesting case for not treating national public sector pay rates as a shibboleth.  Left Foot Forward has also been covering the topic, and here they post poll results indicating quite a bit of resistance to the related proposal to freeze public sector pay outside the London area. 56% felt this would be unfair, and 45% believed such a move would harm regional economies.

There does seem a logical case for some regional differentiation.  This is already in place, of course, through London weightings, so why not refine the process further, seeing as the principle is already recognized by the system?  Marchant notes that high public sector pay rates in otherwise depressed areas may make it more difficult for new private enterprises to get off the ground.

As a knee jerk lefty, I’m not instinctively drawn to the arguments put forward by Marchant.  But they do seem worth engaging with, at least.  One possible counterargument might be that the regions benefit through the implicit trade off in the system.  If a public sector worker is faced with a choice between working in a desirable area or a depressed and/or remote region, the property price differential may act as a powerful incentive to go for the second job.  This may help ensure that the best teachers and doctors are spread more evenly around the different regions.  And, if they have a bit more to spare at the end of the month, they are likely to spend their money in a way which helps support the local economy, including its private sector workers of course.

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