Regional pay is on the front pages and it’s particularly important to us in Wales. It’s a bad idea and we need to unite across all parties in South Wales – MPs, Assembly Members and Councillors – to say that regional pay would be a thoroughly bad idea.
Recently I pointed out that our economy is inevitably tied to the European economy. If it wasn’t obvious before, it’s been made obvious by the impact of this global recession. To divide and weaken our own country by separating it into local markets with lower values of currency is absurd. Even if the argument that it would ‘save money’ was valid – and it isn’t – it would still keep poor areas poor and rich areas rich. It would drastically reduce social mobility for those wishing to change jobs, transfer position or change location.
One estimate suggests that regional pay in Wales would cost the Welsh economy at least £1.25 billion a year. But the real impact would be even greater if you factor in the reduced spending power of public sector workers. The Public and Commercial Services Union is right to say that “regional pay is grossly unfair, penalising workers according to where they happen to live, and it would have a particular impact on women, who make the up majority of the public sector workforce.”
But the damage to the private sector is arguably the real issue. If you cut the income of public sector workers, they won’t be able to spend their money in the small and micro-businesses that form the heart of the Welsh economy. Jane Hutt, the Welsh Assembly’s Finance Minister, describes the idea as “economically damaging and socially divisive for Wales”.
Extra pay is given to people who work in areas of great cost, like London. There is London weighting on salaries and the London Living Wage is adjusted according to the cost of living. But this is the sensible way to deal with exceptional cases. To create regional pay across the country would be to stand logic on its head. To force down wages for the poorest just doesn’t make any sense from any point of view. National pay is what can help drive the regional economies to become better, not to keep them down to stagnate or shrink. I hope we can all unite across parties in this area to fight a daft London-centric idea.