The English Regions used by statutory services and European Parliament lists. Photo: pmsa.org.uk
The right-wing of the Labour Party likes to rabble-rouse. They’re not all a bad bunch, and they have every right to their opinions. But occasionally their blinkeredness becomes too obvious to ignore. The latest topic to pass through their “real world of realpolitik” is the Coalition’s proposal to introduce regional pay in parts of the public sector. Former Labour Party manager Rob Marchant (whose personal blog is linked to on this site), writing on the “New Labour” blog Labour Uncut, invites his readers to “take a step back,” on the unions’ reaction against regional public service pay, arguing that abolishing existing national pay rates is right.
Marchant writes that in some areas, “[public sector] pay rates can be artificially up to 18% higher than their private sector equivalents,” and that some public servants “are overpaid for where they live.” Marchant continues:
As the government points out, the overpayment of public sector staff discourages the private sector from starting up in some areas, meaning that some parts of the country become “public sector ghettoes” where the private sector is squeezed out because it doesn’t want to employ staff at an above-market wage. Result: private sector under-investment.
Marchant offers not a shred of evidence for the government’s claims, seeing content to parrot them. The obvious nonsense in this above statement is that demand for local goods and services in these so-called “public sector ghettos” would drop further if local workers’ wages were to fall (regardless of their employer). Marchant warns of “market failure” if trade unions like the PCS defend the “distortion” of regional pay, but in many areas, including transport, investment in the regions is hugely outweighed by investment in London and the South East: that’s the real distortion. What about the increased risk of market failure when yet more money is taken out of the economies of England’s poorer regions, when no word is given on balancing public investment across the country (which may include a few relocated publicly funded jobs)?
Marchant acknowledges that existing regional pay, the London weighting applied in most public service roles, isn’t fit for purpose. I would agree with him that
the system even then visibly fails to attract, for example, enough teachers to schools in inner London because many cannot afford to live there. So some people are still not paid enough. Result: poor levels of public service.
Marchant omits to consider whether a talented teacher, perhaps recently graduated, wanting to pay off debts but enjoy life with a disposable income, would want to work in a target region for lower pay? I’m sure Cornwall, Cumbria, the North East, the small town former industrial areas of the Midlands can be great places to live, but it is horrendously simplistic to claim the cost of living in these areas is much lower than in London and the South East (not least through the increased necessity of car ownership). A public servant with skills, ideas and career aspirations might not be able to afford to live in many regions either under regional pay. The result? poor levels of public service, in areas that include widespread rural poverty, that need more and better services, not less. The effect: nothing to redress the nationwide economic and social problems caused by an overpopulated, overconsuming South East.
So just what is behind the Labour Right’s embrace of the Conservatives’ latest assault on the regions, particularly the North? The nearest I can get is a fixation with winning Tory-Labour marginals in the South East, seen as crucial for securing a Labour majority at the next general election. Few Labour activists would question the need to target some of the Party’s limited resources in the South East – the only region where the Conservatives enjoy overwhelming support – but only the fanatical want this at the expense of the many marginals and less-than-safe seats elsewhere, particularly the Midlands and the North, which Labour still needs to reconnect with (a whole blog can be, and several already are, devoted to Labour’s position in Scotland).
Ignoring the regions, their need for good jobs in all sectors and balanced investment will be bad for economic recovery, bad for public finances and bad for the Labour Party’s electoral chances. Already, Labour activists where I live in the North are staying at home and members are leaving the Party over the leadership’s pronouncements on public sector pay, coupled with indecisiveness in response to workers fighting changes to public service pensions. Labour’s support for regionalised pay would exacerbate this trend. A failure by Labour to stand up for economic equality and be consistent about regional prosperity would be another move towards political consensus, an embrace of the Conservatives’ divide and rule tactics, that are damaging economic recovery and the communities that need it.
Some might call my view as a kind of One Nationism. I call it solidarity.
The other question is whether regional pay fixing should also be abolished as well? If the government, and other agencies, really want regional and market variations to play a role then they should allow each employer to set their own pay level, per job, based on the skills needed, supply and demand, and other local factors?