Academics slam regional pay plan

Updated: 
Brendan BarberSixty academics have warned that the Government's controversial plan to introduce regional pay rates in the public sector could cause huge economic damage and widen inequalities between different parts of the UK.

There is "no convincing evidence" that regional or local pay rates will boost the economic performance of local economies and could reduce consumer spending, the academics said.

Unions have been campaigning against any move to have different pay rates for public sector workers, and officials welcomed the intervention.

Ministers are considering whether to press ahead with plans that could end national pay bargaining, following a review instigated by the Chancellor in last year's autumn statement.

The academics include leading figures in the field of regeneration and economic development, and their letter to The Times newspaper has been co-ordinated by Keith Shaw, a professor of politics at Northumbria University.

He said: "This proposal will depress public sector pay in regions outside of London and the South East and, in areas such as the North East, could lead to a spiral of decline that would serve to further widen the ever-growing north-south divide.

"This concern is also shared by a number of North East businesses and Government MPs in the region, who are also opposed to the proposal."

John Tomaney, professor of urban and regional planning at University College London, said: "I have serious concerns that the full impact of what has been discussed in terms of regional or local public sector pay has not been appreciated by the Government.

"Reducing wages and spending power in the poorest regions can only widen divisions and harm any economic recovery."

Commenting on the letter, TUC general-secretary Brendan Barber said: "This is yet more evidence that the Government's plans for regional or local pay are not just unfair but ill-thought out. They will end up costing local economies dearly as public sector workers in poorer regions rein in their spending."

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