Thursday, 21 June 2012

Midlands coalition MPs vote to cut public servants pay

Pay Fair: Why Regional Pay Doesn't Add UpSince the government announced plans for introducing local pay in this year's Budget, the TUC has expressed concern that any move towards local or regional salaries could lead to a 'brain drain' of public service professionals who would be more likely to go after jobs in the more prosperous areas of the UK where pay rates were higher.
As a consequence the TUC has repeatedly called on ministers to abandon their regional pay plans, believing them to be unfair, divisive, hard to implement and with the risk that billions will be taken out of local economies, accelerating the already growing north-south divide.
Economic impact
The impact of regionalised pay on the Midlands is potentially severe. As a region that has suffered greatly, localised pay has the potential to enforce ‘low wage ceilings’ across great swathes of the Midlands.  
What’s more, the effect of reducing public sector pay in the Midlands would have a significant impact on the purchasing power of workers in the Midlands – with a direct impact on local private sector employers.
It is worth bearing in mind that the direct effect of just a 1% reduction in income on public sector earnings would lead to a loss of £119million in the East Midlands and £131million in the West Midlands.  In addition, there are significant multiplier effects that could be calculated. Therefore these figures represent a conservative estimate of the money that would be taken out of our regional economies.
Clearly, taking this amount of money out of our economy, especially at a time when we are struggling through a demand crisis and double-dip recession is dangerous.
Proposals for regional pay could see over two million public sector workers suffering an almost permanent pay freeze. Taking money out of the pockets of hardworking dinner ladies, teachers and nurses will not only increase the financial pressure on already hard-pressed families but in undermining their spending power will hit also local high streets hard.
Nothing has been thought through properly and rather than carry on regardless, ministers should look before they leap any further. They should listen to the public. Nearly two-thirds of the public (65%) believe that the introduction of local pay rates for public sector employees would make it harder for schools in low-pay areas to attract and retain good teachers.
 Quite simply, by proposing to cut pay at a time when we need to see wage-led growth is the wrong answer, to the wrong question at precisely the wrong time.
Midlands MPs
Over the last few weeks the Midlands TUC have been meeting dozens of Midlands MPs, from across the political spectrum, to discuss the economic and practical realities of regional pay.
We have been explaining what regional pay would mean, both for hard working public servants in our region and the potential negative impact on our local economies in practice.
Parliament vote
A Parliamentary debate on Regional Pay was held on June 20th. 
The two Liberal Democrat MPs in the Midlands, John Hemming MP and Lorely Burt MP, both signed a public letter in the Guardian on 16th May in opposition to the introduction of localised pay. However, it was disappointing to note that both John Hemming and Lorely Burt both voted in favour of Regional Pay.
Despite a couple of Conservative MPs from the North East speaking out against the proposal, not one Midlands Tory MP voted against the proposal.
There were some interesting contributions from MPs from across the Midlands during the debate.  Aidan Burley, the Conservative MP for Cannock, was especially outspoken and stated that “The Government are right to look at more local, market-facing pay and to end the anomaly of national pay bargaining.”
Richard Burden, the Birmingham Northfield MP, challenged Aidan Burley with the following question: “The hon. Gentleman and I represent west midlands constituencies. Will he answer this simple question: does he want to bring down public-service pay in our region, and if so, by how much?” 
Unfortunately, Mr Burley chose not to answer this question.
 Another contribution to the debate from a Midlands MP was form Chris Williamson, the Labour MP for Derby North. During his speech Mr Williamson  said:
“Make no mistake, Madam Deputy Speaker, the proposals for regional pay represent a naked ideological assault on public services and on public service workers.” Chris Williamson went on to say “this is yet another example of the fact that this Government represent and stand up for the rich elite in our country, a Government who are prepared to give tax cuts to millionaires while forcing pay cuts on public sector workers.”
In total the breakdown of how Midlands MPs voted at the end of the debate:
- 52 Conservative MPs voted for Regional Pay
- 2 Lib Dem MPs voted for Regional Pay
- 35 Labour MPs voted against Regional Pay
(It should be noted that not all Midlands MPs were able to take part and vote due to other commitments that meant they could not be present)
The full text of the debate can be read at:
Next steps
What is clear is that this issue is unpopular with the public and is a threat to our regional economy and a barrier to tackling regional inequalities.
The next milestone will be the publication of the recommendations from the Pay Review Bodies . Let us all hope that the Government see sense and drop these divisive, ill-considered proposals and work towards generating jobs and growth rather than penalising, yet again, hard working public service workers. 

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