Saturday, 17 March 2012

Regions Unleashed...Eventually

Scrapping national public sector pay rates is great news at last for regional growth.  As mentioned previously, government spending is crowding out private businesses in the regions, and strangling their ability to compete nationally and globally.  Labour costs are a big component of this, and businessses should be allowed to base themselves in regions where lower local living costs mean workers don't need to charge as much for their services. 

This means the unions will need to be more flexible and do more work locally if they are to represent their members effectively. Instead, the likes of Brendan Barber, the Trade Union Council general secretary, would rather play on middle class fear and greed, suggesting this will “suck demand out of local economies, increase joblessness and worsen the North-South divide”. This is a bizarre claim. More civil servants will keep their jobs if the government can reduce its wage bill. Similarly, with local wages lower, businesses can afford to employ people who they otherwise could not. So this move means more jobs, not fewer.

But when? The gap between public and private sector pay in many regions is huge:
"In Wales, public sector workers are paid on average 18 per cent more than private sector workers doing the equivalent job. In Yorkshire and the Humber and the East of England the difference is 13 per cent, while in the North East the pay gap is 11 per cent." 
It could take many years for this difference to be removed.
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