Peter Black AM writes: Welsh Liberal Democrats say no to regional pay

The Welsh Liberal Democrats believe that regional pay would further entrench Wales as a low-pay economy, both in the public and private sectors. More to the point it would lead to men and women doing the same job at different ends of the country, but receiving different rates of pay. I believe in the principle of an individual being paid a rate for a job, not in a multi-tier system which sees wages set on a postcode-by-postcode basis which will ultimately see the rich areas of south-east England become richer at the expense of the rest of the UK and in particular Wales.

Freezing people’s salaries for an extended period until they equalise with local private sector pay rates is demonstrably unfair and would lead to declining living standards and the further economic depression of many communities in Wales.

While housing costs in Wales are on average less than those in some areas of England, gas, electric and fuel bills are often much higher. Food costs are the same, or as is the case for many rural parts of Wales – much higher. Any move to reduce or freeze public sector wages based on differences between private and public sector salaries will merely serve to further ingrain deprivation as a fact of life for many Welsh communities.

Welsh Liberal Democrats do not believe that regional pay will stimulate the local economy, and instead urge the Welsh Government, the WLGA and UK Government to work closer together on appropriate private enterprise stimulus packages. The best way to tackle an 18% salary difference between private and public sector workers in Wales is to raise up earnings in the private sector through the development of high value, high quality jobs.

It is important we do not forget that it was under Labour that regional pay was first introduced in to the courts system. We opposed that move then and we oppose the current suggestion made by Chancellor George Osborne that a similar system could be rolled out across other civil service departments.

Like many of our colleagues in Westminster, Welsh Liberal Democrats are fundamentally opposed to regional pay.

* Peter Black is the Liberal Democrat AM for South Wales West and is the Liberal Democrat spokesperson on Local Government, Heritage, Housing and Finance.

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30 Comments

  • Good article Peter, am glad the Welsh Liberal Democrats are making a stand on this.

  • It’s worth noting Vince Cable’s comment on Question Time last week:

    “Imposing regional variation in pay would be completely wrong and it would not work”

    “We certainly don’t want to be in the situation where in relatively low paid areas of the country we depress pay that would not be fair.”

    So there are clearly some people in England, London and in the Cabinet table to take a view that takes on board the inetrests of all parts of the UK

  • Am very worried about this potential change – the Lib Dems can not let this happend.

    Also, let’s not forget that Labour support regional benefits.

  • Caractacus
    >I would argue that a teacher in Wales compared to a teacher in Surrey gets a better quality of life

    Big chunks of South Wales qualify for EU deprivation grants. Plenty of ‘problem’ schools as well as nice rural ones.
    Take Merthyr: 20% of children live in workless households, 13.7% of working age adults are unemployed (Children and Young People’s Plan 2011-14),
    You need more than the scenery of the nearby Beacons, I suspect, to attract teachers there.

    Reason public sector jobs need to be subsidised is that the public sector accounts for 25.6% of employment in Wales (3rd 1/4 2011), against 20.6& UK average, and private sector pay is low. We don’t have the revenue from private sector workers to fully fund the public ones.
    Not sure driving public sector pay down would help the rest of us though: traders etc already suffering from fewer customers as public sector jobs axed.

  • We can’t let this happen, why can’t the coalition just leave well alone? If the Tories want to do it, then fine… but it’s not in the Coalition Agreement so they can do it if/when they form a majority government. Lib Dems should not let this happen, times are hard enough at the moment as it is.

    I hope Vince stops any plans for this.

  • @Lon Won

    It might look as if Welsh councils could set pay locally, they then might be able to encourage people and businesses to move there.

    However, the likely practical effects would be different as Peter points out. To give a very specific pair of examples, if you have pay set by either GO region (very crude, and an astonishingly bad idea, especially for Wales) or by local authority (merely a very bad idea), then skilled Welsh workers in some border regions – Wrexham, or Cardiff to pick two excellent examples, would find they would have the choice of jobs in Wales, or jobs they could just as easily commute to without even moving house in better-paying English regions that would pay more (Cheshire West or Bristol/Bath) for exactly the same job.

    The issue is not ‘Welsh teachers will go to work in London and get paid more’, it’s ‘Welsh teachers can go to work in Bristol and get paid more and they won’t even have to move far or pay those higher London rents’.

    And there is no incentive at all for Bristol teachers to go the opposite direction because there is literally nothing in it for them. Unless they’re the ones who can’t compete with the good Welsh teachers and so can’t get jobs in Bristol.

  • “Welsh Councils could not afford to set pay rates at a level to compete with the South East of England. ”

    That depends on the way that money is dished out. My preference is for all areas to get money for schools based on the number of kids, and the poverty of the area. So Wales would get more money, and people in Surrey would pay higher council taxes to cover the difference. At that point a Welsh council CAN afford to pay the same rates as the South East, but they would not be FORCED to do so. Democratically elected councils in Wales COULD decide to pay less, and hire more teachers, raising school standards, or they COULD decide to pay teachers less and improve other services or they COULD decide to pay teachers less and cut council tax or they COULD decide to just do whatever the South East decides to do.

    Peter: What is wrong with giving them those choices?

  • @Tim

    With all due respect, your idea is not what is under discussion, is it?

    And once you start to allow local councils to set different rates for, eg, teachers, you set up a genuine labour market. In your scenario, the local authority doesn’t ‘improve standards’ by lowering teacher’s pay. It loses their teachers to the LA down the road that pays the good ones a bit more.

    The logical outcome of the free-for-all is that the lowest payers end up with skills shortages.

  • Chris – I don’t think we know whether my suggestion is under consideration, but if there is a way to make local pay work (as I suggest there is), then surely as liberals we should be interested in it? I doubt a Welsh LA would lose lots of teachers to Surrey if it raises wages by half as much over the next few years. A Welsh teacher certainly wouldn’t be better off by moving to Surrey in those circumstances. Note that I am not saying that the Welsh council SHOULD do this, simply that it should have the RIGHT to do this, in the context of proper funding. That’s localism, surely?

  • Chris Riley 29th Mar '12 - 8:29am

    @Tim

    I do agree that regional pay could play a role in addressing some labour market disparities if applied benignly and if your role allows you to influence discussion along those lines, then more power to you.

    As I mentioned in my other post, I’m not so concerned about a Welsh LA losing teachers to Surrey. I’m concerned about an internal labour market developing for teachers that will see the poorest areas losing out and I think local pay scale discussions have to be considered very carefully when we’re looking at a finite pool of skills that may not be very easily increased on a local level. There are ways around that – the most obvious is to allow non-qualified staff to teach – but many of them are unsatisfactory and could lead to other issues developing.

  • Peter – All I am saying is that Wales (etc) should get the money it gets now, no more and no less, but have the right to spend it as it wishes. I don’t see why any liberal would oppose that.

  • This is purely about the Coalition trying to save money, it’s not about localism or liberalism or any such things.

    In a nutshell, people in poorer parts of the country will be getting paid less. Great.

  • Chris Riley 29th Mar '12 - 4:07pm

    @Simon Shaw

    It’s a very good argument against London weightings, but, that argument, like most, has two sides, and the side for London weightings has even better arguments – and more of them. Which is why we have them.

  • Andrew Thomas 29th Mar '12 - 9:51pm

    Well done Peter, I totally support your stance. I wish our party nationally would have the same good Liberal priniciples.

  • People always say that Wales is subsidised by England. That assumes that all the taxes my family paid while living in exile because of a shortage of jobs in Wales were for the exclusive use of England. Personally I would have preferred my English taxes to be spent in Wales so that I could have come home BEFORE taking early retirement.

    On another point, no one considers what happens on the borders of high and low paid areas. For 25 years I was on the wrong side of the London Weighting boundary. The London Weighting allowance paid to Bankers, Senior Civil Servants and Chemical Company employees etc vastly inflated the house prices in the town where I lived. But as an employee of a Research Council (which did not pay London Weighting that far out) with an “on call” job I had to pay these prices. The Nimbyism of the commuters meant that my town with 32,000 population had only “village” facilities and we had to travel to other towns for almost everything.

    One also has to remember what the ultimat affect of paying London Weighting has been. FOr many people in the middle of London, who have been drawn in by the promise of higher pay, “company restructuring” in bad times has left them without an income in a very expensive place. Regional pay will spread this hardship to all the high pay cities.

    I now run a small business in West Wales. On our farm and nature reserve we run a small campsite and decorate china and sell craft items. We are kept afloat by the very people who would be hit by regional pay. This area is famous for its artists and crafts people, and they provide the indoor entertainment for tourists when the weather is less then perfect. Without these small businesses the Tourist industry would fade away.

    For a high proportion of businesses in Wales (including for example Artists, Crafts People, Guest Houses and Static caravan maintenance businesses, village shops, farriers, etc) the cost of employing people is not a problem. The sparse population means that businesses have to remain small to survive. Many are what the Government calls “micro businesses”, and only employ people on a casual basis. (Reducing wage bills would make no difference, as there would be no productive work for them to do once the tourists went home for the winter.) However the micro businesses provide valued services to rural communities and provide work for other businesses. Things might be different in the major connurbations, but if city dwellers enjoy visiting the country on their days off, they have to remember who their hosts are.

    City people talk about the higher standard of living in the country. However we pay a price for that. If you run a micro business you find that for much of the year you work 100 hours a week, and miss out on much of the “standard of living” that city peopl get when they visit you rvillage when on holiday. Yes, its beautiful, we have a lovely community and I love being here, but just because the grass appears greener, does not mean that it is actually quite as green as you imagine! And I keep lsong track of this message because my “up to 8Mb/s Broadband” is only getting about 97Kb/s and that results in very strange Browser behaviour indeed!

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