Think tank calls for an end to national pay deals

Feb 2 2010 By Adrian Pearson, The Journal

PUBLIC sector pay in the North East should be slashed in order to help fund staffing costs in the more expensive south, a think tank has claimed.

The Liberal-leaning CentreForum has called for an end to national pay deals for thousands of council staff and teachers.

Professor Alison Wolf, who helped put the report together, suggested the North East could cope with the wage cut because the cost of living was so much lower.

She has argued that businesses in the region struggle to match attractive public sector pay packages and were denied the chance to grow as a result.

The think tank’s changes would mean a worker in the North East doing the same job as a council employee in the South was paid less.

Academics behind the report claim local councils should set a wage which reflects local pay standards.

Professor Wolf said those living "somewhere in which the price of their house is a third less than others" were effectively paid more than those in the South.

But union leaders rejected the claims as a housing market issue and not a basis to introduce pay cuts. Prof Wolf’s pay proposals would also effect police and NHS staff.

The think tank has urged the Government to offer individual contracts to the five million public sector workers rather than allow unions to secure collective agreements.

Kevin Rowan, regional secretary for the TUC, said it would be unwise to scrap hard-won pay agreements. "There is already an ability to show flexibility in public sector pay requirements, and the problems facing the South East should be addressed without sacrificing collective bargaining agreements," he said.

"Public sector staff in the North East are already among the poorest, a change to collective pay agreements would make that worse not better.

"We would certainly urge against any change to the collective pay agreements." Across the North East councils are preparing to axe thousands of jobs as they face years of reduced funding.

And thousands of workers could be asked to consider strike action after the Government announced it would be limiting pay increases to a maximum of 1% for two years.

Union bosses said setting pay before the rate of inflation is known could amount to wage cuts for many teachers, nurses and council workers.

Blaydon MP Dave Anderson, a former union leader, said the introduction of local pay deals had been a disaster for many North East miners.

"We have had this up here and it was terrible," he said last night.

"What we have with national pay bargaining is a process that stops bad employers from taking advantage of individual workers."