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Where 'local pay' will hit hardest
TEACHERS, paramedics and police officers will be hit hardest by the introduction of local pay in the region, it can be revealed today.
And women in the public sector face more pain than men under the Government’s plans to wipe out higher salaries than those paid by private firms in the North-East and Yorkshire.
The impact of one of the Government’s policies is revealed in evidence from the Treasury to independent pay review bodies.
If true, it will almost certainly see the Government facing the threat of action by teachers already angry over changes to their pensions.
North-East business leaders yesterday joined union bosses to criticise the plan that will mean public-sector workers getting paid less to do the same job as workers in the South.
North-East Chamber of Commerce chief executive James Ramsbotham said he believed that closing the gap that existed between the sectors could provide short-term benefits for businesses that struggle to compete with public-sector wages.
But he added: “The major issue with it is that the Government should be working towards making the economy more equal across the regions and not entrenching further disparity by reducing spending power in the North-East.”
Chancellor George Osborne has vowed to implement local pay from next year, setting lower rates in the North than in London and the South-East, to reflect the cheaper cost of living.
The measure – which threatens some workers with long-term pay freezes – is necessary because higher publicsector salaries are “crowding out” private firms, which struggle to recruit, it is argued.
This week, Mr Osborne accelerated the switch, giving some departments – those where national pay freezes have ended – the go-ahead to backdate any changes to this year.
They include staff working in jobcentres, the Border Force and the DVLA, as well as the departments of business, local government, culture, environment and energy.
However, it will be up to individual ministers whether to opt for local pay – and no worker will have their pay cut, merely held back to allow the private sector to catch up.
Now the Treasury’s evidence has revealed which public-sector staff enjoy the biggest “pay premium” in comparison with average salaries.
It shows the teachers are the most “overpaid”, earning about 1.8 times the average in the North-East and 1.6 times in Yorkshire.
Next most vulnerable to pay freezes are paramedics, police officers and nurses. However, the pay difference is smaller for firefighters and prison officers.
The inclusion of the police in the evidence suggested local pay was still being considered for officers – despite a minister appearing to rule it out last year.
The evidence also points to a study by the Institute for Fiscal Studies, suggesting that public-sector workers were paid 11.7 per cent more in the North-East and 13.4 per cent more in Yorkshire.
But the gap is far larger for women (18.3 per cent in the North-East, 16.1 per cent in Yorkshire) than for men (4.6 per cent and 10.5 per cent).
Labour MPs have vowed to fight local pay, warning of “low pay ghettos” that will widen the North-South divide and take up to £1bn out of the North-East every year.
Last night, the Northern TUC ridiculed the analysis, accusing the Chancellor of a plot to “rob Northern nurses of pay to help fund his tax cuts to millionaires in the South”.
Kevin Rowan, regional secretary, said: “The Government is not comparing like with like. There are no nurses, paramedics or social worker in the private sector, just as there are few engineers or printers in the public sector.
“The only fair comparison to make is between people doing the same job, with the same skills and same experience – not opening up a postcode pay lottery.”
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