Newspaper article The Journal (Newcastle, England)

Osborne's Pay Plan Swiftly under Fire; Workers in the North Set to Lose Out

Newspaper article The Journal (Newcastle, England)

Osborne's Pay Plan Swiftly under Fire; Workers in the North Set to Lose Out

Article excerpt

Byline: Adrian Pearson

THE wages of tens of thousands of North East public sector workers face being slashed in a "race to the bottom" because the Government will not tackle London's cost of living, it was last night claimed.

As fury continues over Chancellor George Osborne's plans to bring in local pay deals for teachers, nurses and council staff opponents to the plan have said the Government would be better making it easier to live on a decent wage in London rather than slash pay packets elsewhere.

The Chancellor is expected to use this week's Budget to confirm he is accelerating moves, floated in December, to close the gap with wages paid by firms.

He believes the so-called public sector "premium" - which the Treasury puts as high as 18% in some places - is stifling private sector recruitment in areas with low unemployment.

Trade unions have reacted furiously to plans to reduce public sector salaries in poorer parts of the country, prompting fears of a year of strike action before the policy is rolled out next year.

Those criticising the proposals include Ed Cox, director of regional think tank IPPR North, who said the Chancellor should focus on making it easier to live in London on any wage rather than seeking to bring down public sector pay nationwide, arguing that the Treasury plans were the result of failing to tackle London's housing problems.

He said: "There are legitimate concerns that the cost of living varies and wages should reflect that.

"But actually the cost of living outside of Greater London is converging, we can see most regions are coming together and London having a different problem, a problem caused by London house prices in particular.

"The solution to that should not be to drive down wages elsewhere, it should be to tackle the problems in London, because really that is where this problem exits. Clearly we should address housing prices and the cost of living in London rather than targeting public sector wages. …

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