Thursday, 21 June 2012

The Regional Pay debate in the House of Commons

Many of you have asked for the speech I gave to the House of Commons on Wednesday on the issue of regional pay. I set out the key points below:
"My entire career has been spent being part of the national health service. My grandmother was an NHS matron, and I came into politics when the hospital in which I was born and which saved my mother’s life was threatened with closure. In 2011 I was diagnosed with a tumour and spent several weeks in the London NHS hospitals. I saw all that was good in those hospitals and literally owe my life to the treatment I received. I will be for ever grateful.

If I took one thing in particular away from that experience, it was an understanding of just how many individuals are involved in making the whole process work. From the porter and the nurse to the physiotherapist, the care lady and the cleaner, everyone is just as important as each other. I think that all Members of the House should remember that when we talk about the public sector we are talking about not only the unions and Unite but the care lady who looks after our mothers and the dinner lady who keeps our children safe at lunch time and provides them with food. It is much more personal than the dry debates we engage in.

There are two key arguments in the debate, the first of which is economic. Having worked as a legal aid barrister or state prosecutor for 15 years, I should declare that I, like many public sector workers, am still owed money by the state, notwithstanding the fact that I stopped working for the state on a legal aid basis two years ago. It was during that time that I saw the effects of local pay, as it is described, and took into account the arguments of Gordon Brown,as usual, he is absent from his place—who first contemplated it in 2003 and then forced it on the Courts Service in 2007.
As with so many of the right hon. Gentleman’s economic policies, I see little evidence that local pay was a success. I have tried to study the economic argument behind it, which is based on the Heckscher- Ohlin factor proportions theory and various academic studies performed by august institutions such as the LSE. I do not support such arguments, which are obscure at best and have not been shown to work in real terms. Also—surely this is the crucial point—it is not supported by businesses in my constituency, none of which has come to me to press for it.

I also believe that regional pay is divisive and manifestly unfair. Members who read The Daily Telegraph today will know that it has criticised me personally for leading the opposition to these divisive plans. It must be very rare to be criticised by The Daily Telegraph and praised by the MP for Sedgefield all on the same day. I was interested when I read on to find that its argument is that pay distortions are:
“economically destructive. They make it harder for businesses in the regions to recruit workers at competitive wage rates and as a consequence they stifle enterprise.”
That is not what individual businesses, whether small or large, in the north-east are saying to me.
This Government, like previous Governments in 2003 and 2007, are right to look at all potential options for boosting growth, and I have no difficulty with them referring the matter for consideration by the pay review body, but ultimately this will not find business support or create the prospect of business growth in the regions that we represent, and we should not support it if it becomes Government policy.
The majority of public sector workers in my region are doing their bit already. They are hard working, and along with the vast majority of my constituents they accept that the Government are right to reduce the deficit, to cut public sector spending, to reform public sector pensions, to freeze pay in some areas and to eradicate some of the non-jobs and excesses that we saw before 2010. That is accepted.

I do not accept that regional pay will be agreed to or supported by the public sector workers who are already experiencing their fair share of the problems that we all have to deal with.
What public sector workers and businesses want is continued investment in manufacturing, something that fell—effectively halved—under the previous Government; the groundbreaking reform of, and improvements to, our schools, and investment in the next generation; continued Government support for apprenticeships, the number of which in my constituency has doubled over the past year; and the maintenance of the Government’s focus on boosting exports, all of which are happening and making a difference to the regional economy.
I have always said that I will put the north-east first, and defending the pay and conditions of public sector workers in this economic climate is just as important as, if not more important than, building up the private sector. I do not deny that I come to this debate with strong opinions on what is economically right, but on this issue I have engaged with union leaders, businesses and local people, and others would be well advised so to do.
We need to be a one-nation coalition, and our focus should not shine too brightly on London and the south-east. We should represent all the people in our constituencies, from the dinner lady to the gentleman who employs 200 people; it is not an exclusive, either/or matter. On this issue, I look forward to the forthcoming visit to the north-east of The Daily Telegraph, which will doubtless come to question many businesses in my constituency.
I make it clear that I do not particularly support the policy under discussion, but I take no pleasure in these debates. This issue is too important to play politics with, so I hope that my friends on the Opposition Benches will spend more time with me, and with their union colleagues, making the case as to why regional pay is wrong, rather than trying to score cheap political points. This is about people’s jobs and pay packets, and I refuse to play any political games with those.
I will not, however, support the Government today, and if this matter were ever put forward as part of Government business, I would not support it.