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Regional Pay

Volume 474: debated on Wednesday 2 April 2008

2. What discussions he has had with Cabinet colleagues on the potential effects of introducing regional pay arrangements in Government agencies and services in Wales. (197225)

My right hon. Friend the Secretary of State and I have regular meetings with ministerial colleagues to discuss matters of such importance to Wales. We need to give careful consideration to all the potential effects of regional pay to ensure that our pay policy promotes economic growth in all parts of the UK.

My hon. Friend will be aware that after the decline in the coal and steel industries in the ’80s, we are at long last beginning to see the benefits of regeneration and growth in the local economy, and we need to do everything we can to keep that momentum going. Will the Under-Secretary agree to meet me to discuss the detrimental effect that regional pay could have on employees and the economy in general in my constituency?

My hon. Friend makes important points. On my recent ministerial visits to her constituency, I have seen the work that she has done to promote jobs in the local economy. The Secretary of State for Wales discussed the issue of regional pay at a recent meeting with the Lord Chancellor, and my right hon. Friend and I will continue to raise Members’ concerns about that issue. In response to my hon. Friend’s request, I should say that we will be more than happy to meet her and other colleagues who wish to raise the issue with us.

The convergence fund areas are there for a purpose: to raise the gross domestic product within those areas. Yet regional pay policy will depress salaries in those areas. Which is it going to be? Is it not time for some joined-up thinking? I know that the Secretary of State has made representations, but I agree entirely with the hon. Member for Llanelli (Nia Griffith). We need to redouble our efforts on the issue, because it could be very detrimental to many areas of Wales.

I am pleased that the hon. Gentleman recognises the representations that we have already made, and we will continue to make them. The civil service currently has regional flexibility in its pay systems, and the Department for Work and Pensions has four separate pay zones. However, that Department, for example, has no plans whatever to introduce low-level regional pay for Wales.

In the wider context, the key is to address, foster and encourage the development of a strong private sector as well, with well paid jobs in Wales, so that the pay arrangements reflect the wider labour market fundamentals for the work force—not least, recruitment and retention. None the less, we will continue to take these issues up and make representations.

Rather than bringing in regional pay for some civil service jobs in Wales, would it not be more sensible for the UK Government to move even more civil service jobs to Wales, and thus help fill the empty floors in the Llanishen tax office in my constituency?

My hon. Friend raises an important point about the reallocation of public sector jobs to Wales. Although the current issues are controversial, it is worth remembering, as I am sure my hon. Friend does, that more than 3,259 jobs have been relocated to Wales from central areas of England. We are the third highest receiving area in the whole of the UK for public sector jobs, thanks to that relocation. However, my hon. Friend makes a fair and valid point, and my right hon. Friend the Secretary of State and I will continue to listen to the concerns expressed and make representations as appropriate.