Chi Onwurah MP for Newcastle Central speaking in the Regional Pay debate in Parliament pointed out that the evidence clearly shows that the disparity between public and private sector wages, is focused on the lower section of earners.
“ From my experience of working in the public sector as a chartered engineer, I know very well that at the higher end, professional engineers, for example, are much better paid in the private sector than in the public sector.
“ Seeking to equalise pay rates in the private and public sectors in the regions will inevitably reduce the wages of the poorest-paid.
“ I think we all agree that the poorest people in the country did not cause the financial crisis, so why are Government policies again targeting the poorest people?
Ms Onwurah highlighted the fact that all the poorest people will pay because depressing wages at the lower end of the public sector will inevitably impact on the private sector.
“ The Government intend to reduce salaries in the public sector, which must have a knock-on effect on the private sector.
“ The minimum wage is not a living wage.
She pointed out that employers paying low-wages and minimum-wages are often subsidised by the state through the working tax credit and housing benefit paid to their employees so that they can live decently. Depressing private sector salaries would cost the state more in benefits.
“ We know that the ideological basis of much of the Government’s approach to the economy is that destroying the public sector will provide space for the private sector to leap in, create jobs and new opportunities, and drive the economic recovery forward.
However she says when she speak regularly to local businesses in Newcastle and the North East, whilst they all want to play a part in driving forward growth and creating a resurgence of jobs in the region, businesses tell her not that wages are too high. But that they need: more public sector support in areas such as skills; investment in shared resources, infrastructure, and transport; and measures to increase confidence and buying power among the public.
Ms Onwurah believes that reducing the salaries of public sector workers in Newcastle will reduce people’s confidence and lessen the prospect of private sector employers increasing employment and stoking growth.
Also that depressing local wages will not only drive out more skilled constituents, but will hit the private sector in regions that are already vulnerable and most greatly affected by public sector cuts.
The Minister, the Economic Secretary to the Treasury, responded to these points but failed to address them and merely made generalised comments about the whole UK economy.
Text taken from Hansard.