Pay for the best, MPs tell business

Dec 12 2006 By Ross Smith, The Journal

Labour MPs in the North-East last night called on businesses in the region to increase pay rates if they want to attract the best talent.

Their call came after a CBI report recommended a cap on public sector wages to stop firms losing quality staff.

Salaries in the public sector should be negotiated in the region based on North-East market rates, rather than nationally, the CBI said - meaning workers in this region would be likely to get smaller pay rises than elsewhere in the country.

But Gateshead East and Washington West MP Sharon Hodgson said: "People in the North-East have always suffered from below average wages and nationally agreed public sector pay is finally making it clearer that this is unacceptable.

"The CBI have got the argument wrong. A civil servant doing the same job here as one in London deserves the same pay - and that's true of jobs in the private sector too."

Blaydon MP Dave Anderson said: "Private sector employers should pay a decent rate for the job, just as the public sector do.

"If we start paying people less in the North-East, we will have less chance of attracting people here.

"The concept of `let's make it worse for everybody else' is typical of the private sector mentality."

But CBI North-East director Sarah Green said businesses could not continue to compete in a market "artificially inflated by public sector pay".

She said: "Only the private sector can generate wealth. If you ignore that fact and price them out of the market, you end up with a region that's wholly dependant on the public sector, which is not sustainable.

"You can continue going round and round in a position of escalating inflation, but the person who will suffer ultimately will be the consumer who will see prices rise.

"What we're looking for is a steady workforce paid a reasonable amount for doing an excellent job, sustainable long term. We don't want a boom-and-bust cycle a where the only option is to cut jobs."