Regional pay could lead to ‘low pay ghettos’

Grahame Morris MP.
Grahame Morris MP.

EASINGTON MP Grahame Morris has warned that areas like his constituency could become “low-pay ghettos” if government proposals for regional pay in the public sector are pushed through.

The Labour MP has issued a stark warning to Treasury ministers that the North East is facing a double-dip crisis of job losses.

During scrutiny of the Finance Bill which puts into effect Budget measures, he scorned coalition claims that cuts in the top rate of income tax, coupled with reductions in corporation tax, would boost the region.

Mr Morris hit out that moves towards regional rates of pay meant “areas such as mine would effectively be turned into low-pay ghettoes”.

He said: “The question that needs to be asked is who will be better off from Chancellor George Osborne’s package. The answer is the better-off.

“Ordinary families in Easington spend the vast bulk of their income on VAT items which are going up.

“They do not save to buy Ferraris or holiday homes or to put it into pension pots.”

He said that independent figures show that the average family will be £511 a year worse off, while top earners stand to gain up to 10 times that.

“The Chancellor has chosen to give a substantial £40,000 tax cut to 14,000 millionaires,” added Mr Morris.

“That choice would not meet with favour in Easington, in much of the North East or across the country.”

Health Secretary Andrew Lansley is supporting proposals for regional pay for NHS workers – meaning that some nurses, midwives and hospital porters would be paid less in poorer parts of the country.