Any attempt by the Chancellor to scrap national pay rates for public sector workers in the Budget on Wednesday will be “vigorously opposed” by the Scottish government. John Swinney, the Finance Secretary at Holyrood, claimed that George Osborne’s move would be a disaster and would mean a reduction in pay for people living outside the southeast of England.
Mr Osborne is expected to say in the Budget that civil servants should have their pay brought into line with private sector salaries in the regions where they work. He is said to believe that factors such as the cost of living in an area should also be taken into account when setting public sector pay.
Treasury sources say that the move would be an attempt to prevent private companies being “crowded out” because they cannot compete with the wage levels being offered in areas where public sector workers are paid more than those in the private sector.
Research by the Treasury has suggested that the pay gap ranges from 18 per cent in Wales to 0.5 per cent in the southeast of England.
In Scotland, women in the public sector are said to earn nearly 20 per cent more than their private sector counterparts, while for men the difference is about 6 per cent. However, trade unions have said that setting pay levels locally would lead to huge disparities across the country and could drive down pay in many parts of the UK.
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Mr Swinney, speaking on the BBC’s Sunday Politics Scotland, said that the initiative would have a “potentially disastrous impact” not only on employment and remuneration, but also on public expenditure within Scotland, Wales and Northern Ireland because it would reduce the cash these areas receive through the Barnett Formula. He said he had made his “complete opposition clear” to the Treasury on the approach that it was taking to regional pay.
Mr Swinney added: “What the Chancellor’s proposal is rumoured to be is a reduction in pay for people in areas outwith the south of England, and what one might consider to be areas of congestion in the jobs market.
“That will be a disastrous approach if it’s taken by the Chancellor because it will undermine economic confidence in areas far removed from the southeast of England and it will do absolutely nothing to solve regional inequities. “My counterparts in Wales and Northern Ireland are as vociferously opposed to this as I am.”
Mr Swinney said that he would not intervene to use Scottish government funds to top up public-sector pay rates, over which he had “no control”. “Let’s be absolutely clear, the Scottish government will go absolutely nowhere near this proposal for the areas of pay policy that are under our control.”
.A new group aimed at keeping Scotland in the Union is to be announced by Ruth Davidson, the leader of the Scottish Conservatives, this week (Angus Macleod writes).
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Conservative Friends of the Union (CFU) will be formally launched at the party’s Scottish conference in Troon, in Ayrshire, on Friday and will be will be open to anyone.
Ms Davidson said that the coming campaign ahead of the independence referendum would be a battle to determine the UK’s very existence. Scotland remaining part of the UK was, she said, an “absolute priority”.
The campaign group is being organised on the basis of the Scottish local authority map and the party said that anyone who shares its support for Scotland remaining part of the United Kingdom could sign up for their local CFU group.