Regional Wage Deals

[ingermany]

Telegraph

Don't know if anyone else has highlighted this, but this is a proposal from government to adjust public sector pay according to regional house prices. So pay won't depend on qualifications or responsibility, but will be determined by a regional Rightmove index. This will result in further central government subsidies to overpriced areas. Contrary to the views in the DT article this will exacerbate the North-South divide. Central government will be pouring direct wage subsidies into the most affluent areas.They already do this indirectly though tax credits and LHA, but now they want basic wages to be made proportional to house prices.

This is a stunning example of inverse logic, which decrees that house prices can't go down, so everything else has to be adjusted to that universal law. In contrast what we need is an acknowledgement that if (for example) teachers can't afford to live in certain areas then the costs of housing in those areas have to be brought down (or the residents made to use private sector resources). Ploughing more public money into these wealthy areas by means of government subsidy will only make the inequalities worse, and is an admission of failure.

Edit: forgot to add: this is just another ruse to maintain inflated house prices.

Edited December 1, 2011 by ingermany

[Dorkins]

Alternatively we could just put all the hospitals and schools in north Wales and everybody can commute to them.

[bajista]

Would work fine if they used increases in local council taxes to fund it. Problem is they'll use national taxes so the people in poorer regions subsidise hospitals in rich ones.

And they wonder why they have a ****ed economy.

I've given up caring - plan to give up working and paying taxes in the next year too. Pointless.

[Democorruptcy]

People outside London, particularly up North, are already paying mortgages for Londoners.

If they have savings the low interest rate has slashed their interest income. The big winners are people with mortgages on the most expensive houses i.e. Londoners

Osborne Osborne said a 1% rise in interest rates would cost the average family £1,000 a year on their mortgage. It would cost those in the most expensive houses with larger mortgages a lot more, i.e. Londoners.

[kenzdawg]

Excellent news! We can take one totally unproductive sector - housing, and let it determine wage inflation in the almost as equally unproductive public sector, whose workers can then use the equity from the homes to get into more debt to buy the consumer crap that will `save the economy`. What could possibly go wrong?

[Dr Renter]

Telegraph

Don't know if anyone else has highlighted this, but this is a proposal from government to adjust public sector pay according to regional house prices. So pay won't depend on qualifications or responsibility, but will be determined by a regional Rightmove index. This will result in further central government subsidies to overpriced areas. Contrary to the views in the DT article this will exacerbate the North-South divide. Central government will be pouring direct wage subsidies into the most affluent areas.They already do this indirectly though tax credits and LHA, but now they want basic wages to be made proportional to house prices.

This is a stunning example of inverse logic, which decrees that house prices can't go down, so everything else has to be adjusted to that universal law. In contrast what we need is an acknowledgement that if (for example) teachers can't afford to live in certain areas then the costs of housing in those areas have to be brought down (or the residents made to use private sector resources). Ploughing more public money into these wealthy areas by means of government subsidy will only make the inequalities worse, and is an admission of failure.

Edit: forgot to add: this is just another ruse to maintain inflated house prices.

I interpreted this differently. My view is that the government will use this to decrease public sector wages in areas where house prices are low, not to increase wages in areas where house prices are high. I've always thought it odd that public sector workers in the south east get paid the same as those in the north west.

[interestrateripoff]

All this is doing is highlighting the massive regional imbalances in the UK economy. The same trade imbalances that have existed at the international level exist within the national borders.

Amazing we can now have "regional" wages but yet we'll still have a single interest rate policy. This needs challenging in court, watch the piggies squeal if that happens.

Edited December 1, 2011 by interestrateripoff

[ingermany]

I interpreted this differently. My view is that the government will use this to decrease public sector wages in areas where house prices are low, not to increase wages in areas where house prices are high. I've always thought it odd that public sector workers in the south east get paid the same as those in the north west.

Yes, of course that's what they want. But the end result is that those in the areas with high housing costs are paid relatively more, simply because they choose to live in an expensive area. The implication is that those who want to buy the most expensive items deserve or need higher rewards for the same work.

[blackgoose]

If Westminster approves such a rule then it is time to move the MPs out of London. That is the area which has easily the most vibrant economy, and now they are thinking about giving further subsidies to those living there.

[libspero]

Excellent news! We can take one totally unproductive sector - housing, and let it determine wage inflation in the almost as equally unproductive public sector, whose workers can then use the equity from the homes to get into more debt to buy the consumer crap that will `save the economy`. What could possibly go wrong?

You missed your vocation

[winkie]

I would say there is a lot of property in London was paid for years ago......water rates and council tax and transport is cheaper, services, entertainment and facilities are close by.....

[mightytharg]

Telegraph

Don't know if anyone else has highlighted this, but this is a proposal from government to adjust public sector pay according to regional house prices.

Good to see that pay is getting fairer and hopefully I won't have to put up with all those Northern scroungers next time I'm on a tropical beach somewhere.

Need to extend this to actual workers though. Why isn't the tax allowance greater in London and the Southeast so that people keep a fairer amount of their post-rent salaries?