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'Wages need to be local'

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One issue that is expected to get a mention in the Budget is that of regionalising or localising pay in the public sector so that a teacher or nurse does not get the same wage everywhere in the country.

Chris May, senior national officer for the Public and Commercial Services Union, told the Today programme's Evan Davis that this would be "cruel and unfair" as public sector workers are just coming out of a pay freeze.

He said there was no evidence of regional pay disparity and while he acknowledged there was an economic imbalance between London and the rest of the UK, he maintained that "postcode pay cuts" are not the answer.

John Cridland, director general of the employers organisation the CBI, explained that private sector business is varied because pay is relevant to local labour market.

He said that local managers need to be able to pay wages that reflect local labour market to give them more funds to invest elsewhere.

Mr Cridland explained that small businesses in the CBI get annoyed at the impact of wages being higher than they need to be for that local labour market because they have to compete with public sector wages.

"Wages need to be local," he added.


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