Resilience to the cuts

But the north-south divide exists. It has been there for all my lifetime and it is about to grow sharper. Independent research confirms what is obvious enough, which is that the government cuts are going to hammer the north more, and the north-east in particular. In a survey for the BBC last week, 324 council areas were ranked as to their \”resilience\” to public sector cuts. Middlesbrough came bottom, the least resilient place. Redcar and Cleveland, Hartlepool, South Tyneside and Sunderland were all in the bottom 20.

This \”resilience\” does of course map very closely (because it is caused by) over the percentage of the local economy which is public sector. Larger public sector is more affected by cuts to the public sector.

This isn\’t rocket science.

Which does give us something to giggle over really. There are those among us who say that the problem with the country is not enough public sector. Which makes the fact that all of the places with large public sectors are shite somewhat of a counter argument.

Somehow \”let\’s expand the public sector so that Bath can be like Middlesborough or Redcar\” isn\’t all that hugely persuasive.

But turning away from snark and being serious for a moment: there is one thing that we can do which will reduce this problem.

We have, in the public sector, an insistence on paying the same wage for the same job anywhere in the country. This \”national pay deal\” thing. And we need to end that, crush it if need be, for without doing so these great northern towns will never recover.

One statistics I can\’t source but which I\’ve heard somewhere is that female white collar wages in the NE are 80% lower than those in London.

I will admit to not being quite sure of that: but I know that it\’s not 80% of London wages, the gap is much larger than that.

OK, so now we have the same wages in London as we do in the NE (and yes, I\’m ignoring the London weighting, which isn\’t all that much anyway) for those working in the public sector. It\’s true of civil servants, of doctors, of nurses…..of however many other groups.

So, in those poorer areas, areas where average wages are much lower than London, relatively high wages are paid by the public sector. In London relatively low wages are.

So, if you were to think about where you might place a factory, a new business, move a large business to, where would you go? Where wages are low, at least as part of your decision: but perhaps not where all the ambitious peeps have already gone into the public sector where they get those relatively high wages.

Now no, I\’m not saying that this is the only cause, only that it\’s one of them.

National pay scales do mean that public sector employment pays better than private sector in poor parts of the country. Meaning that you\’re not going to get much private sector business setting up in those areas because they\’re not going to be able to get the \”better\” chunk of the labour force because they\’re all in that public sector.

Abolish the national pay scales and you\’ll see this problem reduced. The redevelopment of the great nothern towns depends upon their being able to exploit their comparative advantages: one of which is lower living costs and lower wages. But having national pay scales prevents them from doing this in part: thus we must abolish the national pay scales.

4 thoughts on “Resilience to the cuts”

  1. Also, the ability to pay civil servants a pittance uup north, could also lead to a much bigger transfer of jobs, as budgets would go much further there.

  2. To be quite fair you could burn most of the North East and the UK economy wouldn’t so much as burp,

    In fact it’d probably feel just like it had had a massive shit after too many pints the night before, i.e. much better!

    And before the haters start hating, I’m writing this from Sunderland and yes, it is a fucking dump! (but it’s my dump)

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