HL Deb 04 December 1986 vol 482 cc930-3

3.11 p.m.

Lord Sefton of Garston

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government how many government employees are in receipt of extra payment (for example, London weighting) over and above that paid in Merseyside, and what is the average payment in percentage terms, and in cash, to each employee.

The Secretary of State for Employment (Lord Young of Graffham)

My Lords, staff below Grade 3 in the Civil Service receive London weighting as follows: 80,900 staff in the inner zone receive London weighting at £1,465 per annum; 20,600 staff in the intermediate zone at £840 per annum; and 22,500 staff in the outer zone at £615 per annum. Staff aged under 18 receive 75 per cent. of these rates. What this represents in percentage terms will vary according to age, grade, zone and on which point of the incremental scale the officer is paid.

In addition, certain secretarial and typing grades employed in the inner zone receive a special pay addition of either £300 or £400 per annum. There are no other elements of pay related exclusively to the area in which an officer is employed.

Lord Sefton of Garston

My Lords, I thank the Minister for that reply. It will mean some careful study of Hansard, and it does not in fact tell us what the percentage is. Will the Minister not agree that in spite of the differential which exists between less well off parts of the country and London, there is little evidence to suggest that jobs are moving out of London? Will the Minister give an estimate of how wide the differential must be before it takes effect in moving jobs provided by the Government out of London?

Lord Young of Graffham

My Lords, although there is some evidence that banks and other firms have transferred some of their offices out of London, I fear that the message is that wages in less fortunate areas of the country as regards unemployment are not lower than wages in the South. If we take East Anglia and the South-West region of this country, where unemployment for male manual workers is running at 10 per cent. or 20 per cent. under the national average, wage rates are beneath the national average. If we take Yorkshire, the North-West, Humberside and the Northern regions of the country, where unemployment is substantially above the national average, wage rates in those regions are above those in East Anglia and the South-West. Indeed, it is quite disturbing that wage rates remain persistently high in areas of the country with high unemployment. I do not believe that that helps the export of jobs to these regions.

Lord Barnett

My Lords, is it any part of the Minister's policy to encourage the payment of lower wages in areas of high unemployment?

Lord Young of Graffham

No, my Lords; but it is very much part of this Minister's policy to encourage the growth of jobs in such regions, and I shall follow any course which will aid that.

Lord Simon of Glaisdale

My Lords, is it not a fact that London weighting is included in pensionable pay for the purposes of calculating retirement pensions, whether or not the pensioner will retire to London or to the provinces? Is that not contrary to any rational regional policy?

Lord Young of Graffham

My Lords, that may well be so, but that is another question. However, I shall certainly write to the noble and learned Lord on that point.

Lord John-Mackie

My Lords, is the Minister aware that there are other areas of the country where people may feel they should have some weighting in their salaries? I refer particularly to the North-West of Scotland, where expenses such as petrol, education and a whole host of things need looking into. When I was in the Forestry Commission I received many complaints from people living in those areas that they were badly done by compared to their colleagues living in the South.

Lord Young of Graffham

My Lords, I am unable to show a breakdown of wages in particular regions of Scotland. However, Scotland as a whole does have a higher rate of unemployment, as we all know, and yet it also has higher manual male wage levels than parts of the South-West and the South. We are not in the business of having lower wage levels; we are in the business of encouraging firms to move to the regions and of encouraging employment.

Lord Dean of Beswick

My Lords, perhaps I may ask the Minister when differentials in London weighting were last reviewed and whether there is any intention to institute such a review in the near future, bearing in mind the phenomenal increase in the price of housing in London and the South-East.

Lord Young of Graffham

My Lords, that is a matter which is kept under constant review during the course of Civil Service pay negotiations.

Lord Bruce of Donington

My Lords, will the noble Lord get his act together with his right honourable friend the Chancellor of the Exchequer, who is busy boasting not only about the buoyancy of revenue this year but about his anticipations for next year? Is the Minister aware that part of the reason for buoyancy in revenue is that workers are being paid in accordance with a freely negotiated wage level which, according to the reports of the National Economic Development Council, are considered reasonable by both employers and employees?

Lord Young of Graffham

My Lords, perhaps I may tell the noble Lord that I am a member of the National Economic Development Council and that that analysis does not fit in with my recollection of the meeting. It is fair to say that that point was not necessarily agreed.

The matter of concern both to my right honourable friend the Chancellor of the Exchequer and to myself is that if national pay rates are agreed, they do not take into account variable costs of living in different parts of the country and do not always reflect in the same net take-home pay. It is our concern that parts of the country which could and should support more economic activity should have all the necessary economic incentives to do so. One way to achieve this without lowering living standards in the slightest is to see that running costs are lower so that firms are encouraged to migrate to such areas.

Lord Sefton of Garston

My Lords, does the Minister not accept that national wage rates are always negotiated in the context of differences which are negotiated locally in order to take account of local conditions? Perhaps the Minister will also refer to the question which I asked. Will he accept that a quotation in the Daily Telegraph to the effect that pay differences would provide a powerful spur to encourage more jobs in the locality, which was attributed to the Minister, is correct? If it is correct, will the Minister give an estimate of what he considers the differentials should be before the market forces (which he so worships) come into effect?

Lord Young of Graffham

My Lords, I believe that our nation has suffered in past decades from Ministers who have tried to estimate exactly what market forces would actually do.

Noble Lords

Hear, hear!

Lord Young of Graffham

I am looking closely at noble Lords opposite when I say that, my Lords. The point that I make to your Lordships is a simple statement of fact. Areas of the country where unemployment is considerably above the national average have wage levels above those in areas of the country where unemployment is lower than average. I believe that speaks for itself.

Lord Sefton of Garston

My Lords, so the Minister did not know when he made the statement what the effect would be.