Regional pay: 2012's biggest issue says Jonathan Edwards MP
A Welsh MP has told a debate on regional pay the subject will be "more explosive than pensions" and will be the biggest industrial issue of 2012.
Plaid Cymru's Jonathan Edwards led the debate at Westminster Hall on Tuesday and warned regional pay would create "employment ghettos".
A think tank claims men and women in Wales can earn 18% more in the public sector than in private companies.
The Welsh Conservatives blamed Labour for failing to grow the private sector.
According to the Institute for Fiscal Studies (IFS), women in Wales can earn an extra 18.5% and men an extra 18% in the public sector than they could expect to make working for private companies.
It says the public-private wage gap in Wales is the highest in the UK.
The UK government says it wants to create a more balanced economy, but critics say Wales would lose out.
Mr Edwards, who represents Carmarthen East and Dinefwr, told MPs that a policy of regional pay would further depress areas in need of investment.
End Quote Jonathan Edwards MP Plaid Cymru
These proposals will institutionalise low pay in those regions and create employment ghettos where people will not wish to move because workers there will be forced into low pay and low ambition”
He added: "This will lead to a downward spiral as those public sector workers will have less money in their pockets - if they have a job at all - and will have less to spend, with an obvious knock-on effect upon the local private sector.
"These proposals will institutionalise low pay in those regions and create employment ghettos where people will not wish to move because workers there will be forced into low pay and low ambition."
The debate heard about concerns of a "brain drain" if regional pay was introduced, with professionals moving to areas with the highest pay.
Mr Edwards questioned the effect on the morale of police officers asked to go and work in London - as happened during the 2011 riots - for different pay.
Susan Elan Jones, Labour MP for Clwyd South, asked whether Welsh Secretary Cheryl Gillan - who represents an English constituency - would earn more than an MP representing a Welsh constituency.
Conservative MP Glyn Davies, who represents Montgomeryshire, said the subject was not a new issue.
He said the UK government had not made any proposals and said the issue should be debated in July, when a report is published.
Treasury Minister Chloe Smith said such a policy is "not about saving money but it is about supporting economic growth".
Meanwhile, the Welsh Conservatives condemned successive Labour governments in Wales for failing to grow the private sector.
Paul Davies AM, shadow minister for Finance, said: "Under Labour, Wales remains the poorest part of the United Kingdom."
He added: "We need to hear how ministers will support small businesses, encourage entrepreneurship and attract investment to maintain and strengthen private sector pay for hard-pressed workers."