Prospect Deputy General Secretary Dai Hudd said: “Introducing regional pay would take a further £1.7bn out of people’s pockets, if pay were reduced by 1 per cent. All this is money that people would be spending in their regional economies, supporting their local shops, businesses and enterprises. Neither does the budget have anything else to say about growth.”

Today the Cabinet Office had released ‘so-called’ evidence to support its policy on regional pay.  “This ill-thought through policy advocates holding down pay in certain areas of the country, based on the flawed economic logic that it will encourage local enterprise,” said Hudd.

“Prospect condemns the quality of the report. The Cabinet Office should be ashamed to have produced such poor quality evidence in support of a policy that has devastating implications for large parts of the UK and their local economies.

“Hardest hit would be Wales, where it claims a public sector pay premium of a staggering 18 per cent. Its figures do not properly reflect the make-up of the labour market and its private sector comparator in each region. For example it glosses over the fact that the public sector has a higher proportion of highly qualified and female workers and that the pay gap between men and women in the public sector is narrower.

“Once more, ordinary people are the victims today. Rather than kickstart the economy, today’s measures will make things even worse for our members, who are already enduring a perfect storm of pay freezes followed by pay caps, increased pension contributions and job cuts.”