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Boom! Labour concedes principle of regionalised state pay and benefits.

By Tim Montgomerie
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Byrne LiamIn today's Telegraph Liam Byrne announces that Labour will support the Coalition's benefit cap as long as it is regionalised. The Shadow Work & Pensions Secretary writes:

"While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a “one-size-fits-all” cap be fair to working people in both London and Rotherham?"

Boom! A big principle has been conceded by Labour. If we don't need a one-size-fits-all benefits cap then we don't need one-size-fits-all benefits and we don't need one-size-fits-all public sector pay rates. I wonder what the unions think of Mr Byrne's intervention?

In his autumn statement George Osborne said that he was considering the introduction of regional pay scales for public sector workers. It's something long recommended by Nick Clegg's favourite think tank. High public sector wages in, say, NE England make it difficult for private sector firms to recruit the most talented local people. In yesterday's Times (£) Anushka Asthana examined the problem:

"[Public sector] pay restraint may be necessary, but imposing it evenly across the UK is simply not fair. Why? Because in Scotland, Wales and Northern Ireland the public-private wage gap for men is 8.9 per cent... yet in London or the wider South East, any gap is statistically insignificant. In the North East, paramedics earn more than 60 per cent above average pay. But in London they earn less than three quarters of average pay. If relative salary denotes value, a firefighter has much higher status in Wales than the South East of England. Closing the national gap may sound fair in Cumbria, where public sector wages pulled ahead in the boom years. But in Surrey, Sussex and Kent it could mean pushing those who educate our children, care for our health and keep crime off our streets towards the bottom of the pile."

Deputy Tory Chairman Michael Fallon MP has been criticising Ed Miliband today for not backing the benefits cap as proposed by the Coalition. “Ed Miliband said he’s ‘prepared to take the tough decisions on tackling the something for nothing culture," says Mr Fallon in a press release, "but unless he backs the cap on benefits, no ifs, no buts, then his words were just posturing from a weak leader.” Perhaps but Mr Fallon has also argued persuasively for the end for national pay scales. Suddenly and perhaps inadvertently Labour has stumbled into this same territory. Conservatives should welcome this movement towards benefits and wage flexibility.