Public sector workers 'have 14 per cent pay premium' in South West
Public sector pay is still outstripping private sector wages in the South West by more than £3,000 a year despite a squeeze on state salaries.
The difference means workers employed by the state in the region enjoy a 14% "pay premium" over those privately employed, according to an analysis right-of-centre think tank Policy Exchange.
By contrast, in central London, the East and South East the average public sector worker is paid less than they would if they were working in the private sector.
The difference remains despite public sector workers having had a three-year pay freeze. The study underlines how state employment provides the best paid jobs in the region – a long-held claim which critics argue damages companies who struggle to recruit the best staff.
Buy one get one free on main course and specials excludes fillet steaks and beef wellingtons
Must book to qualify 01209 860332 and present voucher on arrival
Contact: 01209 700617
Valid until: Sunday, December 15 2013
Policy Exchange blames the gap on national pay bargaining, and the report will lead to renewed calls to introduce regional pay scales instead.
Chancellor George Osborne commissioned a report into linking salaries for teachers, nurses and other public sector jobs to regional private sector wages.
The Liberal Democrats boasted last month at their party conference they had blocked the plan going any further amid fears in the region it would hit spending by cutting wages.
But some MPs believed regional pay rates should be considered.
"I do worry about the impact of better-paid jobs in the public sector making it more difficult for private sector businesses to recruit, and make profits so they can pay much-needed business tax and also to generate new jobs," said Mel Stride, Conservative MP for Central Devon.
"I will be studying this latest report carefully."
The think tank said reducing the pay and pensions of public sector workers to bring them in line with private sector norms would save £6.3 billion a year, which could be spent on creating 288,000 private sector jobs in some of the poorest parts of the country.
But unions dismissed the idea of a public sector "pay premium" as a "myth" and said the report's figures were misleading, as most of the lowest paid public service jobs – such as cleaners, hospital porters, care assistants and school cooks – had been outsourced to the private sector, leaving higher paid employees like judges, doctors and senior civil servants on the public paybill.
Dave Prentis, the general secretary of public sector union Unison, said: "The idea that there is a public sector pay premium is a myth and dressing it up with dodgy statistics still won't make it true."
The new report draws on data produced by the independent Labour Force Survey for the first quarter of 2013.
Matthew Oakley, head of economics and social policy at Policy Exchange, said: "Nationalised pay negotiation is not fit for purpose for the modern public sector. It is bad for the economy and bad for public services."