Bringing Plymouth’s wage levels in line with the national average would bolster the city economy by nearly a quarter of a billion pounds a year, figures indicate.
The scale of the additional potential spending power generated for householders struggling with rising living costs and cash-strapped public services is likely to fuel the current debate over regional pay, which is feared would hit incomes.
The Coalition Government has proposed to end national wage rates and ‘localise’ public sector salaries to make them “more responsive to local labour markets”, and to prevent private firms being “crowded out”.
But in a low wage economy like the South West, critics have warned the measure would see public sector pay dragged down, and take millions out of the economy.
It comes amid moves by 19 NHS trusts across the region to create a regional pay system which would see wage cuts for NHS staff.
Plymouth Hospitals NHS Trust is among those signed up to the South West Pay, Terms and Conditions Consortium, which has been branded a ‘cartel’ by critics.
Figures compiled from the Office of National Statistics already show that average annual pay in Plymouth standing at £23,879 is £2,736 lower than the national England average of £26,615.
With 81,500 Plymouth residents recorded as being in full-time employment, raising the salary to the national level would be worth £223million a year.
In the South Hams, where the average salary is £25,307, it would generate an estimated £38million and in Cornwall, with average pay of £22,068, it would be worth a potential £744million.
The figures are set to spark calls for steps aimed at improving wage levels, and stiffen opposition to measures that could widen the pay gap.
Proposed local pay deals for state-funded workers were rejected by delegates at the Liberal Democrats conference amid warnings it would hit wages and take money out of the local economy.
And Labour have also opposed the moves, although critics argue the party introduced local pay in the courts service when in power, and claim it paved the way for the NHS changes.