Welfare Reform Bill

My Lords, I have some remarks on Motion G2. I recall vividly that in the Autumn Statement there were indications that regional pay was to be examined and the Chancellor had asked regional bodies throughout the United Kingdom to report to him by next July on the issues of regional pay. From a regional perspective, I have to say to the noble Lord, Lord McKenzie, that I have great reservations about his proposals. While a cap is by definition a blunt instrument, and there always has been a specific London issue in pay for as long as I can remember anyway, if we go down the route of establishing a body to run around the regions—as the noble Lord, Lord Newton, has pointed out with his usual typical incisiveness, the variation is not only between regions but within regions and within cities, streets and districts—then I fear that we open the Pandora’s box not only of regional pay but of regional benefit, and sooner or later some people are going to say regional taxes. I fear that the amendment could inadvertently have a perverse effect on all of us, particularly in the regions. I understand that there is very much a London issue, but within regions there are vast variations. If you want to encourage people to move to where they are more likely to get work, that tends to be in densely populated areas—that is just the reality of life. This measure, however, portends a reality where you could discourage people from going somewhere that they are more likely to find work. I fear that if we go down the road of the amendment, we could open up a range of issues in the regions relating to pay, benefits, taxes and the whole relationship that exists there. When I heard the noble Lord’s colleague announce this policy in the other place some time ago, I was greatly surprised. Many of his colleagues spoke to me after I had made the point about regional pay and said, ““Yes, we can see this is coming””. However, this would actually accelerate the process, so I hope that the noble Lord might not move his amendment and might instead reconsider the policy as it might apply to the regions.