How distortion flourishes in our divided kingdom
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Some time ago Chatroom was disabused of the notion that key workers are really the sons and daughters of politicians looking for a cheap way to get on the housing ladder when an irate senior civil servant at what was then the Office of the Deputy Prime Minister explained that the group really did comprise nurses and the like.
At the time Chatroom was told that the point of the schemes was that all the qualifying grafters had one thing in common - nationally negotiated pay deals.
So basically, the government couldn’t afford to bankroll agreements based on the housing costs of key workers living in London and the South-East and saw subsidised housing as a cost-effective alternative.
But that’s not the only way national wage bargaining distorts the economy and the housing market, and in her new book entitled More Than We Bargained For Alison Wolf exposes some of the folly and unfairness that can result from centralised pay negotiations.
The professor of public sector management at King’s College London claims that the system foists unfeasibly high wage structures on poorer regions of the country, many in the north of England.
Of course, this compounds local unemployment problems while simultaneously imposing uncompetitive remuneration packages on the more prosperous south, efficiently depleting the number of high quality teachers and medical staff where they are most needed.
