Let's cut Scottish wages!

As part of the plan to speed British entry into the Euro, Gordon Brown has come up with various measures to bring about convergence with the continental economies. The UK housing market is very different from those of other European countries. A move to fixed-rate mortgages has been mooted as well as reforms to the planning laws, with the threat of additional stamp duty or even VAT on house sales lurking in the background. Homeowners here in Scotland, especially in Edinburgh and certain parts of Glasgow, have seen large increases in the value of their homes. Threats of additional taxes on housing will not be welcome.

I hesitate to say this, but another of the Chancellor's proposals sounds rather promising. Brown is planning to introduce local or regional pay bargaining in the public sector.

About time too.

Scotland has a higher proportion of public sector workers than the UK average. National wage bargaining makes government jobs disproportionately attractive here. Private companies in Scotland face higher council taxes and water bills and pay much more in transport costs but cheaper land and lower wages can compensate. Except, of course, the public sector is offering nationally set wages and these are often markedly higher than those that private companies can afford in this part of the world. People with most skills will often refuse to consider private sector employment.

The unions are opposed to any ending of national pay bargaining in the public sector where so many of their members are employees. Although I don't support plans to take the UK into the Euro, I do hope that Gordon Brown is able to reform national pay bargaining. Until we are able to sweep away almost all government jobs, at least let's remove the competitive advantage they enjoy over wealth creators.