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Budget (North-East)

The hon. Gentleman asks me to do that as well as to respond to other hon. Members in three minutes, but I value his Back Benchers more than he does, and I wish to talk about local pay. The hon. Member for Gateshead focused much of his contribution on that issue, and I wish to reassure him about something that he already knows. At this stage, the Government are not setting out detailed proposals; they are asking experts how public sector pay might better reflect local markets. Localising pay has the potential to improve the resources available to private sector businesses that need to compete with higher public sector wages. It can improve or reduce unfair variations in the quality of public services, and tackle a limit on the number of jobs that the public sector can maintain created by having to support disproportionate wages. The principle of local pay has already been established, and I confirm, as has been mentioned, that the Labour party did that in 2007. I will move on briefly to pasties and the sausage rolls mentioned by the hon. Member for Redcar. The point is that the Budget closes loopholes and addresses anomalies to ensure a level playing field. The National Federation of Fish Friers states:"““There should be a level playing field. Why should the UK's fish and chip shops have to pay 20 per cent. on all the hot food they sell…when the bakery next door sells hot pies, pasties and sausage rolls free of VAT?””" The Budget seeks to introduce that level playing field.