0:01:22 > 0:01:25In the North East and Cumbria: Battle lines are drawn over local
0:01:25 > 0:01:35pay. Should civil servants, teachers and nurses in the north be
0:01:35 > 0:01:35
0:01:35 > 0:32:09Apology for the loss of subtitles for 1833 seconds
0:32:09 > 0:32:14paid less than those elsewhere in A very warm welcome to this part of
0:32:14 > 0:32:19the show. Coming up: the government says we need more skills like this
0:32:19 > 0:32:27to help our economy. Why are they downgrading the course that these
0:32:27 > 0:32:33teenagers are studying? Will talk about that, and the content of the
0:32:33 > 0:32:37Budget. My guests are Bridget Phillipson and Jeremy Middleton.
0:32:37 > 0:32:39Will start a public sector pay, some people in the North East to be
0:32:39 > 0:32:45paid less for doing the same jobs and people in the other parts of
0:32:45 > 0:32:55the UK. The Treasury set out the case for making public sector pay
0:32:55 > 0:33:01more responsive to local markets. They say that public sector pay
0:33:01 > 0:33:10pays more than necessary, making it hard for private sector employers.
0:33:10 > 0:33:13They are called postcode pay-cuts. This business faces the challenge a
0:33:13 > 0:33:20public sector employees getting paid more than they can afford to
0:33:20 > 0:33:25pay. It is not just in relation to the hourly rate of pay, it is
0:33:25 > 0:33:32flexible working, working practices. In the North East, public sector
0:33:32 > 0:33:38salaries are 11% higher than those in the private sector. Women's pay
0:33:38 > 0:33:42is over 18% higher. I have a fear that we are looking at a two-tier
0:33:42 > 0:33:47country, with the North East very firmly in the bottom tear. We don't
0:33:47 > 0:33:51wish to be known as a low-cost economy, certainly not a low-pay
0:33:51 > 0:33:56economy. We need to pay competitive rates to attract the best talent
0:33:56 > 0:34:06into North East. Some business leaders are worried,
0:34:06 > 0:34:14but there is probably more nail- biting end there. There are 25,000
0:34:14 > 0:34:19civil servants across the North East. Local MPs said be cautious
0:34:19 > 0:34:24over local pay. It is going to take some time to try and implement. I
0:34:24 > 0:34:33think the dust is far from settled on this issue. The Chancellor
0:34:33 > 0:34:43pointedly kept Allied the point of local pay. But who wants it?
0:34:43 > 0:34:46
0:34:46 > 0:34:54I can tell you he doesn't, B PCS union. -- The PCS union. Kevin
0:34:54 > 0:35:02McHugh has joined money to discuss this. Each department has its own
0:35:02 > 0:35:10rate of pay. Someone in Longbenton get paid at the same grade As
0:35:10 > 0:35:20someone in Cardiff or Luton. We think this postal Descartes is a
0:35:20 > 0:35:23
0:35:23 > 0:35:25moral -- postcode pay-cuts is immoral. Would you agree that if
0:35:26 > 0:35:34you private sector company is trying to compete, it is hard to
0:35:34 > 0:35:39find people to fill those jobs? think that some low-grade that is
0:35:39 > 0:35:43true, but middle managers get paid more than in the civil service. It
0:35:43 > 0:35:53is a bit of a myth. You're saying that those figures are wrong?
0:35:53 > 0:35:56think they are slightly skewed. We have millions of people who one
0:35:56 > 0:36:02employee at the moment, and in this region we have people queuing up
0:36:02 > 0:36:09for every job. 7% of the Civil Service get paid less than �15,000
0:36:09 > 0:36:14a year. When not talking great sums of money. If this goes ahead, how
0:36:14 > 0:36:18strongly we commanders fight? Would they strike? I think they would.
0:36:18 > 0:36:23The Civil Service has just had two years of a pay freeze, and again to
0:36:23 > 0:36:31get a 1% cap in the next two years. George Osborne is saying that he
0:36:31 > 0:36:35wants to give us less than people in the south. He's not saying that
0:36:35 > 0:36:45an MP Newcastle will get less than Labour MP in Luton. That is
0:36:45 > 0:36:46
0:36:46 > 0:36:52nonsense. What case is there for this? The government has announced
0:36:52 > 0:36:59that they will be a review. They have said that departments can go
0:36:59 > 0:37:04ahead with this. They have gone a little further. It all depends how
0:37:04 > 0:37:08it will be implemented. I don't envisage they will be any pay cut
0:37:08 > 0:37:12in the public sector. If they came in a tour, it would be bigger
0:37:12 > 0:37:19increases in some parts of the country. I don't think it would be
0:37:19 > 0:37:26universal. It won't be applied to doctors, teachers, nurses, people
0:37:26 > 0:37:29who are not fundamentally mobile. They could be applied in some areas
0:37:29 > 0:37:37of the Civil Service. It is only right that we look at some
0:37:37 > 0:37:40potential benefits of that. For example, if it becomes cheaper to
0:37:40 > 0:37:45run civil service operations in the North East, for example, as opposed
0:37:45 > 0:37:49to London, then that would make a more attractive case for bringing
0:37:49 > 0:37:57more people here. Personally, I wouldn't mind seeing the Treasury
0:37:58 > 0:38:01being relocated here. Bridget Phillipson, this is the key, it
0:38:01 > 0:38:05might have made the North East more competitive? I think this will have
0:38:05 > 0:38:11a devastating impact on the North East economy. It will increase the
0:38:11 > 0:38:14divide between the north and south, and entrench those problems. I
0:38:14 > 0:38:18think if you had a police officer and a paramedic doing a job in
0:38:18 > 0:38:24Sunderland, they should receive the same level of pay as someone in
0:38:24 > 0:38:29Southampton. If you're doing the same job, you should be paid the
0:38:29 > 0:38:39same wage. It will suck demand out to the private sector in the North
0:38:39 > 0:38:40
0:38:40 > 0:38:44East. These public servants spend money here. You have introduced
0:38:44 > 0:38:51local pay rates in the Court Service when you ring government?
0:38:51 > 0:38:57Bows were very different circumstances. -- of those were
0:38:57 > 0:39:04very different circumstances. were pay increases in some parts of
0:39:04 > 0:39:11the country, but not the North East? In the North East, you have
0:39:11 > 0:39:1910 a jobseeker's chasing every job. There is not a lack of people who
0:39:19 > 0:39:29are wanting employment. The private sector can take their pick of the
0:39:29 > 0:39:36candidates. There is no evidence about this theory that having
0:39:36 > 0:39:40higher public sector wages stopping the private sector from expanding?
0:39:40 > 0:39:46I was talking to a businessman, he was talking about the wages that he
0:39:46 > 0:39:51pays. I think we need to keep a reasonably open mind, until we can
0:39:51 > 0:39:54see what the benefits could be. It could mean attracting more jobs
0:39:54 > 0:39:58here, and there could be benefits of the private sector in attracting
0:39:58 > 0:40:02some of the very best talent. I would like to understand what those
0:40:02 > 0:40:07benefits could be. Thanks for a much for now.
0:40:07 > 0:40:13There were a few other nuggets for the North in the Budget. Newcastle
0:40:13 > 0:40:17become a super connected city, with ultra-fast broadband. There will be
0:40:17 > 0:40:25local enterprise partnerships in the North East, and an increase in
0:40:25 > 0:40:29personal allowances should lift 32,000 people out of tax altogether.
0:40:29 > 0:40:39The fiscal measures to benefit a small, because of the lower pay
0:40:39 > 0:40:45
0:40:45 > 0:40:51here. -- to benefit are more. think it is absolutely
0:40:51 > 0:40:56extraordinary. They are letting it ordinary working people out of the
0:40:56 > 0:41:02tax system. I would prefer to see a cut in VAT, putting money back in
0:41:02 > 0:41:06the pockets of people. I would have preferred to see some investment in
0:41:06 > 0:41:11manufacturing firms. We have a real challenge in the North East, and I
0:41:11 > 0:41:19think it is a real problem, that people are being hit hard, there is
0:41:19 > 0:41:28a squeeze on living standards, VAT has risen, tax, the government has
0:41:28 > 0:41:33made deny a logical choice -- has made an ideological choice. This
0:41:33 > 0:41:36was pretty thin pickings for the North East. No major infrastructure
0:41:36 > 0:41:42investment, that must be disappointing? I think you are
0:41:42 > 0:41:46right. The big change was taking people out of the tax net. We
0:41:46 > 0:41:56benefited more than people in any other region. It was all paid for
0:41:56 > 0:42:01by the increase in stamp duty. Less than 1% of houses over 2 million
0:42:01 > 0:42:05are sold in this region. We wanted to see some structural investment,
0:42:05 > 0:42:12none of that? They have been a whole series of measures coming
0:42:12 > 0:42:16through, whether it be be regional growth fund, or the enterprise
0:42:16 > 0:42:21zones, the government does want more investment. They have an extra
0:42:21 > 0:42:27�1 billion for the regional growth fund. We have to secured that
0:42:27 > 0:42:30funding, and invested. There are funds available. The government is
0:42:30 > 0:42:36trying to make it a good place to do business. They have cut business
0:42:36 > 0:42:40taxes, is that not a good move? wanted to see them are delivering
0:42:40 > 0:42:47on jobs and growth. I wanted to see a fair Budget, it is unfair if
0:42:47 > 0:42:51where pensioners are having to pay for a tax break for the richest.
0:42:51 > 0:43:01what more could have been done? would have liked to see more
0:43:01 > 0:43:02
0:43:02 > 0:43:06investment in manufacturing. We were pressing for a repeat in the
0:43:06 > 0:43:10bank's tax. We have a real crisis hearing the North East, and the
0:43:10 > 0:43:18government is not taking the action necessary. You stand accused of
0:43:18 > 0:43:23doing very little? That is completely untrue. We are reducing
0:43:23 > 0:43:33the deficit, keeping exchange rates low. That is why the private sector
0:43:33 > 0:43:35
0:43:35 > 0:43:39is doing well. We have the only region which has a surplus.
0:43:39 > 0:43:47Staying with the economy, the gunmen once more young people to
0:43:47 > 0:43:51consider a career in Engineering. There are vocational courses which
0:43:51 > 0:43:57allow them to study them at school, that is not necessarily the case
0:43:57 > 0:44:06though. Getting under the bonnet of a
0:44:06 > 0:44:10sports car. It is every teenager's dream. At this Teesside school it
0:44:11 > 0:44:17also part of the curriculum. It is a fantastic opportunity to get them
0:44:17 > 0:44:21involved in engineering. We Abri in other subject areas, maths, I T.
0:44:21 > 0:44:29You get to see what engineering would be like in a real working
0:44:29 > 0:44:35environment. We have built this car. We have been to France to do civil
0:44:35 > 0:44:40engineering. That makes a practical and academic has made the
0:44:40 > 0:44:44engineering diploma popular with employers as well as schools. These
0:44:44 > 0:44:48are likely to be some of the last students to study its, that because
0:44:49 > 0:44:58the government plans to cut the qualification's value from seven
0:44:59 > 0:45:03
0:45:03 > 0:45:07GCSEs to one. These are our very best students. We will be limiting
0:45:07 > 0:45:11them a massively, if they get downgraded. The students could come
0:45:11 > 0:45:19out with a handful of GCSEs in the right subject areas would be
0:45:19 > 0:45:24limited, it would be an injustice to take them out. Looking ahead,
0:45:24 > 0:45:26that would be bad for the economy as well as young people. Business
0:45:26 > 0:45:31and young people will lose the opportunity to catch these young
0:45:31 > 0:45:34people at the point when they are most enthusiastic in their lives.
0:45:34 > 0:45:39That point when they are at 16, wanting to make those decisions,
0:45:39 > 0:45:46whether to move on to a Modern Apprenticeship, or a level courses
0:45:46 > 0:45:49that are engineering based. This course is highly rated by pupils
0:45:49 > 0:45:56and teachers, but there have been criticism of other vocational
0:45:56 > 0:46:01qualifications available. There is a sense that the system is ripe for
0:46:01 > 0:46:05reform. The government is drastically reducing the number a
0:46:05 > 0:46:11subject. A former headteacher agrees there had been too many soft
0:46:11 > 0:46:16options. Personal beauty care, horse care, aspects of engineering
0:46:16 > 0:46:21which were of value. We need to get back to the basics of education,
0:46:21 > 0:46:27get children properly educated to a high standard up to 16, and then
0:46:27 > 0:46:31allow variety and depth in other ways after that. Even if a shake-up
0:46:31 > 0:46:40is necessary, some question whether engineering was the right target.
0:46:40 > 0:46:44Supporters of the Diploma include Rolls-Royce and JCB. This
0:46:44 > 0:46:50engineering firm worries that any change will mean less recruits
0:46:50 > 0:46:56coming through the ranks. We cannot attract people into engineering,
0:46:56 > 0:47:01and one of the benefits is to get young people educated into thinking
0:47:01 > 0:47:04that engineering is a good career choice. If we don't inspire the
0:47:04 > 0:47:11next generation to make as well as study things, the price could be
0:47:11 > 0:47:21paid not just in the classroom, but here on the factory floor.
0:47:21 > 0:47:21
0:47:21 > 0:47:30Bridget Phillipson, whatever the merits, the will -- the real issue
0:47:30 > 0:47:38was that schools were using these causes to inflate their results?
0:47:38 > 0:47:44This engineering diploma was the -- was developed with businesses, so I
0:47:44 > 0:47:49don't understand why the government feels the need to back down. Firms
0:47:49 > 0:47:59such as Siemens and JCB were involved in developing its. I want
0:47:59 > 0:48:01to see the government investing in vocational education. It is not a
0:48:01 > 0:48:08dogmatic return to blazers and a style of education that no longer
0:48:08 > 0:48:18exists. We want good jobs, building on the success of vital engineering
0:48:18 > 0:48:19
0:48:19 > 0:48:26firms in the region. This Diploma sends a funny signal out.
0:48:26 > 0:48:30Engineering say they want this course? It is vital. A message is
0:48:30 > 0:48:38that if you want a job, and you want a good job, the best chance of
0:48:38 > 0:48:43getting it is in engineering. does this pass the message on?
0:48:43 > 0:48:47There is a complete commitment to that. The important background to
0:48:47 > 0:48:53all of this is the report that said under the last administration,
0:48:53 > 0:49:03there was a collapse in core skills. Maths, English, science. Why did
0:49:03 > 0:49:07that happen? There was a massive reduction in those core skills. The
0:49:08 > 0:49:15vast majority of those people were not being educated to a standard in
0:49:15 > 0:49:22which they could get higher education, that had to change.
0:49:22 > 0:49:27Let's do some maths, the school says this course takes a three
0:49:27 > 0:49:37times as long to teach, it's only worth one GCSE, so they went
0:49:37 > 0:49:39
0:49:39 > 0:49:46teacher? -- they won't teach it? is not been taken away. There are
0:49:46 > 0:49:50only 4% other vocational such beds which are recognised -- 4% of a
0:49:50 > 0:49:56vocational subject which are recognised. The government is
0:49:56 > 0:50:03creating a lot of apprenticeships, and trying to utilise skills?
0:50:03 > 0:50:09possible to support a traditional academic subject. -- support
0:50:09 > 0:50:17traditional academic subject. It is important that the government does
0:50:17 > 0:50:22not throw out anything that which is not traditional -- which is not
0:50:22 > 0:50:28traditional. Thank you very much. The Chancellor to have just under
0:50:28 > 0:50:36one hour to deliver his Budget. Our own Billy Whizz, Mark Denten, has
0:50:36 > 0:50:42done the whole thing in 60 seconds. Almost 10,000 jobs will be cut by
0:50:42 > 0:50:46local councils and the North East. The biggest cuts will be made in
0:50:46 > 0:50:50Durham, Newcastle and Hillsborough. The Archbishop of York has been
0:50:50 > 0:50:58hotly tipped to be the next Archbishop of Canterbury. He has
0:50:58 > 0:51:04played down speculation. There has been a call for help for the
0:51:04 > 0:51:09pharmaceutical industry. There has been a loss of 450 jobs. I want to
0:51:09 > 0:51:14make use of the North East's potential. I want to keep that
0:51:14 > 0:51:18manufacturing centre opened. I would like the government to assist
0:51:18 > 0:51:23in the recovery of this centre. Opponents of the government's
0:51:23 > 0:51:28changes to the NHS held a candlelight vigil in Newcastle. The
0:51:28 > 0:51:33plans were approved by MPs. Finally, pies, pates and sausage rolls will
0:51:33 > 0:51:41be more expensive in October because there VAT. It got a less
0:51:41 > 0:51:46than warm response from the customers are great. -- all but