I'm sure Members will be pleased to hear that my dissertation will be short and to the point. It is a well-recognised fact that organisations with a large pay gap between the highest and lowest workers experience more sickness absence and staff turnover than those with more equitable pay differentials.

Exaggerated pay gaps also impede the recruitment of staff, particularly to middle management positions. So, while such pay gaps are frequently opposed on moral terms, there is undoubtedly an economic and business case to be made for more equal pay distribution within organisations. It can also be said that large wage differentials have a demoralising effect on staff, who frequently feel they are undervalued in their particular role. This in turn can have a detrimental effect on the organisation as a whole.

Whilst it must be acknowledged that differentials are quite rightly set to reflect seniority, skill sets and responsibility, these are usually achieved by the setting out of differing pay bands and pay spines, all of which are calculated to ensure a fair and equitable pay system. The problems arise when these differential are exacerbated by percentage rises in salaries, often on an annual basis. If we take, for instance, two employees, one on a salary of £20,000 per year and another on £100,000 per year, and apply a percentage rise of, say, 2 per cent. The first employee gets an additional £400 per year, whilst the second gets an additional £2,000 per year. This clearly increase the pay differential of the two employees—in this case, by some £1,600. Obviously, if there is an annual pay rise of this order, over time, the differential becomes quite substantially increased. It therefore seems quite absurd that this sort of percentage pay rise is the system favoured by Labour-run local councils, given that it is patently unfair to those on lower salaries. One also wonders why trade unions are not challenging this practice, which clearly leaves lower-paid workers at a disadvantage. It is also true that women tend to be in the lower paid category and, so are further discriminated against under this system. 

Given the Labour Party's oft-stated call for the fairer distribution of wealth, why is it that they, and the trade unions, are content to see percentage pay rises persist in local authorities and, indeed, in all Government institutions? Some years ago the opposition parties on Torfaen borough council put forward a motion to end this sort of salary distribution, in favour of a flat-rate wage increase. It was passed unanimously, yet, strangely, was never implemented, which, of course, begs the question, 'Why?' We therefore call upon all local authorities and, indeed, all Government organisations to desist from the use of percentage pay rises and introduce the far more equitable system of an across-the-board flat pay rise.