Chancellor has much to prove

Despite a prevailing need to limit spending, this region does not need gimmicks, funding competitions or hints at future pronouncements; there needs to be radical action to engender a new culture of job-creation rather than an annual statement to taxpayers outlining how their hard-earned contribution is spent by the Treasury.

Yet briefings on behalf of the Chancellor do not exactly inspire confidence, given the likelihood that regional pay differentials for the public sector will form one of the centrepieces to his speech.

Mr Osborne’s argument is this: because public workers are paid the same amount in every part of the country, salaries have become artificially high in regions, like Yorkshire, that have been struggling to attract sufficient private investment.

However, by attempting to bring in pay restraint, Mr Osborne would risk exacerbating the North-South divide when he is, in fact, part of a Government that has promised to close the gap. Instead, he should be looking at how private sector wages can be increased, a strategy that would benefit the whole region.

The misgivings about his intended approach do not end here. How does the Chancellor intend to implement this policy, given that there are public sector employees – like teachers – who live in some of Yorkshire’s wealthier communities but who choose to work in some of the region’s most deprived areas? Will the determining factor be their place of residence or the postcode of their workplace?

Given these complexities, never mind the key question about whether people doing the same job should actually be paid the same, Mr Osborne would be advised to limit his Budget to one central objective – policies that will create new jobs and stimulate much-needed growth in the economy.

Rather than tinkering in the margins, he needs to provide the economy with a major shot in the arm. It is what the country needs but, just as significantly, it will be the most effective way of ending reported rifts between the Tories and Lib Dems that are beginning to undermine the coalition.