GOVERNMENT proposals for regional pay for public sector workers would see businesses fail and jobs lost, according to a Gwent MP.

Jessica Morden, MP for Newport East, said it would be "clearly unfair" if a teacher with the same experience was paid more in Bristol than in Caldicot.

Speaking at a debate on regional pay in the House of Commons, Ms Morden said arguments that the proposal would allow the private sector to grow by allowing it to compete with the public sector were "clearly nonsense".

Currently many public sector workers have their pay set on a national basis but proposals have suggested that salaries could be brought in line what is paid in the private sector locally.

However reports have recently suggested that the UK government coalition is backing away from the idea.

Ms Morden said she hoped that the coalition may be "heading for another U-turn" and that any move on regional pay would "hurt the economy, including the private sector".

She said: "As an Office for National Statistics worker said to me recently... does paying him less mean that the private sector in Newport will suddenly be clamouring for statisticians?

"We both thought not."

Ms Morden said: "If I have two teachers in my constituency, one working in Caldicot, the other in Bristol, with the same skills and experience but paid differently, that is clearly unfair."

She said that regional pay will be a race to the bottom and "create higher unemployment and more business failures".

Francis Maude, cabinet office minister, told the debate there is a serious case for "local market-facing pay" and public sector workers are often paid more than private sector workers in similar jobs.

"A one-size-fits-all system for public sector pay could limit the number of public sector jobs that could be supported in lower cost areas," he said.

Pay review bodies, which oversee the pay of almost 2.5 million public service workers in the UK, are expected to report on proposals for regional pay in July.