Regional pay differences in the public sector

I've been trying to find out if the coalition government plans to tear up national pay and conditions in the public sector, introducing regional differentials to more closely reflect local market rates, will apply to Members of Parliament. Should an MP in the South East earn more than one from the South West?

I'm grateful to St Austell & Newquay MP Stephen Gilbert for cheekily tweeting his thoughts during the Chancellor's budget speech today:

"Doesn't think localising public sector pay is the way forward - don't want a race to bottom."

The government believes national pay deals distort local market conditions and stifle competition. But according to the TUC the coalition's proposals would have a particularly severe impact on the economy of Devon and Cornwall. I should declare an interest: the BBC is part of the public sector and is currently signed up to national agreements which ensure that a reporter in Devon or Cornwall gets paid the same as one doing an identical job in Surrey or Hampshire.