MPs have been debating government proposals for the possible introduction of regional or local pay.
Labour has put down a Commons motion criticising the plans.
The Shadow Chief Secretary, Rachel Reeves, quoted warnings from North East business leaders about the damaging impact of regional pay.
Ministers insist that there are no plans to get rid of national pay bargaining.
They say the aim is to encourage greater flexibility, rather than cut pay.
The former minister for the North East Nick Brown has called on ministers to drop proposals which could open the way to local and regional pay settlements for public sector workers.
Speaking in the ongoing budget debate in the Commons, Mr Brown said their introduction would lead to unwelcome and unintended consequences. He also said it was a myth to suggest that higher public pay rates were crowding out the private sector locally.