SCOTTISH independence risks a "race to the bottom" on pay, Labour will argue today as it steps up its fight against regional pay in the public sector.

Earlier this week, No 10 signalled a rowing back from the policy being pushed by George Osborne in the face of stiff opposition from Coalition partners the Liberal Democrats.

The Chancellor believes having higher state pay than private sector wages in poorer areas reduces the availability of labour for companies.

A review is ongoing but a spokeswoman for Prime Minister David Cameron earlier this week said: "Unless there is strong evidence and a good case for it, things won't change."

Ahead of an Opposition debate on regional pay in the House of Commons this afternoon, Margaret Curran, the Shadow Scottish Secretary, who will close for Labour, said the policy risked entrenching difference across the UK.