Figures out this week show that engineering pay settlements have fallen below the Government’s inflation target of 2.5% to their lowest level since March 1994.
The Engineering Employers’ Federation survey shows that the average settlement for January the largest month for pay settlements in the industry was 2.46%. The news coincided with the headline inflation rate dipping to 2.4%, below the Government’s target.
The EEF said the wage figures confirmed the absence of inflationary wage pressures in the manufacturing sector, and renewed calls for further cuts in interest rates.
Pay freezes made up almost one quarter of the total number of settlements for the three-month period to the end of January; almost 90% of pay freezes centred on the West Midlands.
This news will be little comfort to workers at Royal Ordnance, who have had to accept a deal that amounts to a 5% pay cut, with the ending of their current pension arrangement in May.
The company, owned by British Aerospace, has been at the centre of speculation about possible disposal.
The Government decision to allow firms not to print details of the minimum wage on every payslip has been welcomed by the CBI but criticised by unions. Trade and industry secretary Stephen Byers said that the change in regulations provided a reasonable balance between worker protection and industry burdens.
Finance, page 10
Opinion, page 12