Guest Blogpost from Richard Lynch: “Mixed picture on pay”

The latest statistics show a mixed picture on pay, with figures from the pay research organisations reporting a continued improvement on last year but Office for National Statistics figures apparently going in the opposite direction.

The pay research organisations’ median settlement figures for the three months to end February 2012 (with end January figures in brackets) show the following:

Income Data Services (IDS)                                          –              3.0% (3.0%)

Labour Research Department (LRD)                        –              3.0% (3.0%)

XpertHR (formerly IRS)                                                  –              2.6% (3.0%)

Office for National Statistics figures had been expected (by this writer, at least) to follow the pattern above but their latest figures, for the three months to end January 2012, were down on the previous month’s figures, as outlined below:

Average total pay (including bonuses)                    –              1.4% (1.9%)

Average regular pay (excluding bonuses)             –              1.7% (1.9%)

According to the ONS figures, average total pay in January was £461 a week (£23,972 a year) and average regular pay was £438 a week (£22,776 a year). According to LRD, average full-time pay is £606.70 a week (£31,548.40 a year).

Both IDS and LRD believe that 3% is likely to become established as the going rate for private sector settlements in 2012. This view is backed up by Towers Watson Data Services, which expect companies in the UK and Europe to raise pay by an average of 3% this year. XpertHR, however, is more pessimistic and expects 2012 settlements to fall to around 2%, with the introduction of pension auto-enrolment in big companies in October likely to depress pay increases.

Of course the figures above relate mainly to the private sector and pay increases in the public sector are still more of an aspiration than an expectation. With most pay freezes in that sector now in their third year, it was something of a surprise for the Office for National Statistics to announce recently that the gap between hourly rates in the public and private sectors was widening, with rates in the former now 8.2% higher than those in the latter. One possible explanation for this is that low-paid jobs (cleaning, catering, waste disposal, caretaking etc) have been increasingly outsourced by the public sector, leaving a larger proportion of higher-grade roles in the public sector than before. The increased proportion of private sector employees having to do part-time work, due to lack of full time roles, is another possible explanation.

And of course there is a lot of almost criminally low pay in retail, hairdressing, security and other parts of the private sector. This will not be helped by this month’s decision to freeze the National Minimum Wage for young workers and to increase it by only 11p an hour for workers aged 21 and above.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

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Guest Blogpost from Richard Lynch: Sharp fall in January inflation

The latest Office for National Statistics figures show inflation falling sharply in January, as the effects of last year’s VAT increase fell out of the calculations. However, prices are still rising faster than wage increases and faster than in the large majority of competitor economies.

The figures for the year to end January 2012 (and end December 2011) are as follows:

Retail Prices Index (RPI)                                –                       3.9% (4.8%)

RPI excluding mortgage interest (RPIX)        –                       4.0% (5.0%)

Consumer Prices Index (CPI)                                    –                       3.6% (4.2%)

Much of the fall was due to technical reasons, mainly because current prices are now being compared with prices after the VAT increase from 17.5% to 20% last year, rather than prices prior to that increase. The increase in VAT is estimated to have added around 0.76% to inflation figures during 2011 and a fall in the figures was therefore expected when it was no longer a factor in the calculations.

However, there were also other downward pressures on inflation in January with the CPI, for example, affected by lower prices for clothing and footwear, furniture and household goods, due to the new year sales.

But there were upward pressures as well. In the case of the CPI, these included annual increases in the prices of alcoholic beverages and tobacco (6%), electricity (13.2%), gas (18.7%), tools and equipment for houses and gardens (16.8%), air transport (9.6%), jewellery, clocks and watches (8.4%) and transport insurance (15.5%). Upward pressures on the RPI came from increases in the price of biscuits and cakes (10%), beef (11.6%), lamb (16.2%), pork (11.7%), coffee and other hot drinks (15.2%), tobacco (8.8%), electricity (13.2%), gas (19.1%), vehicle tax and insurance (14.2%) and CDs (6.5%).

UK inflation is now no longer the highest in the EU but our 3.6% CPI is still higher than the CPI rate in the Euro Area (2.6%), in the EU as a whole (2.9%) and in 22 of the 27 member countries. These lower-inflation countries include Ireland (1.3%), Spain (2%), Greece (2.1%), Germany (2.3%), France (2.6%) and Italy (3.4%). It also compares badly to CPI rates in Japan (0.1%), Switzerland (-0.9%) and the US (2.9%).

Almost all economists are predicting that inflation will be lower in 2012 than in 2011, but there are mixed views on whether there will be sustained reductions during the year or whether prices will remain stubbornly high. The Bank of England is predicting significant falls by the end of the year, but they have made similar predictions over recent years and they have been consistently wrong. In addition, recent figures showing diesel prices at a record high of 143.7p a litre and petrol prices at a record high of 137.4 p a litre, suggest that there is more bad news to come.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Things are still tough on the pay front

The latest research on settlements shows that things continue to be tough on the pay front, with increases still running at around half the rate of inflation and only tentative signs that 2012 may be better than last year.

The most recent figures for the main pay research organisations are for the three months to end December 2011 and these (together with figures to end November) show the following:

Income Data Services (IDS)                 –        2.5% (2.3%)

Labour Research Department (LRD)      –        2.5% (2.5%)

XpertHR (previously IRS)                      –        2.5% (2.0%)

These median figures hide differences between economic sectors with IDS, for example, showing a 3.1% increase in manufacturing and production but only a 0.9% increase in the not-for-profit sector and widespread pay freezes in the public sector.

However, both IDS and LRD say that initial figures for January show that most settlements are around 3% and that if this trend continues, it could help arrest the fall in real wages which we have been experiencing in recent years.

The latest figures from the Office for National Statistics (ONS) are for the three months to end November 2011 and these (together with the figures for end October in brackets below) are less encouraging:

Average total pay (including bonuses)            –        1.9% (2.1%)

Average regular pay (excluding bonuses)       –        1.9% (1.8%)

Average total pay, according to the ONS, is now £464 a week and average regular pay is £438 a week. LRD figures say that average full-time pay is now £618 a week.

Of course, the tentative signs that things may be getting better this year do not apply to the public sector, where pay freezes are still commonplace and a 1% cap on increases and regional pay rates are being threatened for the future. However, George Osborne’s regional pay proposals are coming in for heavy flak from businesses and MPs, as well as unions, on the grounds that lower wages for public sector workers will reduce demand and damage local economies.

By the way, Osborne’s justification for regional pay is that the state paying higher wages than many private firms in the poorer parts of the country is “suppressing the availability of labour for companies” and thereby damaging the economy. With an average of almost six people chasing every job vacancy, I hadn’t realised that there was a shortage of labour in the economy!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blog Post: Richard Lynch on the widening gap between pay and inflation

The gap between pay increases and inflation is continuing to widen, according to figures from the pay research organisations and the Office for National Statistics (ONS). The figures for median increases during the three months to end October 2011 (with end September figures in brackets) show the following:

Income Data Services (IDS)-2.3% (2.4%)

Labour Research Department (LRD)-2.5% (2.5%)

XpertHR (formerly IRS)-2.0% (2.0%)

ONS figures for increases in the three months to end September 2011 (with end August figures in brackets) show:

Average total pay (including bonuses)-2.3% (2.8%)

Average regular pay (excluding bonuses)-1.7% (1.8%)

However, the ONS figures for the three months to end October (which are published later than the figures from the pay research organisations) show increases in average total pay falling to 2.0% and increases in average regular pay rising marginally to 1.8%.

None of the above figures go even halfway to matching October’s RPI increase of 5.4% and an average of all the figures shows that pay increases are running at less than 40% of price increases. This means that ‘real pay’ is falling for most people, and falling particularly badly for public sector workers and others experiencing pay freezes at present.

According to XpertHR, pay was frozen for 28% of workers in the three months to end October 2011, compared to 25% for the previous quarter. This situation is likely to continue for public sector workers next year and XpertHR is predicting that 10% of private sector workers will see their pay frozen in 2012 as well. And to add insult to injury, the coalition is now telling public sector workers that pay increases will be capped at 1% from 2013 and, if they succeed in introducing regional pay, millions of nurses, teachers, council workers and others will experience further cuts in their standard of living.

There are no such restrictions in the pay of Britain’s top bosses, however, and a recent report from the High Pay Commission showed that not only has their pay been motoring away ahead of ours, but some have enjoyed increases of up to and above 4,000% in the past 30 years.

Total pay for lead executives in BP, for example has increased by 3,006.5% since 1980 and has increased from 16.5 times’ average pay to 63.2 times’ average pay during that period. In Barclays, the total pay of lead executives has increased by 4,899.4%, with the multiple of average pay increasing from 14.5 to 75. The increase in Lloyds was 3,141.6%, with the multiple increasing from 13.6 to 75. Not bad for companies which have contributed more than most to either ecological or economic disasters over recent years!

Average total pay (including bonuses) is now £463 a week, according to the ONS, with average regular pay at £436 a week. LRD estimates that average full time pay is £618 a week. Average pay for the CEOs of FTSE 100 companies, according to the High Pay Commission, is £80,769 a week (£4.2 million a year). So much for all of us being in this together!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

GUEST BLOG POST FROM RICHARD LYNCH ON PAY AND INFLATION

Pay is still not catching up with inflation

Pay settlements have been improving in some parts of the private sector of late but pay freezes abound in the public sector and the gap between pay and prices is getting wider. The latest median pay settlement figures from the main research organisations, for the three months to end September 2011 (with end August figures in brackets), are as follows:

Income Data Services (IDS) – 2.4% (2.5%)

Labour Research Department (LRD) – 2.5% (2.5%)

XpertHR (previously IRS) – 2.0% (2.0%)

The latest Office for National Statistics figures, for the three months to end August (with end July figures in brackets), show:

Average total pay (including bonuses) – 2.8% (2.8%)

Average regular pay (excluding bonuses) – 1.8% (2.1%)

According to the ONS, average total pay in August was £463 a week and average regular pay was £435 a week. According to LRD, average full-time pay was £618 a week in September.

All of the research organisations are suggesting that pay is beginning to look up in parts of the private sector, with IDS reporting that median settlements in manufacturing are now 3%. However, there is also general agreement that that settlements in retail and services are disappointing, with IDS putting them at 2.4% and LRD at 2.2%. There is general agreement as well on the fact that there is virtually no pay movement in the public sector and that the gap between pay increases and inflation increases is now wider than ever.

The pay settlement figures quoted above average out at 2.3% and RPI inflation is 5.6%, giving a gap of 3.3%. And even if the 5.2% figure for the CPI (the cut pay index) is used, the gap is still 2.9%. That’s the extent by which real pay is falling today, while pay for the directors of major companies is rising by 49% a year. Time for a change, I think!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

GUEST BLOG POST FROM RICHARD LYNCH ON INFLATION

Just how bad is UK inflation?

UK inflation is now at its highest level for over 20 years and prices are rising faster here than in almost all of our European neighbours and global competitors. The figures for the year to end September 2011 (with August figures in brackets) show the following increases, together with some frightening underlying increases:

Retail Prices Index (RPI) – 5.6% (5.2%)

RPI excluding mortgage interest (RPIX) – 5.7% (5.3%)

Consumer Prices Index (CPI) – 5.2% (4.5%)

The main reason for the rise in the RPI was an 18.8% increase in the cost of fuel and light, which included a 28.2% increase in the cost of domestic oil and other fuels, a 22.4% increase in the cost of gas and a 12.9% increase in the cost of electricity. Other reasons for the higher RPI included increases in the cost of tobacco (13.1%), clothing and footwear (11.1%), motoring expenditure (8.7%), fares (8.5%) and food (6.9%). Leisure costs, however, had a negative effect on the figures and cost of leisure goods actually fell by 2.4%.

The main reason for the rise in the CPI included increases in the cost of gas (13%), alcohol and tobacco (10%), transport (8.9%), electricity (7.5%) and food (6.4%).

The RPI is now at its highest point since June 1991, when John Major was Prime Minister, and it has been at or above 5% on ten occasions in the year and a half since the coalition took office. By way of comparison, it only reached or exceeded 5% on four occasions during the 13 years of the previous Labour government. The CPI is also abnormally high and its current level of 5.2% has never been exceeded since the index came into existence.

This CPI figure is also higher than comparable figures in Ireland (1.3%), France (2.4%), Germany (2.9%), Greece (2.9%), Spain (3%), the EU as a whole (3.3%) and Italy (3.9%). In fact only one EU country has higher CPI inflation than the UK – Estonia at 5.4%. The difference is even more extreme when we look at non-EU competitors, including Japan, which has zero inflation and the US, which has 0.3% inflation – 17 times lower than our figure!

And what we thought was the one bit of slightly good news, namely that state pensions and benefits would be going up by 5.2% (the September CPI figure) next April, is being questioned. George Osborne, the Minister for Misery, has now announced a review of the link with the September inflation figure and is considering a freeze or sub-inflation increases in these benefits instead!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Census Day

Today is Census Day and you should have already received your 2011 Census form through the post.

The census is very important to Brent Council and our partner organisations such as the NHS, as much of the funding we receive from central government is directly dependent on how many people are counted in the census.

It helps us understand the needs of our residents and we use this information to ensure that we are providing the best possible service.  Put simply, the higher the population count, the more funding we will receive and the less services we will need to cut. The better we can also ensure that we can plan for school places in the future and be properly funded by Government and our children do not lose out on resources. It is in everyone’s interest to help.

All the information you give is confidential and protected by law. This means your answers will only be used for the census survey and no other reason. Personal information is not shared with anyone. There are no questions on sexuality or income, and the question on religion is voluntary.

You can fill in the forms online or by post. If you have any questions or need help filling in your form call Office for National Statistics on 0300 0201 101 or go to www.census.gov.uk