Trend in pay settlements show companies resisting pressure to compensate for National Insurance increase according to EEF

Pay settlements in engineering and manufacturing are continuing to remain below levels of inflation in the vast majority of cases, according to the EEF (Engineering Employers Federation), illustrating that companies are resisting pressures to compensate staff for the recent increase in employees national insurance contributions.
The EEF reported that the latest figures for the three months to the end of July are unchanged from the three months to the end of June at 2.4%. Some 80% of settlements were below the average rate of inflation in the three months to the end of July, compared to 20% in the same period a year ago.

In addition, pay freezes accounted for some 16% of settlements, whilst pay deferrals rose to the highest level this year, some 6.5% in the three months to the end of July, illustrating the continuing tough economic conditions.

Director of Employment Affairs, David Yeandle said:

"These figures show that, despite the fall in the pound's value, companies remain focused on controlling costs tightly as they face increasingly intense competition."



Settlement level - per cent Number of settlements Zero (pay freeze) 27 0.01-2.00 19 ( 16 settlements at 2 per cent exactly) 2.01-3.00 81 ( 36 at 3 per cent exactly) 3.01-4.00 26 ( 4 at 4 per cent exactly) 4.01 or more 6

Notes for editors

The August 2003 Pay Bulletin analyses 159 settlements affecting 21,009 employees. Of these, the average level of settlements was 2.7% in May and 1.8% in June with both these figures based on relatively small samples, and 2.5% in July. These figures may be liable for revision to take into account settlements for this period that have not yet been received.