Circular No. NP/126/15 15 July 2015
TO: ALL BRANCHES, REGIONAL COUNCILS,
REGIONAL OFFICES, COUNCIL OF EXECUTIVES & HO OFFICERS
Dear Members,
RMT PAY BULLETIN: July 2015
Headline forecasts
Inflation rate: Average new forecast
June 2015 RPI inflation (change in cost of living relative to same time one year earlier) was 1%
For the final three months of 2015, annual RPI (according to the latest forecasts) will rise to 1.3%
For the final three months of 2016, annual RPI (according to the latest forecasts) will rise to 2.8%
Average earnings growth: Average new forecast
Over the course of 2015, average earnings are predicted to increase by 3%
Over the course of 2016, average earnings are predicted to increase by 3.4%
What crisis? Some directors of transport sector companies receive 70 - 90 times ordinary workers’ pay
At the start of the financial crisis, the difference between director and average employee pay seemed to narrow. However, since then, the difference has reached record proportions. For example, a Mitie Group director recently received remuneration over 90 times the pay of an average Mitie employee.
Forecasts in detail: RPI inflation[1]
Predictions for RPI inflation made by a range of forecasters are:
Q4 2015
Average forecast (non-City): 1.4%
Average new forecast: 1.3%
Average forecast (City): 1.5%
Highest recent forecast: 1.9%
Lowest recent forecast: -0.2%
Median recent forecast: 1.5%
High RPI Q4 2015 forecasts to quote to employers in pay negotiations are:
Société Générale (1.9% - forecast made in June), Nomura (1.9% - forecast made in May), ING Financial Markets (1.8% - forecast made in July), IHS Global Insight (1.8% - forecast made in July)
Q4 2016
Average forecast (non-City): 2.8%
Average new forecast: 2.8%
Average forecast (City): 2.8%
Highest recent forecast: 3.6%
Lowest recent forecast: 1.5%
Median recent forecast: 2.8%
High RPI Q4 2016 forecasts to quote to employers in pay negotiations are:
Nomura (3.6% - forecast made in May), ING Financial Markets (3.5% - forecast made in July), Oxford Economics (3.2% - forecast made in July), Economic Perspectives (3.2% - forecast made in June)
Forecasts in detail: Average earnings growth
Predictions for average earnings growth made by a range of forecasters are:
2015
Average forecast (non-City): 2.7%
Average new forecast: 3%
Average forecast (City): 2.7%
Highest recent forecast: 3.5%
Lowest recent forecast: 1.9%
Median recent forecast: 2.7%
High average earnings growth forecasts for 2015 to quote to employers in pay negotiations are:
Credit Suisse (3.5% - forecast made in July), Fathom Consulting (3.3% - forecast made in July), Oxford Economics (3.1% - forecast made in July)
2016
Average forecast (non-City): 3.3%
Average new forecast: 3.4%
Average forecast (City): 3.4%
Highest recent forecast: 4%
Lowest recent forecast: 2.4%
Median recent forecast: 3.3%
High average earnings growth forecasts for 2016 to quote to employers in pay negotiations are:
Citigroup (4% - forecast made in July), ING Financial Markets (4% - forecast made in July), British Chambers of Commerce (4% - forecast made in June), Nomura (3.9% - forecast made in May)
Recent RMT Settlements
Company
/Award
/Effective From
Train Operating CompaniesChiltern Railways / · 2.4% increase to basic salaries and allowances / 1 April 2015
First TransPennine Express / · 2.5% (2nd year of deal)
including minimum increase of £500 / 1 April 2015
East Midlands Trains (Customer Services and Engineering Grades) / · 2% increase to base rates and allowances / 1 April 2015
Southern (Drivers) / · 3.34% increase (salary will rise to £47,500)
· 3.16% increase (salary will rise to £49,000) / 2 Aug 2015
3 April 2016
Train workshop and maintenance
Harsco Rail / · 2.4%, including to London Allowance and South East Allowance / 1 Jan 2015
Globalforce (Ashford, Hitachi contract) / · 2.5% increase to current hourly rate.
· Premium hourly rate (nightshift) for train cleaning will be £7.69 / 22 June 2015
Amey / · 2% increase - will be made up of RPI + 1% with a minimum of 1% and a maximum of 3%. For those on the lowest pay, there is to be a £500 minimum rise to be applied if this is greater than the % pay rise
· Jan 2016 RPI + 1% with a minimum of 1% and a maximum of 3%. £500 minimum rise
· Jan 2017 RPI + 1% with a minimum of 1% and a maximum of 3%. £500 minimum rise / 1 March 2015
1 March 2016
1 March 2017
London Transport and other Metro
Keolis Amey Docklands / Year One· 2% pay increase, including for allowances
· Those with a salary of less than £30,000 will receive a minimum increase of £750
Years Two & Three
· An increase of March RPI + 0.25%, with a guaranteed minimum increase of 1.5%
· To reflect the movement of the pay anniversary date, one additional day’s leave will be given in 2016 to each member of staff employed on 1 Jan 2016. This extra day of leave applies to 2016 only and is equivalent to 7 hours. / 1 Jan 2015 – 31 March 2016
Buses
Stagecoach East Midlands Drivers (Mansfield & Worksop) / · Grade 1 (more than 1 year’s service): increase from £9.50 to £9.75· Grade 2 (less than 1 year’s service):
increase from £7.90 to £8.10
· Grade 1 (more than 1 year’s service): increase from £9.75 to £10.00
· Grade 2 (less than 1 year’s service):
increase from £8.10 to £8.30 / 2 August 2015
31 July 2016
Cleaning and catering
Axis Cleaning & Support Services (Arriva Trains Wales Contract) / · 2%
· 2.5%
· 2.5% / 1 Oct 2014
1 Oct 2015
1 Oct 2016
Recent non-RMT settlements
Company (Sector)
/Award
/Effective From
Crown Paints (Manufacturing) / · 3% / 1 April 2015BMW – Hams Hall (Manufacturing) / · 3.5%
· 0.5% on bonuses / 1 April 2015
ISS - Woolwich Hospital contract (Healthcare) / · 8.7% / 1 April 2015
Thorn Lighting (Manufacturing) / · 3% / 1 May 2015
London United Busways (Transport) / · 5% / 1 May 2015
Why we use RPI and not any other measure of inflation
RPI, which includes housing costs and excludes high earners’ spending, is the only inflation measure to use for negotiating pay (though referencing average earnings is also recommended for the coming period).
RPI is also used to calculate index-linked government bonds, privately issued index-linked bonds, National Savings and Investments, Corporation Tax, Business Rates, Alcohol Duty, Tobacco Duty, Gaming Duty, Air Passenger Duty, Vehicle Excise Duty, Climate Change Levy, car and van Fuel Benefit Charge, regulated rail fares, regulation of water and sewerage charges, indexation of British Telecom’s wholesale charges and interest payments on student loans.
CPI is designed for comparing different EU countries’ economic performances and not for internal UK purposes. It excludes housing costs (though includes stockbrokers’ fees and foreign students’ university tuition fees), is calculated to a mathematical formula less responsive to price fluctuations and doesn’t adequately reflect changes to ordinary workers’ cost of living: so says the Royal Statistical Society.
Any attempt by an employer to link a pay award to CPI inflation must be refused and should be logged with the union’s National Policy Department.
Yours sincerely,
Mick Cash
General Secretary
1
[1] The average of forecasts generally predict a modest rise or fall. While forecasts can be useful in identifying trends, the data should not be relied on overly - the economy is complex and no model can anticipate what will happen in all circumstances.