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Salary and wage inequality: all in this together?

13 February 2015


From Mr David Hughes

Sir, - The General Secretary of the TUC, Frances O'Grady, makes several valid points in her article on wage and salary inequality (Comment, 30 January).

Recently, the TUC, in one of its briefing emails, made the point that inflation affected the lower-paid more than the higher-paid because the lower-paid spend a higher proportion of their disposable income on essentials such as housing, food, household utilities, and transport.

With that in mind, last year, the two unions that represent a sizeable proportion of staff in the organisation for which I work abandoned the usual claim for a fixed percentage of pay, and sought from our employer the total amount of the applicable salaries bill and the number of full-time-equivalent posts. By dividing the former by the latter, they ascertained the amount were every applicable employee paid the same increase (pro-rata for those employed part-time).

I say "applicable", because our joint unions negotiate only for the first half of our salary scale, but, by tradition, the upper half on executive spot salaries get the same percentage. Although we are not a public-sector body as such, we are subject to the same one-per-cent limit on overall pay, because we receive government grant-in-aid. Were we to exceed the one per cent, our grant-in-aid would be reduced proportionately.

Treasury guidelines say only that our yearly pay increase should not exceed the one per cent of total salaries, and do not dictate how that amount is shared. For the 2014-15 pay year, we requested for each full-time employee an equal share of the available pay pot, which would have benefited those for whom we negotiate by £316 each - a marked difference from a straight percentage applied to every individual salary, where our lowest-paid would have received £189, and the highest-paid more than £700.

After the usual foot-dragging of pay negotiations (at least in our organisation), management declined our approach, and offered one per cent overall, and an unconsolidated bonus for most of the lower-paid. With Christmas and its associated expenditure looming, it is no surprise that their offer was accepted, despite being to the long-term disadvantage of the lowest-paid.

What rankles is that the pay claim is decided by those on the second, higher-paid, part of the pay scale, most of whom are able to save, each month, more than our lowest paid have to live on (before deductions).

If this Government really believes that we are all in this together, and wants to assist the average "hard-working" (hard-pressed, more to the point) family, it should insist that, at least over that part of the working population that they control, the one-per-cent increase should be paid in equal shares. It won't cost the taxpayer any more.

Another campaign for the TUC to pursue?

David Hughes
23 Greenway, Kenton
Harrow, Middlesex HA3 0TU

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