29 June 2011
Pay freezes return to private sector
Pay freezes have made an unwelcome return to the private sector, contributing to subdued settlements across the board, according to the Labour Research Department's database of collective agreements.
LRD Payline, which monitors agreements across all UK sectors, showed the median basic pay rise in the three months from March to May to be 2.7% - a fall from the 3% level reached earlier this year.
This partly reflects the fact that one in five new deals in the latest period were pay freezes. Widespread pay freezes in the public sector are beginning to make their mark on pay trends, accounting for four out of 10 public sector pay deals monitored since the pay round began last August.
But freezes are also returning to the private sector, where until very recently they seemed to have faded out. Examples of firms recently freezing pay are directories and business information supplier Yell, the Greenock Telegraph (Clyde and Forth Press), food manufacturer Uniq (St Ivel), the Bank of Ireland, Carnival Cruises (formerly P&O Cruises) and IT company Steria.
LRD Payline also found that the spread of settlements continued to widen in the three months from March to May.
At the higher end, a quarter of settlements were worth 3.9% or more but at the lower end a quarter were worth 1.5% or less, meaning that the gap between the two (the "inter-quartile range") was well over two percentage points.
The overall median of 2.7% comes as inflation hits 5.2% on the RPI measure or 4.5% on the CPI measure
Notes for editors