Manufacturing pay awards hit all-time low

Manufacturing pay awards have fallen to a historic low, with more than three-quarters of manufacturing companies now freezing pay, latest figures have revealed.

In July 2008, the average pay rise was 3.2%.

But new pay data from manufacturers’ organisation EEF showed that – for the three months to the end of August 2009 – the average level of pay settlements had fallen sharply to 0.3%.

This makes it the lowest level of pay settlements reported by manufacturers since EEF’s survey began in 1987.

The August 2009 Pay Bulletin, based on 158 settlements covering 25,766 employees, also found that in the same period, the number of manufacturers reporting they had frozen pay rose to just over three-quarters of all reported settlements – the highest figure reported since EEF’s survey began.

David Yeandle, EEF head of employment policy, said: “This further sharp fall in manufacturing pay settlements is mainly due to the exceptionally high proportion of companies that are now freezing pay.

“Given the tough economic conditions, there are no signs that this pattern of very low average pay settlements and significant numbers of manufacturers freezing pay will change in the near future.”

Elsewhere, a strategy to improve access to quality training and development for manufacturing companies in the UK was announced yesterday.

The Manufacturing Skills Alliance – which consists of sector skills councils Cogent, Improve Ltd, Proskills, Semta and Skillfast-UK – is developing new qualifications and new routes into industry, such as the new diplomas and foundation degrees.

It is also developing smaller, flexible, modular and standards-based qualifications that match the way employers actually train their staff.

The move has been supported by trade unions Unite, GMB, CSEU and the TUC.

Business and regulatory reform minister Ian Lucas welcomed the plans revealed at a House of Lords event.

“A globally competitive, advanced manufacturing sector is completely dependent on UK manufacturers having access to the right skills, in the right place, at the right time.”

Tony Burke, Unite assistant general secretary and board member of Cogent, said: “Developing skills is paramount to creating a strong industry base, and Unite is rigorously pursuing this agenda. We are working through the Manufacturing Skills Alliance with employers to ensure a framework where employees develop new skills and gain qualifications that really mean something.”

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