Circular No. NP/114/15 17June 2015

TO: ALL BRANCHES, REGIONAL COUNCILS,

REGIONAL OFFICES, COUNCIL OF EXECUTIVES & HO OFFICERS.

Dear Members,

RMT PAY BULLETIN: June 2015

Headline forecasts

Inflation rate: Average new forecast

May 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 1.5%

For the final three months of 2016, annual RPI (according to the latest forecasts) will rise to 2.9%

Average earnings growth: Averagenew forecast

Over the course of 2015, average earnings are predicted to increase by 2.5%

Over the course of 2016, average earnings are predicted to increase by3.2%

Currency boost for Eurozone headquartered companies operating in the UK

The value of the Euro currency against the Pound has fallen by 10% over the past few months. For companies based in the Eurozone (such as some train companies), the value of the profit generated in the UK - when transferred to their home EU member state – is therefore now worth more to them:

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: 1.5%

Average forecast (City): 1.5%

Highest recentforecast: 2.2%

Lowest recentforecast: -0.1%

Median recentforecast: 1.4%

High RPI Q4 2015 forecasts to quote to employers in pay negotiations are:

ING Financial Markets(2.2% - forecast made in May), Experian Economics(2% - forecast made in June), Société Générale(1.9% - forecast made in June),Nomura (1.9% - forecast made in May)

Q4 2016

Average forecast (non-City): 2.8%

Average new forecast: 2.9%

Average forecast (City): 2.7%

Highest recent forecast: 3.6%

Lowest recentforecast: 1.2%

Median recent forecast: 2.8%

High RPI Q4 2016 forecasts to quote to employers in pay negotiations are:

ITEM Club(3.6% - forecast made in May),Nomura (3.6% - forecast made in May), ING Financial Markets (3.5% - forecast made in May)

Forecasts in detail: Average earnings growth

Predictions for average earnings growth made by a range of forecasters are:

2015

Average forecast (non-City):2.5%

Average new forecast: 2.5%

Average forecast (City): 2.5%

Highest recentforecast: 3%

Lowest recentforecast: 1.9%

Median recent forecast: 2.6%

High average earnings growth forecasts for 2015 to quote to employers in pay negotiations are:

Nomura(3% - forecast made in May),Cambridge Econometrics (3% - forecast made in May), Citigroup (2.9% - forecast made in June), Commerzbank (2.9% - forecast made in June)

2016

Average forecast (non-City): 3.2%

Average new forecast: 3.2%

Average forecast (City): 3.3%

Highest recent forecast: 4%

Lowest recentforecast: 2.3%

Median recent forecast: 3.1%

High average earnings growth forecasts for 2016 to quote to employers in pay negotiations are:

British Chambers of Commerce(4% - forecast made in June),ING Financial Markets (4% - forecast made in May), Nomura (3.9% - forecast made in May)

Recent RMT Settlements

Company

/

Award

/

Effective From

Train Operating Companies
Abellio Greater Anglia /
  • Year One: 2.5% or RPI whichever is greater
  • Year Two: 2.5% or RPI whichever is greater
  • For members based in London, minimum of London Living Wage
  • Further negotiations to take place over single set of terms and pay, plus bringing Cambridge Gate staff in-house
/ 1 April 2014
Serco Caledonian Sleeper /
  • 3% increase
/ 1 April 2015
Eurostar /
  • 2% increase or £408.09
  • an increase of either 2% or March 2016 RPI + 0.5%
/ 1 May 2015
1 May 2016
Eurostar / Year 1
  • 2% pay increase (including for allowances) running to 31 March 2016.
  • Those with a salary of less than £30,000 will receive a minimum increase of £750.
Years 2 and 3
  • An increase of March RPI + 0.25%, with a guaranteed minimum increase of 1.5%.
  • Reflectingchange of pay anniversary date, one additional days leave to be given in 2016
/ 1 Jan 2015
Train workshop and maintenance
Signalling Solutions /
  • 2% increase
/ 1 April 2015
Babcock /
  • 2.25% for members covered by Procedure Agreement 1 (General Collective Bargaining)
  • 2.75% for members working as Infrastructure Assistant; Infrastructure Technician; Clerical Officer Grade 2; Clerical Officer Grade 3; Professional & Technical 1; Apprentice.
  • Where members are on non-Babcock grades following TUPE transfer, these increases will be backdated to the relevant anniversary date and future pay awards will be effective from April each year for all members.
  • Meal, Lodging, Disturbance and Associated Allowances will be increased by 2.25%.
  • Review ofarrangements for rostering and working away from Home depot.
/ 6 April 2015
VGC Rail /
  • 1.75%
/ 1 June 2015
Maritime
DFDS /
  • 2%
  • increase the current pension contribution by 0.5%
  • increase the current pension contribution by a further 0.5%
  • Travel Expenses:For D&E Ratings, the current maximum cap of £150 will be raised to a maximum cap of £164
/ 1 Jan 2015
1 Jan 2015
1 Jan 2016
1 May 2015

Buses

Stagecoach Hants Basingstoke Drivers /
  • Flat rate increase of 20p per hour on all hourly rates
/ 3 May 2015
Other road transport
TM Travel /
  • Supervisory, Admin & Engineering: 2%
  • Drivers:
TM Travel Standard: Mon-Fri: £8.42
TM Travel Standard: Weekend: £8.90
TM Protected: Mon-Fri: £8.98
TM Protected: Weekend: £9.28
Coach Driver: Mon-Fri: £7.50
Coach Driver: Weekend: £8.15 / 1 April 2015
Cleaning and catering
Turnberry Hotel /
  • 2.5% increase
/ 1 April 2015

Recent non-RMT settlements

Company (Sector)

/

Award

/

Effective From

Thorn Lighting (Manufacturing) /
  • 3%
/ 1 May 2015
BMW – Hams Hall (Manufacturing) /
  • 3.5%
  • 0.5% on bonuses
/ 1 April 2015
London United Busways (Transport) /
  • 5%
/ 1 May 2015
ISS - Woolwich Hospital contract (Healthcare) /
  • 8.7%
/ 1 April 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.

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.