PAY RISES

Chancellor of the Exchequer, Gordon Brown, told Derbyshire workers seeking "inflation- busting" pay rises that increases should be pegged at 2% in 2004. Speaking at the British Chambers of Commerce conference, in London, he said inflation was currently 2% and was forecast to remain at about the same level for the foreseeable future. He added, "Our message on pay is clear. There must be no return to the bad old days of pay irresponsibility."

Mr Brown said that, in the past, Britain had fallen into recession when wage negotiators sought, in their pay claims, to catch up with expected high inflation. The Chancellor is urging employers to base pay rises on the Consumer Price Index, which monitors High Street spending and does not include property prices or council tax.

Amicus union members working at Rolls-Royce in Derby, however, are seeking a pay rise above the Retail Price Index monitor, which does include property prices and shows inflation at more than 3%. The union, which represents 3,000 of R-R's 10,000-strong Derby workforce, has rejected a 2.75% pay offer, made before the announcement that R-R would be supplying engines for Boeing's new 7E7 aircraft in a deal expected to be worth £65bn.

Amicus joint chief negotiator Mark Tittley said, "It would seem wholly sensible to me that people would at least be seeking pay rises in line with RPI. While the Chancellor may call for rises of only 2%, I think it's an unreasonable expectation that it will be acceptable to a workforce." Chris Needham, regional organiser for the GMB union, which is fighting to for a pay rise for staff at R-R packaging supply company Daher Sawler, of Nottingham Road, dismissed Mr Brown's comments as "ludicrous".

He added, "It's absolutely farcical. These people (MPs) don't live in the real world. They're protected by their high wages but my members, some earning just £200 a week, are barely surviving. It's ludicrous that the Chancellor of the Exchequer should even suggest we should accept this. Council tax rises, for example, have been 'inflation busting' to a point where a 2% pay rise won't even cover that additional monthly household cost."