The 2022 pay pot, the amount of money the bank spends on pay, is just 3% compared to the current inflation rate of 6%.
On the Bank’s own figures, that means all Lloyds staff are going to see their pay fall relative to the cost of living. Matt Sinnott, Group People and Property Director says: “the pay offer we’ve proposed for next year will be the largest we’ve made since Lloyds Banking Group was formed 12 years ago”. That may be true but the fact that the bank has short-changed staff in the past is not the benchmark by which the latest pay offer should be judged. We are in uncharted waters and that requires a unique response from the bank. The bank’s latest proposals fall significantly short of what is required.
If the bank doesn’t want to listen to the largest, independent trade union in Lloyds when it comes to pay, then it should listen to its own staff. 40% of Lloyds staff said that their reward package was not good enough. And staff said that Charlie Nunn should make reward one of his top three priorities. A pay pot that delivers just 3% to those staff in the ‘market zone’ is not making pay a priority. It’s a joke.
In our last Newsletter we reported on the Institute of Fiscal Studies which said that an individual would need to see nominal (actual) wage growth of 8% to April 2022 to maintain the same standard of living given the forecast 6% annual inflation rate. If inflation increases again, which seems very likely, that figure would need to be 9%.
The Group’s pay proposals are as follows:
- A pay pot of just 3%,
- Everyone at grade A-C will get a minimum pay increase of £500.
- Fixed pay matrix for staff in grades A-G. This matrix will provide for salary increases of between 2% to 4% depending on in position in scale.
- Staff who are above the maximum of their pay scales will receive a one-off payment of 1% for 2022 only.
- The Grade A pay ranges will be increased by 5%; the Grade B pay ranges will increase by 3%. All other ranges will be increased by 1%.
Members will recall that back in August we reported that William Chalmers, Chief Finance Officer, had said in a presentation to analysts that Lloyds would be spending £100 million more on Group Profit Share than it had budgeted for at the beginning of the year. 2022 is going to be a bumper year for bonuses but that should not detract from the bank’s latest pay proposals. Bonuses are welcome but it’s basic pay rises that are important because those have knock-on effects on other benefits.
The two in-house staff unions are hoping that GPS will get them off having to do anything on basic pay. Both unions can’t agree with the bank’s latest pay pot because it’s derisory, but they don’t want to reject it yet because that would require them to do something about it. Accord has a history of avoiding conflict and Unite are too insignificant in Lloyds to do anything meaningful. So, both unions are waiting and hoping that the bonus payments which will be announced on 24th February will give them enough cover to agree the bank pay pot proposals.
It’s a cynical approach that stops them from having to confront the bank on pay. Last year on bonuses, Accord said: “LBG has confirmed that the Group Executive Committee and Board have reached a decision that there will be no Group Performance Share paid for the current financial year. This decision will disappoint many members but it is important to emphasise that the GPS is not negotiated with the unions and it is separate from the pay negotiations”. So, last year Accord argued that bonuses are completely unrelated to pay: this year its stance is: “We won’t do anything on pay until we know what the GPS is going to be.”
We will be producing a further analysis of the Bank’s pay proposals in future Newsletters. In the meantime, members with any questions can contact the Union’s Bedford Office on 01234 262868 (Choose Option 1).