Bosses Call For Zero Wage Rises!

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CONSUMER price inflation fell in January, much less than was expected by the so-called experts.

The Consumer Prices Index reached an annual rate of 3%, marginally down from the 3.1% in December, the official figures have shown.

This rate is still almost one per cent above the government’s inflation target.

There is a contradiction at the centre of these figures.

While the inflation rate has now fallen for four straight months from a high of 5.2% in September, driven down by falls in petrol costs and fuel prices, the weakening pound has pushed up the cost of the UK’s huge food import bill, with vegetables showing a 20 per cent increase.

At the same time there have been rises in the price of household equipment such as furniture and alcohol, clothing and footwear, as retail stores gave up on permanent sales and the desperate discounts of December.

The headline Retail Prices Index (RPI) fell to 0.1% from December’s 0.9%, with the collapse of house prices at its centre.

The completely distorted RPI is being used as the rate upon which wage and train ticket rises are based.

Such a low rate of Retail Prices Index inflation has given the employers the green light to demand a government imposed wage freeze.

The aim is to match ‘A zero or negative RPI with average pay increases also falling towards zero,’ said John Philpott at the Chartered Institute of Personnel and Development.

This is at the same time as the working class cost of living is rising as a result of growing mass unemployment, the collapse of sterling and much higher food prices.

• After the massacre of 850 agency workers’ jobs at BMW Cowley on Monday a further 560 manufacturing jobs were axed by GKN yesterday.

GKN announced plans to consolidate its UK driveline component operations into a single centre at its existing plant at Erdington, Birmingham.

As a consequence, its forge facility at Hamstead will close by the end of 2009 and the car parts facility at Walsall by the middle of 2010, with the loss of 323 jobs.

Due entirely to the dramatic and sustained reduction in customer orders, 150 jobs will also be lost at the auto structures plant at Telford this year.

GKN Automotive Chief Executive, Nigel Stein said: ‘We are in unprecedented times and we must protect our position as a leading global automotive supplier and ensure we are in a strong position to meet our customers’ needs now and when markets recover.’

The Group also announced plans to ‘reduce headcount by 91’ in its Aerospace division. This includes the loss of 56 jobs as a result of the closure of the Aerospace Services site in Burnley and 35 in Luton.

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