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BT Pay 2010: You Are Worth More Than 2%

29 April 2010

The CWUs pay claim is for 5% on pay and allowances. BTs final offer is 2% and two non-consolidated, non-pensionable 250 payments, the second of which is dependent on meeting undisclosed end of year profit targets.

The CWU has rejected the offer. BT can afford more and youre worth more for the part youve played in BTs financial recovery.

Youve delivered more, youre worth more!

Reject 2% and one-off payments.

Demand a fair share in BTs success.

BTs performance and ability to pay

  • Profits of 1.44bn in the third quarter, up by 11%.
  • Savings of 1.6bn in the first nine months.
  • Reported earnings per share up 188% in the third quarter.
  • Free cash flow of 1.7bn expected for the full year, up by 130%.
  • BTs share price surged 10p to 134p in April after Morgan Stanley reported BT shares were around 20% undervalued.
  • A 5% pay rise would cost just 1.1% of BTs 5.7bn projected annual profit.

Your contribution

  • Hard work and commitment in a high pressure environment.
  • Changes to terms and conditions delivering huge cost savings.
  • Acceptance of changes to the BT Pension Scheme that have reduced BTs pension costs and helped remove 1.5bn from the pension liabilities./li>
  • BT reduced its total labour resource by 15,000 in the year to March 2009 and expects to do at least the same in the year to March 2010, putting more pressure on you.
  • Total labour costs decreased by 18% in the third quarter due to reductions in labour and lower pension costs.
  • Further multi-million pound savings are set to flow through following the acceptance of changes to attendance patterns in Openreach and BT Operate and potentially BT Retail.
  • Year end profit per permanent employee is set to increase by 12% on last year

Cost of living

  • With inflation at 4.4%, a 2% pay rise would cut the value of your pay in real terms.
  • Overall inflation for the calendar year is expected to be around 3.6%.

Some of the essentials that have risen in the year to March 2010

  • Petrol and oil rose by 25%.
  • Vehicle tax and insurance rose by 18.2%.
  • Rail fares rose by 8%.
  • Bus and coach fares rose by 4.2%.
  • Household goods rose by 4.7%.
  • Water rates rose by 4.7%.

To get away from it all youll need to factor in the 10.6% hike in travel and leisure costs.

The Economy and Other Settlements

  • The UK has emerged from recession and the OECD predicts strong growth for the second quarter, outstripping most G7 peers.
  • Pay settlement levels are increasing, with a number of companies offering awards of 3% in April 2010 (1).

Impact on Pensions

  • A pensionable pay rise will have no impact on the repair payments BT are making on the 9bn deficit.
  • At the time of the next valuation in December 2011 the 2009 pension changes will have helped to significantly reduce the pension deficit.
  • BT will likely have the ability to reschedule its deficit repair payments as a direct result of the 2009 pension changes and increased asset values.
  • JP Morgan has played down concerns surrounding the 9bn deficit, suggesting the actuarial deficit could have reduced by 4.6bn (2).

Dont let BT suppress your pay for the benefit of shareholders.

Demand a fair pay rise.

Youve delivered more, youre worth more!

References

  1. IDS (Income Data Services) Pay Report 1046, March 2010
  2. 2 Financial Times, 20th April 2010