S E R V I C E

FACT S E R V I C E

185 Banks must publish top salaries — almost Economy shrank less than thought

187 Employers need advice on quality jobs Workers are to carry on past retirement age

186 The cold winter took a terrible toll on the old Earnings by industry show mixed fortunes

188 Women at the top hit glass ceiling again

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Banks must publish top salaries — almost UK banks and other large finance groups, such as bulding societies, should disclose the number of their employees who earn more than £1 million a year, a report has said. The recommendation is one of 38 in the review of the corporate governance of banks headed by Sir David Walker. The review recommends that: “For FTSE 100-listed banks and comparable unlisted entities such as the largest building societies, the remuneration committee report for the 2010 year of account and thereafter should disclose in bands the number of 'high end' employees, including executive board members, whose total expected remuneration in respect of the reported year is in a range of £1 million to £2.5 million, in a range of £2.5 million to £5 million and in £5 million bands thereafter and, within each band, the main elements of salary, cash bonus, deferred shares, performance-related longterm awards and pension contribution. "Such disclosures should be accompanied by an indication to the extent possible of the areas of business activity to which these higher bands of remuneration relate."

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The government said it would now move to implement Walker’s proposals and will include his call for banks to publish how many staff earn more than £1 million in its Financial Services Bill. Rob MacGregor, national officer for the general union Unite which has a large presence in the finance sector, said the union "views the Walker proposals as a step in the right direction, but there is still a long way to go before we see the changes in culture and behaviour required in the boardroom of the banks. Simply tinkering on the edges of this industry is totally futile". The move is hardly earth shattering given the broad pay bands in which pay and benefits have to be disclosed. And no-one will be any the wiser as to who the fat cats are, except for directors whose names are already known. www.hm-treasury.gov.uk/d/walker_review_261109.pdf www.unitetheunion.com/news__events/latest_news/unite_reaction_to_walker_repor. aspx?lang=en-gb

Economy shrank less than first thought The UK economy contracted at a slower pace than originally estimated in the third quarter of the year, official figures show.

LABOUR RESEARCH DEPARTMENT

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Gross domestic product (GDP) in the third quarter of 209 shrank by 0.3% on the previous quarter, an improvement on the original estimate from the Office for National Statistics of a 0.4% fall. Nevertheless, the UK economy now has posted six consecutive quarterly falls since the first quarter of 2008. On an annual basis, GDP was down by 5.1% on the third quarter 2008. Manufacturing output fell by 0.1% in third quarter on the previous quarter. Substantial increases in production of motor vehicles were offset by continued declines in paper and publishing, and manufacturing of machinery and equipment. Manufacturing output was down by 10.1% on the same period 2008. www.statistics.gov.uk/pdfdir/oie1109.pdf

The cold winter took a terrible toll on the old The number of deaths during the coldest three months of the year was up by almost half on the previous year to 36,700, sending an extra 10,000 pensioners to early graves, official figures showed. The rise in “excess winter mortality” for England and Wales for the three months to February was the biggest for years and the highest total in a decade, sparking fresh calls for ministers to combat high energy prices. Dot Gibson, general secretary of the National Pensioners’ Convention, said: “Since 1997, we have lost over 260,000 pensioners during the winter because of cold-related illnesses, yet the government seems incapable of acting. No other section of our society is so vulnerable and treated so badly. Pensioners see rising fuel bills and are constantly worried about whether or not they can afford to put their heating on.” Announcing the latest figures, the Office of National Statistics pointed out that seasonal flu last winter had been “moderate” but temperatures had been the coldest since 2005. Campaigners said a 40% spike in the price of gas and electricity to £1,310 had exacerbated the situation.

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As fuel bills have soared over the past six years, the number of households in “fuel poverty” — defined as having to spend 10% or more of their income on power and heat — has risen five-fold to 6.6 million this year. Britain has a worse record on winter deaths than colder European states, such as Sweden, Norway and Finland. Age Concern, the charity for the elderly, warned that unless heating was made more affordable, further large-scale deaths would occur this winter. “To end this national scandal, the government must do much more to tackle fuel poverty,” said Andrew Harrop, its head of policy. According to Age Concern’s polling, four in 10 pensioners will not be able to afford to switch on gas and electricity when they want to this winter. Last winter more than 90% of deaths were pensioners, who are among the least able to afford heat but the most vulnerable to cold-related diseases, such as flu, hypothermia, bronchitis and emphysema. www.independent.co.uk/news/uk/home-news/fuel-bills-blamed-for-50-rise-in-winterdeaths-1826917.html

Earnings by industry show mixed fortunes It may be the finance sector that brought the country to its knees, but it is workers in manufacturing and some utilities who have taken the hit over pay, the latest figures show. Gross weekly earnings in manufacturing were down by 0.3% in April 2009 on a year earlier, according to the latest Annual Survey of Hours and Earnings (see last week’s Fact Service for the main findings). And for electricity and gas industries the fall was even higher at 11.4%. On the other hand, in finance and insurance earnings were up by 4.8%. Agriculture, forestry and fishing posted the biggest increase of 8.5%. But earnings in the industries were the second lowest — above only those in accommodation and food service. The gross weekly earnings for full-time employees on adult rates whose pay was unaffected by absence are shown below. The link at the end of the story will give take the reader to tables where

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Fact Service

part-time pay and earnings for men and women can be accessed. The figure used is the median or midpoint figure.

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Stephen Bevan, managing director of The Work Foundation said: “Employers grasp the link between staff wellbeing and how it can affect productivity. What is missing is how to deliver this.”

Gross weekly earnings by industry — April 2009 £ a week

% change

All Employees All Industries and Services All Production Industries All Manufacturing All Service Industries

488.70 488.70 496.10 484.90 484.80

2.0 2.0 0.4 -0.3 2.6

Agriculture, forestry, fishing Mining and quarrying Manufacturing Electricity and gas Water and sewerage Construction Wholesale and retail trade Transportation and storage Accommodation/food service Information/communication Finance and insurance Real estate Professional and scientific Admin and support services Public administration Education Health and social work Arts and recreation Other service activities

387.00 697.70 484.90 585.80 528.40 529.30 388.30 479.10 298.70 643.50 626.10 462.70 597.80 391.00 547.90 541.60 473.00 387.80 424.30

8.5 7.5 -0.3 -11.4 5.7 2.4 2.2 1.8 0.7 1.4 4.8 2.4 3.1 1.9 2.7 3.0 3.2 1.9 2.3

www.statistics.gov.uk/downloads/theme_labour/ASHE-2009/tab4_1a.xls

Employers need advice on quality jobs Employers are committed to improving the quality of jobs in the UK but lack guidance about how to achieve it, says new report from employment consultants, The Work Foundation. Far from seeing decent quality jobs and commercial or organisational success as conflicting objectives, the Work Foundation says that growing numbers of employers see them as mutually supporting goals. Employers understood a “good job” to involve: being valued and appreciated, interest and fulfilment, job satisfaction, autonomy, decent working conditions, morale and teamwork, effective management, and staff development

The report calls for the government to take the lead in helping employers do more to improve job quality. In addition, the government should champion better working conditions; promote best practice; carry out further research; publish case studies and incentivise employers to experiment with new approaches to good jobs. www.theworkfoundation.com/pressmedia/news/newsarticle.aspx?oItemId=199

Workers are to carry on past retirement age There has been a dramatic rise in the number of older workers who are planning to work beyond the state pension age, research from the Chartered Iinstitute of Personnel and Development (CIPD) has revealed. The Employee Outlook survey of 2,000 working people found that the proportion of people aged 55 and above planning to work beyond the state pension age has jumped to 71%, compared with 40% in a similar survey two years ago. Stretched finances are the main reason for the trend with pension pots, savings and investments, and house values all being hit by the recession. An older workforce poses many challenges for employers, not least that of how to engage a group who are only still working for financial reasons, said Charles Cotton, CIPD adviser on reward and employment conditions. “With more people planning to work past 65, employers will have to accommodate older workers and motivate those who wish they could be elsewhere,” said Cotton. And he added: “Employers need to review how they are helping their employees save for retirement to get value from their pension spend.”

Although over three-quarters (78%) did not mention pay, 22% cited it as an important feature.

While people are planning to work longer, manufacturers have called for the retention of the default retirement age of 65, another survey has revealed.

Poor quality of jobs was seen as being part of an underlying explanation for many persistent workforce issues they faced including sickness absence, retention, poor motivation levels and difficulties hiring the right people.

The study of nearly 500 employers showed twothirds (65%) back the retention of the default retirement age of 65, the support slightly higher among large and medium-sized companies than in small firms, according to The Consulting Employment

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Survey 2009 published by manufacturers’ organisation EEF and CPH Consulting. The survey also showed that most requests by employees to postpone their retirement had been accepted by employers (84%). In addition, just under half (47%) of employees who had reached age 65 in the past year had asked to postpone their retirement and continue working. David Yeandle, head of employment policy at the EEF said: “Manufacturers clearly want to retain a default retirement age that is linked to state pension age. “Experience shows that the right for employees to request to continue working after 65 is enabling employers and employees to find mutually acceptable outcomes. This should be taken into account by the government in its evidence-based review of the default retirement age of 65.” www.peoplemanagement.co.uk/pm/articles/2009/11/majority-of-older-workers-nowplan-to-work-past-65.htm www.personneltoday.com/articles/2009/11/18/53038/default-retirement-age-shouldstay-according-to-majority-of-manufacturers.html

Women at the top hit glass ceiling again A rise in the proportion of female directors at top UK companies is one of the few positives that can be taken from an annual study by Cranfield University School of Management. Now in its eleventh year, the 2009 Female FTSE Board Report found that the number of directorships held by women, at 131, is exactly the same as in 2008. But because of an overall decline in the number of directors in FTSE 100 companies the proportion of female held directorships rose to 12.2% from 11.7%. The number of women executive directorships has stalled at 17, but the proportion rose to 5.2% from 4.8%, while the number of part-time, non-executive directorships is unchanged at 114, but again the proportion rose — to 15.2% from 14.9%. Ruth Sealy, one of the reports co-authors, said she was “very disappointed” by the slow pace of change. The proportion of female directors in the FTSE 100 is just five percentage points higher than in 1999. There are other discouraging signs of progress

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being stalled at best. Firstly, the number of women holding FTSE 100 directorships is steady at 113 after years of growth. Companies with female executive directors numbered 15 in 2009 against 16 the year before. And there is an overall decline in the number of companies with women on boards from 78 to 75 this year. Also down from 39 to 37 is the number of companies with multiple female directors. And the list of shame of companies where there is no women director grew longer – 25 or one in four FTSE 100 companies have exclusively male boards in 2009 against 22 the year before. One of the few positive findings for equality campaigners in the Cranfield report was that there are 2,281 women — up from 1,877 last year — on the boards, executive committees and senior teams of all listed companies in the FTSE indices. That meant there was “a huge and growing pipeline of female talent available to the FTSE 100 boards”, said the report. Four women are at present chief executives of FTSE 100 companies — Angela Ahrendts at luxury clothes group Burberry, Cynthia Carroll at mining multinational Anglo American, Katherine GarrettCox at investment trust Alliance Trust and Dame Marjorie Scardino at media group Pearson. And they are to be joined by Alison Cooper, chief operating officer at Imperial Tobacco, is to take on the chief executive's job next year. In addition, there are also three women who chair FTSE 100 companies — Alison Carnwath at property group Land Securities, Baroness Hogg at private equity group 3i and Lesley Knox at Alliance Trust. Joint top of the women directors league table, with three women board members out of seven, are Alliance Trust, and Burberry. The drinks group Diageo comes third and is the only company with four women board members (out of an 11-strong boardroom). The study found that, out of 14 new FTSE 100 women directors, only one is British. “There is a problem still in the perception that somehow foreign women are better,” said Sealy. www.cranfieldknowledgeinterchange.com/kihtml/topic/The%20Economic%20Down turn/0028/Report.pdf

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