The chief executive of the Financial Conduct Authority has moved to avert a potential strike by offering base pay rises of up to 20 per cent to his lowest-paid employees plus a cash Easter sweetener of £1,000 or more to all staff.
Nikhil Rathi, who runs the main City regulator and has been trying to ban cash bonuses, said most staff members would get a pay rise of at least 9 per cent over two years, with the average pay packet going up by 12 per cent.
He sweetened the offer with the promise of a cash payment in April equivalent to 4 per cent of pay to everyone who meets objectives “in recognition of the changed economic environment”, a reference to inflation. Despite the offer the Unite union urged Rathi to come to the negotiating table. A total of 87 per cent of FCA union members voted in favour of strike action this year. Dominic Hook, Unite national officer, said: “The pay proposals today by the FCA are a grave error and will be significantly harmful for a large number of loyal, experienced and long serving staff.”
Many of the 4,000 staff fear they will be worse off in real terms if bonuses are scrapped and pay bands narrowed. The existing bonus system was near universal, with 85 per cent of staff receiving 10-12 per cent of base pay.
Rathi’s offer comes a month after his predecessor, Andrew Bailey, governor of the Bank of England, called for pay restraint to prevent inflation rising even higher than the 7.25 per cent peak the Bank has pencilled in for April.
Rathi has moved significantly since first announcing the pay rethink in September. He has lifted his initial pay offer of 4 per cent this year and 2 per cent next year to 5 per cent then 4 per cent.
He also raised the offer to the 800 lowest paid staff, who are being given a pay rise averaging £4,310 for the full year. His previous offer was £3,800.
Rathi said: “We believe we have developed a fair, competitive, and sustainable offer that will help us achieve our regulatory objectives, as well as diversity goals, that supports the lowest paid and the strongest performers, with most colleagues receiving a minimum salary increase of over 9 per cent over the next two years and an average of over 12 per cent over that period.”