Workers set for further pay cuts


Updated:

Nearly 60pc of bosses admit they are planning to hit their workers with another pay freeze in 2010, writes Becky Barrow. The British Chambers of Commerce says if salaries do not rise but household bills do, many will be left with no option but to go into debt to keep themselves afloat.

Its report, published today, says that for many workers the outlook is even more bleak.

Around 5pc of bosses told the business lobby group they are planning to cut workers' salaries next year.

Office worker

More tough times ahead, says the British Chamber of Commerce



In a further blow, the survey found that nearly one in five bosses may axe benefits given to workers, such as bonuses and gym membership. The figure would have been even higher, but nearly 40pc of bosses said they have never offered any benefits to staff.

Bosses are telling their staff that they face a tough choice - cut costs or cut jobs - and they know that most workers would prefer to keep their jobs.

David Frost, director general of the British Chambers of Commerce, said: 'We face a tough year ahead. It will be a really long haul.

'The stark reality is that business finances are still under incredible pressure.'

He added: 'Wages freezes and cuts are unpleasant but have ensured unemployment has not risen like it did in previous recessions.'

Unemployment has shot up over the past year by 608,000 to 2.5m, less than the 3m predicted by some economists.

Frost also attacked the assertion that 'all the pain' is being felt by private sector workers, while the public sector is almost unaffected.

The public sector, which employs about one in five British workers, has been hiring new staff and awarding pay rises averaging 2.8pc.

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