An STUC delegation met with Tony Strachan in the Bank of England’s Glasgow offices on 18 August 2006. The STUC was represented by Katrina Purcell, UNISON and STUC President, John Quigley, AMICUS, Matt Smith, UNISON, Harry Frew, UCATT, Margaret Fleming, USDAW, Grahame Smith, Deputy General Secretary, Dave Moxham, Assistant Secretary and Stephen Boyd, Assistant Secretary.
Tony introduced the meeting and began by discussing the Bank’s August 2006 Inflation Report and the reasoning behind the Monetary Policy Committee’s decision to raise rates by 0.25% at their August meeting.
In response the STUC delegation raised the following points:
• Scottish economy continues to perform well with surveys indicating robust private sector growth;
• Whilst acknowledging concerns about capacity and energy prices, trade unions had been surprised and disappointed by the MPC’s August decision – the move came too early given that the scope for non-inflationary growth has increased over the last few years;
• Higher pound will continue to adversely affect key industries such as manufacturing and tourism;
• No evidence that higher energy prices are feeding through into higher wages – the Bank’s Agents’ summary for August had agreed that there are ‘few signs of any general increase in pay pressures’
• Unemployment rising at the UK level;
• Migrant workers contributing to non-inflationary growth;
• Rising interest rates will affect the ability to negotiate 2 or 3 year pay deals;
• High energy prices having a seriously detrimental impact on employment, particularly in manufacturing;
• Workers prepared to forego elements of wage increases for higher pension contributions.
Tony was particularly interested in the issue of migrant workers which he agreed was only likely to rise in profile with the accession of Bulgaria and Rumania to the EU.
It was agreed that meetings between the STUC and the Bank’s Agent in Scotland should take place at least once a year. The STUC will also continue to meet with the Governor/MPC members during visits to Scotland.