Bank reviews staff salaries as it tells public to avoid pay rises
THE Bank of England has been accused of hypocrisy after launching a pay review scheme for its 4,000 staff as its Governor urged the public not to accept big salary rises.
The “performance and salary review process” was signed off by the Bank’s board in December at a meeting attended by Andrew Bailey and takes effect this year, The Sunday Telegraph can disclose.
The move comes despite Mr Bailey warning in February that workers should not demand significant pay rises in an intervention that sparked controversy. Last week, he added higher earners should “think and reflect” about demanding money from employers.
The Bank is facing mounting criticism over its handling of inflation, with Lord King, a former governor, saying last week: “Monetary policy has been too loose ... And the problem for central banks is that, for very understandable reasons, they don’t want to say, ‘You know, maybe we got it wrong in the last year or so.’”
Last week The Telegraph reported that some Cabinet ministers were turning on the Bank, with one warning that it had been failing to “get things right” for “a long time” and another saying it had failed a “big test”.
Last night, Robert Jenrick, a former Treasury minister, called for greater “scrutiny” of the Bank, saying: “Despite the clear warnings in the real economy, the Bank of England misjudged the scale and longevity of inflationary pressures – not least by continuing their enormous expansion of quantitative easing for far too long.”
Details of the salary review scheme are contained in minutes of a meeting of the Bank’s Court of Directors, which was held on Dec 2 2021.
On the “new performance and salary review process”, the minutes stated: “The aim was to encourage high-quality feedback and constructive development discussions as well as providing a basis for reviewing pay. There would also be more emphasis on values and behaviours.”
End-of-year ratings will also be introduced in line with how employees are to be monitored, which staff said was in line with “most progressive firms”.
It follows an 8.9 per cent increase in the number of staff earning more than £80,000 from 2019/20 to 2020/21 – before Mr Bailey’s calls for pay restraint – according to data reported yesterday.
Appearing before the Treasury select committee last week, Mr Bailey said: “I do think people, particularly people who are on higher earnings, should think and reflect on asking for high wage increases.”
Saying he was not “preaching” and it was for businesses to “make their own judgment”, he said he had told the Bank not to give him a pay rise this year.
Last night Liam Fox, a former Cabinet minister, called for a parliamentary inquiry into the Bank’s handling of inflation. He said: “Having taken its eye off the ball on inflation, there will be intense scrutiny of how the Bank of England behaves in future.
“I assume that when they tell the rest of the British people not to ask for a pay rise, they will apply the same rules to themselves knowing the public are watching as never before.”
Gary Smith, the general secretary of the GMB trade union, said: “Andrew Bailey has spent the past few weeks lecturing low-paid workers on why they shouldn’t ask for a proper pay rise.
“Now it turns out 4,000 of his own staff are in for a tidy wage boost. It’s sickening hypocrisy.
“Keeping inflation under control is literally Mr Bailey’s job. It’s not the responsibility of the carers, NHS workers, refuse collectors and shop workers who are at breaking point with out-ofcontrol food and energy bills.”
The Bank said that “no changes have been made to remuneration as a consequence of what was agreed by Court”.
It is understood that 2022 is the first year in which the system applies, so pay rises arising via the scheme have not yet been awarded.
‘Having taken its eye off the ball on inflation, there will be intense scrutiny of how the Bank behaves in future’