U.K. Finance WatchDog Staff Reject 5% Pay Rise Offer

(Bloomberg) --

Union members at the U.K.'s Financial Conduct Authority have voted to support industrial action over what they say are proposed cuts to their pay and conditions.

Some 87% of FCA members of Unite backed action over cuts, which the union said in a statement threaten to “damage the interests of savers, borrowers and businesses by creating a bargain basement regulator.”

Unless a negotiated settlement is reached, Unite can proceed to a full industrial action ballot, raising the prospect of strikes.

The changes are part of FCA Chief Executive Officer Nikhil Rathi's attempts to revamp the regulator. The watchdog has previously said it won't pay bonuses to its top officials amid criticism for its failure to stop a multimillion-pound bond scandal that hit retail investors.

“The employees are telling FCA bosses that the proposed changes are damaging and destroying any remaining goodwill the staff had,” Sharon Graham, Unite's general secretary, said in a statement. She added that Rathi “should be waging war on malpractice in the financial sector, not on his own staff.”

A spokesperson for the regulator said that under the proposals, most colleagues will receive base salary rises of at least 5% this year and 4% next, with many receiving significantly higher. Around 800 of the lowest paid staff would receive pay rises this year of an average of 3,800 pounds, the spokesperson said in an email.

The watchdog employs about 4,000 people in total, its latest annual report shows. The threat of industrial action comes against a backdrop of soaring inflation. The squeeze on household incomes is set to worsen in April, when energy bills are forecast to rise by almost 50% and a payroll tax increase is due to take effect.