Madam, - The euro has appreciated by 40 per cent against sterling since January 2007. In simple terms, this means that those of us still at work have received pay rises of 40 per cent vis à vis our nearest neighbour and most important trading partner. The Central Bank would dearly like to devalue our currency to counter this development but we surrendered that right 10 years ago. But we still have some control over our economic destiny.
Can we really afford a further 10.6 per cent pay rise, as provided under the terms of Towards 2016? If we are truly facing a deflationary period then this wage increase will in real terms be more generous than anything we granted ourselves during the boom years. - Yours, etc,