PAY freezes in the engineering industry have risen to the highest level in three years. The Engineering Employers' Federation says there were no increases in nearly a quarter of pay settlements agreed in the three months to the end of October. The EEF's December Pay Bulletin analyses 168 reported settlements covering 18,397 employees.

Thirtyeight firms settled between two and three per cent and 73 paid increases of between three and four per cent.

There was one settlement over five per cent and one above six per cent.

Mr John Brown, Chief Executive of EEF Lancashire, said: "These figures clearly indicate that there is no wage inflation in the engineering sector and show that the Monetary Policy Committee was right to reduce interest rates earlier this month.

"There is clearly scope for further reductions to be made at the earliest opportunity."

The UK's beleagured engineering and manufacturing sector has made a joint Budget submission to Chancellor Gordon Brown.

Sixteen organisations - representing nearly 20,000 engineering and manufacturing companies - want "pro-active, counter-cyclical measures" to maintain investment, enable industry to improve its competitiveness and take advantage of improved conditions.

These include:

Movement to 100 per cent capital allowance for technology and engineering SMEs.

Tax credit open to all firms based on incremental research and development spending.

Creation of an Applied Technology Scheme to enhance the shared expertise between firms and institutes in the training of skilled personnel in technical uptake.

A form of small firms guarantee scheme (perhaps tailored to technical firms) for project not development finance.

Provision of a rebate to NI contributions for both companies and individuals when the latter undertake approved training.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.