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The Communication Workers Union, representing 55,000 BT workers, is to ballot staff on strike action against a perceived pay cut in the face of company profits and management bonuses.

BT has offered workers a 2 per cent pay rise, but the union argues that given an inflation rate of 4.4 per cent that actually means cutting wages by 2.4 per cent. That's at a time when the company is making pre-tax profits of a billion quid and dropping a £1m bonus to CEO Ian Livingstone.

The union reckons increasing wages by 5 per cent would cost BT £65.5m, but the company is having none of it and, the BBC reports, is polling its middle management to see what skills they might have that can be applied to the front line if the strike goes ahead.

BT argues that times are still tough, and while last year's pay freeze helped there's still not enough confidence to offers workers an above-inflation pay rise. The company does point out that Ian Livingstone turned down a £50,000 pay rise this year, and that the 2 per cent offer is in addition to a £500 bonus for workers - though half of that bonus is dependent on end-of-year targets.

The ballot will take a while to arrange, and both sides are saying they're still hoping a strike won't happen, but with such a gulf between what's being asked for and offered they'll have to be some remarkable negotiations to avoid the first strike at BT since 1985. ®

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