WEDGWOOD is pledging to keep production in Staffordshire after offering workers their first pay rise in five years.

Trade union Unity and managers have agreed a three per cent pay increase for manufacturing and warehouse staff at a time when many firms are struggling against the recession.

The one-year deal, which could be worth an extra £500 a year for the average worker, is the first at Wedgwood since 2004.

It comes eight months after the assets of the Wedgwood and Royal Doulton brands were saved from administration and formed into the new company WWRD.

Its chief finance officer Anthony Jones said: "We have always been fully aware that the outstanding quality and enduring appeal of the Wedgwood brand owes much to this region and its people, and we are entirely committed to maintaining a presence in Barlaston.

"We've taken a hard look at the business, trying to rebuild the brands and put some of the pay freezes and troubles staff have had to endure behind them.

"Eight months in and this is looking to be an exciting turnaround, which is going better than original expectations."

The pay rise comes into effect in April and will cover around 400 staff employed in manufacturing in Barlaston and warehousing at the Stafford distribution centre.

WWRD had warned earlier this year 250 of the firm's 600 jobs could be lost through a major restructuring plan looking at concentrating on prestige ceramic and some fine bone china production at Barlaston.

But officials now hope the total job losses can be cut back to 190 after some of the 60 jobs were saved through investment in a £280,000 new fine bone china unit, set up to meet demand for dinnerware with the Made in Stoke-on-Trent backstamp.

Mr Jones said: "We're actively looking to invest to keep not just prestige production at Barlaston, but also classic Wedgwood traditional fine bone china."

Negotiations over a possible pay rise for about 100 administrative staff is still ongoing.

WWRD would not reveal the average pay for workers affected, but figures from Stone-based pay specialist Croner Reward show the average skilled production worker earns £18,000 a year. That's equivalent to around £15,000 five years ago based on inflation of three per cent.

Unity deputy general secretary Garry Oakes said: "There has been strong demand in mark of origin-sensitive markets and that has meant they've needed to keep people on."

The deal comes 11 months after Waterford Wedgwood fell into administration with debts of more than £400 million.

Mr Oakes added: "I believed that was the end of Wedgwood. I thought the debts were just too big.

"So to see there is still a business at Barlaston, and one which seems to be growing, is very good news."

Pottery giant rebuilding for the future: Page 4; Comment: Page 10