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Oracle November 2008

Oracle cover - November 2008 Contents


Editorial

In the last issue, Pete Lockhart explained that the gap between putting Oracle together and it going to print means that those of us writing articles have to try and predict what will happen by the time an issue reaches members. A week was a long time in politics for Harold Wilson, these days, with 24 hour news coverage and instant electronic communications the world changes even more quickly.

Since we last went to press, the world economy has been in turmoil. Dave Hartnett recently told us that ‘we are witnessing changes in the economic climate that are greater than anything that any of us has experienced before’. He then asked us to judge the likelihood of a further pay increase, the impact on services and the potential damage to the reputation of HMRC before supporting any industrial action over pay. This issue of Oracle highlights just how much they are asking of us in real terms pay cuts up to 2008. The limits placed on our pay for 2009 and 2010 will widen the gap even further. This represents a real and significant drop in the standard of living for HMRC staff at a time when they are struggling to meet rocketing bills. Civil service pay didn’t keep pace during the good times that we now know were built on an illusion. If we don’t stand up for ourselves now, we will continue to see a rapid fall in the value of our pay over the next few years which could have a lifelong impact on pay and pensions. We have no choice but to defend ourselves.

British financial institutions have shown how ineffective deregulation is and have proved beyond doubt that a ‘light touch’ approach leads to widespread abuse in pursuit of profits. If we’ve ever been in a climate when the public believe that business cannot be trusted, it’s now, yet HMRC is reorganising and cutting staff based on the belief that the taxation system can be run effectively with a ‘light touch’. The policies to cut jobs and shut offices were born in a time when news of 104,000 job cuts was cheered. We are no longer in that world. PCS is not alone in its concerns about the effect of the HMRC cuts and we report on some of those voices in this issue. Hopefully, in this brave new world, Gordon might start to listen!

Lorna Merry

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Stop Press
VOA members vote to reject pay offer

Valuation Office Agency (VOA) members were balloted between 4 and 30 September over the final pay offer for 2008. Members briefing VOAC/MB/025/08 gave full details of the pay claim and the VOA final offer prior to the ballot taking place. The result, declared on Tuesday 7 October, was:

Reject : 967
Accept: 535
Spoiled papers: 4
Percentage of valid votes in favour of rejection: 64.4%

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News
Delivering on job security

Members threatened with office closure and transfer of work may now face the future with more confidence, thanks to agreements on job protection reached between national PCS and the government.

Measures are now in place to avoid workplace redundancy or compulsory moves of home and to ensure that staff will not be expected to move offices outside reasonable daily travel (RDT). In addition, offices should not be closed where it can be shown that closure would have an adverse impact on either staff or service delivery and if staff are made surplus, then they will be offered alternative jobs within the civil service.

The agreements come after more than a year’s intensive campaigning by PCS and were welcomed by members with an enthusiastic 95% ‘yes’ vote in a ballot conducted in late summer.

Branches and offices throughout the country have fought hard against the cut¬backs and in defence of local offices and jobs. The new agreements represent a measure of job protection which had seemed at first unlikely amid the present upheaval within the department.

Members, reps and branch officials must now ensure that the agreements are respected by the employer. If they are not, then local ballots may be taken to call for further action.

Since the first wave of announcements from HMRC in November 2006, thousands of R&C Group members have endured the worst effects of departmental cutbacks of 5% year on year to 2011. Over 200 offices have been targeted for closure with the eventual loss of 12,500 jobs as work has been centralised to the larger sites. The Workforce Change programme (WFC) has meant an effective salary cut for many now facing lengthy and expensive journeys to work and the disruption to work/life balance and family responsibilities. Female, part-time and disabled members have been particularly badly treated in what is little more than a policy of discrimination against them.

It is to be hoped that now a measure of agreement has been reached on the key issues, it will be applied fairly and consistently across the department. Meanwhile PCS is seeking further agreements on outsourcing, privatisation, working conditions and the use of overtime.

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Members vote for action on pay

Members in HMRC have voted overwhelmingly both to reject the department’s pay offer and to take industrial action in support of an improved settlement.

In a ballot conducted last September members responded magnificently to the call from the Group Executive Committee to turn down the 2.4% offer and to consider action short of a strike.

Members voted by 23,801 to 4,710 to refuse the offer and by a very similar margin of 23,298 to 5,177 in support of action. Turnouts were very high for a ballot of this kind, particularly in response to the call for action, at 41% and 42% respectively.

Group President Dave Bean said: ‘This is an excellent result for members and shows that they are prepared to stand by their colleagues, their Group and their Union to show the Department and indeed the whole civil service employer that these so-called awards are just not good enough. We are driving home the message that the offer is totally inadequate at a time when prices are rising and the real value of salaries is falling faster by the day. Members are prepared to lose a day’s pay now in order to protect and improve their standards of living in the future.’

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Scotland shows the way

Thousands of PCS members in Scotland have already demonstrated their frustration and anger at inadequate pay remits by taking strike action on July 31st and August 20th.

Scottish Finance Minister John Swinney has attempted to hold public sector pay increases at just 2%, even lower than those offered to civil service workers elsewhere in the UK. PCS members were taking united action with their colleagues in Unison, Unite and the GMB who are also pressing for improved pay offers.

On the eve of the August 20th action, PCS General Secretary Mark Serwotka said: ‘Please convey my very best wishes, and those of our national executive committee, to all our members in Scotland who will be on strike (tomorrow). Please also convey our solidarity to those in the Scottish local government unions, who will also be on strike. The fact that these strikes are coinciding should make it clear to all public sector employers that their workforces should not be asked to shoulder the burden of inflation by taking what amounts to a pay cut.

‘Many public sector workers are already struggling to pay the bills. Asking them to pick up the tab for price rises, over which they have no influence, as well is a disgrace.’

See pps 8-11 for details of the Group campaign on pay.

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Scottish forum delivering for a united membership

The team of leading R&C Group trade unionists meeting about 10 times a year under the banner of the Scottish Forum in Edinburgh have seen their work become a vital ingredient in what they do to represent members north of the border.

Formed after the inception of the R&C Group following the merger of the Inland Revenue and Customs and Excise in April 2005, the Forum brought together the nine former Revenue branches with the two from Customs and Excise.

The original idea was for both groups to get to know their new colleagues and to establish increasingly close working relationships whilst exchanging ideas and ‘best practice’ so that solid representation for members could continue during the full scale overhauls that were taking place in the PCS R&C Group, and which continue to occur in HMRC under Workforce Change.

Speaking to Oracle after the September meeting at the PCS regional office in Edinburgh, Forum member and president of Edinburgh Taxes Tony McCauley said: ‘We felt that rather than try and merge our different cultures, we would set up the means whereby we could gradually get to know each other and the various office scenarios, so that their problems became our problems and ours became theirs. Then we needed to get things onto a proper footing, which is what we have now.’

These words are echoed by Bob Philips, secretary of Scotland East ex-C&E: ‘The forum is an invaluable tool for getting to know colleagues from former IR and their ways of working. As Tony says, we now have a much better understanding of each others problems, which helps us to move forward in a united fashion . One of the other great strengths of the forum has been the strong link to the GEC and NEC. In the early days the GEC was always well represented, there was a bit of a dip last year in the attendance of GEC members (at the forum), however we are more or less back on track and the flow of information in both directions is greatly valued by members.’

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HMRC RDT data is flawed, says Weston MP

‘Journey times not accurate,’ admit Transport Direct
John Penrose, MP for Weston Super Mare, has discovered that the data used by Workforce Change (WFC) to calculate members’ journey times to new locations is wrong.

When an office is threatened with closure, WFC use the website Transport Direct to back up their claims that journeys to a proposed new location is within ‘reasonable daily travel’ (RDT), set at no more than one hour.

Weston members faced with an arduous rush hour journey to Bristol should their office be closed (see October edition), complained that daily traffic congestion around the access road to J21 on the M5 made a mockery of WFC claims that Bristol was comfortably within RDT.

When the MP contacted Transport Direct, chief executive Nick Illsey confirmed that estimated journey times on feeder roads to the M5 were indeed unreliable.

Mr Penrose said: ‘This shows two things. Firstly, a key part of the Government’s case for closing the Weston tax office is seriously flawed because they’re seriously underestimating the time it will take for staff to commute into Bristol… they’re sitting in London relying on data which is plain wrong.’

Editor’s note: Sadly, this is not the first time that WFC have tried to force closure issues based on shaky data. Last year Portsmouth was mistaken for Southampton (November 07, p5) and this edition has an account (p6) of a flawed analysis of public transport in Glasgow. Members should work out their own journey times and make sure that management are clearly informed of any local conditions (excessive walking time, unreliable public transport, unsafe neighbourhoods, congestion, etc) during the one-to-one process.

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Union fights security privatization plans

PCS officials are continuing the union’s battle with the employer over the outsourcing of HMRC estate security.

Hundreds of long standing PCS members at 19 sites across the UK were dismayed and disappointed to learn last August that the Department is still determined to privatise their jobs. There are widespread fears about job security, terms and conditions and the effect on pensions if work is transferred to the private sector. Members are also justifiably concerned that their sites will not receive proper levels of protection under the new proposals.

In a joint statement, security members at St John’s House, Bootle said: ‘We have worked for the civil service for many years and are proud to have done so. We feel disappointed that our years of service and professionalism are being disregarded in the pursuit of number crunching.’

For PCS, Lewis Bevan and Cathy Cross are handling the campaign and members may contact them at union HQ. Members may wish to write to their MPs about the issue and template letters are available.

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President’s column

May I first thank all of you for your continued support of the campaigning action as put forward by your PCS leadership. Your emphatic endorsement of the Group Executive Committee’s strategy around pay, jobs and office closures certainly demonstrates to HMRC that there is an overwhelming rejection of the Treasury’s flawed proposals for taking the Department forward.

Recently I was pleased to address the Trades Union Congress (TUC) speaking on a motion outlining the issue of enforcing employment rights in respect of vulnerable workers. Obviously I was able to highlight that whilst the National Minimum Wage (administered by HMRC staff) was of substantial benefit to the low paid, the promised resources were not in place for effective enforcement. That scenario is repeated across the civil service notably in respect of employment standards, health and safety, gangmaster licensing and equality rights.

I was also delighted to be asked to speak at a fringe meeting arranged by PCS and War On Want in respect of the tax gap. Our important campaign for tax justice is covered in this edition of Oracle and it is essential that this is coordinated with as many interested parties as possible, including the TUC. Whilst the issue of avoidance and ending the flow of money from the poorest to the richest needs to be part of a political lobby to change legislation, there are a number of other areas that could be rectified by reversing the job cuts of members working in HMRC.

With tax evasion and compliance costing the Treasury billions of pounds it is essential we have the proper resource to allow us to pursue those culpable. Similarly there is now an admitted £21.5 billion of uncollected tax and yet at the same time the Department continues relentlessly with its Workforce Change proposals consequently losing the expertise accumulated over several years in the field of debt management.

The TUC proved yet again that PCS continues to have a high profile and this will be as necessary as ever over the coming months. Now is the time for the whole membership to stand firm together so that PCS can continue to negotiate from strength, campaign vigorously and take action for fair pay, job security and keeping local offices open.

Dave Bean

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Group Secretary’s column

PCS members in HMRC have had enough. The feeling is palpable; not only at members’ meetings but in the discussions we have all the time with ordinary members and reps who call into our office in Clapham. PCS members in HMRC have voted in their tens of thousands in support of industrial action, and unless there has been a shift in government attitude in the week between me writing this article and you reading it, we are about to enter a period of potentially protracted dispute.

It would take only a minor policy shift on behalf of Brown’s government to avoid a major national dispute, of course, and this is very much part of the frustration we all feel. In practical terms it adds up to awarding civil servants a reasonable pay award that reflects the rate of inflation and rewards loyalty and experience. And, at the risk of getting carried away, it involves making sure there are enough people with enough resources to be able to do the job properly.

On the other hand, somewhere right now in Westminster, some very influential people are saying – ‘I have it! You know that lot that work for us – the civil servants and what have you – let’s put it about that their pay is causing inflation and conclude that their pay should be capped for evermore at, umm, say, 3 .. no 2%. It’ll be hilarious! And we could bring back Peter Mandelson! Ha ha ha – mine’s a spritzer, etc etc.’

And by way of a morale booster the head of the civil service could, on the eve of the PCS ballot, decide to send out a message to the troops reminding everybody how well rewarded civil servants are! Genius!

So, as PCS members, how do we change this mindset? How do we influence government policy in such a way that it makes a tangible difference to our wage packets and to the way that we work every day? After all, pay is only part of the equation – if you work in HMRC then you will be variously affected by … an imminent office closure, micro-management, a privatisation treat, working in a team with not enough staff to do the work, dealing with irate members of the public ….

There are 300,000 PCS members working in all areas of the civil service, 75,000 of whom work in HMRC. We will continue to talk with the government and the department, in a sane and rational way, to try and come up with a solution. But, occasionally, the people we deal with do not always come up with solutions that reflect well on either their sanity or rationality. At times such as these we really have no option but to express our discontent. Not by ourselves, as individual members of staff, but together as union members.

In the course of the next few months PCS members in HMRC have a real opportunity to make a difference. By acting together now, decisively and collectively, we can change opinion and make a tangible difference to the way we work.

The time has come to take action. We thank you in advance for your support.

Peter Lockhart

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Workforce change

Blythswood House, Glasgow – One to savour, one to save

An open letter to HM Revenue and Customs Executive Committee, PAYE and SA Processing and Workforce Change. Copy to Rt Hon Stephen Timms MP, Financial Secretary to the Treasury

Dear Key Decision Makers,

We write to you here in a spirit of comradeship in the hope that we can persuade you to take all steps necessary to reverse the current decision to close the HMRC Processing Office at Blythswood House in Glasgow. We firmly believe that to keep that office open is in the best interests of all concerned, not only of the 120 PCS members still left in the office whose livelihoods we are of course pledged to defend, but also of the untold numbers of HMRC customers whose interests the department is committed to support and the business of HMRC itself. It is surely in everyone’s interest to protect and promote that!

We appreciate that in an age when all political parties are vying to outbid one another in the numbers of civil servants and public sector workplaces that must be deemed surplus to requirements, HMRC is under intense pressure to deliver substantial cuts.
Nevertheless, we have never understood the logic behind the notion that less must somehow mean more. At a time when the so called tax gap is in excess of an annual £25 billion through tax avoidance by big business and the very rich, for instance, we think it indefensible that the resources and expertise required to reduce the gap are being destroyed.

This would seem to be especially so in Blythswood House which is a particularly efficient, productive, and in our view, viable office and we must pay tribute at this point to the PCS representatives in the office for their sterling work on behalf of their members who continue the fight against difficult odds to try and lessen the impact of Workforce Change in Glasgow: Russell Sanderson, Michael Hughes and Caroline Kenny.

You may well have seen the letters and documents to various key officials in which the reps have set out the detailed case for re-establishing Blythswood as a strategic site and summarised the situation as it has developed. Their main points are worth repeating:

  • Blythswood works: and we mean this literally. Each week staff clear 7,150 items of Customer Correspondence (CC). For the 2008-09 planning year to the end of August, they would have cleared 157,300 items of post which more than eclipses the items of outstanding post at a nearby strategic site. In helping their non-strategic partners in 2008-9, Blythswood Assistant Officers have cleared 123,000 customer reviews, 28,500 CC items and 2,817 SATRs.
     
  • We are sure you will agree that the performance of staff at Blythswood is phenomenal from an office that has been under constant threat of closure since May 2006. As Russell Sanderson says: ‘Morale has taken a beating,’ and since that time, office numbers have dropped from 180 to just over 120 now. That process could be reversed. There is enough room to take in an additional 100 staff including any displaced from the possible closure of small offices in the west of Scotland. 68 work stations with IT support are currently available.
     
  • During the Glasgow Urban Review process, it emerged that the employer believed that over 80% of the staff at Blythswood were within reasonable daily travel (RDT) of other sites. Further investigation of the Glasgow public transport system, however, showed this to be completely false. In fact only 20% of the staff were within RDT. Many of these have since transferred (at some cost to the business in travel payments over three years), leaving a remainder of 120 who are now practically all declared pre-surplus. Effectively they cannot now be moved anywhere and work will have to be found for them to do. With so many staff still on site, therefore, it would seem to make business sense to redefine the office as a strategic site and to work to regenerate it, rather than leaving it to wither and die, as now seems to be the plan.

No decision is irreversible and even the most implacable anti-bureaucrat would baulk at the waste of a facility as productive and useful to the business of HMRC as Blythswood House. All that is needed is a re-examination of the facts and a pinch of political will. The office is already working well. It would do even better if its future could be secured.

Yours in good faith,

The staff, PCS members and reps, Blythswood House, Glasgow.

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New Crewe MP defends local tax office

‘Edward Timpson’s support for our campaign is magnificent,’ say local reps. Ian Mellor reports

Just three weeks after his election victory on May 22nd, Edward Timpson, the new Conservative MP for Crewe and Nantwich plunged into the thick of another battle, this time to save the 80 strong tax office in the heart of his constituency.

His win for the Tories in the former seat of Labour legend Gwyneth Dunwoody was perhaps the first in a sharp series of recent wake up calls for the present government, yet to his credit, the new MP has not allowed any suggestion of traditional party political stereotyping to stint his contribution to the causes of organised labour in Crewe. He continues to work flat out on behalf of PCS members and staff in the tax office and is doing all that an MP can to retain a strong HMRC presence in the town.

Crewe is also in danger of losing up to 600 postal workers in a proposed Royal Mail shake-up, and this hard working lawyer turned politician is also supporting the postal workers in their tough fight to preserve the sorting office in Weston Road.

The HMRC proposal to close the tax office at No 4 Oak Street came on June 11th announcing that staff would transfer either to Warrington, Manchester or Stoke-on-Trent. In response, union members rapidly formed their campaign team and with the office in full support, determined to fight the plan and try and save what is widely regarded as one of the best performing units in HMRC.

Led by PCS member Karen Scholes, the team’s first move was to contact Edward Timpson who responded immediately offering any help he could. It was the start of an excellent, on-going campaign. ‘This is one of those life defining moments,’ says Karen. ‘We’re absolutely committed to this and are doing all we can to show the Department that to close our office is bad for business, bad for customers and absolutely awful for staff here.’

A highlight of the campaign so far saw the new MP leading a PCS delegation of members and reps to 10, Downing Street on October 7th. They presented a petition to Prime Minister Gordon Brown containing over 4,000 signatures in support of the Crewe office collected by the team in their lunch breaks and at weekends since June 11th. ‘That’s the first time a WFC campaign has got to Downing Street,’ said Karen. ‘It’s a testament to the depth of feeling in the office and in the town itself.’

‘That petition will now go to Stephen Timms, Financial Secretary to the Treasury,’ says the MP. ‘I’ve also presented a separate petition in Parliament to save the office, so we’re approaching him on two fronts,’ he adds.

Meanwhile he has visited the office and spoken to all the staff, and met five times with the team to update progress and plan ahead. He has also written letters and arranged meetings with government ministers and senior officers in HMRC in order to drive home the logic of the campaign’s counter proposals contained in their business case consultation document submitted to the department ahead of the August 6th deadline.

‘The way HMRC seem to handling this leaves a lot to be desired,’ he says. ‘I’ve had a lot of bland responses following my contacts with them. I asked Workforce Change why they had not visited Crewe office, as I have done, to learn for themselves what the effects of closure will mean to staff there. They said it was not part of their operational practice to do that. Personally I don’t think that’s good enough, especially with loyal people who have worked there for 20 and 30 years. It’s not good business practice, in my view, to treat staff in this way.’

The MP has made his own feelings very clear. Writing in his first Westminster Report for constituents, he declared: ‘Crewe is the best option. Most of the HMRC staff are local and moving to another office would have significant knock-on effects for their families. There is also a vast amount of experience and expertise at the Crewe office and it would be a shame for this to be lost.’

It would also be highly detrimental to the business of HMRC in general and their operation in this area in particular. West Lancs. and West Cheshire Branch Secretary Helen Stockton, who is also based in Crewe, says: ‘If the current HMRC plans go ahead, there will be no Departmental presence in Cheshire at all. That would be a serious loss to the business, to our members here and to the town of Crewe itself, as our campaign team’s business case makes very clear.’

We shall investigate that and other reasons to keep the Crewe office open in our next edition. Meanwhile we pay tribute to the members, reps and staff in Oak Street and their team for an excellent effort all round. In particular we must thank Edward Timpson who is proving to be a superb constituency MP. He opened his maiden speech in the House of Commons by paying tribute to Gwyneth Dunwoody. He is already becoming her worthy successor.

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Pay
Pay – the case for action

The real cost to members who take no action on pay may well be far more than a day’s wage. Ian Mellor writes
 
This edition will be coming through your letter boxes at the end of October. As a member of PCS you will have been asked to support industrial action designed to send a signal to the government that the pay increases currently on offer to civil service workers are unsatisfactory, unjust and totally unacceptable. It is almost certain we will need members to support industrial action to progress our claim.

The only question that remains is, can you afford not to take part? Can you afford not to withdraw your labour and support your colleagues on that day and ensure that the government hears our message loud and clear – pay offers running at less than half the cost of inflation mean that millions of public sector workers are battling on through times of great turmoil and change within the civil service and its related agencies whilst watching the real value of their packets go into free fall.

Low Pay

Low pay remains a fact of life and naturally a number of members at this moment will be searching their souls (and their pockets and purses!) and weighing up the costs of losing a day’s pay. That is what it will cost to go on strike. Yet the question bears repeating – who can afford not to? We shall not put an end to the injustice of poor pay and real terms pay cuts unless we stand together. We may lose a day’s pay now but that will be nothing compared to our future losses if we fail to push for improvements today. (see The New Ragged Trousered Philanthropists, these pages)

The bare bones of the three year deal on offer to members in HMRC stand out clearly: in each of the three years of the offer, the average pay increase is 2.4% – translating into an increase of just 2% for those at the top of their grades in year one, and slightly more for others. In years two and three, the increases for those on the maximum will be just 1%. So far so bad, but here is the real sting: just over 40% of the workforce will be looking for their annual progression increase, so far paid to those who are not yet on the max. They will search in vain.

Although there is an element of pay progression in year one, this goes nowhere near to meeting the commitments previously made by HMRC to progress members to the maximum in five, six, or eight years depending on grade. Next year, pay progression pay will be reintroduced, but be will funded by capping the maximum at 1% for the majority.

In other public sector pay deals, increases and progression are treated separately. Only in the civil service are the two strands linked so that, as in this case, the one pulls down the other. Meanwhile, for the 5% of HMRC members who are opted out of Departmental scales, the ‘award’ represents a consolidated increase of exactly 0% (see Opted Out, these pages and the letters page)

For every extra £2.40 the current pay offer would put into your pocket, the rising cost of living is taking out £10.80

High cost of living

Such an offer would be contemptible at any time. In today’s economic climate, it is also insulting. As everyone knows to their cost, prices in key areas such as food, fuel, utility bills and mortgage repayments are rising much faster than the headline rate of inflation, currently running at 4.8% (RPI).

According to the Office of National Statistics, retail food bills are up by 12% in the year to last September, adding £750 to an average family’s annual bill. The UN Food and Agriculture Organisation declares that food prices will continue to rise by a further 20% in the years to come. Meanwhile petrol has gone up by 20% in the last year alone as rocketing global oil prices have also forced up domestic gas and electricity bills by 38%.

Mortgage deals at the lower end of the market were in fact easing slightly during September, yet still, someone coming to the end of a typical two-year fixed rate deal at around 4.6% would be lucky to remortgage the same property on the same terms at less than 5.9%, adding £115 to the monthly cost of the repayments.

Even council tax increases, capped at 5%, add an extra pound a week to average household bills. Councils around the UK are cutting back on their services to the elderly and disabled in order to stay within these government imposed limits.

So far, union negotiators have done what is possible within the constraints of the money available - which is limited by remits set by the Treasury. Discussions may continue about how the award may be distributed in years two and three, but the global sum remains fixed for all three years unless the government responds to pressure from PCS and the other public sector unions.

Myths exposed

At the TUC Conference in September, Chancellor Alistair Darling dismissed pay rises for civil servants, warning that the battle against inflation was his top priority to prevent further recession. He said: ‘In the private and public sectors, pay rises must be consistent with our inflation target, otherwise every penny in pay rises will be very quickly swallowed up by higher prices.’

Do not believe it. Inflation is a highly complex issue, of course, but the current increase is created essentially by the rising price of oil and by global businesses passing on the escalating costs to their customers. Evidence suggests that even when the price of oil fell back in the early autumn, big business did not reduce prices but continued to charge more, so that dividends to their shareholders could be maintained along with massive pay awards and bonuses for their senior staff. And private sector pay increases were running at almost 4% to the end of May this year.

We support the TUC General Secretary Brendan Barber when he says: ‘We have shown that you cannot create world-class services with a workforce battered and bruised by change, sapped of morale by a thousand reorganisations, and crippled by pay awards that do not begin the reflect the true cost of living.

And don’t let anyone tell us that the government can’t afford fair pay for public servants.

‘If it can spend billions on consultants, billions on tax breaks for UK plc, then surely it can find the money to give Britain’s teachers, prison officers, civil servants and local government workers the fair pay they deserve. But let us be clear about this: working people are not the cause of inflation; they are the victims of it.’

So, who can afford to go into work on a strike day? To do so would be to fall victim to short term expediency and to sacrifice the chance of longer term gain. A recent YouGov poll showed that the general public support fair pay for their civil servants. By standing together now, PCS members may by then have secured a better longer term future for themselves and their families and the benefits will last forever.

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PCS members condemn pay offer

Quite simply the pay offer is not acceptable. Whilst there is no guarantee that taking action will result in a pay offer that is satisfactory, doing nothing simply sends a message to the board that they can walk all over us.

Brian Rankin

Both me and my husband work as AOs in HMRC. We have two children under six to provide for, a mortgage and bills which need paying. Bills, food and childcare costs keep rising but the pay ‘increase’ is so poor that it doesn’t even begin to cover the outgoings we have each month. In fact we are doubly affected and I would probably say we are no better, even worse off. So much so that my husband has to do two extra jobs just to keep our heads above water.

Sharon O’Neill

The pay offer is roughly half the rate of inflation which of course means it is effectively a pay cut. It was refreshing to see members voting to fight for a better deal although I wonder what planet the ‘no’ voters were on! Employers will pay what they think they can get away with; therefore as union members we must send a clear message that we will not accept such derisory increases; if we don’t fight this we face a future of pay cut after pay cut.

Brian Cairns

The government have found £100 billion to bail out the banks yet they claim they can’t afford to offer their employees a pay rise that would amount to a third of a per cent of that figure. Rich banks get bailed out whilst civil servants barely scraping the minimum wage get a pay cut.

 

Ritchie Hammond

I’m not at my pay maximum yet so the disappearance of the progression element of the award was something of a shock. Like everyone else, I’ve had to pay more for household utilities and 2.4% will not fund those increases. It’ll mean about an additional £450 pa for me. With progression and performance pay, that would have been at least double. Those who have been in the Revenue most of their working lives have not had a decent pay rise in the ten years that I have been here. We deserve better. If the union called for a two week strike, I’d be there. Everyone should be.

 

Liam Ryan

Given the governments concerns about pensions and the growth of the pension population I wonder if it is just coincidence that the last three year pay deal coupled with the current offer spans a period of time which will see a huge amount of retirement from the department as post war baby boomers reach 60.

 

By depressing pay awards over this period our employer has manipulated ( and made substantial savings) on future pension payments.

A colleague in the classic scheme who retired on the 31-5-2005 on scale max with 40 years service is, today, likely to be receiving a pension 5% greater than that awarded to someone in identical circumstances who retired on 31-5-2008. With higher levels of inflation expected over the course of the proposed pay settlement it is not unreasonable to expect a similar comparision in 3 years time to show that by then our 2008 retiree will be paid a pension 15%+ more than a colleague who retires on 31-5- 2011.

Now is the time to put an end to these below inflation pay awards which for so many will affect the rest of their lives.

Chris Thorne

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Opted out

One area of significant uncertainty and discontent about the current pay offer is in relation to those members who are still opted out and when they might opt in and under what terms. This problem is compounded for those opted out members who are on reserved right allowances (RRA) and pay additions. We print just one of the comments we received. Also, see the star letter p.14 and circulars BB/303/08 and MB/013/08.

I wish to enter a protest for all those who have opted-out of the HMRC terms and conditions. Those who were on even bands (in particular Band 10) and have now reached their maxima are being discriminated against by only receiving a non-consolidated pay rise of 2%, which I believe means that for pension purposes this pay rise does not count. For those that have opted in and on their maxima their pay rise is consolidated which means it will count for pension purposes. Opting-in is not an option for us as we are in receipt of pay above the maxima for the HMRC pay ranges. Our only hope is to obtain promotion and in the current climate this is not a very realistic hope.

Debbie Rudd

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Expert witnesses

PCS supports the National Union of Teachers in their campaign for better pay. The October edition of their magazine The Teacher helps to expose the myth of links between public sector pay and inflation, and the government’s contention that there’s no money to fund inflation-level pay rises in the public sector:

Quote: ‘Public sector pay rises have nothing to do with inflation.’ Stephen Nickell, Head of Nuffield College, Oxford, specialist in labour economics (Financial Times, Jan 2008)

Quote: ‘It’s not the case that inflation is being driven by domestic factors. Wages aren’t part of it.’ Ken Mulkearn, editor of Income Data Services’ Pay Review (Public Finance, July 2008)

As for the lack of money, see pages 12-13 for our own exposure of the nation’s £25 billion tax gap.

(with thanks to The Teacher magazine)

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HMRC workers: The new Ragged Trousered Philanthropists

The Ragged Trousered Philanthropists is a book by Robert Tressell, a house painter and sign writer working in Hastings in the early 20th Century. The story describes the poverty and exploitation suffered by workers at the hands of their employers.

The ‘philanthropists’ are the workers themselves who acquiesce in their own misery in the interests of their bosses. They refuse to do anything about their downtrodden lives and work long hours in foul conditions for starvation wages because they think that a better life is ‘not for the likes of them’.

One hundred years later, Oracle readers who have a look at the chart (Turning the Tables, these pages) will quickly realize that even if they accept HMRC’s current pay offer without a struggle, they will in effect be handing over a month’s pay to the employer every year for the rest of their lives.

Even more staggering are the figures worked out by SE Essex Assistant Branch Secretary Stuart Holttum. Members who settle for 2.4% rather than trying to keep pace with inflation at, say, 4.5%, are effectively giving the employer no less than £140,000 over the rest of their lives, based on the life of a career tax worker currently taking home £1,000 a month with 20 years to go before retirement and 25 years on an HMRC pension.
Philanthropy indeed!

Editor’s Note:
Events commemorating Robert Tressell in Liverpool , organised by PCS, TUC North West, UCATT, Liverpool Trades Council and Unions 08 included the unveiling of a plaque to Tressell on the evening of the 9th May 2008 at Walton Park cemetery

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Union leaders call for justice on public sector pay awards


 ‘With the credit crunch biting, with incomes being squeezed by rising food, fuel and energy costs, with the gap between the super-rich and the rest of us now a yawning chasm, the British people are crying out for fairness - and I believe the case for action is compelling.’

Brendan Barber, General Secretary TUC

‘Public sector pay does not cause inflation, it follows it. We’ve been offered 2% when in many areas inflation is running at 15 to 20 %.
Public sector workers are not highly paid people. They are being offered 20p an hour extra in many jobs. What we are saying is, they need a decent pay rise. They should be cushioned from the worst ravages of the economic downturn. If people at the top can make a massive killing from what’s going on, at least our government should be protecting the weak.’

Dave Prentis, former President of the TUC and General Secretary of Unison

‘It is all well and good saying that they want to listen but if they came down to (this TUC Conference in) Brighton today they would hear the voice of seven million workers who are facing financial misery and hardship at the hands of a government policy which is driving down the pay of hard-working families. Public sector workers see through the myth peddled by the government who seem more intent on championing the rich and the fat cat salaries of the city. Which is why we are balloting our members across civil and public services for what would be the most sustained action over pay since the Thatcher era.’

 

Mark Serwotka, General Secretary, PCS, at the TUC Conference, September

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Turning the tables – the effect of inflation on HMRC pay

HMRC uses Office for National Statistics charts in order to calculate the impact of Retail Price Inflation on its customers. Here, Oracle employs the charts to work out how much staff pay packets have fallen in real terms over the last three years.

In effect this means that across the life of the last HMRC pay deal, and factoring in the offer currently on the table, members at the top of their pay grades have lost out by the following amounts. Simply to keep pace with inflation, pay offers should now increase by these amounts, which represent a full month’s additional take home pay for everyone at all grades:

Pay: What you can do

WRITE TO YOUR MP AND LOCAL NEWSPAPER

Alert them to the fact that by uniquely including progression in the pay cap, many members will receive no increase at all.

SUPPORT UNION ACTION

Again, the more people who take action – which can mean working to rule and overtime bans as well as strike action – the more notice the Department will take, and the more likely it is we will get that 4.5% instead of 2.4%.

ENCOURAGE YOUR COLLEAGUES to join the union. The more members we have, the more effective any action will be. The more members we have, the stronger the union becomes. And the stronger the union is, the more pressure is on the Department to make a decent pay offer.

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Tax justice - The Missing Billions – PCS calls for fairness on tax

Each year the UK loses a minimum of £25 billion through uncollected tax and tax avoidance. This represents prevents us helping the development of countries abroad. It needn’t be like this. Ian Mellor investigates

Costing the gap

An extra £25 billion a year in the national exchequer would pay for
75 hospitals or
7,000 schools or
145,500 nurses and
146,150 fire fighters and
146,106 teachers and
146,100 police

Trade unionists have long condemned the hypocrisy which lies at the heart of the present government’s social and economic policies. On the one hand Gordon Brown calls for a fair and equal society yet on the other lets loose a financial system which brings untold riches for the few and constantly declining standards of living for the many.

Speaker after speaker at this year’s TUC conference in Brighton in September called for both an end to low pay in the public sector, a reversal of New Labour’s privatisation agenda and a complete revision of the current tax system which effectively allows the rich to rob the poor.

Tax legislation in particular drew strong fire from President Dave Prentice and General Secretary Brendan Barber in their key note speeches: ‘Our tax system is one of the most unfair in the EU. The lowest top rate apart from Luxembourg. Those at the top can and should pay more... pay more to help relieve the suffering of the very poorest in our society. A bold step to show whose side Labour’s is really on,’ said the President.

The normally understated Mr Barber was even more explicit, showing his depth of feeling on the issue: ‘In 2000 a typical FTSE 100 Chief Executive was paid 39 times the national average. Now it is over 100 times. And according to accountants Grant Thornton in 2006 the 54 billionaires living in Britain paid £14.7m in tax on their £126bn combined fortunes. In other words they are paying tax at an average rate of a little over 0.1 per cent. The grotesque inequality we see now is a scar on our country, and I have to say, that when I hear Ministers talking about celebrating more millionaires it makes me cringe,’ he said.

PCS is of course deeply involved in the tax issue which is as it should be in a union with over 75,000 of the 300,000 total membership working in HM Revenue and Customs.

President speaks out

On the second day of the TUC Conference, PCS President Janice Godrich led for PCS on Motion 26, headed Tax Justice. The motion welcomed the recent publication of the TUC pamphlet The Missing Billions and called for a revised and improved system of tax collection in order to address the key issues of economic inequality and social injustice.

Janice pulled no punches in her speech, laying out clearly and emphatically the gross inequalities and damage to the UK’s social infrastructure created by the scandal of a tax system which currently operates at an annual loss to the country of £25 billion through tax avoidance – the so called tax gap-which is widened by a further £8 billion through the exploitation by big business and the super rich of tax loopholes provided by the present government.

She said: ‘The government says it is serious about combating poverty and inequality but has presided over a tax system which has caused the International Monetary Fund to describe the UK as a tax haven for the super rich. The missing billions could be used to transform our social services, lift millions of pensioners and children out of poverty and guarantee fair pay increases for every low paid civil servant.

In a further statement which will resonate especially with the thousands of HMRC members facing threats and disruption to their living conditions through Workforce Change, Janice said: ‘ It is ludicrous to continue to cut the jobs of the thousands who are responsible for collecting tax. HMRC has gone a considerable way to realising their ambition to cut 12,500 jobs by 2011. We believe this is irresponsible and unsustainable. ’

War on Want

On the following day at a fringe meeting sponsored by PCS, deputy general secretary Hugh Lanning, deputy president and president of the R&C Group Dave Bean together with members of the charity War on Want and the Tax Justice Network described how the UK’s overseas aid budget is tied to the internal tax system. As less tax is collected, so our contribution to the developing world is reduced, automatically.

Casino capitalism

Within days of the conference, international financial markets and global institutions were approaching meltdown. Many of the so called masters of the universe on Wall Street and in the City of London were exposed as little more than cheap spivs gambling yet again on the futures of mortgage and savings institutions, threatening the jobs of thousands and the livelihoods of millions.

It had to stop, and for once the iron chancellor turned rusty prime minister showed himself capable of taking a degree of control, at least in the short term, to try and salvage something from the wreckage of what insiders were now calling the worldwide financial tsunami. In merging the crumbling Halifax Bank of Scotland company with Lloyds TSB in mid-September, and later moving to rescue Bradford and Bingley, Gordon Brown showed that dire situations need firm, decisive solutions. For once the political will was found to bend the rules and put in place a degree of sanity and fairness into the system. Rampant capitalism was reined in, at least for the time being.

What is needed now is the same determination to reform the tax system so that the rich minority are made to pay a fair share in support of national and international needs so that the poorer majority can enjoy more fair and just societies. Brown may have taken measures to protect financial and banking infrastructures but the emphasis has been on preservation, not change and control. There is no evidence to suggest that once the system recovers, the fat cats will find themselves short of cream. Restoring Peter Mandelson to cabinet rank did not bode well – the last thing we should be very relaxed about is the very rich. Meanwhile, the £50 billion the government provided in aid to the ailing system in early October would be recovered in just two years if proper measures were put in place to eliminate the tax gap.

If Labour is to regain any credibility and restore respectability in the ballot box, then these things must happen, and happen soon.

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Next: Tax losses cost developing world dear

‘The news that one third of Britain’s largest companies avoid paying any tax at all is a reminder that this key weapon in the fight against poverty is often overlooked. And while non-payment costs the UK dear, the impact of corporate tax dodging on developing countries can be disastrous.’ War on Want.

Through 2008, PCS has been establishing a Tax Justice campaign, working with the TUC, the charity War on Want and the Tax Justice Network an independent organization of tax experts, academics, journalists and trade unions which aims to expose the international injustice of off-shore tax avoidance and its devastating effects on developing countries. Their website is www.taxjustice.net. It contains extensive and in depth analyses of the harmful impacts of tax evasion, tax avoidance, tax competition and tax havens.

In future editions, Oracle will report on the campaign and examine the key issues in detail.

 

What is to be done?

The Missing Billions – The UK Tax Gap* is a recent TUC publication designed to focus attention and stimulate debate on the current UK tax system.

Of particular interest to HMRC workers will be the recommendations to:

  • stop the current round of HMRC staff cuts so that adequate resources are available to tackle the tax gap
     
  • abolish unnecessary tax reliefs enjoyed primarily by the wealthiest individuals
     
  • engage more actively internationally in tackling abuse promoted through tax havens – HMRC estate owners Mapeley, for instance, are based off-shore.

    These and other proposals, says the report, could at least halve the cost of tax avoidance and bring many potential benefits to the ordinary people of the UK:
     
  • half of the missing billions could raise the level at which the highest rate of tax is paid by £10,000, offering significant financial relief to those on middle incomes
     
  • alternatively, the same amount would pay for a 20% increase in the state pension or could reduce the basic rate of income tax by 3p in the pound
     
  • a 25% cut in the tax gap would be enough to provide 5½ million public service staff who are currently facing the prospect of a real terms pay cut with a pay settlement equivalent to the rise in average earnings across the economy in 2007.

*www.tuc.org.uk/touchstonepamphlets
The pamphlet was researched and drafted for the TUC by Richard Murphy, Director of Tax Research LLP and a leading member of the Tax Justice Network, www.taxresearch.org.uk

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Top dodgers!

Follow more on tax justice in the October Edition of New Internationalist magazine (01858 438896 to subscribe). Readers can vote for their top tax dodgers. The current favourites are:
 

Bono, Rupert Murdoch, Tesco, The Prince of Liechtenstein, Leona Helmsley – the Queen of Mean, who served time for tax evasion and bequeathed $12 million to her dog, and… the British Monarchy

Visit www.newint.org/tax to read more on the nominations and to vote for who you think should win.

And talking of tax dodgers, last month’s The Teacher magazine cited the case of Philip Green (head of TopShop and BHS) who in 2006 avoided paying £300 million of tax – enough to fund the current 2.4% pay offer for practically every member of the R&C Group in PCS-mainly by basing his family in Monaco.

And lest it be forgotten, according to Accountancy Age, 220 senior HMRC staff received bonuses for 2006-7 worth £1.7m, on average £8,000. Of course all the due tax was properly paid, but even so...

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