HMRC pay award “unfair, unbalanced and inadequate”  

06 Aug 2019

The derisory, unfair and inadequate 2% pay award announced by HMRC today, which it is imposing on staff next month, completely fails to tackle years of decline in the value of workers’ pay or address serious concerns PCS members have over pay.

HMRC has informed PCS that in September, it intends to impose its pay offer for 2019/20 which features:

  • Awards ranging from 1.84% to 2.08%
  • Awards ranging from £360 (AA national) to £1,279 (Grade 6 national); and in London, from £423 (AA London) to £1,410 (Grade 6)
  • All awards being fully consolidated and will be paid on the 30 September, backdated to apply from 1 June
  • Ex-gratia payments to compensate for additional pension contributions occurring as a result of backdated payments will be paid to those affected in October.

It is clear that HMRC is currently unwilling to properly address the serious concerns that PCS members has regarding pay. The failure to consider alternatives, or to approach the Treasury for more funds, reinforces the view that the employer is working to an agenda that is not in the interests of our members.

PCS will be convening members’ meetings on pay in September, with further details available on shortly. We are scheduled to meet outgoing HMRC chief executive and permanent secretary Sir Jonathan Thompson for the final time before his departure on 23 September, we will press him and his successor for a different approach on pay. An approach that must include securing more funds from the Treasury.

Fairer alternative was possible

The Treasury Pay Remit Guidance issued by the government in June, indicated that civil service employers would be funded for a 1% increase in pay bill costs, but could increase pay bills by a further 1%, as long as this could be found from existing budgets.

Even within the constraints of the guidance, a more equitable distribution of pay was possible. PCS had calculated that a flat-rate pay award of £500 for AA/AO grades and £550 for all others, with an underpin of 2% at AA-EO grades and an underpin of 1% for all other grades, would have spread the available funds more evenly, and given more people a higher pay rise. This distribution would also have delivered real progress for the very lowest paid.

HMRC rejected this alternative, preferring instead to enhance the pay disparities that have built up through the application of government pay restraint and strict percentile increases.

Pay award impact

With annual inflation rates currently running at between 2% (CPI) and 2.9% (RPI), members are yet again, faced with a real-terms pay cut. In addition, the severe restrictions on pay imposed by the government over the last decade continue to prevent staff from moving through their pay range with more than 40,000 people or two-thirds of the HMRC workforce, currently on, or close to, the minimum for their grade. PCS asked HMRC to go back to the Treasury and make the case for more money to satisfy our pay claim. The employer refused this request.

Embarrassing spectacle

PCS has highlighted the current HMRC policy of tracking the statutory minimum allowable pay rates; the misnamed National Living Wage (NLW), for the lowest paid workers in the department. We pressed the employer to take action to confront the ongoing, embarrassing spectacle of the department charged with enforcing the NLW, having to uprate the pay of its own lowest paid staff when the statutory minimum increases every April. Once again HMRC has rejected our demand, preferring to widen the gap between the lowest and highest paid.

The HMRC policy on this issue is not just morally bankrupt, it is storing up a major problem for April 2020, when the long-standing government commitment that the NLW should equate to 60% of UK median earnings will apply. Our calculations show that this will mean that more than 12,000 HMRC workers will be classed as earning on or close to statutory minimum pay rates by next April.

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