You may have also seen details in the media about a Lobby of Parliament in October 2010, prior to the Comprehensive Spending Review on 21st October 2010.
As part of the lobby the Branch wrote and lobbied Paul Maynard MP (Blackpool North and Cleveleys).
The following details are the points that we raised and Mr Maynards reply follows:
First Letter:
“I am writing on behalf of the Public and Commercial Services Union (PCS) Department for Work and Pensions (DWP) Fylde Central Benefits and Services Branch concerning a lobby of Parliament on Tuesday 19th October 2010 that PCS is organising about the Government’s spending review, which is due on 20th October 2010.
Thank you for previously taking the time to meet with the Branch and discuss the issues facing the members in the area.
Job cuts in the Fylde thus far
In the Department for Work and Pensions it has been established that over two thousand one hundred jobs have already been cut on the Fylde. These figures have been supplied by the former MP for Fylde the Rt. Hon. Michael Jack by means of questions to the Minister.
The extent of the job cuts in the DWP (alone) in the Fylde over the past five years (broken down into Council Boroughs) are set out below. The figures are in whole time equivalents Job Cuts between 2005 and 2009:
Blackpool = 245; Fylde = 1,057; Wyre = 860
TOTAL JOB CUTS ACROSS THE “FYLDE” = 2,162
Cuts already announced and being implemented
On 31st March 2010 it was announced that a further 247 whole time equivalent jobs cuts at Warbreck. The cuts are already taking place in terms of natural wastage and freezing recruitment exercises that had already concluding, but people had not been taken on (posted).
Other units in the area have also been undertaking small scale cuts.
False economies masking the impact of the cuts thus far
There have been large scale job cuts however the impact of the cuts in permanent staffing has masked by large scale expensive overtime spending. At Warbreck for example a fifth of the work is done on overtime. Without this overtime, work would be left undone and the public would become even more frustrated at the poor level of service.
Danger of further cuts
There is an inherent danger not just to the staff, the services they provide but also the economic health of the Fylde if there isn’t a moratorium on any further job cuts whilst an evaluation is undertaken as to the impact on the Fylde of the previous, ongoing and future cuts.
Civil Service Compensation Scheme
The CSCS is the scheme by which severances and redundancy payments are made to Civil Servants when there are job cuts. The former Government attempted to bring in changes to the CSCS and imposed changes to our accrued rights from 1st April 2010.
The changes included the fact the amount of compensation paid if someone is made compulsory redundant; reduced the amount of money that may be offered on any exit scheme (including compulsory redundancy on voluntary basis) and all the enhancements to any early retirement schemes that may be offered in the future would be ended.
PCS Campaigned against the attacks on the CSCS indicating the cheap job cuts would mean more job cuts. The former Government had indicated that it wanted to save £500 million pounds by the changes over the forthcoming period. This level of saving could only be achieved if there were jobs on a massive scale.
PCS also undertook a legal challenge and it was concluded that the former Government had acted unlawfully as they had imposed changes to our accrued contractual rights.
We are totally dismayed that the new administration has chosen not to honour the decision of the Courts, and instead has embarked on a process to try and bully and brow beat PCS into accepting even worse terms than were on offer under the previous Government. We do not feel that this demonstrates a commitment to fairness and natural justice.
Pay in the DWP
The Chancellor announced a new pay cap of zero percent pay increases for the next two years in the Public Sector for anyone earning more than £21,000.
Pay cuts and pay freezes have been a common feature for civil servants as the Government has sought to drive down pay over the past few years, with all of the DWP staff receiving 2% rise in 2007, a 0% pay rise in 2008 and 1% in 2009.
As you can see there has not been a golden decade of pay rises in the DWP with people getting on average a one percent pay rise over the past three years; however we are being asked to pay for the financial crisis none of which was our doing.
In reality, because of the fact that, uniquely in the Public Sector, pay progression in the Civil Service is costed out of Annual Pay rounds, this means negative pay rises, i.e. pay cuts of -1%, or alternatively no pay progression. Pay Progression is the time that it takes to move from scale Minima to scale Maxima. This used to be as little as 4 to 8 years in the 1980’s and is distinct from the Pay Rise element. This is how much the pay scale increases by; it is sometimes also called the “cost of living rise”.
To explain this; without pay progression, two people doing the same identical jobs, but one is paid up to £5,000 per annum less than the other, in perpetuity.
Any pay freeze would therefore be a pay cut in real terms due inflation and also due to pay progression not being funded separately.
Unacceptably this situation is exactly what many of the members are now facing. By 2011, unless there is a reversal of the pay freeze, members will have seen the value of their wages diminished over the five year period by as much as 15% in real terms i.e. a 15% cut in wages in real terms.
There is an alternative to the cuts
Addressing the ‘tax gap’ is a vital part of tackling the deficit. Figures produced for PCS by the Tax Justice Network show that £25 billion is lost annually in tax avoidance and a further £70 billion in tax evasion by large companies and wealthy individuals.
An additional £26 billion is going uncollected. Therefore PCS estimates the total annual tax gap at over £120 billion (more than three-quarters of the annual deficit!). It is not just PCS calculating this; leaked Treasury documents in 2006 estimated the tax gap at between £97 and £150 billion.
If we compare the PCS estimate of the tax gap with the DWP estimate of benefit fraud, we can see that benefit fraud is less than 1% of the total lost in the tax gap.
Employing more staff at HM Revenue & Customs would enable more tax to be collected, more investigations to take place and evasion reduced. Compliance officers in HMRC bring in over £658,000 in revenue per employee.
If the modest Robin Hood tax – a 0.05% tax on global financial transactions – was applied to UK financial institutions it would raise an estimated £20–30bn per year. This alone would reduce the annual deficit by between 12.5% and 20%.
Closing the tax gap, as part of overall economic strategy, would negate the need for devastating cuts – before even considering tax rises.
Our personal tax system is currently highly regressive. The poorest fifth of the population pay 39.9% of their income in tax, while the wealthiest fifth pays only 35.1%. We need tax justice in personal taxation – which would mean higher income tax rates for the richest and cutting regressive taxes like VAT and council tax.
Surely these measures should be implemented rather than expecting the people who were not responsible for the financial mess created by speculators to pay with their jobs, their pay, their pensions and their services.”
Second Letter:
“I am writing on behalf of the Public and Commercial Services Union (PCS) Department for Work and Pensions (DWP) Fylde Central Benefits and Services Branch following the Spending Review announcement on Wednesday 20th October 2010.
We are keen to meet the MPs in the Fylde area to discuss the jobs situation (you may have seen in the Blackpool Evening Gazette for example that 2, 150 jobs have already been cut in the DWP on the Fylde from 2005 to 2009, another 250 Whole Time Equivalent Jobs were to be cut between now and 31st March 2011 at the Warbreck site alone) and now further announcements have been made regarding saving of £6 billion in administration costs from ”Whitehall” and that the overall resource savings in real terms in the DWP’s core budget will be cut by 26% between now and 2014/ 15. As you could imagine at times of great uncertainty we fear even more that jobs cuts.
We would also be keen to discuss pay in the DWP. This year we have been offered a pay cut in real terms for everyone, no pay progression (i.e. movement up the pay scale which means that if this is replicated people will be earning thousands of pounds less than colleagues doing the same jobs with no prospects of people earning the rate for the job).
There has not been a golden decade of pay rises in the DWP. In 2007 in the DWP we had a two percent pay rise imposed, in 2008 this was zero and 2009 it was one percent. This is the fourth year of pay freezes and severe pay restraint.
However we are now being asked to bail out the bankers and the errors of the financial sector in terms of our jobs being in jeopardy and our pay being cut in real terms – year on year, our jobs being cut year on year, our conditions of service being eroded in terms of our redundancy payments when we are laid off and our pensions being undermined.
We believe that this is grossly unfair.
I would be grateful if you could contact me in order that we can arrange a date, time and venue to meet again (we would preferably be looking at an on site venue for the meeting, preferably Warbreck House).”
Paul Maynard MP (Blackpool North and Cleveleys) reply:
“Dear Mr Griffiths,
I received your correspondence prior to the Comprehensive Spending Review and your, more recent correspondence subsequent to the announcements made by the Chancellor. Accumulated together there are a series of points you raise, primarily all of which are related in some way to the Government's course of action to move this country's public finances out of the parlous state they were left in by the previous Government. We clearly come from different ends of the political spectrum and therefore the opportunities for us to reach common ground may possibly be infrequent. However, it is my responsibility as the representative for all those who live in my constituency to make it clear why I support the course this Government has chosen regarding economic policy.
Fundamentally I am deeply angered and frustrated that as a country we spend £120 million a year on servicing our debt. If this pressure on our public finances is not alleviated this figure will only increase. The longer it takes for us to pay off the debt we have accrued the more expensive it will be for all of us. How many hospitals and schools could we build with £120 million per day? How many teachers and policemen could we employ on the frontline? The existing and long term burden of public sector spending has to be addressed. Yes changes are being made to the Civil Service Compensation Scheme and the pay structure that are tough but these are necessary measures over the next two years. You acknowledge yourself that for those earning below £21,000 the government has sought to allow for a pay rise of broadly 2.7% because it wants to do what it can to help those on low incomes through this period.
There has been a concerted effort by this Government to balance a concern for the most vulnerable with the need to reduce the level of public spending. Every swathe of society and the UK economy has been affected by economic events over the last two to three years. Ring fencing spending on the NHS and the schools budget, protecting the winter fuel allowance and free bus passes, creating a 'Pupil Premium' to directly target educational resources at the most deprived children in the country. These are just some of the policy decisions that are there to help the most vulnerable.
You mention further that it is a crisis of income not expenditure. Whilst I reject this analysis that expenditure is not an issue I hope you will join with me in congratulating the Chancellor of the Exchequer for pledging £900 million to resource investigation of non-compliance with the tax system. This is forecast to produce f7 billion of extra revenue for the Treasury over the coming years.
I do not expect you to agree with me, and nor do I support the Government lightly. I am conscious of the difficulties that people may face as a consequence of the Comprehensive Spending Review. Fundamentally I believe the answer is for the UK economy to return to strong, steady and durable growth. This will encourage investment into the UK economy and generate a significant number of jobs. To simply keep on accepting the massive budget deficit we have is not a strategy for growth, nor is it a strategy for job creation.”
The Branch will continue to raise points on behalf of the members regarding the issues of the jobs on the Fylde etc.
