Timms: Decision on HMRC pay freeze is just a few weeks away

Treasury minister Stephen Timms has said the government will soon make a pay
decision for HM Revenue & Customs staff and has refused to rule out a freeze
on salary levels.

At a Treasury sub-committee meeting last week, Timms was asked whether he
agreed with Audit Commission chief Steve Bundred that a public sector pay freeze
is needed to make savings and help the government resolve its massive fiscal

‘It is certainly the case that our pay policy needs to reflect the wider
economic circumstances and the constraints under which we are operating. We will
be deciding on pay policy over the next few weeks.

‘It is not something we have ruled out or in,’ he said.

Timms also defended changes which form part of the department’s operational
efficiency programme (OEP), including staff cuts.

HMRC has reduced its overall staffing beyond targets set as part of the OEP.
The target up until March last year was job cuts of 12,500, but HMRC has
achieved a 15,000 headcount reduction.

Responding to suggestions this had contributed to a fall in morale at the
department, according to the findings of a staff survey, Timms conceded there is
more to be done. ‘The people survey published in May shows a poor position as
far as morale is concerned, but with some signs of encouragement. Overall it was
a disappointing outcome and HMRC recognises there’s a lot to do to improve

‘There’s been a lot of uncertainty around office closures…there’s a good
deal of work to be done. HMRC is focusing the attention that’s needed on this,’
he said.

Andrew Hudson, managing director of public services and growth at the
Treasury, also addressed the committee, and said any public sector pay freeze ­
including that of HMRC, would not be factored into the targets of the OEP. ‘The
OEP is about doing things better rather than doing things at less cost, so we
would have to consider it [pay freeze] if that was the decision,’ he said.

According to Peter Lockhart, national officer of the Public and Commercial
Services union (PCS), it would be disappointing if the Treasury doesn’t allow
scope to recycle money back into members’ pay packets, including the funds used
for overtime pay. He said the PCS is in dispute with the Treasury over the 1%
annual pay increase currently on offer. ‘We’d expect Mr Timms to be realistic
about what most debate is already fairly poorly paid staff. One quarter of our
members are paid less than £17,000 per year,’ he said.

He said HMRC pay rises have been less than the rate of inflation since the
department’s inception in 2005.

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