The Autumn Statement – why and how it matters

Autumn Statement 2014A central theme of George Osborne’sAutumn statement today is that the government has not got as much money as it wants to have or thought it would have. The main reason for this is because revenues from taxation are way below where they should be. This is a big deal for our members, and the younger you are the harder, most-like, it will hit you.

“But hang on a minute!” I hear you cry! The government has said that there’s an economic recovery in full swing right now! Recovery means more jobs; more jobs means more tax revenue. Doesn’t it? Well the simple answer is; “No, it doesn’t.”

It’s not just the number of jobs have been created, but what the jobs are like. Britain is suffering an epidemic of low pay and under-employment. People are either being paid too little or not working long enough, (or both) to lift them – and the country – out of poverty and recession in a real sense. In a way that people can feel.

But it doesn’t just end at low tax revenues. Many working people’s income is so low that they are entitled to state benefits generally in the form of tax credits. This is a further loss of revenue that any sensibly-run government should and would avoid.

You could argue that very clear restrictions on the use of zero-hour contracts, payment of a living wage rather than a minimum wage, and better regulation of key sectors such as the private rental market would ensure that there was more money flowing around the country and ultimately into the government’s coffers. Surely that would make more sense?

The very real consequence of all this is that the country’s books are nowhere close to being balanced. So under the prevailing government’s philosophy the widespread and deep reductions in public expenditure will continue.

In the CWU we have had very real and direct experience in the last week of what such mad-house economics and politics mean for our members.

Last Wednesday, in front of a Parliamentary Select Committee, TNT boss Nick Wells laid the blame at the door of Royal Mail for the ills of the industry and fears for the future of the Universal Service Obligation. He said: “What Royal Mail need to do is improve their efficiency and modernize their labour relations policy,”

So let’s get this right….this is one commercial rival, that has exploited the ability to cherry pick the most lucrative and profitable sectors of the market, telling the other that maintains a universal service to everyone in the four nations of the UK, that they are in the wrong.

And when they say “modernise” what do they mean? They mean our members’ wages and conditions. Of course, it’s obvious isn’t it? Postal workers are paid an absolute fortune and must be reined in.

Paul BlomfieldAs the Daily Mirror reported “Paul Blomfield (MP for Sheffield Central) raged: “The impression most of us have is when you talk about changing labour relations policy, what you’re talking about really – forget the weasel words – is driving down workers’ conditions and pay rates.”

Ann McKechinHis Labour colleague Ann McKechin (MP for Glasgow North) added: “I welcome the fact Royal Mail workers are benefiting from a reasonable pay rise. They do a very hard and responsible job. And they are not on the salary levels of anything like anyone here on this panel.”

OfcomAnd then, just yesterday, the long awaitedOFCOM review in to the Universal Service Obligation (USO) was published. Again, it’s not rocket science to see that if you have an uneven regulatory system, service to people who are harder to reach will suffer if there is no cross-subsidy from the revenues of services in densely populated, easy to reach, areas.

But no, OFCOM as the postal services regulatory body, took a different view. There is no threat to the USO. This is all just scare mongering. Nothing to see here.

Now interestingly, the formal statement put out by OFCOM when you read it was very carefully couched. It refers to OFCOM’s statutory duty under the terms of reference that they must operate under.

Now we as a union do not believe that OFCOM has acted within their powers. We believe there is a very strongly arguable case to say that OFCOM has misunderstood its role and misapplied it in this case. As has been reported in the press and elsewhere, we are actively exploring the possibility of launching a judicial review into this decision. That would be a fairly unprecedented step, but one that the situation clearly warrants consideration of.

But even if OFCOM is right in stating their statutory duty – and that is a very big and contentious if – that then raises another question: if, n practice, the only thing OFCOM is concerned about is a particular view of competition, and has so little regard for service users and those who work in the industry, then it is surely time for those terms of reference to be changed.

But fairness – and you might say common sense – are two things we won’t have heard from George Osborne today.