7 June 2004

SPEECH BY ECONOMIC SECRETARY JOHN HEALEY TO THE PUBLIC & COMMERCIAL SERVICES UNION CUSTOMS GROUP ANNUAL CONFERENCE

Thank you for inviting me to speak at your Annual Conference. I believe I may be the first Customs minister to address the Customs Group conference – but I sincerely hope I will not be the last.

I was particularly pleased to be invited to speak today, as a former TUC official. In the TUC we recognised that trade unionism has a long and proud history in Customs and Excise. Indeed, going back to the eighteenth century, Thomas Paine tried to organise Excise staff to obtain increased wages – of course, when he didn’t succeed, he was blamed for the failure – which is a fact of life that all trade union officials come to terms with!

I am told that the Department has records of an early Excise union in the mid-19th century arguing for better pay and promotion – and also improved allowances for keeping a horse. Perhaps this is just the claim in 2004 to put the new Department’s management on the defensive!

In more modern times the C&E unions were among the first of what were then called ‘white-collar’ unions to join the TUC, and were ahead of some of the more mainstream Civil Service unions. And in this context, I should pay tribute to the joint campaign that the civil service unions and TUC led to lift the ban on trade unions at GCHQ. I am proud that restoring trade union rights to staff in GCHQ was one of the first actions of this Government. It demonstrated in the clearest possible terms our belief that all public service workers have the right to be represented by a union, and that unions can be a benefit not a barrier to good government, even in the most sensitive areas.

Indeed, many of the most important gains of the last seven years are the fruits of trade union campaigning, in conjunction with progressive politicians. It is only because of our joint efforts, that we have won over the last few years:

new rights to paid holidays;
the right to time off when children are sick;
the right to join and be represented by a trade union;
new rights against unfair dismissal;
rights for part time workers equivalent to full time workers;
and a statutory national minimum wage.

These were all campaigns which started not in Westminster or in Whitehall, but as aspirations at union branch meetings and then motions at union conferences. Now, what were once aspirations set out in resolutions are spelled out in the law of the land.

But there is still more to do. For too long equal pay has remained a promise undelivered to millions of working women in this country; stronger health and safety protection is still needed in some workplaces; good child care from the earliest age is still not universal.

And as we upskill our economy, the next challenge – the challenge of every advanced industrial nation – is as unions have argued, to equip people to move from low skilled to higher skilled work. Today, the skills of union members are the key to their job prospects, career opportunities and future standards of living. That’s why I was pleased to see that your union, PCS, has received over £1 million from our Union Learning Fund, set up 10 learning projects, and leads the way in some departments with a wide rethink of learning reps.

We have different roles, different responsibilities – but there is much that Government and unions can do together. I value the regular discussions I have with Frank Campbell and Doreen McNeill, as your group officials. I find it invaluable to get a direct – some would say “blunt” – trade union view on what Departmental senior managers are telling me, and I hope it helps us both in doing our jobs.

I have been pleased to back the recent pay agreements you have reached with management – especially those significantly increasing the entry point of Band 2 last year, and this year of Bands 3 and 4 as well. As you set out to negotiate your members’ way into the integrated new department on job security, pay, re-skilling, terms and conditions.

But just as the Chancellor has pledged publicly there will be no recourse to the economic quick-fixes of previous governments, no return to arbitrary public spending cuts and privatisations of the Conservative past and no retreat from our vision of a full employment Britain and public services free at the point of need, I tell you honestly: there can be no retreat from demanding efficiency and value for money, as well as equity, as we renew and reform each of our public services – including our Customs and Revenue services.

“Frontline first” is the message of our 2004 spending review. And the best defence of public services, is not to defend the status quo but to make sure the services evolve to meet modern demands and exist for the people they are supposed to serve. The O’Donnell Review and its plans for an integrated Revenue and Customs service are based on this general principle.

Customs & Excise and the Inland Revenue are two of the most important Civil Service departments in the UK – together employing 1 in 5 of all civil servants in the country, together delivering some of the most important functions for the Government, the public and the business community. You deal with almost all individuals across the country, and certainly all businesses – affecting our enterprise and productivity levels, the creation of wealth, jobs and new businesses. This work is vital for the economic success of our country now and in the future.

One of O’Donnell’s key objectives, emphasised in the Review, is increasing compliance to close the tax gap. A second is improving service to customers. And the third is increasing efficiency.

Achieving the first two objectives, and getting the balance right between enabling and enforcing, is a difficult task. We need to ensure the new department succeeds in providing an excellent service to customers while being extremely tough on enforcement. The new management, led by David Varney and Paul Gray, will want your ideas on how to organise the department to do this.

Let me stress that Gus O’Donnell’s Review did not sort out these issues. It set the strategic direction, but it is for you – in many ways the experts – to work with the new management to work out how best to deliver the clear objectives.

Now, this is a period of great potential uncertainty for Customs’ 20,000-plus staff – a period in which many may look in particular to the union for support, reassurance and leadership. Some, I know, see little but threats. Some even see an element of potential defeat in the series of organisational changes we have announced:

the new HM Revenue and Customs Department;
the new Serious Organised Crime Agency;
the new arrangements for co-operation at the frontier;
the efficiency review and targets announced by the Chancellor.

I see these changes in precisely opposite terms. I think Customs sets the standard for the new agencies and for the other departments which will play a part in them.

With the new revenue department:

it is Customs that has pioneered a strategic approach to tax losses;
it is Customs that last year brought in over £2½ billion more than target through indirect taxes.

As Gus O’Donnell says in his Review:

‘Customs has developed a more focussed approach to its taxes … similar approaches should be taken in other areas, particularly on the Revenue side.’

With the Serious Organised Crime Agency:

it is Customs that chairs the Concerted Inter-Agency Drugs Action Group;
it is Customs that seized 60% of the heroin and 80% of cocaine last year;
it is Customs that recovers more than half of all the proceeds of crime under new legislation.

As a senior Customs officer told me:

The official line is that ‘it’s good to work together with other agencies’…
but it is even better to show them how it’s done!

With border security:

it is Customs that is the largest of the frontier agencies;
it is Customs that must lead the work on closer co-operation and new strategies;
it is only Customs that can deploy wherever needed, anywhere around the UK border;
and it is only Customs that can balance the need for greater security with the need to keep our borders open to facilitate trade.
And with organisational change and efficiency savings, Customs has shown in the past its capacity to change and reform both to meet the pressures it faces and to make the most of new technologies. This is true across a range of functions:
the National Advice Service delivered from 6 major locations,
combined from 34 separate advice centres;
the new electronic Human Resources service;
business plan changes in regional law enforcement.
And, of course, Government has given Customs high-profile new responsibilities since 1997:
developing new environmental taxes;
control of money service businesses;
and the introduction of the Lorry Road-User Charge.

That’s why, when I am called on to defend Customs in public or in Parliament, I recognise the complexity, difficulty – and sometimes danger – that the Department faces in its day-to-day work.

And when I am asked about integration and the culture clashes between Inland Revenue and Customs, I must say that what I have chiefly seen in dealing with both departments – what the staff of both Departments have in common – is:

integrity;
professionalism;
dedication to public service;
and a deeply-held sense that what you do and how you do it matters a great deal to the country.

These are very significant strengths on which to build for the future.