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TaxPayers' Alliance Bulletin - 11th March 2011 High Speed Rail letter On Thursday the Daily Telegraph published a letterfrom business leaders, economists and politicians who attacked the Government's plans for a new high speed rail line. It comes at a huge cost to ordinary families and is facing serious criticism over its business case. As featured on BBC Midlands Today (pictured) Conservative competitiveness guru Simon Wolfson, Chief Executive at Next, and former Chancellor of the Exchequer Nigel Lawson are among high profile signatories of a letter to the Daily Telegraph opposing the HS2 high speed rail proposals. Organised by the TPA, the letter highlights the huge cost of the project. The Government has argued that the line will promote growth, but the 21 signatories believe this expensive project is not what the economy needs. Pictured right is Chris Kelly, one of the business leaders who signed the letter, being interviewed by BBC Transport Correspondent Peter Pilsner. Click here to read the whole letter The letter, which was also mentioned on front page of the Daily Telegraph, makes it much harder for the Government to keep churning out lines about regeneration and business, which they are now relying upon as a justification for spending billions of taxpayers' money, well over £1,000 a family overall. Phillip Hammond the Transport Secretary, seems determined go full steam ahead with this "White Elephant" relying on flawed figures and vague promises. His dismissal and comments in the commons are responded to by Matthew Sinclair here. The consultation period for this billion pound project is meant to be a time to listen, have a chance to reconsider plans and address concerns. The very worrying flaws in the business case highlighted in our earlier reportneed to be debated. Government spin won't wash with the signatories of the letter. We've countered claims that jobs will be created, by pointing out that the money could be expected to create four times as many jobs per pound if invested in the wider economy. There are more affordable ways of getting the capacity needed and reducing overcrowding. We will continue to call for the project to be scrapped. Public sector pension reforms After a long wait, Lord Hutton's report on public sector pension reformthis week announced plans to reduce the cost to taxpayers. The keyrecommendations have been much discussed in the media: ending final salary schemes and instead linking pensions to career average earnings; lifting the retirement age to 65; imposing a cap on the cost of public sector pensions to the taxpayer. The TPA has carried out lots of research in this area including NHS, local government and other public sector pensions, so we think that reform is long overdue and badly needed. A liability of£1.3 trillion for unfunded public sector pensions hangs over the heads of taxpayers, both now and in the future, and continuing with the status quo is simply not an option. The current arrangements aren't sustainable, so we welcome these proposals and recommend that the Government implement as many of them as possible, as soon as possible. Reflecting on the report, our Research Director John O'Connell (pictured) said: "Reform of public sector pensions is desperately needed, and these changes are long overdue. Taxpayers face a liability of over a trillion pounds to pay for unfunded public sector pensions and this is simply unsustainable. Hard-pressed families can no longer afford to prop up final salary schemes, subsidising million pound retirement benefits for the public sector elite while seeing the value of their own pensions plummet. It's not right to lumber future generations of taxpayers with a bill that they can't afford so the Government should look to implement as many of Lord Hutton's recommendations as possible, with a view to switching to a defined contribution scheme in the longer term." Bankers' bonuses The Royal Bank of Scotland handed out big bonuses for their executives during the week, despite still being mostly owned by taxpayers and making a loss. We commented on this story in the papers. Campaign Director, Emma Boon said: "It's unacceptable to pay such eye-watering bonuses when RBS is still majority taxpayer-owned. Worse still, RBS is still making losses so Hester and his team are being rewarded for failure." The Government must now take the necessary steps to move these banks back in to private ownership as soon as is practically possible to relieve the burden on the families that bailed out them out in the first place. Once that happens though, it's crucial that the same mistakes that caused the last disaster aren't repeated. One idea to prevent a future financial crisis is imposing global regulations on the financial services industry, as it operates globally. However, this only increases the likelihood of a future meltdown – indeed, creating more frequent and intense global crises. We released a research paper with the Legatum Institute at the end of last year explaining this in more detail, which you can read here. Reviewing police pay The details of plans to reform police pay have been revealed. The independent report called for changes to the payments for police, in overtime and other rewards. This will be the most detailed review of the perks and allowances that are given to police for the last 30 years. Tom Winsor's report recommends making savings of £60m a year in overtime. Examples like getting double pay as well as a day in lieu will be need to change to make the payroll bill more affordable. Other examples like an officer being paid 4 hours overtime for taking one call in the evening, which we raised with the head of the Thames Valley police, are going to be scrapped. It's important that the way police are paid is reviewed so these kind of examples can be addressed. Some, including a former TPA Campaign Director in the Spectator, have said this review is well overdue. Everyone appreciates the work that police officers do and the risks that they take. One change put forward by the report is that officers on front-line duties will see their pay rise to reflect the dangers they face, and back office staff will receive less money in perks that were designed for frontline police, this seems right. Rewarding in line with the risk they take seems fair also not giving over generous deals where they aren't appropriate or affordable has to be sensible. Savings have to be found. The force spends three quarters of its budgets on the payroll bill, so reviewing the cost is absolutely necessary to find savings and to make sure money isn't being wasted that could be funding frontline policing. Our Campaign team has been discussing the need for reform, the choices to be made to keep pay down and numbers up, both on policing and with similar decisions being faced in the Fire Services. Grassroots In our manifesto we called for the top 10% of earners in the public sector to take a 5% pay cut. There was victory for our campaign in Bath & the South West this week. Local grassroots coordinator Tim Newark reports that the Chief Fire Officer of Avon Fire Service, Kevin Pearson (pictured) is taking a voluntary pay cut of 22%. This means his pay will be reduced by £37,000 to £130,097. Mr Pearson is to be congratulated for leading by example. If only overpaid executives and directors would do the same. Speaking of overpaid senior staff, it was also revealed that Sheffield City Council is spending £3.5 million on interim staff, PR firms and consultants. Although this figure is coming down - and the leader has said he will trim another £1 million off the bill next year - it is not being reduced quickly enough. If you can save £1 million next year, why can't you can save it this year. If you know of similar waste in the public sector, or of someone who has taken a pay cut, please let us know. Best of the Blogs Campaign: Response to HS2 Ltd on the business case for the new high speed line - Matthew Sinclair updates the case against HS2 Grassroots: Non-job of the week - Andrew Allison: "This week's non-job, is once again, from Surrey County Council" Campaign: Government promoting High "Speed" Rail which will slow down more journeys than it speeds up - Charlotte Linacre: "The figures are shocking - the train line will impact on existing busy routes and slow down other journeys." Grassroots: Councils don't need to go to MIPIM - JP Floru on councils sending officers on expensive trips to Cannes Grassroots: £3.5 million paid to interim staff and consultants in Sheffield - Andrew Allison looks at where councils could make savings in their budgets Better Government: How to declare war on the enemies of enterprise: declare war on shopkeepers, apparently -The Government's plans to ban the display of tobacco products are wrong - together with other think tank leaders, we've explain why 2020 Tax Commission: Government must oppose devastating EU 'Robin Hood' tax -Rory Meakin on the dangers of a European Tobin tax Grassroots: Public sector inertia - Andrew Allison wonders how one gets suspended on full pay for 5 years Grassroots: A dark day for democracy - The decision to award a £670 million PFI contract for Norfolk's waste incinerator has been made, reports TPA supporter John Martin somewhat glumly. Better Government: Council Tax freeze to save average household £72 a year - Chris Daniel applauds the council tax freeze, but stresses local councils must protect taxpayers' interests rather than their own Grassroots: Leading from the top - Tim Newark implores more senior public sector staff to follow the lead of Avon Fire & Rescue's Kevin Pearson and take a voluntary pay cut Grassroots: Advantage West Midlands - TPA Leicestershire's Jago Pearson with a truly remarkable story from Birmingham's beleaguered RDA Better Government: DCLG announce review of statutory duties placed on local government - Chris Daniel asks "Ever found yourself dealing with employees from your council and having no idea what they actually do?"