Europe: Kinnock plans to clamp down on Eurocrats' perks

NEIL KINNOCK, the European Commission's vice-president, won backing yesterday for sweeping curbs to the perks and benefits enjoyed by 20,000 Eurocrats.

The Commission approved Mr Kinnock's plans to rid Brussels of a jobs-for-life culture and remove some of its more indefensible perks.

The reform plans, which would be considered tame in most British companies, have provoked outrage among Brussels' powerful staff unions - one of which last year accused Mr Kinnock of "la Thatcherisation" of the service.

As the European Commission met to debate the changes, a group of about 100 placard-waving protesters occupied the entrance of the Commission's Breydel headquarters. Later, a much bigger group confronted the Commission president, Romano Prodi, and Mr Kinnock at a stormy staff meeting at which both men were accused of lying and being untrustworthy.

But the unions have so far pulled back from threatening strike action and yesterday claimed a victory after the Commission agreed to far-reaching negotiations on their reform. A Commission spokesman denied that this was a concession, saying that consultation was a central part of the approach.

Mr Kinnock, a life-long member of the Transport and General Workers' Union, has pledged not to cut pay but he is acting on the recommendation of Danish consultants who have made a study of the Brussels bureaucracy.

His reforms aim to change the entire career structure for civil servants or fonctionnaires, from their entrance examination to promotion procedures, with a new emphasis on merit-based pay.

At present, Commission workers can double their salaries - in addition to inflation increases - over a period of 14 years, without promotion, due to automatic rises built into the system. Under the latest plans the time-serving element will be pegged at 8 per cent with other rises geared to performance. All staff will have annual assessments with their line manager, and the training budget will increase considerably.

The reforms include the scrapping of a salary transfer scheme that allows staff - overwhelmingly British and Danish - to make thousands of pounds per annum by transferring cash home.

This benefits officials whose countries are outside the euro by setting an exchange rate which, in the British case, is out of date and hugely favourable: instead of the current rate of 62 Belgian francs to the pound, staff have a rate of 45.

Also destined to go is an allowance, dating from the era in which there was a distinction between telephonists and others, which rewards secretaries for typing. Ninety per cent of secretaries claim the "typing allowance" - worth about pounds 1,200 a year on top of extras. To save administrative costs, the money is being incorporated into salaries.

Another outdated benefit that is destined to end is a travel perk under which Commission staff can claim for family journeys at least once a year to their home member states.

This allowance, drawn up in the days before cheap flights between European capitals, allows for a first-class rail fare. It will now be replaced by a flat-rate of 0.3 euros per kilometre up to a still- generous maximum of 900 euros per person. The six staff unions will also have the number of full-time officials salaried by the Commission halved.

Last night, Alan Hick, president of the biggest union, Union Syndicale, said there was an "opening" after the meeting with Mr Kinnock and Mr Prodi and the agreement to consult. He added: "We have a mandate for industrial action if necessary. The policy issues need to be discussed and not just the detail. The whole way this has been handled explicitly degenerates staff. People feel outraged: it is as if we have not worked for 40 years.

"We have to move on and modernise but we do not think the Kinnock proposals do anything to look at the real problems, including cronyism and nepotism."

Mr Kinnock said the proposals were based on "facts of life" and "as independent analysis shows they are fair by comparison with other international organisations employ-ing mainly expatriate staff".

The reforms flow from the mass resignation of the European Commission almost two years ago amid claims of nepotism and sleaze.

THE PERKS OF A EUROCRAT

The Economat, a supermarket exclusively for European Commission staff and journalists, stocking luxury goods ranging from fine wines to foie gras.

Due to close.

Pay increments that can generate increases of 50 per cent over 14 years on time-serving grounds - in addition to inflation-linked rises.

Due to be curtailed.

Preferential exchange rates, allowing staff - overwhelmingly British and Danish - to make thousands of pounds per annum by sending their earnings home.

Due to be scrapped.

An "expatriation allowance" for all but Belgian-born Commission staff, worth 16 per cent of salary.

To remain.

Family benefits including a 5 per cent "head of household allowance", a "dependent child allowance" of pounds 134 a month for every child under 18 and an "education allowance" of up to pounds 120 a month per child to university- going age.