Examination of Witnesses (Questions 120
- 139)
MONDAY 24 JANUARY 2005
INLAND REVENUE
Q120 Mr Field: Mr Varney, when you
say you have delayed the claw back, it may be that they are all
so happy they do not come and see me. I have not had one constituent
where it has been delayed, often they find out because the money
has stopped that you have made a claw back.
Mr Varney: If people are receiving
the benefits then, as we have said, subject to the requirements
in the code of practice, we can moderate repayments over the balance
of the year to ensure they get their entitlement. If there was
an overpayment, which they reasonably could have thought was their
just deserts, then that is grounds for us not recovering the money.
Q121 Mr Field: One constituent whose
wife becomes ill, who has £100 withdrawal of tax benefits,
now has so little money he has to walk three miles to the hospital
and to work because you claim, rightly, he has had this income
as an overpayment. He does not even have the option of going unemployed
to get a larger income because when he turns up to the Jobcentre
Plus, his entitlement is computed on the basis that he possesses
this income which you have overpaid him and which you are clawing
back. Now he has to continue working to a degree where they have
got £40 to pay all the bills after rent and council tax with
a sick wife, with two children and not being able to have the
bus fare to work. We are still waiting to see whether there is
a hardship payment. Even if you come up with £30 or £60,
what is that to someone you have taken £3,000 off because
you claim there has been an overpayment?
Mr Varney: I cannot answer individual
cases unless you give me the identity and the name.
Q122 Mr Field: I thought you had
it.
Mr Varney: Not all of the cases,
but if this is a case which you feel I have not dealt with appropriately,
I will look at it again.
Q123 Mr Field: I feel strongly about
all of them. When they go down to the local office now your officers
say: "We do not understand it, but your MP does, he will
queue jump for you, get on to him". Now you are pushing your
work on to me.
Mr Varney: I read what you said
to The Financial Times in your letter. Our view is that
is not appropriate advice to give, no matter how clever your MP
is, it is not the right advice. One thing we are working on is
at the moment we have not got the IT functionality to stop recovery
if we have a hardship discussion going on. That is what we are
trying to build into the next set of releases.
Q124 Mr Field: Mr Varney, I have
not had one case where hardship has not been caused other than
you already doing the claw-back. Often you tell the people later,
after their bank statements have changed, that you are in the
process of clawing back.
Mr Varney: That is an IT functionality.
We have not got the functionality to be able to do that and that
is why we are building that into the next set of releases.
Q125 Mr Field: When will that occur?
Mr Varney: Autumn through to April.
Q126 Mr Field: We have got half of
this financial year plus all the other back-payments. We have
established today there is not an independent appeal system, the
appeal is down to people making a mistake, and maybe other members
have already asked you this, but how many individuals have you
written off the overpayments for?
Mr Varney: In terms of the overpayment,
we have written off about 375,000 cases.
Q127 Mr Field: You have written them
off?
Mr Varney: Cases with under £300.
We had a long discussion about this earlier.
Q128 Mr Field: The bigger the overpayment
the less chance of a write-off?
Mr Varney: Yes, that is not surprising.
Again, I am looking at what it costs the Department to recover
the money as against the sum which is being recovered.
Q129 Mr Field: Mr Varney, I know
you are running a system which you inherited and, I tried not
to give vent to my anger about this because, in a sense, although
you are responsible for it now it is other people who are at fault
for this. I do want to leave on record my sense of despair of
not being able to rescue my constituents from the utter chaos
that their lives are in. When Alan Williams said: "Why should
they know that £19,000 was an overpayment?", the Government
keeps trumpeting on that it pays to work. You get more money,
why should you know, when there is no clear wage-slip coming with
these benefits, that they are being overpaid? The whole Government
propaganda is you will be substantially better off if you work,
but how do any of my constituents know what substantial means?
They think: "God, how wonderful, the Government is delivering
on its promise. I have got some money to buy some shoes and some
food and I can make up the rent which is in arrears". They
are not in a position to know that. In a way, it is a measure
which, although about empowerment, destroys the sense of empowerment
for my constituents. I have tried to give you some sense of their
anger about all this.
Mr Varney: Certainly, you have
done that. Also, my in-tray is full of others of your colleagues
who have written about individual cases. Also, there is a group
who are receiving what they are entitled to, fulfilling their
obligations. It is important we grow the size of that group, we
do that by trying to communicate and where there are problems,
we try and handle them as sensitively as we can. We are not perfect
and we do make mistakes.
Q130 Mr Field: We hope those who
are not making any complaints are getting what they are entitled
to.
Mr Varney: We do also.
Mr Field: My constituents who have come
up against your errors now say: "I wish I had never heard
of tax credits", their life has been plunged into such chaos.
Q131 Mr Davidson: First of all, I
apologise in case any of the points I want to raise have been
touched on already as I had to go out during the meeting. I wonder
if I can pick up on an issue about the culture of your organisation.
I have a lot of cases also from yourselves, but I have also a
lot of cases from the CSA. There is a substantial difference from
the CSA because the CSA in trying to help appear not to be capable,
but your people do not even try and help, and do not provide much
assistance. I have got reports from the CAB and from my own staff
indicating how unhelpful your organisation is. Do you think that
comes because of your background as tax collectors? Why is it
that you are so unhelpful compared with people like the CSA who
genuinely appear to try?
Mr Varney: I would be very disappointed
if that was a widely shared view. I think the staff have done
a fantastic job, faced with the difficulties of the computer system
and faced with trying to introduce a new tax regime Not everybody
is going to be as sympathetic, I accept that, but we have put
an awful lot of work into this.
Q132 Mr Davidson: I received a letter
from the Citizens' Advice Bureau in my constituency, which I was
involved in setting up to deal with issues like this. They tell
me the CAB advisers are supposed to have a special helpline number,
not available to the public, in order that they can assist clients
and advise when they call the Bureau. In practice, our advisers
found that tax credit officers refuse to give out any information
over the phone, routinely insist that they put their enquiries
in writing, they have offered to fax through consent forms there
and then to enable the enquiry to be dealt with but this has been
refused; obtaining information by post is extremely difficult
et cetera. What is the point in having a helpline if you
do not deal with people over it?
Mr Varney: There is no point in
having a helpline if you do not help people. We have gone out
and consulted with groups around the country and the general picture
is not at all the way your CAB is describing it. If you would
like to pass the details of that to me, I will get one of our
senior officers to see what is going on in the particular situation
in your constituency because that is not mirrored in the advice
we get elsewhere.
Q133 Mr Davidson: That is helpful.
I want to continue with the mail, they are advised to write. They
are saying here, the standard pattern is they write to you, they
hear nothing, they send reminder letters, they get a standard
acknowledgement which tells them to wait another six to eight
weeks for a response. They have given a particular case: they
enquired on 6 July, they sent two reminder letters, nothing happened,
they complained to the Edinburgh office, who replied promptly,
who sent them back to the office. They wrote a complaint to the
office on 1 November, they still have not had a reply to the complaint,
however, they got a response to the original reply on 15 November,
that was unsatisfactory. They wanted further details on 24 November,
they sent a reminder on 16 December. They got sent back a standard
response telling them to wait six to eight weeks for a reply.
They sent me that one as being a typical example of dealing with
yourselves. Can you understand why people are frustrated?
Mr Varney: Certainly, I would
be more than prepared to look at the case. Whether it is typical
or not is a matter of debate.
Q134 Mr Davidson: Can you confirm
one point: my staff have been told that where there seems to be
a case going into review, there seems to be a glitch in the system
whereby everything has to go back to be checked manually right
from the very beginning?
Mr Varney: Not that I know of.
Can you give me the case?
Q135 Mr Davidson: I will give you
the case later on. I have another case where a Citizens Advice
client was told she had been overpaid tax credits, the CAB asked
for a breakdown of the calculation as the client wished to dispute,
as you can imagine. After four months the tax credit office replied
to say: "It is not possible to give an explanation of how
the awards are calculated".
Mr Varney: We know there have
been a small number of cases like that, if this is one of them
we will get on the case and resolve it.
Q136 Mr Davidson: Another one is
where somebody had an award, the circumstances changed, they were
then told it would take two months for the new award to be processed,
the old one was stopped, so they were left with at least a two
month period receiving nothing at all from yourselves and that
was over the Christmas period.
Mr Varney: That should not happen.
Q137 Mr Davidson: That should not
happen either. The point I made about where somebody phones in
to discuss a claim and the tax credit office refuses to discuss
it over the phone, they offer to fax in a consent form there and
then to allow it to be discussed over the phone and you still
refuse to discuss it and say: "It cannot be dealt with until
the next convenient date at the very earliest", is that standard
practice?
Mr Varney: No, I thought we accepted
faxes from the CAB.
Q138 Mr Davidson: They tell me here
that they do not. Again, there are other ones about not replying
to letters and all the rest. My own office tells me when they
deal with these cases you refuse to give out any information because
they quote constantly the Data Protection Act and say it prohibits
them giving out any information to anybody other than the client.
We have gone through a whole rigmarole, that you pass it to the
office, to the office, to the office and we have offered to give
you code words. If the IRA can provide code words and it can be
taken as valid by the appropriate authorities, I would have thought
you should be able to work out some mechanism whereby if somebody
comes into your office and are sitting there with a member of
my staff, they are able to discuss details.
Mr Varney: We have got a helpline
for MPs which has been well used. As far as I am concerned we
talk on a regular basis to people in your office dealing with
cases, trying to resolve them. The line is quite heavily used.
Mr Field: It is shocking that you have
a line for MPs. It is a second rate service for our constituents.
Mr Steinburg: No, it is not.
Q139 Mr Davidson: This point about
repayments of overpayments, I am genuinely perplexed—and
I am sorry if this was touched on earlier—how you expect
some of the people in my area involved with an overpayment to
genuinely repay the amounts involved. There are a number of cases
which can be provided where there are quite substantial sums and
where the people involved thought Christmas had arrived, have
sought to clarify whether or not this was in fact incorrect and
were told, no, it was absolutely right—how that gels with
the point earlier on, it is not possible to explain how calculations
are arrived at, I will let that pass—then they went ahead,
spent the money and were told there was an overpayment and are
now being pressed quite hard for the repayment of substantial
sums. The money in those circumstances is simply not there. Then
to hear the average compensation is only £34 going up to
£68 does not seem to be an adequate grasp of reality. Coming
back to the very first point I made about the culture of the organisation,
while I appreciate they are dealing with an immensely complex
set of issues, and I appreciate that the vast majority of staff
are working hard, you do not seem to have got all of this right,
do you?
Mr Varney: We have set out a very
clear code of practice in trying to deal with the hardship cases.
In the circumstance you have described where there is an official
error and they reasonably could have thought that was the right
answer, we will not pursue the overpayments. The compensation,
which you have drawn attention to, is never going to be adequate
for the hardship and suffering which people go through, it is
a way of saying sorry. I know of no system where when people suffer
you get the exact financial compensation, it is a gesture. While
you were out of the room, I said the amount we are paying this
year is double the—
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