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Westminster Hall

Wednesday 12 March 2008

[John Bercow in the Chair]

HMRC (Northern Ireland)

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Alan Campbell.]

9.30 am

Mr. Gregory Campbell (East Londonderry) (DUP): It is a privilege, Mr. Bercow, to serve again under your chairmanship.

The House and the wider public will know that Her Majesty’s Revenue and Customs is undertaking a regional review, and we know the results of the initial stages of that programme. The next stage is the core of the matter that I wish to debate today. It is aimed at rationalising offices in smaller towns and cities throughout the United Kingdom. In Northern Ireland, that could affect locations such as Coleraine in my constituency, Ballymena, Enniskillen and Londonderry, with almost 500 jobs being put at risk.

Coleraine is the only town with two tax offices, both of which could be closed. Those two offices have 80 employees in post. Most people appreciate that HMRC staff throughout the UK engage in a task that is not only worth while but vital. They try to ensure that the appropriate revenue accrues to the Treasury, particularly in Northern Ireland where, in some sections of the community, evasion is more rife than in other parts of the UK.

The Northern Ireland Assembly has for several years supported the principle of decentralising public sector jobs, but it seems that the regional review is contemplating moving in the opposite direction. On the face of it, it would appear that most jobs will be centralised in the Belfast area. If they do move along that route, it will have significant adverse financial and social consequences.

Virtually all those employed in the Coleraine offices will be offered posts in the Belfast area, which is between 90 minutes and two hours travelling time away during peak hours. That will necessitate an assisted travel allowance being paid for three years. That will amount to about £1.5 million. I do not include the redundancy payments, but if that were to be contemplated, it would cost more than three times that amount.

In addition, there is the thorny question at the core of my contention, which is about the requirements of section 75 of the Northern Ireland Act 1998. At the moment, they do not apply to the rest of the UK, but we in Northern Ireland are only too well aware of them. Under section 75, HMRC has to establish whether specific sections of the community would suffer as a result of the rationalisation programme. I shall give a few examples.

Approximately 58 per cent. of HMRC staff in the UK are female. The female complement in my constituency is 64 per cent. I suspect that the other offices at risk have a similar proportion. The point is that females will be specifically disadvantaged by relocation, as many of them are carers and some are mothers with young
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children. The prospect of an additional three and a half to four hours travelling time a day on top of their normal work load would undoubtedly cause hardship and create unnecessary family stress, which is completely at odds with the requirements of section 75.

I turn to the age structure of HMRC’s staff. The proportion of staff in my constituency over the age of 35 is 81 per cent. The national average is 74 per cent. Again, the additional travelling time caused by rationalisation would make the elderly staff complement more prone to illness and stress. Again, that is in contravention of section 75.

Over the past five years, HMRC’s staffing in Northern Ireland has been shown to be under-representative of the Protestant community. Indeed, that is the case in much of the public sector in Northern Ireland. According to the Equality Commission for Northern Ireland, the staff is 55 per cent. Roman Catholic and 45 per cent. Protestant. The closure of offices in a town such as Coleraine that has a predominantly Protestant population would make the task of trying to create a more balanced work force even more difficult. Again, section 75 requirements would not be met.

Much of Northern Ireland outside the Belfast travel-to-work area is rural. It has a higher than average ratio of people registered as disabled, in both rural and urban areas. Fern house in Coleraine is fully compliant under the Disability Discrimination Act 1995; that would be a prerequisite for the disabled population of Coleraine. However, for disabled people as consumers to have to travel the journey that I have outlined would be completely unacceptable.

I understand that the two buildings currently occupied by staff in Coleraine are leased. I hope that the Minister will address directly the question that I am about to put, as well as dealing with the general concept. I understand that several freedom of information requests have been made to the Department, seeking to establish the terms of the leases of those two buildings. To date, that information has not been released.

It is a simple question. What is the current rent? Once that has been established, we will be in a position to say whether it will take 15 years or even 20 years in savings of the rental merely to cancel out the assisted travel allowance, let alone the other factors that I have mentioned. Amalgamating those two offices would be a better option—or a least worst option—than closing both.

The north coast and the north-west of Northern Ireland have been particularly hard hit with redundancies over the past two years, in both the public and the private sectors. We need stability, as the Northern Ireland Assembly seeks to generate inward investment.

Mr. Nigel Dodds (Belfast, North) (DUP) indicated assent.

Mr. Campbell: I note the approval, from a sedentary position, of the Minister of Enterprise, Trade and Investment in the Northern Ireland Assembly. I accept that in the spirit in which it was given.

During the past year, decisions have been taken about Northern Ireland’s Driver and Vehicle Agency; much of its work is being transferred to the Driver and Vehicle Licensing Agency in Swansea, south Wales. That is resulting in job losses in Northern Ireland. Even then,
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some job saving was managed by non-location-specific work being transferred from Swansea to Coleraine. I ask the Minister to say whether it will be possible to do likewise in respect of HMRC.

Finally, I understand that a recent Treasury Select Committee report expressed concern that the current tax gap, with underpayments of VAT, direct tax and national insurance contributions and a deterioration in the performance of self-assessment, may be linked to the overall reduction in the head count that has already taken place under the HMRC review. For those reasons, I hope that the Government, even at this stage in considering the progress of the review, will be able to come to a more satisfactory conclusion. The problem is affecting hard-hit communities in a way that could make unemployment much more likely and re-employment even more difficult in an area that is already experiencing hardship.

9.40 am

Mark Durkan (Foyle) (SDLP): It is a pleasure to sit under your chairmanship this morning, Mr. Bercow.

I congratulate the hon. Member for East Londonderry (Mr. Campbell), or East Derry—he can take his choice—on securing this debate. Like him, I recognise the potential impact of the pending changes to the Revenue and Customs estate in Northern Ireland. For many of us, part of the issue is: are those changes effectively estate-driven, and blind to the performance issues facing Revenue and Customs, almost blind to the job implications for people currently working for Revenue and Customs and indeed blind to the implications for the areas in which the affected offices are located?

It has already been said that there are standing commitments in Northern Ireland to decentralisation. If I am honest, I would have to say that everyone seems to be for decentralisation but few are for doing anything about it. It is the usual story: everybody wants to go to heaven, but nobody wants to die. When I was Minister of Finance and Personnel in Northern Ireland, I sent missives around, commissioned a review on office accommodation strategy and asked all my fellow Ministers to offer up candidates for decentralisation. I received three indications of possible candidates for decentralisation, which were effectively non-starters in terms of their impact.

Therefore, I am not trying to be dishonest, saying to the Minister, “We have a perfectly wonderful active policy of decentralisation and we want you to do the same”. That is not the fact, and the Minister has her own experience of being in office in Northern Ireland, so she knows the resistance and talented inertia that can exist within the civil service system regarding such matters.

However, a number of localities, not least in my constituency, have seen job losses, some in the private sector and some in the public sector. Those jobs were previously decentralised back in the 1990s, and they have been lost in the past few years. They were decentralised within the Northern Ireland civil service—under direct rule, I hasten to add, before the hon. Member for Belfast, North (Mr. Dodds), who is the current Minister of Enterprise, Trade and Investment in Northern Ireland, thinks that I am being pointed in my presentation.

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Some of the remaining civil service jobs in my constituency, namely in Foyle house in Revenue and Customs, are now under threat because of this so-called rationalisation. That rationalisation seems to have the effect of sucking jobs in Revenue and Customs away from the west of Northern Ireland and on to the eastern sea board. That is a pattern that we need to avoid. People see that as centralisation in a particular direction, and as geographic concentration. That affects not just the reasonably equal job opportunities that people throughout Northern Ireland have every right to expect, but, materially, the performance and effectiveness of Revenue and Customs.

When we lose the existing network of local offices, Revenue and Customs will lose the effective rate of contact and access that it has with local taxpayers, local businesses, local tax advisers and local accountants. That will make a real difference to the performance and effectiveness of Revenue and Customs. It is a good thing when some people appreciate being able to access and contact a tax office—[Interruption.] I notice that the hon. Member for Upper Bann (David Simpson) dissociates himself from those remarks; perhaps he is in a constituency position that gives him some comfort to do so. I certainly know, however, that it is not just people working in Foyle house in Derry who are concerned about the changes, but people whose work leads them to rely on the contact with, availability of and access that they have to Foyle house and some other tax offices in the region. That level of availability is not something that should simply be tossed aside. It seems that this process is effectively driven by estate policies and estate agendas, rather than by service effectiveness and performance.

The changes in relation to Revenue and Customs, and the impact on the capacity of Revenue and Customs in Northern Ireland, are not just happening in isolation; I refer to the wider issues of public sector job distribution in Northern Ireland. In that context, we should not ignore the changes in relation to, say, the Assets Recovery Agency. That agency was particularly successful in its work in Northern Ireland. It has been able to address the local Mr. Bigs and the ostentatious affluence from questionable sources that people have been able to demonstrate in Northern Ireland, in ways that would not interest the Serious Organised Crime Agency. Many public representatives in Northern Ireland are concerned that the impact that we have seen on illicit moneys and on money laundering—some pretty mature money laundering fronts have developed in Northern Ireland—will not continue. The ARA was having an effect on that, and was able to draw on the expertise, assistance and intelligence of other agencies, including Revenue and Customs. Given that we will potentially lose out in the shake-up of ARA, I would have thought that a case could be made that the experience in Northern Ireland and the insights in Revenue and Customs in Northern Ireland could be used to good effect to continue the pursuit of those moneys and potential revenues through Revenue and Customs and other means.

Under the new regime in SOCA and in policing, in terms of how the models work, police will essentially deal with level 1 crime, SOCA will be interested in level 3 crime, and nobody will really pursue the illicit means and moneys involved in level 2 crime. It is almost as if a tax band system has been created for the criminals in
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Northern Ireland, many of whom are essentially just the privatised paramilitaries. They will know that if they effectively stick within band 2, they will get away with things because nobody in particular will pursue them. That would be a dreadful signal for us to send at a time when we are trying to ensure that everything about Northern Ireland is more legitimate and more stable.

We have capacity, intelligence, means and hard-working personnel available. If we are simply going to toss those resources aside, that would be wrong. Will the Minister therefore ensure that whatever other adjustments are made to the Revenue and Customs estate strategy across the UK more widely, particular attention is paid to the specific circumstances and issues in Northern Ireland, to determine how best those are to be tackled across the range of Government interests? It cannot be in the interests of Revenue and Customs to do otherwise.

In Northern Ireland, Revenue and Customs has been part of the Organised Crime Task Force, which has had road shows. A direct rule Minister and people from Revenue and Customs have been going round telling businesses what they have to do and what they can do in relation to money laundering and other aspects of organised crime. In the aftermath of all that publicity, all those road shows and all the motivating effort to help business, the signal coming from the Government is essentially that they will do less about such activity, and the means and the tools that they have will be left, or made, redundant in some of the reforms.

Mr. Dodds: May I say to the hon. Gentleman that I agree with him entirely in what he says about the ARA, the work that it has done and the problems and concerns that have now arisen, given SOCA’s new role and so on, and the gap in chasing organised crime that he refers to? Does he not agree that that pursuit of organised crime is even more important in the context of the great outcry and the spotlight on the enormous amounts of money lost through fuel laundering, smuggling and all the rest of it? Also, does he not agree that there is great concern within Northern Ireland about this transfer from the ARA to SOCA along the lines that he has mentioned?

Mark Durkan: I thank the hon. Gentleman for that point. He raises another dimension: revenue issues in Northern Ireland in respect of fuel smuggling and other criminal activities. Of course, there is the issue of Northern Ireland having a land border, with legitimate businesses conducting their affairs on a cross-border basis, as well as some illegitimate businesses conducting their affairs on that basis too. Again, that points to the need to ensure that Revenue and Customs has services and offices in Northern Ireland that are attuned to all the factors and circumstances in play so that they can understand what is going on.

The hon. Member for East Londonderry mentioned the Treasury Committee report, which cannot be ignored. We all know that questions have been raised about self-assessment and the terrible problems with tax credits. Indeed, Northern Ireland no longer has its own tax credit office, and we all have to ring Frank in Preston if we want anything done; if we do not get Frank in Preston, it is hard lines, and the problems remain. We have to wonder why the answer to all these problems is supposedly to rationalise the estate in ways that will only strain the performance capacity and the flexible intelligence of the Revenue and Customs system.

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I have mentioned issues particular to the Northern Ireland economy and revenue base, but the skills, experience and insights offered by the work force in the existing offices in Northern Ireland can also serve Revenue and Customs more widely. Just as many of us in Northern Ireland have our tax affairs dealt with by an office in Wales, offices in Northern Ireland can serve other regions in the UK. That is true not least in respect of money laundering, and I return to the implications of the concentration on SOCA. Under the proposals, level 2 crime and illicit financial activity will essentially be given a bye ball. The issue of Revenue and Customs needs to be addressed if the Government are serious about levying legitimate tax and pursing illegitimate activity where they can.

I hope that the Minister and her colleagues will reflect more widely on the implications of the proposals. We are not simply making an appeal for jobs in our constituencies, although it would not be honest to deny that that is a dimension of what is happening here, because it is a real and legitimate concern. We are talking about people who have given good service in difficult circumstances and sometimes not in the best premises. If the estate in Northern Ireland is to be rationalised, that must be based on safeguarding performance and effectiveness at Revenue and Customs more generally and ensuring that there are proper working conditions.

David Simpson (Upper Bann) (DUP): When the hon. Gentleman refers to jobs, does he agree that the loss of jobs flies in the face of Government policy? The Government encouraged females to return to part-time work, but the current proposals fly in the face of that. We are talking about the economically inactive taking up different jobs in the Province, but the Government are kicking the feet from under these ladies, who have made the effort to return to part-time work, but who will lose their jobs.

Mark Durkan: I fully take the hon. Gentleman’s point.

The workers we are talking about have been told that there might be retraining opportunities for them, but when they have asked questions about those, they have been given bizarre, evasive and confusing answers. As the hon. Member for Upper Bann said, these people have made their way back into the work force, taking advantage of retraining opportunities that were previously available and fitting their jobs in with their other responsibilities. We cannot turn around and tell them that they will be released altogether, albeit with limited opportunities for retraining, or that they can travel two or more hours each way every day to and from their job. Essentially, that is a let-them-eat-cake response.

The workers on whose behalf we are speaking face various challenges and difficulties and they have been told that offers of retraining are available to them, but those offers cannot be available to all of them. It is great to offer people retraining, but there is a reduced number of jobs, so the idea that everybody is being offered relocation is somewhat dishonest. That is not a satisfactory answer, and these employees and their families deserve more than a let-them-eat-cake response from their employers.

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