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Westminster Hall

Wednesday 11 March 2009

[Mr. Martin Caton in the Chair]

HMRC (Office Closures)

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr. Ian Austin.)

9.30 am

Mr. Anthony Wright (Great Yarmouth) (Lab): As you can see, Mr. Caton, I brought my fans along as well—[Interruption.] Unfortunately, I cannot control them, as I am sure the record will show.

I am pleased to have secured this debate, but it is unfortunate that we have to discuss the possibility of up to 200 offices of Her Majesty’s Revenue and Customs throughout the UK closing. Many Members have turned up today, but I know that many others would have loved to be here to join the debate and make their arguments on why it is wrong of HMRC to close many of its offices.

The possibility of up to 200 offices closing was announced two or three years ago. Some have closed already and more closures were announced in December. To give an idea of how many offices are to close: the eastern region would lose 18, the south-west 19, Yorkshire and Humber 9, Northern Ireland 5, Scotland 20, Wales 11 and the north-west 11. The spread of closures will have a huge impact on all parts of the United Kingdom.

I am sure that other hon. Members will relate stories from their own constituencies, so I shall concentrate mainly on the proposal to close Havenbridge house in my constituency. As a result, not only will people suffer poorer service, but staff in Great Yarmouth will be faced with the prospect of losing their jobs, which many of them have been doing for more than 20 years. The situation in many constituencies throughout the UK that are facing similar closure proposals will be identical.

Against that background is the fact that we in Great Yarmouth have already suffered from public sector job moves. In the past two years, we have lost the criminal justice unit—approximately 50 jobs moved to Norwich—and the Department for Work and Pensions has streamlined its Jobcentre Plus services, resulting in the closure of the office in Yarmouth house, Yarmouth way.

Dr. Ian Gibson (Norwich, North) (Lab): My hon. Friend and I are both in a good mood this morning because Norwich City managed to get three points last night and may yet escape relegation. Despite the bad news, there is some good news as well.

If jobs were to move from Great Yarmouth, which is a centre that desperately needs support because of deprivation, would they go to Norwich? The last thing anyone who represents constituents and working people in Norwich would want is a competitive environment in which jobs are taken from one place and put in another. Jobs are needed in both places.

Mr. Wright: I absolutely agree with my hon. Friend on job moves, which will affect the whole of Norfolk; for example, the office in Dereham is also up for closure. I believe that we would all say exactly the same thing:
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we do not want jobs to be taken from other areas. I shall discuss the deprivation indices in my constituency, but first I want to develop my argument a bit further.

As I said, Great Yarmouth has already lost many offices and jobs to other areas. The last closure, just recently, was of Norfolk mental health care trust’s adult unit in Northgate hospital, which was moved to Carlton Court hospital in Lowestoft. There has been a migration of jobs from my constituency to other areas—not a million miles away, but problems are created for the staff and, in the case of Norfolk mental health care trust, for patients and their families.

The debate about the HMRC closures is not new. People in the local branch of the Public and Commercial Services Union have been writing to ask for my support ever since the announcement in 2004 of the consultation. As well as asking questions, I had a debate on the subject in May 2007 to which the present Minister for Local Government, who was then the Minister responsible, responded. I shall quote from that debate later. I have had meetings with three Ministers with responsibility for the matter over that time. The last was with my right hon. Friend the Minister who will respond today. He has been given a poisoned chalice, as it will be on his watch that many people will see the demise of their livelihood.

During the consultation, there were written agreements about jobs. I quote from the response that I got from the Minister for Local Government on 2 May 2007. He stated:

On the face of it, there appears to be a guarantee that employees and unions alike would find acceptable; in practice, however, that is not the case. For example, what is a reasonable daily travel distance? In negotiations last year, the PCS and HMRC concluded an agreement on staffing, working conditions and job security. The process was designed to establish, on an individual basis, the reasonableness of expecting members of staff to move to another office. A journey time of one hour each way—to and from work—was adopted as the limit beyond which it was not reasonable to expect any individual to travel. HMRC accepted that although reasonable daily travel should not exceed one hour each way, individual personal circumstances—for example, disability and caring responsibilities—could mean that less than one hour each way might legitimately be beyond a reasonable daily travel limit.

To achieve consistency and fairness, the process called for every member of staff situated in an office whose closure was proposed to be interviewed by their manager, on a one-to-one basis, to provide an indication of whether they were within or outside the reasonable daily travel limit. The preliminary indication from the one-to-one interview was then to be quality assured by a moderating panel of more senior managers, who would decide on the issue of reasonable daily travel and notify each individual of their decision. Those deemed to be within the reasonable daily travel limit would be
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instructed to move to another office. However, experience has shown that, far from providing an assurance of fairness, the moderation procedure has consistently delivered perverse outcomes. I shall give examples.

One part-time single mother has two children, both of early school age. She is an administration officer—the second lowest grade—and works during term time only for 20 hours per week. Despite having a planned journey each way of between one and one quarter hours by car or two hours by bus and train, and fixed working times due to child care commitments, that member of staff was told that she is within reasonable daily travel of Norwich. Although part-time workers do not have their travel time calculated pro rata, like their pay and holiday entitlement, they are expected to undertake the same length of journey as their full-time colleagues, in effect making a disproportionately longer day. In that person’s case, the proposed travel time is four times longer than at present and would make up one third of her working week, albeit one third that is not paid.

The present child care arrangements further complicate the situation. No child care is available in the village where my constituent lives. To maintain her working pattern, her two girls would have to attend pre-school and after-school child care in the nearest town. That would mean that the girls would have to travel to and from the child care facilities by taxi. The member of staff has estimated that that would cost up to £31 a day, or £124 a week—just under £500 a month out of a take-home wage of £756. The only other option would be to reduce her working hours so that she could continue to take her children to and from school herself. That option, however, would result in her having to work nine hours less a week and suffer a 24 per cent. reduction in her take-home pay. I would call that constructive dismissal.

Another member of staff has long-term care responsibilities for a disabled parent who is housebound and who receives no support from social services. The individual has a back injury and therefore cannot drive very far. Despite the fact that public transport will take 85 minutes each way and obviously have a particularly detrimental effect on the individual’s ability to carry out their caring responsibilities, HMRC has not deemed them to be outside the reasonable travel limit.

Another individual who lives in Great Yarmouth transferred to Havenbridge house from Norwich because of elder care responsibilities. Even by HMRC’s questionable method of calculating journey times, the travelling time to the new location exceeds one hour each way, but it is still deemed to be reasonable daily travel. HMRC’s moderating panel ignored the individual’s changed circumstances and simply decided that because they had once done the journey, it was reasonable to expect them to do it again.

Although HMRC is prepared to make a contribution for a period to an individual’s additional travel costs once they are compulsorily transferred, the daily travel allowance is regarded as income and taxable. Other colleagues will lose tax credits because of the daily travel allowance, so they will be financially disadvantaged.

Another example is that of a 62-year-old male part-time admin assistant. He did a financial breakdown of the effects of having to relocate to Nelson house in Norwich.
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His monthly wage of £852 will increase due to the daily travel assistance of £90 a month—the amount is higher, but these figures refer to the actual increase in net pay after the employee has paid tax and national insurance on the gross sum. The increase in total earnings, however, means that the individual loses £75 a month in tax credits, because the daily travel allowance counts toward total income, so it reduces his tax credit entitlement. He will incur further financial detriment, as the increase in gross income will reduce his housing and council tax benefits by £29 a month. This constituent will be £104 worse off every month owing to the relocation of the office to Norwich—and that is before he actually travels.

Gwyn Prosser (Dover) (Lab): My hon. Friend carefully paints a very accurate picture of the difficulties that PCS workers and others face during the programme. Is it not true, however, that even before the formal proposals are introduced, offices such as Centurion house in Dover, from where business streams are being transferred to other areas, face closure by default, and that its employees face, as my hon. Friend says, constructive dismissal?

Mr. Wright: Yes, absolutely. As I said earlier, everything that is happening to us in Great Yarmouth is replicated throughout the country. I shall prove that point when I develop my argument about the issues that were not taken into account when assurances were given.

Andrew George (St. Ives) (LD): The hon. Gentleman makes an excellent case, and we can all make strong cases for not closing tax offices in our constituencies. Penzance, in my constituency, sits at the poorest end of the poorest region in the UK, so cutting jobs at the present time is not especially wise. The specific problem, however, is the bizarre way in which HMRC has treated its main asset: its human resource. The people in the Penzance office’s compliance team, for example, provide the service with the type of stability that will not be replicated in the new centres, where job turnover will be much more rapid. That stability among HMRC’s human resource is its greatest asset, and it is going to lose it.

Mr. Wright: Absolutely. The hon. Gentleman has hit the nail on the head in terms of experience, because, in my constituency, the average number of years that people have worked in the department exceeds 20. I do not know of any other industry or profession with such consistency, and over those 20 years, people have built up their professionalism, contacts and local knowledge. However, if we put in their way obstacles such as travel or care responsibilities, which do not allow them to strike a work-life balance, we will lose that professionalism.

David Taylor (North-West Leicestershire) (Lab/Co-op): My hon. Friend mentions local knowledge, and it is particularly important in tackling tax evasion, because local knowledge is a major factor in the success of compliance. Today, and every day in this country, a minimum of £100 million in income tax payments is evaded, but compliance officers typically obtain an extra £600,000 to £700,000 tax each year through their work. If we distribute those people to the winds, to areas that they do not know, we will seriously weaken that valuable compliance role throughout the UK.

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Mr. Wright: That is a very valid point about compliance offices. The proposal creates other issues, problems and, indeed, questions about what will happen within the compliance units when they are moved away from their localities, where they know local businesses and people and can keep their finger on the pulse. Bridging the gap created by the huge amount of businesses and business people who may evade tax is, indeed, an issue. Another perverse point is that, Mapeley, the managing agents of Havenbridge house, is based in the tax haven of Guernsey.

David Taylor: And whether or not the tax offices are left open, we still have to pay rent.

Mr. Wright: Absolutely.

I really wanted to give those examples, because we can multiply them hundreds of times over, and individuals find themselves in such situations throughout the country.

Mr. Alan Reid (Argyll and Bute) (LD): The hon. Gentleman makes a very powerful case on behalf of his constituents. Does he agree that the proposal, as well as having a devastating effect on current staff, has a knock-on effect in our areas, where jobs will be lost for ever? That will affect future generations. In my constituency, tax offices in Rothesay, Oban and Dunoon provide employment in remote areas where alternative employment is often difficult to find. The losses will have a devastating effect on those communities for generations to come.

Mr. Wright: Absolutely. I could not have written the script much better if I had asked hon. Members to intervene. The hon. Gentleman raises another issue that must be looked at. I expressed my constituents’ concerns about these job moves, because they weaken the base for young people to come through and take up jobs in what they consider to be good, long-term professions in the civil service or public sector. They will not have that opportunity, and, once the skills are gone, they are gone for ever. Great Yarmouth thrived on the herring industry for centuries, then on oil and gas, and now we are into renewables. We were able to adapt those skills, but, in the case under discussion, it will be almost impossible. We will lose people with 25 to 35 years’ experience. In the Public Gallery, there is one gentleman with 39 years’ experience. He is coming up to retirement, so does he really want to move to Norwich? I suggest not. We will lose that experience, but we will also lose—the other side of the coin—the opportunities for young people to move from education into a profession, and, in an area such as Great Yarmouth, that will have a devastating effect.

John McDonnell (Hayes and Harlington) (Lab): I congratulate my hon. Friend on the campaign that he has waged in Great Yarmouth. I particularly enjoyed the PCS stick of rock at Yarmouth market; it was an effective tool. The anecdotal evidence that we have from all our experiences is that the job cuts and their impact fall disproportionately on women, largely because of carers’ issues and the amount of women who work for HMRC. Interestingly, there is a contradiction, because the Government are going to introduce their Equality Bill in May, in which we will focus on how we protect people, particularly women, on an equal opportunities
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basis; yet, here we are introducing a policy that will put large numbers of women at a financial detriment and, often, out of employment.

Mr. Wright: Again, that is an extremely valid response to an issue that affects Great Yarmouth, as well as other areas. Many of the jobs are part time, and people took them because they were flexible and allowed them to strike a work-life balance. I commend the Government’s moves on equality to give women the opportunity to go back to work, but here we have the perverse opposite. The profession contains a large proportion of women, and I have anecdotal evidence of single mothers who will not be able to continue with their work but may be penalised by further legislation for not actually going to work. We are not giving them many opportunities, and, in area such as Great Yarmouth, that will have a profound effect on the economy.

During the 2007 debate, the then Minister said that management would meet staff and discuss whether the proposed moved was

I do not believe that that has happened, or that it was considered important. From my discussions and the letters that I have received, there is no doubt that many staff will not be able to commute to their new place of work.

When I met the then chief executive, Paul Gray, at the insistence of the then Minister, Mr. Gray confirmed that those issues would be taken into account when considering the possibility of office closures. I left his office with a degree of comfort and thought that we had won the argument, because I knew the cases, arguments, difficulties and unemployment levels in my constituency. Back in 1989 we were at 20 per cent. unemployment. We constantly have the highest unemployment level in the eastern region and there are severe deprivation factors. Fortunately, during the last 10 or 12 years significant sums of Government money have been pumped into the regeneration of our new harbour and the integration programme, for example, and dozens of other projects, which have created a new impetus in the town to give us encouragement that we are combating unemployment there, even in the dire circumstances of the recession. I do not want another arm of the Government creating other difficulties in the difficult circumstances of the recession.

Mr. Andrew Turner (Isle of Wight) (Con): The problem is that there are low-level businesses, such as the ones that the hon. Gentleman and other hon. Members are speaking about—like the one in my constituency on the Isle of Wight—and then there is something up at the top. There is a difference between hon. Members from all parties and what is being said at the top. Those differences need to be brought together gradually and the people who organise things should not allow the opportunity to do so to run away.

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