I want to touch on the issue of girls and gangs, which other hon. Members may want to touch on as well. We are only just beginning to understand the extent to which young women are affected by gang culture. This culture has been regarded very much as a male thing.

4 Dec 2012 : Column 220WH

People think of young men being in gangs, with all the violence that is part and parcel of that. However, there is no doubt that there has been a significant problem, which is only just being uncovered, with the victimisation of young teenage girls through sexual exploitation and violence such as that exposed in the recent Children’s Commissioner report. There is also the issue of girls acting more as perpetrators as a result of the power and control exerted by gangs. It is crucial that the Home Office funding over the next three years is used to employ young persons’ advocates. That is an important step towards addressing those concerns, but it has to be part of a wider safeguarding response, and local areas need support and guidance to embed the right approaches.

Let me make some comments about elements slightly closer to home, which were alluded to by the hon. Lady. We all appreciate that Westminster, right in the centre of London, is pioneering the approach that we are talking about, but there is growing concern among residents of the Churchill Gardens estate in the Pimlico area of my constituency about gang members, many of whom—not all—are coming from other boroughs to Westminster to engage in criminal activity and intimidation. A petition was delivered to me only yesterday by two especially dedicated local constituents, which demonstrates just how anxious residents on estates such as Churchill Gardens feel when a core group of offenders comes from outside to cause trouble.

It is perhaps a slightly depressing thought that often things need to happen in the constituency that I represent, or in that of the hon. Lady in order for many opinion formers to take a little more notice than they otherwise would. When things happen within the curtilage of the parliamentary buildings that we are sitting in, they inevitably get far more coverage in the national papers and perhaps more extensive coverage in papers such as the Evening Standard. That allows the profile of the issue to become more prevalent, but gang culture is clearly a major issue that we face not only here in central London, but in many of the suburbs and the other seats whose representatives will make contributions later in the debate.

I shall conclude by asking this of the Minister. I hope that he will feel that his Department has a role in disseminating and sharing information on best practice when there have been especially successful programmes, such as Your Choice, in order to prevent instances in which one borough’s difficult gang members are not being dealt with as effectively and therefore cause trouble in neighbouring areas and beyond.

I am sorry that I am the only Back Bench Member from the governing parties to be present at the debate. Obviously, other important debates and other important parliamentary business are going on today, but I hope that the Minister will recognise that gang and youth violence is a concern that is close to the hearts of all hon. Members representing inner-city seats or London seats generally. These are very important issues that are affecting many millions of the constituents whom we represent. Perhaps it is a different culture from the culture that is prevalent in the relatively leafy market towns of Somerset. I am not being in any way disrespectful to the area that the Minister represents. However, these problems affect and have an impact on the constituencies of all Members of Parliament who represent the inner cities and, in particular, the capital city. These are

4 Dec 2012 : Column 221WH

Members from all political parties. I hope that the Minister will be able to address some of the very real concerns that he will hear about in the course of this debate.

Mr Gary Streeter (in the Chair): We have 30 minutes before the winding-up speeches begin and three speakers left, so this should work like clockwork.

3.9 pm

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Westminster North (Ms Buck) on securing a debate on this important subject.

I am going to dive straight in by saying that despite media reports, overall crime levels in Hackney have dropped dramatically over the past six years. However, safety issues and the fear of crime remained the No. 1 priority in the council’s residents survey. Indeed, one reason why parents appeal school admissions is that young people are frightened of crossing postcode areas. Although fewer than 1% of Hackney residents have any involvement in gang crime, the fear effect therefore ripples out further. The Home Office had the mission in the past of reducing the fear of crime as well as actual crime, and I hope the Minister can comment on the progress that has been made on that, if it remains a target for the coalition Government.

My hon. Friend talked about riots and gangs overlapping; as she said, there are separate issues, but there are some similarities, and I will echo her comments in the time I have. However, I would like to mention one concern. I am a great defender of a free press, but one thing that those of us who are routinely active on doorsteps, in communities and in people’s homes get quite irritated about is the simplistic headlines generated by some of the media. Some of the journalism about the aftermath of the riots in Hackney was based on questionable and often unbalanced vox pops and on evidence gathering that was not true evidence gathering, which was not helpful. I suspect Hackney suffers from its improved transport links and its proximity to the headquarters of many national newspapers.

Let me give a feel for how inaccurate the coverage sometimes was. I turned up in Hackney town hall the day after the riots in August 2011. I was speaking to a French journalist, who interrupted our interview to stick her microphone out in the road, saying, “I just needed to get that police siren for good effect in my report.” That rather summed up the issue, especially as she also said, off-microphone, “This is a really nice area of town, isn’t it? It’s much nicer than Paris.” That is something I would echo for those Members who have not been to Hackney recently.

However, let me get back to some of the issues, causes and concerns. One really big concern that has been mentioned is unemployment. Unemployment among under-24s in Hackney is very high. We have a high percentage of young people, and about a third of Hackney residents—it is probably even more now, because these are old census data—are under 24. We had an increase of 30,000 or so in our population between censuses,

4 Dec 2012 : Column 222WH

which was made up largely of under-fives and people in their 20s and 30s. Some of those young people will be living in private accommodation, where 90% of people are employed, but only 40% of my constituents living in social housing are employed.

The issue of young black men is also of real concern; it feeds the negative stereotypes that are so often untrue, but there is a reality in Hackney. It is interesting that no schoolchildren were involved in the riots in August. There may be poverty in my constituency, but there is no poverty of ambition. We have seen hugely improved school results, so there is real reason for people to focus on what they can achieve in their own right, and that improvement in education is making a difference.

Another big concern—this touches on some of what is going on in our schools—is that, sadly too often, there is a lack of good influences and role models, particularly male role models. I will not repeat all the research, but an eight-year-old boy will typically look for a male role model. At that age, he looks away from his mother’s skirts, and he will latch on to whomever is around. On the Pembury estate—contrary to media reports, it was not the heart of the riots, but adjacent to where some of the worst activity took place—when older gang members have been put in prison, the youngsters, aged nine and 10, have sometimes begun to act the big man and to act as the leaders of their groups. The lack of male role models in schools, communities and, often, homes can therefore make a real difference.

That is a big issue for the Home Office to resolve, and I am not saying that it can resolve it, but we need to have a serious adult discussion nationally about what is happening, particularly in our primary schools. I always add up how many male teachers there are in primary schools, and, sadly, there are far too few. In under-five settings, too, there are generally far too few male role models. That is a real issue, which has a long-term effect, and I am sure my right hon. Friend the Member for Tottenham (Mr Lammy) will have something to say about that.

Let me touch on the operation of gang injunctions. They were introduced by the coalition Government, and the Minister has direct responsibility for this area of policy. There is a concern about them, compared with antisocial behaviour orders. Gang injunctions come into operation after a crime has been committed, and they link good, positive aspects with punishment, but lawyers for the convicted have been arguing against the positive elements—for example, that their clients should have to attend college—and they have been winning. I hope the Minister will continue to be vigilant about how the Crown Prosecution Service represents the Crown in such situations, to ensure that those positive elements are not removed. I hope he will be humble enough to recognise that if gang injunctions do not work as intended, they may need reform. I am not completely against them, but they need to work, and it takes a lot of time to put them in place. If they are not delivering the positive, diversionary element, they are not worth very much. I hope the Minister will comment on that; if not, I hope he will give me a detailed response in writing.

Has the Home Office given any consideration to Operation Ceasefire, which is based on work by sociologist David Kennedy from Harvard? He came up with the Boston strategy, or Operation Ceasefire, in 1995, and it

4 Dec 2012 : Column 223WH

has subsequently been copied, most notably in Glasgow. In its work on knife crime in June 2009, the Home Affairs Committee praised the Glasgow model for achieving results. I will not go into detail, but, in summary, this approach involves pulling known gang members—nominals—together and confronting them with the information the police hold about them and with the impact of their crimes, before offering them the opportunity to come forward for diversionary activity. The model has critics and supporters, but has the Home Office done a serious analysis of this option for dealing with gang nominals?

That brings me to the work being done locally in Hackney. On the policing side, some progress is being made against gangs, but the most important work is being done by the gangs integration unit, which is headed by the former borough police commander, Steve Bending, who is now no longer a serving officer. The unit brings together police, probation, youth work, housing and any other agency that needs to be involved to tackle and divert gang members. It targets the top 50 gang nominals at any one time and sends them letters saying, “We know who you are, and we know where you are. We will be watching you. If you wish to divert yourself from gang activity, to move house or to get involved in education, or if your family do, we will help you in any way we can.” The unit is also doing a strand of work on girls in gangs, which, as the hon. Member for Cities of London and Westminster (Mark Field) said, is a growing issue and a real concern in my constituency. The unit’s work is funded by the London borough of Hackney, where the mayor has done a good job, in difficult circumstances, of making sure that certain local priorities retain council funding.

I strongly echo the point so well made by my hon. Friend that we cannot have a stop-start approach. I am not asking for lots more money, but we need consistency of approach. Solving gang problems is not about having lots of new initiatives all the time. There are things that have been proved to work, and I am sure there are things we can learn that will work in different situations in the future. However, this is not about continually reinventing the wheel, as the hon. Gentleman said; it is about consistency of approach. I am sure the Home Office is fully aware that the cost to the taxpayer of not tackling these issues is probably higher than that of tackling them early, so this is important. Given the fear of crime that the few members of gangs can generate, this has to be a high priority for the Government.

I want briefly to mention some of the work being done by local landlords. The Peabody Trust, which is the housing association that runs the Pembury estate, has projects such as Threads, which helps young women on the fringes of gangs. It also has the local intervention fire education programme—LIFE—which is a five-day course for 13 to 17-year-olds on the estate. The evaluation is clear that the programme works and really diverts young people from antisocial behaviour. The trust has also introduced a 13-week parenting course, and parenting is an issue we have perhaps not touched on enough. It is challenging being a teenager’s parent at the best of times, but it is very difficult at the worst of times. It is easy to tell parents that they should control their children, but if they have a large teenager who has got in with the wrong crowd, that can sometimes be difficult.

4 Dec 2012 : Column 224WH

We also have the Makeda Weaver project, supported by Shian Housing Association, which helps to rehouse gang members away from their area of activity. In the current climate, with such pressures on housing, some of which are caused by the coalition’s policies, such a scheme might be unpopular, but I would defend it to the hilt, because unless we get gang members away from their area of activity, there is no easy way of helping them to stay away from the company they keep there.

There are many organisations that do good work in Hackney. One is The Golden Company, which works with young people at risk of exclusion and often on the edge of gangs. They get engaged in a project that collects honey and other bee by-products, and they learn how to create small businesses and become young entrepreneurs. The company does some very good work.

In short, there are important local solutions, and one pan-London or national solution may not always work. We have good examples of how local solutions can work in Hackney. However, we can learn lessons, and some things can be applied more or less across the board. Pan-London support is crucial. There cannot be a rehousing programme from one borough: Hackney cannot have a rehousing programme on its own, and nor can Westminster. We need a proper way of working, agreed across London, or it will not deliver.

We need funding for diversion and intervention early on. The Peabody Trust is working with Hackney council to attend to parenting and intervention from toddler stage onwards. We need to consider a range of actions. I touched on parenting support, which is important, and so is support for young women; that is also happening in Hackney. It is all needed. I know that not everything that I have mentioned is within the purview of the Home Office, but I plead with the Minister to become a champion of the approach, across Whitehall.

I want to reiterate the point that it is not one-off funding and lots of new initiatives that we need. Let us stick with what works and keep funding it, so that we do not have a stop-start approach. As for those young people whose lives are ruined by gang membership, whose life chances are changed for ever and who are affecting their neighbourhoods, we need to get them out of that and into positive activity. Let us deal with the scourge of gang activity and gang violence once and for all.

3.20 pm

Mr David Lammy (Tottenham) (Lab): I am grateful for the opportunity to take part in the debate. I pay tribute to my hon. Friend the Member for Westminster North (Ms Buck) for her comprehensive remarks on the whole range of issues, and for returning, as she has done over many years, to the root causes: housing, welfare and some of the central challenges that exist across London.

I want to concentrate on diversionary activity, but will begin with some fundamental assertions. First, gangs are not new in British life. In the 19th century Dickens wrote well, in “Oliver Twist”, about gang life in London and how older men like Fagin could prey on groups of young men in the inner city and cultivate criminality among them. More recently there was violence involving mods and rockers. There are certain points in history when young men, masculinity and violence become

4 Dec 2012 : Column 225WH

issues—so what is new now? Why are we particularly concerned? I think it is because of the callousness towards human life, and how quickly it is taken—usually with knives—with so little regard for that life. The House needs to pause and think deliberately about how so many groups of young men can take life so lightly—and how they can take female life and the dignity of a woman’s disposition so lightly, displaying such terrible misogyny. The work of the Children’s Commissioner in recent weeks highlighted the way in which young women are often sexually exploited, which underlies that callousness about human life for which we should have concern.

Gang activity is but one small component of the story of the riots and it amounts, when we look at the arrest profile, to no more than 20% of the arrests that were made. We should not overstate the effect of gangs there; but in some areas those involved in gangs clearly orchestrated the violence. It may well be that those who were arrested initially were new to criminality and therefore were caught earlier. That is an important aspect of the matter; but, to underline the points that my hon. Friend the Member for Westminster North made, it is a matter for deep concern that we live in a country that is prepared to spend up to £2 million on an inquiry but does not want to get to the fundamental reasons for the riots and then act. I pay tribute to the work of the Riots Communities and Victims Panel but it was not a judicial inquiry. I am sure that hon. Members taking part in the debate today will want to revisit the issues, particularly on the anniversary of the riots, to consider what has happened since, but when we look for lessons it is not clear at all that there has been a coherent approach, save for the work on troubled families and some activity on gangs. What comes across in a debate such as this, from all the hon. Members who have spoken, is the comprehensive way in which the problem needs to be attacked, and the fact that such comprehensive action is lacking.

I applaud the efforts that have gone into a joined-up approach to gang activity in London. It is right to pay tribute to the work of the Metropolitan police, because there is a reduction in such activity across London. Young men are being imprisoned because of their gross antisocial behaviour. In Haringey there has been a 31% reduction in serious youth violence, a 31% reduction in gun crime, a reduction of just under 21% in knife crime and a 26.2% reduction in knife-enabled robbery. However, there is a lot of experience in the Chamber this afternoon and hon. Members know that when young people are put in jail they come out; that the same effort has not gone into the prison system; and that the recidivism rates for people getting out of Feltham are about 75%. They know that young people in their late teens or early twenties who are arrested have younger brothers and cousins who take over the turf, and that gang violence is quintessentially a turf war, a ridiculous parochialism about postcode. That means that the mainstay of violence in the London borough of Haringey is what happens between, broadly speaking, 12 gangs, although three dominate. Those three are NPK in Northumberland Park, Tottenham Man Dem, largely around the Broadwater Farm estate in Tottenham, and the Wood Green Mob. Just weeks after the riots, we had the most amazing knife crime incident, with multiple knifings outside the

4 Dec 2012 : Column 226WH

McDonald’s in Wood Green, for no reason other than a turf war. I am afraid that as arrests are made, new people move on to the turf.

It is right, building on what has happened in Glasgow, to approach the issue as one of public health and to be purposeful about diversionary activity; but that is where I have deep concerns about the understanding of what works, the comprehensive nature of what is taking place, and the money that is being dedicated to the purpose. Communities Against Guns, Gangs and Knives funding in the London borough of Haringey is £45,000. It is barely possible to buy a lock-up garage in Tottenham for that. Ending Gang and Youth Violence funding—that is for projects such as the Ben Kinsella knife crime exhibition that young people visit, and targeted mentoring work—is £199,000 in the London borough of Haringey. A one-bedroom flat cannot currently be bought in the borough for that money.

I must ask what the priority is. Austerity issues are rightly raised, but in that context we must at least consider what our priorities are. I want to reinforce the points that have been made about quality, cost and the sustaining of investment. We know what works in mentoring, and not enough of it, of a high enough standard, is going on comprehensively in our constituencies. We know, too, that there are particular problems in high-rise tower blocks in constituencies such as Lambeth, Haringey and Hackney across London. The issue is about getting down to a neighbourhood level. It is not about a feral underclass; it is about the workless poor and an endemic worklessness in too many such tower blocks—dysfunctional and not working. It is deeply problematic that only 110 young people in Tottenham have benefited from the Work programme long-term. It is not good enough and it cannot be good enough in the circumstances in which we find ourselves.

There are question marks over the work needed to ensure that young people do not follow in the footsteps of their brothers and cousins following arrest. As a society, we must underline the importance of men, and particularly fathers, in our communities. They cannot be forgotten. We must challenge the stereotypes coming out of the games industry and parts of the music industry in particular, where toleration of violence and misogyny is totally unacceptable. Not enough is being done to tackle it. I shall end my remarks there. Many of us could go on, but we hope that the subject is revisited in the main Chamber soon.

Mr Gary Streeter (in the Chair): I remind Members that the wind-ups begin at 3.40 pm.

3.30 pm

Heidi Alexander (Lewisham East) (Lab): I am grateful for the opportunity to take part in the debate. I congratulate my hon. Friend the Member for Westminster North (Ms Buck) on securing it. I am sorry that I did not hear everyone’s contribution, as I had to leave to meet a group of young people from Haberdashers’ Aske’s Knights academy in my constituency who have been visiting the House of Commons today.

I want to speak today for two reasons: first, to underline the huge importance to my constituents of tackling gangs and serious youth violence; and, secondly, to urge the Government to take an holistic approach

4 Dec 2012 : Column 227WH

and put their money where their mouth is in tackling the problem. They need to think hard about how they use the resources that they have allocated to best effect.

In the past nine months, I have met the parents of three young men who were stabbed to death in my constituency or neighbouring constituencies. In March this year, Kwame Ofosu-Asare, a 17-year-old boy from Catford, was stabbed to death in Brixton. I will speak a little more about that incident in a few minutes. The second young man whose mum I met was Nathaniel Brown. In August this year, he was stabbed after a party in Downham and lost his life on the street there. The third young man whose father I met was Kevin Ssali. He was stabbed as he got off a bus in my constituency in Lee Green in September. There are no words that a Member of Parliament can use when sitting in the front room of a parent who has lost a son or daughter to brutal violence on our streets. Tackling such violence is one of our biggest challenges.

To underline the importance of tackling gangs and serious youth violence, I want to say something briefly about Kwame Ofosu-Asare, who was killed in Brixton. The court case into his murder started last week. The prosecutor, Crispin Aylett, told the court:

“Kwame was not a member of either gang”

involved in the incident in Brixton. He continued:

“He was killed for no reason other than his murderers had come upon him on an estate they considered to be enemy territory and at a time when they were looking to take revenge for the stabbing of one of their own only hours earlier.”

I never met Kwame, but everything I have heard about him suggests that he was a very fine young man with a very bright future ahead of him. His father has been understandably beside himself with grief. He has come to the House to ask what we will do to prevent such violence from happening again.

Such incidents are not isolated. When I visit community groups in my constituency, such as XLP, a youth project based in Lewisham, and Second Wave in the neighbouring constituency and meet young people, I am struck by the seriousness with which they talk about their safety. I feel safe on the streets of Lewisham. We can quote statistics about falling crime, but when young people are losing their lives, the streets do not feel safe to them or their parents, which is why it is imperative that the Government and everyone in the House come together to tackle the problem.

There are four parts to the process to think about. First, we need to think about how to prevent young people from getting involved in gangs and serious youth violence in the first place. Secondly, when they are involved and caught up in gangs, we need to give them a way out and the means to get out. Thirdly, we need to tackle the retaliative behaviour and escalation of violence. Fourthly, when young people and those involved in violence go to prison, we need to ensure that they have a means to find a different life for themselves and not get caught up in exactly the same behaviour that they were involved in before they went to prison.

On the first part of that process, there are fine examples of community-led projects, which, with a relatively small amount of money, have a proven track record of going into schools, talking to young people and being accessible to them. They look like and sound like the young people, and they listen to them. Such projects can make

4 Dec 2012 : Column 228WH

a huge difference in stopping those on the edges from getting caught up in gangs and serious youth violence. They can help young people to understand the consequences of their behaviour and that if they are hanging around with a dodgy group of friends, they can get caught up in joint enterprise charges. It is important that such work is done in our schools at a young age to tackle the issue.

Mr Gary Streeter (in the Chair): Order. I am reluctant to interrupt, but there is a Division in the House, so I am afraid that the sitting is suspended for 15 minutes.

3.36 pm

Sitting suspended for a Division in the House.

3.51 pm

On resuming

Heidi Alexander: I was talking about what needs to happen to stop young people getting involved in the gang culture in the first place. We must think very hard about what leads a young person—or even an older person—to think that they can resort to the level of violence that we see on our streets to resolve a difference. The Government cannot necessarily solve the problem; it is as much about parents, families and communities coming together and saying that the violence is unacceptable. The Mizen foundation, which was launched by the parents of Jimmy Mizen who was also murdered in my constituency, has recently introduced the valuable initiative, “Release the Peace” to stem the level of anger and violence that we see among some young people in our communities.

When young people are involved in gangs and caught up in youth violence, we need to find a way of giving them a route out. We need to enable young people to talk to someone in confidence when they arrive at accident and emergency with a stab wound. It is imperative that they can be open about what has happened, instead of closing up and not talking to anyone.

In Lewisham, the Trilogy Plus initiative, which is run by the police, has recruited previous gang members to become mentors and to work hand in hand with families of young people who are in gangs. The idea is to make it clear to young boys or young men what the consequences are of going out on the streets and doing certain things. They are told very clearly that the police will catch up with them. That sort of work on a real-time basis is critical.

We need to find a way to stem the escalation of violence. In my earlier intervention, I talked about online material that glamorises gang culture and that fuels and foments some of the animosity that exists between rival gangs. The problem will become more significant as time goes on. The Department for Culture, Media and Sport should talk to the Home Office about how, in future communications legislation, it might consider giving the courts more power, under very constrained circumstances, to take down such material because of the damage that it does on the streets in our communities.

As I have said, we need to provide a route out for people who have been in prison after being involved in serious youth violence. Nothing will do that better than finding a job. Instead of going back to the neighbourhoods in which they were living or hanging around with their old groups and friends, they need to be given a way out.

4 Dec 2012 : Column 229WH

The situation is not straightforward. Some money has to be invested in the projects and initiatives that work. There is expertise in this area and the amount of money that is required is quite small. I implore the Government to do all they can to solve this horrendous problem that is afflicting our streets and communities.


3.55 pm

Stella Creasy (Walthamstow) (Lab/Co-op): I am honoured to respond to this debate, which has been organised by my hon. Friend the Member for Westminster North (Ms Buck), both formally on behalf of the Opposition and as an MP who, like many of those who have spoken today, lives day to day with such issues. If there is one message that the Minister can take away from the debate it is that this is not just about public spending. For many of us, it is the life and death of our local communities, and it is our local young people whom we are concerned about. The contributions from my hon. Friends the Members for Harrow West (Mr Thomas), for Lewisham East (Heidi Alexander), and for Hackney South and Shoreditch (Meg Hillier) and from my right hon. Friend the Member for Tottenham (Mr Lammy) recognise very strongly the need and the genuine concern to get this matter right, not just over the next year or so but over the whole generation.

I welcome my hon. Friend the Member for Croydon North (Steve Reed), who has just been elected. He has a strong passion for this issue and, in his former life, made a tremendous difference to the local community in Lambeth.

I think I speak for everyone when I pay testament to the work of my hon. Friend the Member for Westminster North who has displayed a persistent commitment to this issue and to getting it right, too. She is unparalleled in her experience and knowledge of, and passion for, tackling youth violence and gang crime.

Like many Members in this debate today, I have cause to reflect on the young people whom we have lost to these crimes in my local community in Walthamstow—whether they be the young people who have been killed or the young people whose lives have been irrevocably changed by being a victim of youth violence. There were 155 incidents in my own borough last year, and a fatal stabbing after a party just this summer of a youth on the cusp of adulthood. That senseless loss of life has to stop. However, it is a question not just of addressing these issues when we are in a crisis situation—when we have riots on our streets—but of the day-to-day work that needs to go on to turn around the cultures and practices that all too often lead to such incidents.

I encourage the Minister to read the work of John Pitts so that he can better understand the nature of the gangs and of the young people whom we are dealing with in these instances. We should not see all young people, or even the reasons why they get involved in gangs, as the same. The Minister needs to understand why we are calling for a joined-up approach and why it is so important to invest not just in policing but in housing, social care and education. He should also look at the contribution that other parts of Government can make.

4 Dec 2012 : Column 230WH

The Minister may well say that we have had some success in dealing with the issues over the past year and a half, and I agree with that, especially with the introduction of the Trident gang programme in my part of the country. We know just how much crime gangs are responsible for in our local communities—Members have mentioned many of them in this debate. We also know that gangs are responsible for about 14% of rapes, so when we talk about the gender effect of gang crime, it is about not just young girls being drawn into gangs but the consequences on our streets. We know that the Trident programme has made a difference. We have seen a 34% reduction in the numbers of young people being involved in gang crime, and the arrest of 1,500 gang members in London.

The question today is what happens next. The Minister should take away from this debate the fact that we are concerned, as indeed the Centre for Social Justice is, that our first step should be the engagement by the police with these young people, but that cannot be the only one. In particular, the concept that we can arrest our way out of this problem just does not hold true.

I read the report by the Centre for Social Justice and about the funding that is now going into gang intervention work, but I was concerned about the challenges that face some of the organisations involved. For example, some groups are being stopped from applying for funding because they are working with younger potential victims of gang crime. Many Members here today have flagged up the familial links in gangs. We see young people getting involved in the culture through their brothers, sisters, cousins or even next-door neighbours. Their close networks can lead them to be involved in gangs, and we need to stop that before it even starts.

The other problem is that the funding is guaranteed for only a short amount of time, and we all recognise that our problems cannot be resolved speedily. The most crucial aspect of the CSJ research shows that the relationship between the police and young people has got no better, and indeed in some circumstances it has got worse. If we want to turn around young people’s sense of their relationship with the public services—those people who are there to serve them and keep them safe—we need to do a lot more than we are doing at the moment.

That is about a number of factors. First, it is about building resilience. My hon. Friend the Member for Lewisham East spoke admirably about resilience and the ability to tackle life’s challenges without resorting to violence and without feeling the need to join a gang, and about finding a positive identity and positive future for yourself as a young person.

Secondly, it is about understanding where the flashpoints are. My hon. Friend the Member for Westminster North admirably set out where those points of crisis and tension are on our streets, and she spoke about trying to divert young people away from them.

Thirdly, it is about the longer term engagement that we have with young people. Containment of young people who are involved in gangs is simply not an effective strategy. We have to engage with them, and we have to dispel and disperse those kinds of behaviour.

Fourthly, we have to protect the victims. I am very mindful that 70% of young people in London do not feel safe on our streets. That means that they do not feel

4 Dec 2012 : Column 231WH

safe getting on a bus to go to college, let alone walking about their own capital city. We have to address these issues too, because they feed into a culture in which gang violence and youth violence are the norm, rather than something that we must all address.

We recognise that dealing with this issue involves a joined-up approach. I press the Minister to think very carefully about what he can do to bring pressure to bear to tackle some of the bureaucratic problems that many people within our local communities face in trying to address these issues, particularly in terms of housing. We have heard today about some of the challenges that many of our local authorities face in moving people. Moving people cannot be done purely on a borough-by-borough or neighbourhood-by-neighbourhood approach. It needs to go from the grass roots up, but it also needs national support.

We must also learn from the best in the voluntary sector. Many people here today have already mentioned some of the fantastic groups that they work with in their local communities. I have had cause to meet Barry Mizen, and he is an incredibly empowering and impressive man. I have also met representatives of organisations such as the Spirit of London and Bang FM in Harlesden, and I have met many local councillors, such as Councillor Zaffar Van Kalwala in Brent, who are trying to tackle some of these issues at a grass-roots level. Within my own community, there are the Active Change Foundation, Gangs Unite—

Steve Reed (Croydon North) (Lab): Does my hon. Friend agree that empowering communities is a fundamental part of finding solutions to the problems that many of our poorer communities face with high levels of youth violence? Croydon North has an escalating problem of that kind, as youth violence spreads across London from the inner urban areas.

Next door to Croydon is Lambeth, which is of course the borough I was leading until yesterday morning, where a very different and innovative approach, which bears further scrutiny, is being used. It empowers communities to take action and take control of the problem for themselves. It is based on experiences such as the one on the Myatts Field estate, where a group of local parents, who were terrified when their young people started getting involved in gangs, began to take action for themselves with precious few financial or other resources. However, over a period of three years, they were able to get 80 of their young people out of gangs by running a range of activities for them. What the council is doing through a new youth services trust is to give local communities access to public resources to take action themselves. Is my hon. Friend’s view of empowerment models such as that one favourable?

Stella Creasy: My hon. Friend, who is newly elected to Parliament, has just shown why he will be a very powerful advocate for his local community, and he has also shown that he offers a huge amount of expertise on what works in tackling some of these problems.

My hon. Friend makes a very powerful case about empowerment and about working from the grass roots. As I was about to say, I absolutely agree with that approach but it needs resourcing. That is why this issue is about resources. When we consider that we spent

4 Dec 2012 : Column 232WH

£133 million in four days of policing the riots last year, the consequences to the public purse of not investing in those people who are working in the voluntary sector and our local communities who understand and can engage in these ways are huge. The Government have put £18 million in, but that is nothing compared with the 20% cut that we have seen in youth offending team and community safety partnership budgets, the very money that was funding the type of work that my hon. Friend and others here today have talked about.

Finally, I just want to put four questions to the Minister, which I feel he must address. First and foremost is the overriding question that all of us are asking: what happens to those who have been arrested and their families? What happens next? The strategy cannot simply be to deal with that issue on a year-by-year basis. The Government must come forward with a plan to deal with those generations who are affected, including the next generation and those people who are coming out of prison.

Secondly, where will the resources come from so that we can do that? We can all see the savings to the public purse from prevention. We need to see the Government being very clear about where the money will come from to make sure that those prevention programmes are made real.

Thirdly, my hon. Friend the Member for Hackney South and Shoreditch made a very important and powerful case about gang injunctions. Will the Minister commit to review the effectiveness of the proposals about gang injunctions and what they do on the ground, particularly to work on those positive diversionary activities to ensure that we take people out of gangs and into a positive future?

Finally, can the Minister tell us more about what he is doing to bring together other Ministers and other resources from other Departments? Those Departments include the Department for Communities and Local Government; the Department for Culture, Media and Sport, which my hon. Friend the Member for Lewisham East referred to; the Department of Health; the Department for Education; and the Ministry of Justice. Too much money in Government is spent on dealing with the consequences of the failure to address youth violence and gang violence. Can he tell us more about what he is doing to bring those resources together to ensure that we join up our plans, to protect our young people and ensure that the potential that they offer to our communities is not lost but realised?

4.5 pm

The Minister of State, Home Department (Mr Jeremy Browne): Thank you very much, Mr Streeter, for giving me the opportunity to conclude this afternoon’s debate. It is a pleasure to serve under your chairmanship.

I congratulate the hon. Member for Westminster North (Ms Buck) on securing this debate. I remember that about five or six years ago, when she was a Minister and I was a relatively new MP, she was very nice to me—well, she said that I was surprisingly sensible for a Liberal Democrat, which was qualified niceness but nevertheless nicer than I had expected. I will try to reciprocate that positive attitude during my concluding remarks.

4 Dec 2012 : Column 233WH

I just want to give a little bit of context. I do not say this in any way because I take any of the issues that have been raised lightly, but listening to the debate, one might be forgiven for thinking that we are having it against a backdrop of escalating crime in London or across the country. I will respond in a moment to the substantive points that Members have made, but it is worth briefly putting the statistical context in front of the House.

That context is that recorded crime figures show a 14% reduction in homicides in the last year. That is very substantial. Offences involving knives and sharp instruments are down by 9% over the same period. Also, NHS data on hospital admissions for assault, which are a very good indicator of the level of violent crime, including unreported violent crime, show a 6% reduction in the 12 months to the end of March 2012. Members have been good enough to pay tribute to the work that has taken place with the Metropolitan Police Service and other agencies here in London.

Of course there are appalling incidents and we are not complacent. As a Government, we want to try to do everything that we can to reduce gang membership and gang violence, but it is worth noting that there have been successes. There are volunteers and charitable organisations across London and across the country as a whole who should feel proud of what they have achieved; we should recognise that their efforts are reaping some dividends; and we would like even more to happen in the future.

I will divide my comments into three sections: the first is about how we try to prevent gang membership and violence; the second is about how we try to intervene at the crucial point if we fail to prevent gang violence; and the third is about the sanctions that are used afterwards.

I obviously have only a few minutes left to speak, so let me split up the first section on how we try to prevent gang violence. In a way, prevention easily splits into a sort of adolescent stage and a pre-adolescent stage. Regarding the pre-adolescent stage, I hope that Members will join me in Westminster Hall tomorrow when we have a debate about early intervention. That is a very important area and Members will know about the troubled families initiative, in which the Prime Minister takes a personal interest. That initiative is trying to help the 120,000 most troubled families in the country. There is a very high statistical correlation between children being born in troubled circumstances and their going on to experience underachievement, as shown in their employment history, their crime record and their gang membership. There is a certain level of activity through which the Government can intervene in that area.

Members will also know about the Government’s commitment to the family-nurse partnership programme, in which we will double the number of places to at least 13,000 by 2015. So there is a body of early work, and the right hon. Member for Tottenham (Mr Lammy) again mentioned today the importance of even wider social initiatives, such as having more male teachers in primary schools and more role models for boys, and I agree with him on that.

We then get into the adolescent and predominantly male stage; we are talking mainly, although not exclusively, about young men. Members have referred to the Government’s

4 Dec 2012 : Column 234WH

initiative to reprioritise £10 million worth of funding to 29 areas, including areas here in London—every Member who has spoken in the debate, apart from me, represents a London constituency. At least half of that money, so at least £5 million, has been spent on grants that have been given to voluntary groups, and that is not the only funding that has been made available.

However, I should say that I do not think the Government’s commitment to tackling this issue is just measured by how much public spending is devoted to it. There are huge numbers of very good voluntary groups, such as cadets, scouts, sports clubs, church groups and others, that are run by people right across the country and that have a very big role to play in engaging young people and giving them meaningful activity that does not involve gang membership and violence. I therefore reject the notion that the Government’s commitment to the agenda is measured entirely by the amount of public money we spend.

Having said that, we are spending £3.75 million over two years on the communities against guns, gangs and knives programme, £4 million has been made available to voluntary and community organisations working directly in local communities, and—I was asked about this by the hon. Member for Cities of London and Westminster (Mark Field)—we are also providing £1.2 million over three years, starting this year, to improve services to girls at risk of being victims of gangs and sexual exploitation.

Meg Hillier: I have been in the Minister’s shoes, and I am a constituency MP with a strong interest in this matter. He has talked a lot about voluntary projects, but what the Home Office can do apart from providing some funds is rigorously to evaluate what works and to ensure that funding goes only to the projects that work. It should not be sprinkled so thinly that it has less impact than it ought to.

Mr Browne: We are keen to spend the money where it works most effectively. As has been pointed out, it is not just the Home Office that spends it; the Department for Work and Pensions has an innovation fund of £30 million, some of which is spent in this area, and there is another DWP project that helps prisoners on their release from prison. That matter was raised by a number of Members, including the right hon. Member for Tottenham.

The Ministry of Justice is leading some interesting pilot studies on payment by results, looking at how we can incentivise prisons more effectively to reduce the terrible reoffending rates, which the right hon. Gentleman mentioned. He also talked about work in young offenders institutions and adult prisons, and he specifically mentioned Feltham young offenders institution, which has joined together with the Islington youth offending team to deliver a specialist programme for gang members in custody. There is a lot of excellent work such as that, large parts of it directly supported, and in some cases funded, by central Government.

Ms Buck: I have been listening closely to what the hon. Gentleman has said, and he has not yet answered the question that I and my hon. Friend the Member for Walthamstow (Stella Creasy) put to him: will the ending gang and youth violence funding from the Home Office,

4 Dec 2012 : Column 235WH

which is delivering so much of the anti-gangs strategy at the moment and is due to expire in March 2013, be continued at least at its present level into 2013-14?

Mr Browne: Let me address that point, and the initiatives that we have carried out, in the remainder of my speech. It is relevant to the third part of what I hope to tell the House.

Let me address the funding first. I am not in a position this afternoon to give guarantees on funding for future financial years. The funding was never made available on the understanding that it would be available indefinitely. We want to plant seeds and allow trees to grow. There is a lot of voluntary activity of which we are very supportive, and community safety budgets are being de-ring-fenced and will be spent by police and crime commissioners or, in London, by the Mayor’s office. They might choose to spend more money in this area than has previously been the case, but we are not in a position to second-guess elected police and crime commissioners, including Labour ones, who might or might not spend more, depending on their priorities.

Mark Field: Although the Minister is absolutely right to make the case that none of the funding was to be indefinite, does he not accept that where a local authority, such as Westminster—I am sure this applies in other areas, from Hackney to Haringey and elsewhere—has successful programmes in place, it would be sensible to continue elements of the funding to ensure that we get the right outcomes?

Mr Browne: We are keen to ensure good value for money, and that is what the Government will try to achieve with the huge amounts of public money we are spending. I am pleased that crime levels are dropping dramatically, and we want them to continue to fall, which is why we are also bringing forward measures such as the ones introduced just yesterday that will allow for more severe penalties for knife possession. Such sentences were not available in a mandatory form under the previous Government. We have new initiatives on injunctions, which we believe are very positive, and I will take forward the point made by the hon. Member for Hackney South and Shoreditch (Meg Hillier) about the positive as well as the negative use of injunctions. We have a reasonable story to tell, and we want to make further progress in the years ahead.

4 Dec 2012 : Column 236WH

Remploy Factories

4.15 pm

Mr William Bain (Glasgow North East) (Lab): It is a pleasure to serve under your chairmanship once again, Mr Streeter, and to have secured this debate on behalf of Remploy workers and their families in my constituency and across the country.

Tomorrow is the day of judgment for the Chancellor’s failure to grow the economy, but today is the day of decision for this Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey). The honour of serving in the Government comes with responsibilities, and the hon. Lady and her colleagues must accept that it is not just the Chancellor’s fiscal and growth policies that are not working, but her Department’s strategy on long-term unemployment among the disabled, which has been worsened by the short-sighted and ruinous decisions to close 31 Remploy factories across the country this year. Now, 46 jobs in the Springburn Remploy factory in my constituency hang in the balance, and it is to those dedicated workers that the Minister must give hope, and clear answers, today.

The Minister will no doubt remind me that there have been Remploy factory closures before, under different Governments, but the economic, and particularly the employment, climate are now very different. This is the longest journey out of an economic slump for 140 years, with median wages in Scotland falling by 7.9% in the past two years. We need only look at the closed stores on our high streets to see the effects that the lack of demand is having on the spending power of local communities. If unemployment in general is far higher than it should be, nearly four years from the low point of the recession, how much worse is the picture for disabled people?

There are 63,000 more disabled people out of work than a year ago, and 554,000 of them out of work in total, which is a record high since figures were separately allocated for the disabled.

Jim McGovern (Dundee West) (Lab): I congratulate my hon. Friend on securing this very important debate. I have visited the Remploy factory in my constituency so many times now that I am on first-name terms with almost all the members of the work force. They seem to be a happy work force. They are happy to stay where they are and do not wish to go elsewhere. Does my hon. Friend not agree that it seems a perverse Government policy to throw disabled people on to the dole, against their wishes, and then tell them that if they do not find alternative work they must work for nothing or have their benefits cut?

Mr Bain: Absolutely. My hon. Friend highlights precisely the complete lack of logic in the proposals, at this time when the disabled, young people and people in long-term unemployment are encountering the toughest employment conditions in decades.

Mr Jim Cunningham (Coventry South) (Lab): We have Remploy in Coventry, and it is one of the most profitable organisations there are. It has contracts with Jaguar and Ford, and if a factory can get such contracts

4 Dec 2012 : Column 237WH

and drive hard bargains it is doing very well. The tragedy, which anyone who has met these people from Remploy knows, is that within days they were sacked, and some of them will never work again. The Coventry plant operates like a normal factory as, I am sure, do others. It is amazing. They have their own representation. What is being done is short-sighted and, more importantly, it shows the true face of this Government.

Mr Bain: Indeed, and the Government should be looking at the application of procurement rules, striving every sinew within the Cabinet Office, the Treasury, the Scotland Office, the Northern Ireland Executive and the Welsh Assembly Government to ensure that good industries such as these have the accessibility to public service contracts that would give them a good long-term future. That is one of the things that I will be asking for later.

The Minister, perhaps inadvertently, revealed the real picture when I last secured a debate on the topic in this Chamber: of the 1,021 disabled workers sacked by Remploy and this Government in their closure programme of this year, a mere 35 have found other work. Will she be able to update us on the most recent figures when she winds up?

Gloria De Piero (Ashfield) (Lab): The issue cannot be divorced from the economic situation that we are in. In the areas where the factories are based, 17 people are chasing every job. Does my hon. Friend agree that this is precisely the wrong time to cut disabled workers adrift?

Mr Bain: I entirely agree with my hon. Friend.

Those 35 people are not in jobs of equivalent pay and skills to the ones they had with Remploy; they are the only 35 people who have got any work at all. Additionally, the Work programme is placing only 2.5% of long-term jobless people in my constituency, and less than 4% across the country, into sustained work.

To have any chance of producing a solution to the crisis, the Minister must recognise the true problem: the economy is too weak and long-term unemployment is soaring. Some 1,320 people in my constituency alone are long-term jobless. Vulnerable groups such as the young and the disabled are suffering the most. The OECD has shown that a disabled person is twice as likely to be unemployed as a non-disabled person. It is clear from the figures so far that the Minister’s plans for Remploy workers, and for the disabled as a whole, are not working.

The reality is that the longer someone is out of work, the lower their chances are of finding another job. So instead of doing nothing, the Minister should be redoubling her efforts to help disabled people in long-term unemployment get jobs now. It is unacceptable to plough on with a failed strategy that simply consigns sacked Remploy workers to near certain long-term unemployment, and crushing poverty, as a result.

In the spirit of constructive engagement, I offer the Minister a plan out of the hardship that the closure programme is inflicting on disabled workers across the country. First, given the ways in which I have shown it is increasingly hard for the disabled to find new work,

4 Dec 2012 : Column 238WH

the Minister should announce today a moratorium on any further factory closures in phases 1 and 2 to lift the threat from 18 other Remploy factories in communities such as Clydebank, Cowdenbeath, Dundee, Stirling and Leven, as well as in Springburn.

Secondly, I ask the Minister to convene an urgent working group, to report by the end of the year, composed of officials from her Department, the Scottish Government, Glasgow city council, Scottish Enterprise, trade unions and other representatives of the disability and local business communities to help locally elected politicians draw up plans to save the Springburn factory.

Thirdly, I ask the Minister to engage specifically with the Scottish Government to build on the commitments made by Minister Fergus Ewing in Holyrood last Thursday to introduce a proper strategy to support Remploy staff in Scotland and those who have already lost their jobs but not found new work, as the Welsh Assembly Government and the Northern Ireland Executive have already done.

Fourthly, the Minister should ask ministerial colleagues to review the application of public procurement rules, particularly the application of article 19, and to draw up plans for how supported employment workplaces can more effectively win Government contracts and secure their long-term futures. The Springburn factory makes high-quality wheelchairs for the NHS, but it has no long-term relationship with the NHS in Scotland or with Government agencies at UK level.

Finally, given the disastrous conduct of the tendering process in relation to the Springburn factory, the Minister should order an inquiry into what went wrong, why the process collapsed and how the hopes of workers were raised last month only to be so cruelly dashed by her letter of a few weeks ago. In particular, she needs to provide answers to questions being posed by workers at the factory and by one of Scotland’s major newspapers.

Last Wednesday, the Daily Record reported that Remploy Healthcare entered a deal with R Healthcare, otherwise known as R Link, in July 2011 to take over the “front end” of the business, including

“the sales, marketing and distribution of Remploy’s healthcare products.”

There are many people who believe that that contract may have endangered the probity of the tendering process for the sale of the Remploy Springburn factory. Workers at the factory believe that the contract, which was not made public at the time, sealed their fate as long ago as last year.

Will the Minister tell the Chamber why there has been such a lack of transparency on the existence of those contracts? How can she ensure that this tendering process and future tendering processes will operate on a level playing field for other potential buyers of the Springburn factory and any others? She will be aware of the concerns of Greentyre and other potential bidders—they felt excluded from the tendering process because of the link with R Healthcare. Why were the contracts kept secret only until the decision to close the factory was announced? Why has her Department refused my freedom of information requests on those contracts? The reply refusing the request was sent on the same morning as the confirmation that the factory would close. Does she really believe it reflects well on her Department that R Healthcare is planning to keep Remploy’s wheelchair

4 Dec 2012 : Column 239WH

order book, and to benefit from the business that will be released thereby, after dumping all the workers and closing the factory?

The Minister will remember from when we debated the issue previously that if the factory had been sold, the workers would have benefited from the protection of the TUPE regulations. If any workers are taken on by Haven, R Link’s subcontractor, they will not benefit from the protection of TUPE, which is the difference. If workers are fortunate enough to be re-engaged, they might be hired on markedly poorer terms and conditions. Such asset stripping should not be worthy of contracts issued under the aegis of her Department.

Mr Jim Cunningham: What my hon. Friend has revealed is nothing short of scandalous. Having said that, will he include the affected factories in Coventry and the rest of the UK in his proposals to the Minister?

Mr Bain: Absolutely. My hon. Friend is entirely right that, given the scale of the disaster being faced by people in the disabled community, the only answer is for there to be a moratorium so that this incompetent Government can produce a strategy for disabled employment that actually works.

Jim Shannon (Strangford) (DUP): I congratulate the hon. Gentleman on bringing this matter to the House. Does he feel that perhaps this is the time for the Government to introduce a strategy that works alongside shops that need certain types of goods and alongside private enterprise so that the expertise of Remploy factories across the United Kingdom can be used for the good of the factories and the workers?

Mr Bain: I entirely agree with the hon. Gentleman. When I speak to workers in Remploy factories, it is clear that what they want is a level playing field, which comes down to public procurement rules and the proper interpretation and application of article 19 by the Government and other agencies. That would do a huge amount to secure a long-term future for factories that are able to stay open.

I specifically ask the Minister whether she sought advice from the Attorney-General on the propriety of the tendering process at the Springburn factory. Did she seek any advice about the possibility of a conflict of interest following the emergence of the contract between Remploy and R Healthcare, given that R Healthcare was the initial preferred bidder for the Springburn Remploy factory?

As with the Work programme, the pattern emerging with the Government is that public money is being handed over to private companies in outsourcing deals in which the private companies are the major beneficiaries. Are the internal audit procedures of the Minister’s Department satisfied that the contracts offer value for money to the taxpayer?

Surely with such a flawed process the only fair answer, so that Remploy employees in other factories under threat of closure can have confidence in the integrity of the tendering process, is for the entire closure programme to be halted so that an inquiry can be conducted by officials in the Minister’s Department. Is the Minister confident that the contract that has been revealed can withstand scrutiny if referred for investigation to the

4 Dec 2012 : Column 240WH

Public Accounts Committee? I have written to my right hon. Friend the Member for Barking (Margaret Hodge) about the matter this afternoon, seeking her advice on whether such a reference may be made.

I urge the Minister to think of the human cost of her actions or inaction today. I ask her to think what it would be like across the Christmas dinner tables of Springburn Remploy workers, with nothing to look forward to but near certain joblessness next year, and how much their families will suffer with them in the new year. How much more economic demand will be sucked out of my local community, and other local communities potentially affected by further factory closures, as people move from spending wages and paying taxes into the system to struggling on benefits with their spirits sapped?

I also urge the Minister to consider what will happen to Simon Yearling, a 35-year-old with Down’s syndrome, who has worked for 13 years in the Springburn Remploy factory. He is now under threat of the sack next year and, if he cannot find another job next year, could even be sent on an unpaid work placement on the threat of losing 70% of his disability benefits under the Government’s new rules on mandatory work placements introduced this week. Did his 68-year-old father not sum up the harm that this Government are doing to the fabric of our society when he said:

“If society can’t find some slot for the disabled, then society is in a poor way”?

Governments work in this country when they make decisions on the basis of evidence and compassion for those whom they serve. The evidence is in, and the results are clear: this Government’s plans for current and sacked disabled Remploy workers are failing badly. They need to change tack now, if we are to escape avoidable suffering and the biggest waste of all—the enforced idleness of productive, skilled and talented people in our society. The Minister has an opportunity to signal that change today and avert a terrible injustice to nearly 50 hard-working disabled people in my constituency. I hope she will take it.

4.32 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): It is a pleasure to serve under your chairmanship today, Mr Streeter. I thank the hon. Member for Glasgow North East (Mr Bain) for expressing his concerns passionately today. I hope that we have a constructive dialogue. I will bring him up to speed on everything that has been happening and that we have been doing on a daily basis. He and I have met and have spoken on many occasions, and I know how strongly he feels about the issue. I hope that he will give me credit for feeling as passionately and strongly as he does on the issue, and for working on it with my colleagues every day.

I shall start at the beginning—as they say, that is a good place to start—so that I can explain how and why the changes have come about. Obviously, amnesia has occurred among the Opposition about the closures, and the uncertain future, which have been going on for many years. In 2008, 29 factories were closed. A modernisation plan was put in place but failed, having set overly ambitious targets that were never achieved. As such, the factories became increasingly loss-making and their future became more precarious, which left all

4 Dec 2012 : Column 241WH

staff in a vulnerable position. The future must be about finding jobs for the employees and supporting them into mainstream employment. The issue is about sustainable jobs and a future with a job. That is precisely what we are trying to achieve.

The Government have committed themselves to protecting the budget of £320 million for specialist disability employment support. Governments of both parties have looked at the money going into Remploy factories and their future capability. One sixth of the entire budget has been going to Remploy factories, to 2,200 disabled people. Actually, there are 6.9 million people with disabilities of working age. We must look at what is best for all those people.

The hon. Gentleman gave incredibly negative figures, which I did not quite recognise. Remploy employment services, a different part of the organisation, has managed to find 50,000 jobs since 2010 for people with disabilities. In his constituency, 263 jobs were found in the past year. There are 44 disabled people in the Springburn factory, but we have to look at who we can help—and how best we can help them— among the 12,700 people with disabilities.

Without a shadow of a doubt, I understand how unsettling it must be for the people at Springburn, and that is why we have put in place a special £8 million package for personal help and support. It is the first time that has been done. No one tracked the staff in 2008, and no one put in a special package for them. There was no inadvertency when I mentioned the number of people from Remploy who had jobs. I answered accurately: the number was 35 people when we last met. I have been working on the matter daily, and I hope that the hon. Gentleman will be pleased to know that in the past few weeks, by changing on a daily basis, by looking at what has worked and by following best practice, we have quadrupled that to 129 people in employment. I am not saying that that is the best we can do, but by learning every day, we have considerably improved the number. Trust me—I will be following it up, and the number will get better.

Mr Bain: I do not doubt the Minister’s sincerity, but clearly, she must acknowledge that her plan is not working. The number of disabled people who are out of work is 63,000 higher now than it was a year ago. I welcome the fact that 11% of dismissed Remploy workers have now found some work, but what she has just announced does not scratch the surface of the jobs disasters for the disabled that she is presiding over. She must accept that.

Esther McVey: I do not accept that. I have explained clearly how many people we have found jobs for in the hon. Gentleman’s constituency in the past year and what we have done since then. Since the general election, 1 million new jobs have been created by the private sector. As I have said, the issue is about sustainable, long-term work.

I will give examples of what some Remploy staff have been doing. The numbers might be small, but they show that things are developing. Four former Remploy employees have set up their own co-operative business to undertake sewing machine working. They are now registered as a

4 Dec 2012 : Column 242WH

company and have been given advice and specialist training. They are opening their factory in Aberdeen. In Wigan, Red Rock Data Processing Services has started. It was set up by ex-Remploy managers, who have so far recruited two ex-staff in management positions. By Christmas, 16 people will be employed. In Oldham, four ex-employees have found work with Dekko Window Systems. People have also found work at Cornwall college in Camborne near Penzance, at Hayman Construction in Plymouth, and at Asda.

What we are seeing is what disability experts had envisaged: the issue is about mainstream work and having people work and fulfil their potential in every way. Where Remploy factories can remain viable, they will do. Where they can be bought out as co-operatives, they will be. Where we can have people working in mainstream work, we will support them as best we can.

Jim McGovern: The Minister has not yet covered procurement, but she has mentioned sewing machines. The Remploy factory in Dundee is based on textiles and fabrics and on manufacturing uniforms—

Mr Gary Streeter (in the Chair): Order.

4.39 pm

Sitting suspended for a Division in the House.

4.51 pm

On resuming

Mr Gary Streeter (in the Chair): Order. Mr Jim McGovern is about to finish his intervention.

Jim McGovern: I did not realise that the Division bell had gone and I thought that I had said something out of order, so I am delighted to be called again.

The Minister was mentioning some of the functions in various factories. The Dundee factory is based mostly on textiles and the manufacturing of uniforms, and I hope that she will accept my invitation to see it at work. I have had discussions—

Mr Gary Streeter (in the Chair): Order. There has been ample time for the intervention, if both parts are taken together, so I will allow just one more sentence.

Jim McGovern: I ask the Minister to make representations about uniforms to the Minister with responsibility for procurement, the hon. Member for Mid Worcestershire (Peter Luff), so that they can be produced in Dundee.

Esther McVey: I will indeed visit as many factories as I possibly can. I have been to several, and I have been up to Scotland recently—up in Edinburgh—so if I can and time permits, I will visit. Regarding procurement, I believe that a different Member now has that responsibility, but I will have a word with the relevant Minister.

Some right hon. and hon. Members have expressed concerns about the commercial process, but I am now satisfied that the Remploy commercial process has been open and transparent. It was published on 20 March on the Remploy website, which has communicated the outcome of the process at all stages and continues to do so. In the light of the assertions made by MPs, MSPs

4 Dec 2012 : Column 243WH

and the trade unions, I sought absolute assurances from the Remploy board that the commercial process for stage 1 was operated as published and that it allowed an equal opportunity for interested parties to submit a proposal for consideration. It is important to note that any assertions made—from all those who have made certain allegations—included no evidence of malpractice or wrongdoing as part of the commercial process.

The assurances provided by the Remploy board confirmed that: the commercial process was consistently delivered with equal opportunity for all interested parties, including in excess of five months for bids to be developed and submitted; the current preferred bid for Remploy Healthcare, excluding Springburn, remains the best value bid as a result of the commercial process; and the preferred bid will preserve the ongoing employment of 30 employees. The process was developed using expert advice on its design and structure, taking into account the need to ensure that employees and employee-led groups had an opportunity to take part actively and to develop robust bids. An independent panel was set up to provide independent assurance to the assessment process, because we recognised the need to ensure that proposals were robustly assessed. The panel played an active part in the assessment of bids at all stages of the commercial process.

To encourage employees and employee-led groups to take advantage of the opportunity, the Government made funding available, up to a maximum of £10,000, to be used for expert advice and support in developing proposals. The Government offered a time-limited, tapered wage subsidy, totalling £6,400, to successful bids for each eligible disabled member of staff as part of Remploy’s commercial process, again seeking to support the ongoing employment of as many Remploy disabled employees as possible. The offer of the wage incentive was a direct result of Remploy’s and the Department’s response to a number of proposals and of issues that were raised by bidders during the commercial process. To reflect such additional support, we extended the deadline for the submission of business plans, adding an extra three weeks to the time line.

Remploy’s preferred bidder for its Springburn factory put in bids for Springburn and for another of Remploy’s sites at Chesterfield. Unfortunately, Remploy has been advised by the preferred bidder that it no longer wishes to proceed with an offer for the Springburn site. There were no other viable bids for the factory, so it will now close. Remploy’s preferred bidder is, however, saving jobs at Chesterfield. The jobs saved might not be as many as people hoped for but, nevertheless, they are saving jobs. Without that bid, we are uncertain if there would have been a viable bid for Chesterfield. The design of Remploy’s commercial process has maximised the potential of the bids and proposals for the factories concerned but, clearly, that is not the end of the process.

4 Dec 2012 : Column 244WH

As with the factory in Wigan, where a new company has emerged, and in Aberdeen where a social enterprise has started, we are asking people to come forward with other bids and offers on how they would like to see the future of their Remploy factories, including Springburn.

I am grateful to hon. Members for raising the issues and for giving me the opportunity to set out what we are doing, how we are doing it and how best it can be done. I will continue to keep the House up to date with further developments for Springburn and other factories.

Mr Bain: For the record, can the Minister confirm whether she is happy to reopen the tendering process for the Springburn factory to allow other potential bidders to come forward? Given that, can she guarantee that no notices will be issued to workers before Christmas?

Esther McVey: The commercial process, which was robust and has been carried through, will not be reopened. As I explained, however, there is an opportunity now for people to come forward with their best and final offers, as with Aberdeen and Wigan. Equally, should Greentyre—as mentioned by the hon. Gentleman—wish to come forward, it may bid for the factory. That is what we are looking for and what we are doing with other factories.

The hon. Gentleman also mentioned article 19. Previous modernisation plans assumed a 130% increase in the Government procurement rules under article 19 but, in reality, that did not happen. Article 19 allows the use of sheltered employment to deliver services, but it has to be done in the context of value for money. If use of article 19 does not deliver value for money, it is not valid.

I hope that I have answered all the hon. Gentleman’s questions.

Mr Jim Cunningham: Will the Minister give way?

Esther McVey: We have a couple of minutes left, so I will take the intervention.

Mr Cunningham: Can the Minister publish the figures on people who have been made redundant from Remploy and found employment?

Esther McVey: I believe those figures are in the public domain. If they are not or if the hon. Gentleman needs clarity about them, I can provide them or break them down by factory.

If there are no more interventions or requests, I will come to a close. I know that the process will be long and that we are all passionate about the issue because we all want to see the best solution and conclusion possible but, as I have said in the past, all channels of communication are open. Not only do I meet with MPs, trade unions and MSPs, but I also work with ex-employees of Remploy.

4 Dec 2012 : Column 245WH

Extra-statutory Concession A19

4.58 pm

Nigel Mills (Amber Valley) (Con): It is a pleasure to serve under your chairmanship today, Mr Streeter. I can assure you that we are discussing a tax issue and not a road or an aeroplane, which is probably a relief to the Treasury Minister responding.

Several of my constituents who sought to make use of the A19 concession have expressed concerns after, in their view, being unreasonably denied. For the record, that is the concession whereby if a taxpayer has underpaid tax because the Revenue failed to use information that it was provided with in a timely way, it can agree not to collect that tax from the individual. That is particularly relevant when collecting that tax, which may cover several years, would cause hardship to the individual. The most severe cases I have seen are those involving pensioners who have been presented with a sizeable bill.

I want to raise three aspects this afternoon. The first is how HMRC currently applies concession A19 or, in many cases, does not apply it. Secondly, I wish to ask what an appropriate appeal or review process for those decisions might be. Thirdly, I will say a few brief words about HMRC’s consultation on changing the concession from next year.

The easiest way to illustrate my concern is to talk through the case of one of my constituents. I will not name him for confidentiality reasons, but he had a job working in a factory from 1997. In 2001, he started to receive an occupational pension from a previous job. Everything worked well, and his tax was collected accurately, his employer had a coding notice with his personal allowance, and his pension was taxed at the basic rate.

Everything worked fine for five years until June 2006 when, for reasons unbeknown to the Revenue and certainly to my constituent, it decided to change the tax code for the pension, effectively giving him a personal allowance on two sources of income. That went undetected until February 2011 when, following a reconciliation process, the Revenue sought to collect the tax from my constituent for the previous four tax years—a bill of £5,000.

The Revenue issued the demand to my constituent, and did not think to go after either his employer or the pension fund. I believe that the pay-as-you-earn regulations state that in the first instance the Revenue should go to the employer if it believes that it has misapplied the rules. It would be helpful if the Minister confirmed that that is his understanding of the process. It does not happen often, sadly.

My constituent eventually took advice from a local firm of accountants, which advised him that concession A19 might apply. However, the Revenue rejected that on a couple of occasions, and there is concern about the thoroughness of the review and the fairness of the summation of facts. It rejected the application because its only failing was that it had not reviewed forms P14 and P35 provided by the employer and the pension fund and realised that the personal allowance was being used twice. Its reason was that the purpose of the forms is not to inform the coding notice process, as required by the wording of statutory concession A19.

That logic is bizarre, because the best information that the Revenue receives to decide whether someone is paying the right tax is those two forms, which all

4 Dec 2012 : Column 246WH

employers must file within so many days after the year end, and I suspect that that is how the Revenue has reconciled people’s tax affairs manually in the past. I think it now uses the information electronically to make that reconciliation, so I struggle to see much logic in saying that the information about what an employee has earned in a year and what tax they have paid is not relevant to the coding process. That process is designed to find out what income and benefits someone has had in previous years, and to work out what tax they should pay in the next year and therefore what code they should have. The issue has been raised with the Minister by the Association of Taxation Technicians, the Chartered Institute of Taxation, and the Institute of Chartered Accountants in a letter that they sent him in August.

The Revenue’s other argument was that the taxpayer should have understood that the coding notices were wrong. That is even more bizarre, because it was arguing that my constituent had started his employment in 2005, not 1997, and that his employer had never told the Revenue that he was working for it, so it did not issue any coding notices. That was all complete rubbish, because he had been employed for much longer, and the employer had issued coding notices, which had been applied correctly.

It is strange that in its letter the Revenue said that my constituent should have been able to work out that he was receiving two personal allowances by comparing the one coding notice it thought he had with his payslip or P60. That was surprising. The Minister and I might just about be able to work out how our tax code has been arrived at, and to divide it by 10 and add a random letter at the end depending on whether we owe it money or not, but I suspect that when benefits are added the process is much harder, and it is not easy for an ordinary member of the public to work out what a coding notice means. The explanation of how various adjustments are calculated is not clear, and to expect someone to do that by working back from a tax code that they might spot on their payslip is somewhat unreasonable.

Jim Shannon (Strangford) (DUP): I thank the hon. Gentleman for highlighting this issue. As an elected representative, I have had to deal with several A19 concessions in the last few years. I have been successful with most of them, but the one thing that keeps coming through is that people are not aware of the concession. Does the he agree that HMRC should publicise it more?

A record is taken of telephone calls and registration in every case, and that should show that people have expressed concern over a period. That helps when someone applies for an A19 concession, and they may receive the concession and a reduction in payments. Some of the people I have dealt with owed £7,000 or more, which we got reduced.

Nigel Mills: I agree with most of what the hon. Gentleman says, and I will come to some of his points. My constituent was not as lucky as those he helped, because he had no idea that his tax affairs were wrong. He was receiving two sources of income, and tax was being taken from both, so he did not realise that a mistake had been made sometime during the process. One could argue that he should have realised that his income had increased slightly, but the impact was not hugely significant on a weekly or monthly basis.

4 Dec 2012 : Column 247WH

Such matters are complicated when personal allowances change every year, and recently they have rightly been changed by quite a lot every year. If someone’s income fluctuates because they are working overtime, they might not notice that their weekly pay is £25 different from what it would be if the tax was deducted correctly.

We must be careful about expecting people in this country who do not have to file tax returns, and who do not generally have dealings with the Revenue, to understand what the complicated bits of paper that come through their door mean. If we base a system on relying on people understanding, we must make sure that what they receive is clear and complete, so that they can work through the calculations and understand where they are wrong. That is not the case with the current coding notice.

My constituent’s advisers and I thought that his experience had met all the requirements for an A19 concession. It had continued for several years, and the fault was clearly not his but either his employer’s or, more likely, the Revenue’s because he had been in the same continuous employment for much longer than the Revenue seemed to realise. Even if HMRC thought it was the employer’s fault, it made no effort to make contact with that employer while it existed. Sadly, it ceased to exist in mid-2011, about six months after the issue came to light.

To the adviser, it looked as if the Revenue was just refusing to accept an A19 claim based on a new policy that it should resist more such claims. The purpose of the concession is to provide fairness in the system if something goes wrong for an innocent victim. Yes, they should have paid the tax and, yes, they have received money that they should not have had, but if that has gone on for several years there might be severe hardship if they were required to find that money several years later. I suspect that we all believe that that concession is right, and it is important that it is applied consistently and fairly, and that people understand when it should and should not be applied. I am not sure that that is the case now, and perhaps that is why the Revenue has considered redrafting the concession, although there is significant concern that the redrafting will not help the situation much, which I will come to.

If an individual goes to the Revenue and has their request turned down, they have almost nowhere to go. It does not count as a tax assessment in the Revenue’s view, so they cannot appeal through the normal tribunal system. The only option is to make a complaint and go to the adjudicator, but even that is not ideal, as the adjudicator is only allowed to make recommendations to the Revenue that are consistent with the law or its own internal policy. Unfortunately, I do not think that the Revenue has even published all its internal guidance, although I am aware that some freedom of information requests have been made for details of the grounds for refusing A19 claims. It is hard to think that there is much chance of success when someone’s only route can be turned down if it is inconsistent with guidance that they have not actually seen.

Does the Minister have any ideas on how we can end up with a proper independent review of some of these cases? R.E. Clark v. HMRC was a tax case in which Mr Clark tried to make a formal appeal based on the P800 assessment notice that he had received being some kind of informal assessment. Interestingly, at the first

4 Dec 2012 : Column 248WH

stage, the judge hearing the appeal refused to accept HMRC’s request to dismiss it out of hand. Probably luckily for Mr Clark—although it not so good for us—the case was settled out of court and we did not see how the tribunal would have taken it. This is an issue of fairness. The concession is a policy that we think should exist, and it is important that a clear, impartial review is available, so that when HMRC has perhaps not come to the right answer, a clear resolution can be found.

The final topic I want to raise in the time that I have left is the recent consultation, which was intended to make the issue clearer. In some ways, it is possible to become cynical after a few years of doing this; clarity appears to mean that a document goes from being two thirds of a side of paper long to more than three sides. Greater length may make things clearer but it can also add a lot more complexity, ending up with a lot of references that have to be chased around, and I am not sure that that makes things clearer.

The consultation raised a more fundamental concern, which was that the new words seem to restrict the application of A19 in future. It is not just a clarification but a restriction, and it seems to impose a duty on taxpayers to ensure that their tax code is correct and up to date, which implies a continuing duty for people throughout every tax year to ensure that nothing is changed, and that their car benefit has not gone up, or whatever else. That is an onerous position to put people in. We all hope that with real-time information and more regular reconciliations, we will not see the sort of situation that we saw in 2010, when several years were unreconciled. The ongoing reconciliation process has been throwing out errors, and we hope that in a year’s time, when things are done in real time, no more people will face the hardship of getting a multi-year tax demand. However, if we are going to have this thing in place, it needs to be clear and only impose realistic burdens on taxpayers. It is right that we all try to understand our tax affairs and check things that come to us, but where things are complicated and the mistake is the Revenue’s, not ours, we should allow the concession to be in place.

I hope that the Minister will help me and my constituent to understand whether there has been a change of policy by the Revenue in how it handles A19. Has an instruction been sent out centrally? An article in Taxation a few months ago seemed to allege that the instruction was almost, “Thou shalt not agree any of these and if any of you do, you will get some kind of action taken against you.” I suspect that that was a little exaggeration, but it was what the article suggested. It would be helpful if the Minister could give us some data on how many A19 applications have been made in recent tax years and how many have been accepted and rejected. I suspect that he may not have that information to hand, but if he could let me have it in writing, that would be helpful, as it would show whether there has been a trend in the last year or so for a lot fewer of them to be approved.

Finally, will the Minister confirm that what the Revenue should do in PAYE cases is go after the employer first when it is their mistake, and only then going after the taxpayer if they are somehow jointly at fault or if there is some reason why the employer cannot be pursued? Various answers would bring much greater clarity to the situation and help people who get caught in this sort of mess.

4 Dec 2012 : Column 249WH

5.14 pm

The Exchequer Secretary to the Treasury (Mr David Gauke): It is a great pleasure to serve under your chairmanship again, Mr Streeter, and I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing the debate. Once again, he is bringing to the attention of the House his knowledge and expertise of the tax system and representing his constituents so well on a number of matters. He does so today with regard to the extra-statutory concession A19, and the debate has been helpful. I am grateful for the opportunity to respond, and I hope to be able to address his questions.

Before doing so, it is worth recognising that HMRC has made considerable progress in modernising the PAYE system and bringing the legacy issues for PAYE customers up to date. The national insurance and PAYE computer system—NPS—became operational in early 2010, enabling HRMC to bring all taxpayer records on to a single national database held under unique references. For the first time, HMRC has been able to bring together all sources of income for a customer under one reference. Although I know that there were considerable problems with the implementation of NPS, now that it is fully automated, it is a very cost-effective process that enables HMRC to reconcile nearly 60 million PAYE tax records very quickly.

In October 2010, HMRC’s late chief executive, Dame Lesley Strathie, made a commitment to the Public Accounts Committee, in response to an NAO recommendation, that HMRC would bring PAYE up to date for taxpayers by the end of 2012-13. It is on track to deliver on that commitment and it has already settled 17.9 million unreconciled customer records. As a consequence of those improvements, in the last two years, the number of unexpected tax repayments and demands issued by HMRC has been higher than usual, and in turn, that has led to an unprecedented number of customers contacting HMRC for help and advice. HMRC recognises that on occasions its customer service has fallen short of the standards that it wants to provide. HMRC has taken steps to improve its customer service over the past year—for example, by investing in its contact centres—and it is making customer information more accessible and easier to understand. It recognises, however, that there is more to do, and it is building on this year’s improvements to give all taxpayers the services that they rightly expect.

A significant proportion of the complaints that HMRC has received relate to HMRC’s implementation of ESC A19, and HMRC consulted on the operation of the concession over the summer. It has listened to the views of taxpayers and to comments in the media. Its current operational process was developed in response to the exceptional circumstances of 2010, when steps needed to be taken to ensure that the 166,000 requests that it received could be dealt with quickly. To respond to a question raised by my hon. Friend, from September 2010 to 31 March 2012, HMRC received 166,000 claims to the value of £185 million, and 41,766 of those requests were successful, at an estimated value of £53.7 million.

HMRC looked to deal with those matters as quickly as possible, creating a dedicated team and a streamlined process that included a more relaxed approach to the reasonable belief test during 2010 and 2011. It also raised the collection threshold to £300, and as I said in my statement to the House in January 2011, HMRC would not reconcile the tax affairs of 250,000 pensioners

4 Dec 2012 : Column 250WH

for whom we believe a request under the concession would have been successful. HMRC recognises that there is much more that it needs to do to improve its implementation of the concession for the future. There is work in progress to deliver process improvements and better guidance for officers dealing with requests, and particularly to improve the service for those customers who will always need help understanding and managing their tax affairs. That work is specifically aimed at reducing the number of customer requests that become formal complaints.

At this point, it may be helpful if I try to respond to some of my hon. Friend’s specific questions. He asked whether HMRC had published all the internal guidance on ESC A19. HMRC has published all guidance except where it considers that publication of the decision-making process that it uses to determine the reasonable belief test would prejudice its application. If HMRC published certain items, all cases would be phrased in a particular way to meet it. That would not be helpful, but that is the only reason why guidance would not be published.

HMRC has not changed its policy on ESC A19. HMRC has been looking to improve its consistency of decision making in these cases. Taxpayers have an appeal route to the Revenue adjudicator if they cannot agree the position directly with HMRC. Perhaps it is worth saying a word or two about that appeal route, which was raised by my hon. Friend. If a claim is refused, the taxpayer can request a second review. The taxpayer can make a formal complaint to HMRC. The taxpayer can then request a review of the formal complaint decision. The taxpayer can ask the adjudicator or ultimately even the parliamentary ombudsman to conduct a review. It is correct to say that there is no statutory right of appeal to the tribunal. That point has been tested with the tribunal, and that was the conclusion reached in that case.

Of course, HMRC has a responsibility to collect the tax correctly as prescribed by Parliament. ESC A19 is a concession that applies where HMRC has not acted in a timely or accurate way, but clearly there is not complete flexibility for HMRC to agree not to collect the tax that is due.

My hon. Friend asked whether, in some cases, the matter should be taken to the employer or pension provider first, rather than going to the taxpayer. HMRC has a process that allows it to approach both the employer and the taxpayer at the same time. In the majority of cases, a review under ESC A19 can be conducted quite quickly to establish the nature of the error. HMRC is happy to discuss individual cases with taxpayers if the taxpayer feels that it is their employer who has made the mistake.

Nigel Mills: Is it not the case that under, I think, PAYE regulation 72, the Revenue should go to the employer first? I think that it can then issue a notice to say that it can go after the taxpayer. In theory, the taxpayer should be sent a copy of that notice. I am not entirely sure that that is the process that is followed very often, but I think that it is the one set out in the regulations.

Mr Gauke: If I may, I shall come back to that specific point, because I want to deal with another issue raised by my hon. Friend, which was whether the P14 forms could be used for information and why that does not

4 Dec 2012 : Column 251WH

happen. I just point out that due to the volumes received each year—approximately 60 million—P14 forms are processed over several months. That is an automated process. There is currently no scope within the process that would enable HMRC to identify and amend a tax code for the current year on receipt of the previous year’s P14.

My hon. Friend asked about the ESC A19 consultation. The outcome of that consultation has yet to be decided. Obviously, he will be keen to know what it is. When that has been concluded, I will ensure that he is fully aware of it.

It is right to say that HMRC has delivered a real change in the operation of PAYE and brought its legacy issues up to date. That means that 85% of PAYE customers will have paid the right tax during the year. The remaining 15% will be due a refund or owe tax for a variety of reasons other than HMRC error. Furthermore, the vast majority of customers will be notified of their tax position well before the end of the tax year.

ESC A19 is designed to apply routinely when HMRC has failed to act on information received and also fails to notify the customer of their arrears for a full 12 months after the end of the tax year. This year, HMRC has received significantly fewer requests, and most of those were received immediately following the issue of the tax calculation. The vast majority were not eligible for the concession because there had been notification of the arrears within the 12-month deadline. The occasions on which taxpayers will need to make a request under ESC A19 in the future are significantly diminished. HMRC does not envisage the problems and complaints that arose from its implementation of the concession in the exceptional circumstances of the past two years arising to the same extent in the future.

However, my hon. Friend raises an important point about the difficulty that some taxpayers have when they simply have a tax code. That can make it difficult for them to assess exactly what the right amount of tax to be paid is and, if they are paying the wrong amount, what can be done about it. My hon. Friend will be pleased about the progress that we are making with tax statements. We are making much more information available to taxpayers, so that they can see what tax has been paid. The way I see that developing is that ultimately it should provide a much clearer route—much greater clarity to taxpayers—to ensure that the correct amount of tax has been collected.

Let me return to regulation 72, which my hon. Friend raised a moment or so ago. He is correct about the process. The NPS is fully automated and cost-effective

4 Dec 2012 : Column 252WH

and deals with 1.5 million underpayment cases per annum without recourse to this process—without going into regulation 72. These cases do not arise only because of employer error. Regulation 72 is really an anti-avoidance measure to prevent collusion between employer and employee. I hope that that provides some clarity to my hon. Friend.

It is important to distinguish between HMRC’s obligation to apologise and provide redress for customers who experience poor service and its collection and management discretions in effect to withdraw tax rightly due from the Consolidated Fund. HMRC has a statutory obligation to collect the right amount of tax from each taxpayer and to be fair to all taxpayers in that respect.

ESC A19 was intended to remedy the hardship and injustice of unexpected demands caused by the then Inland Revenue’s error and delay. Although HMRC’s tax commissioners can forgo tax in cases of financial hardship, its discretions to forgo tax that is rightly due are limited and are certainly restricted to the strict application of the conditions of the concession.

Compensation payments to remedy the cost and distress of poor service are ex gratia and are applied using the guidelines in the “Managing Public Money” rulebook. Those must not allow recipients to gain financial advantage as a result of poor customer service. It would be acting outside the parameters of the authority delegated to HMRC to provide redress that clearly linked someone’s tax liability with the amount of their compensation. To be fair, HMRC does have to operate a difficult balance.

We must recognise that the complaints and problems that we have heard about today, although serious and distressing for the individuals involved, have arisen in exceptional circumstances. HMRC has recognised and apologised for poor service and is taking steps to put things right for the future, particularly for pensioners and other vulnerable customers. It is working closely with professional organisations and charities to understand customer needs and improve services.

The need for customers to turn to ESC A19 for redress in response to an unexpected tax demand is diminishing. I would like to reassure my hon. Friend that HMRC will compensate customers for poor service, using its authority within “Managing Public Money” rules, and use its collection and management discretions to forgo tax where that is appropriate and necessary and where it has the power to do so.

Question put and agreed to.

5.29 pm

Sitting adjourned.