3.54 pm
The Minister for Defence Procurement (Mr Philip Dunne): I am pleased to be able to follow the hon. Member for East Renfrewshire (Kirsten Oswald). I believe that she was making her debut in winding up a debate on behalf of her party, and I congratulate her on that. As she said, this has been a well-informed and at times passionate debate, and rightly so, because the strategic deterrent forms a key part of the Government’s No. 1 priority: the defence of the realm.
The Government are committed to maintaining a minimum credible and assured deterrent, as was clearly stated in the manifesto on which they were elected to govern the whole of the United Kingdom. The hon. Lady argued that we should respect the wishes of the Scottish people, and we should indeed take them into account, but that is the same argument as was advanced by the then leader of the Greater London Council when he declared London to be a nuclear-free zone. No nuclear weapon would have been allowed in this country had his views been entirely respected. That is not an argument that we can respect, because we have responsibility for the government of the United Kingdom as a whole.
We are committed to building four new nuclear-armed submarines to replace the current four Vanguard class submarines, but not to replacing the Trident missile, which is the notional subject of the debate. As was pointed out by the hon. Member for Chesterfield (Toby Perkins), the subject of the debate is not, strictly speaking, what is at stake today, because what we are actually discussing is whether or not to replace the submarine class, rather than the missile system.
Why do we stand by our commitment? First, as the Secretary of State said, this is about being realistic. We do not live in an ideal world, much as we might wish to. Our deterrent is there to deter the most extreme threats to our national security and way of life. Those threats have not gone away, however much people might wish it were otherwise. The national security review which was published yesterday shows that, if anything, they are growing and becoming more complex and more diverse by the day.
Under the coalition Government, we as a nation took steps to reduce nuclear arsenals, and we have reduced the number of deployed warheads on each submarine from 48 to 40. Other nations with nuclear weapons have not responded to that unilateral action. They need to follow our example, and nations without nuclear weapons should end all notions of obtaining them. Those who wish to gamble with the nation’s security do so with no ability to predict what the world might be like in decades to come.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): Will the Minister give way?
Mr Dunne: I am afraid that I have very little time.
Secondly, our deterrent works for us every day, for 365 days and nights each year, thanks to the brave service of so many of our valiant personnel serving on
24 Nov 2015 : Column 1253
the Vanguard class submarines—and, indeed, the husband of the hon. Member for Glasgow North West (Carol Monaghan), whom she mentioned earlier. I believe that he has now retired from the Royal Navy, but I respect the service that he gave.
The fact that we have a continuous at-sea deterrent sows the seeds of doubt in the minds of our potential adversaries. As was emphasised by my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) in a powerful speech, continuous at-sea deterrence works because it provides the ability to strike back. It also provides another decision-making centre in the NATO alliance, and complicates and confuses an enemy’s calculations.
Finally, there is no alternative. Notwithstanding the recollection of my friend and former colleague the right hon. Member for Orkney and Shetland (Mr Carmichael), the 2013 Trident Alternatives Review made it very clear that if we were to have a cost-effective way of delivering the minimum nuclear deterrent, Successor was the only viable solution. Moreover, the ramifications of removing our deterrent would be immense, putting at risk not just our national security and our position in NATO—the cornerstone of our defence—but our economy, our essential skills base, and thousands of jobs across the United Kingdom.
John Woodcock: I asked the Minister earlier if he would reassure the workforce that the change in the industry would not affect their jobs throughout the supply chain. Will he do that now?
Mr Dunne: I am about to respond to some of the comments that have been made today. Before I answer the hon. Gentleman’s question, I want to deal with the fantasy figures presented by the SNP’s defence spokesman, the hon. Member for Argyll and Bute (Brendan O’Hara), who had conjured up from nowhere the idea that if the nuclear deterrent ceased to exist, Scotland would benefit by some £15 billion as a result of not spending money on it. The cost of replacing the Vanguard class with the Successor class is, as identified clearly in yesterday’s document, £31 billion spread over decades—over some 30 years—so the idea of a much larger figure is not correct.
Mr Dunne: No, I am afraid I will not give way.
I welcome the hon. Gentleman’s apparent admission that in the event that the deterrent was to be decommissioned, Scotland would take its share of the nuclear decommissioning risk and location of nuclear material. That is very welcome indeed and is in stark contrast to the responses we have had from the Scottish Government to the disposal project currently in consultation.
The hon. Gentleman also indicated no willingness to acknowledge there is any potential threat from nuclear-empowered nations. He was challenged and signally failed to provide an answer as to what the potential threat might be from Russia, despite the fact that every time there is an incursion into either air or sea space approximate to our national territorial waters SNP Members are the first to jump up and ask what we are doing about it. It seems that they have, as so often, double standards. Finally, I point out to the hon. Gentleman
24 Nov 2015 : Column 1254
that there has been no increase in nuclear weaponry in this country—far from it; nuclear weapons numbers have declined.
The hon. Member for Chesterfield gave a thoughtful speech from a somewhat confused party position. On the governance of implementing a delivery organisation to make sure we deliver the Successor programme on time and to budget over the years to come, I can confirm that this will remain subject to oversight by the MOD. We are in the process of working out how we best learn the lessons of delivering major procurement projects like Aircraft Carrier Alliance to get the industry properly aligned, and the Ministry and the delivery organisations currently within DE&S properly aligned, to work in partnership to deliver this vital programme.
Toby Perkins: The Minister said there will be MOD oversight. Does that mean the MOD will be leading this, or will it be led from the Treasury?
Mr Dunne: As the Prime Minister and the Secretary of State have made clear, this will be reporting through the MOD structures to the Secretary of State, and of course the Treasury will take its interest in the delivery of major programmes as it does in all our category A programmes, of which this will obviously be the largest.
We have had contributions from a number of Members across the House, and they have been well-recognised already. I do not have time to thank Members for contributing, but I would just say by way of conclusion that it was welcome to see consensus between most of the contributions of the Official Opposition and the contributions from the Government Benches. I recognise that many who stood up have done so with courage in speaking of their belief in the vital importance of our strategic deterrence, some despite the appalling provocations and bigoted comments from the former Mayor of London, who has allegedly been appointed by the Leader of the Opposition, without the courtesy of informing the shadow Defence Secretary, to, as we heard today, co-convene a Labour review of the strategic deterrent.
The hon. Member for Chesterfield did his best, but even he was unable to make clear what this review is for, who is in charge and what difference it will make. Heaven knows what will emerge from the review—we might get a clue from the vote imminently—but I was astonished to learn from the Opposition spokesman that he does not regard it as appropriate to vote on this motion in Parliament today. I say to those Labour Members who share my concern to maintain continuous at-sea deterrence, “Let your conscience guide you into the right Division Lobby this afternoon.” I urge Members of both sides of the House to do the right thing for the whole of the UK, not just for today but for tomorrow, and restore the consensus that has kept us safe for decades.
The House divided:
Ayes 64, Noes 330.
Division No. 131]
[
4.4 pm
AYES
Ahmed-Sheikh, Ms Tasmina
Arkless, Richard
Bardell, Hannah
Black, Mhairi
Blackford, Ian
Blackman, Kirsty
Boswell, Philip
Brock, Deidre
Brown, Alan
Cameron, Dr Lisa
Campbell, Mr Ronnie
Chapman, Douglas
Cherry, Joanna
Cowan, Ronnie
Crawley, Angela
Day, Martyn
Docherty, Martin John
Donaldson, Stuart Blair
Durkan, Mark
Fellows, Marion
Ferrier, Margaret
Godsiff, Mr Roger
Grady, Patrick
Grant, Peter
Gray, Neil
Hendry, Drew
Hopkins, Kelvin
Hosie, Stewart
Kerevan, George
Kerr, Calum
Law, Chris
Lucas, Caroline
MacNeil, Mr Angus Brendan
Mc Nally, John
McCaig, Callum
McDonald, Stewart Malcolm
McDonald, Stuart C.
McDonnell, Dr Alasdair
McGarry, Natalie
McLaughlin, Anne
Monaghan, Carol
Monaghan, Dr Paul
Mullin, Roger
Newlands, Gavin
Nicolson, John
O'Hara, Brendan
Oswald, Kirsten
Paterson, Steven
Ritchie, Ms Margaret
Robertson, rh Angus
Robinson, Mr Geoffrey
Sheppard, Tommy
Skinner, Mr Dennis
Stephens, Chris
Stringer, Graham
Thewliss, Alison
Thompson, Owen
Thomson, Michelle
Weir, Mike
Whiteford, Dr Eilidh
Whitford, Dr Philippa
Williams, Hywel
Wilson, Corri
Wishart, Pete
Tellers for the Ayes:
Liz Saville Roberts
and
Jonathan Edwards
NOES
Afriyie, Adam
Aldous, Peter
Allan, Lucy
Allen, Heidi
Amess, Sir David
Andrew, Stuart
Argar, Edward
Atkins, Victoria
Bacon, Mr Richard
Baker, Mr Steve
Baldwin, Harriett
Barclay, Stephen
Barron, rh Kevin
Barwell, Gavin
Bebb, Guto
Bellingham, Mr Henry
Benyon, Richard
Beresford, Sir Paul
Berry, Jake
Berry, James
Bingham, Andrew
Blackman, Bob
Blackwood, Nicola
Boles, Nick
Bone, Mr Peter
Borwick, Victoria
Bottomley, Sir Peter
Bradley, Karen
Bradshaw, rh Mr Ben
Brady, Mr Graham
Brazier, Mr Julian
Bridgen, Andrew
Brine, Steve
Brokenshire, rh James
Bruce, Fiona
Buckland, Robert
Burns, Conor
Burns, rh Sir Simon
Burrowes, Mr David
Cairns, Alun
Carmichael, Neil
Cartlidge, James
Cash, Sir William
Caulfield, Maria
Chalk, Alex
Chishti, Rehman
Chope, Mr Christopher
Churchill, Jo
Clark, rh Greg
Clarke, rh Mr Kenneth
Cleverly, James
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Costa, Alberto
Cox, Mr Geoffrey
Crabb, rh Stephen
Creagh, Mary
Crouch, Tracey
Davies, Byron
Davies, Chris
Davies, David T. C.
Davies, Glyn
Davies, Dr James
Davies, Mims
Davies, Philip
Davis, rh Mr David
Dinenage, Caroline
Djanogly, Mr Jonathan
Dodds, rh Mr Nigel
Donaldson, rh Mr Jeffrey M.
Donelan, Michelle
Dorries, Nadine
Double, Steve
Dowden, Oliver
Doyle-Price, Jackie
Drax, Richard
Drummond, Mrs Flick
Duddridge, James
Duncan, rh Sir Alan
Duncan Smith, rh Mr Iain
Dunne, Mr Philip
Elliott, Tom
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Chris
Evans, Graham
Evans, Mr Nigel
Evennett, rh Mr David
Fabricant, Michael
Fallon, rh Michael
Fernandes, Suella
Field, rh Mark
Fitzpatrick, Jim
Foster, Kevin
Fox, rh Dr Liam
Frazer, Lucy
Freeman, George
Freer, Mike
Fuller, Richard
Fysh, Marcus
Gale, Sir Roger
Garnier, rh Sir Edward
Garnier, Mark
Gauke, Mr David
Ghani, Nusrat
Gibb, Mr Nick
Gillan, rh Mrs Cheryl
Glen, John
Goldsmith, Zac
Goodwill, Mr Robert
Gove, rh Michael
Graham, Richard
Grant, Mrs Helen
Gray, Mr James
Grayling, rh Chris
Green, Chris
Green, rh Damian
Greening, rh Justine
Grieve, rh Mr Dominic
Griffiths, Andrew
Gummer, Ben
Gyimah, Mr Sam
Halfon, rh Robert
Hall, Luke
Hammond, rh Mr Philip
Hammond, Stephen
Hands, rh Greg
Harper, rh Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon
Haselhurst, rh Sir Alan
Hayes, rh Mr John
Heald, Sir Oliver
Heappey, James
Heaton-Harris, Chris
Heaton-Jones, Peter
Henderson, Gordon
Herbert, rh Nick
Hermon, Lady
Hinds, Damian
Hoare, Simon
Hollingbery, George
Hollinrake, Kevin
Hollobone, Mr Philip
Hopkins, Kris
Howarth, Sir Gerald
Howell, John
Howlett, Ben
Huddleston, Nigel
Hunt, rh Mr Jeremy
Hurd, Mr Nick
Jackson, Mr Stewart
James, Margot
Jayawardena, Mr Ranil
Jenkin, Mr Bernard
Jenkyns, Andrea
Jenrick, Robert
Johnson, Boris
Johnson, Gareth
Johnson, Joseph
Jones, Andrew
Jones, rh Mr David
Jones, Mr Marcus
Kendall, Liz
Kennedy, Seema
Kinahan, Danny
Knight, rh Sir Greg
Knight, Julian
Kwarteng, Kwasi
Lancaster, Mark
Latham, Pauline
Leadsom, Andrea
Lee, Dr Phillip
Lefroy, Jeremy
Leigh, Sir Edward
Leslie, Charlotte
Leslie, Chris
Letwin, rh Mr Oliver
Lewis, Brandon
Lewis, rh Dr Julian
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
Lopresti, Jack
Loughton, Tim
Lumley, Karen
Mackinlay, Craig
Mackintosh, David
Main, Mrs Anne
Mak, Mr Alan
Malthouse, Kit
Mann, Scott
Mathias, Dr Tania
May, rh Mrs Theresa
Maynard, Paul
McCartney, Jason
McCartney, Karl
McLoughlin, rh Mr Patrick
Menzies, Mark
Mercer, Johnny
Merriman, Huw
Metcalfe, Stephen
Miller, rh Mrs Maria
Milling, Amanda
Mills, Nigel
Milton, rh Anne
Mitchell, rh Mr Andrew
Moon, Mrs Madeleine
Mordaunt, Penny
Morris, Anne Marie
Morris, David
Morris, James
Morton, Wendy
Mowat, David
Mundell, rh David
Murray, Mrs Sheryll
Murrison, Dr Andrew
Neill, Robert
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
Offord, Dr Matthew
Owen, Albert
Paisley, Ian
Parish, Neil
Patel, rh Priti
Paterson, rh Mr Owen
Pawsey, Mark
Penrose, John
Percy, Andrew
Perry, Claire
Phillips, Stephen
Philp, Chris
Pickles, rh Sir Eric
Pincher, Christopher
Poulter, Dr Daniel
Pow, Rebecca
Prentis, Victoria
Prisk, Mr Mark
Pritchard, Mark
Pursglove, Tom
Quin, Jeremy
Quince, Will
Raab, Mr Dominic
Redwood, rh John
Reed, Mr Jamie
Rees-Mogg, Mr Jacob
Reynolds, Emma
Robertson, Mr Laurence
Robinson, Gavin
Robinson, Mary
Rosindell, Andrew
Rudd, rh Amber
Rutley, David
Sandbach, Antoinette
Scully, Paul
Selous, Andrew
Shannon, Jim
Shapps, rh Grant
Shelbrooke, Alec
Simpson, David
Simpson, rh Mr Keith
Skidmore, Chris
Smith, Angela
Smith, Chloe
Smith, Henry
Smith, Julian
Smith, Royston
Soames, rh Sir Nicholas
Solloway, Amanda
Soubry, rh Anna
Spelman, rh Mrs Caroline
Spencer, Mark
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stuart, rh Ms Gisela
Stuart, Graham
Sturdy, Julian
Sunak, Rishi
Swayne, rh Mr Desmond
Swire, rh Mr Hugo
Syms, Mr Robert
Thomas, Derek
Throup, Maggie
Timpson, Edward
Tolhurst, Kelly
Tomlinson, Justin
Tomlinson, Michael
Tracey, Craig
Trevelyan, Mrs Anne-Marie
Truss, rh Elizabeth
Tugendhat, Tom
Turner, Mr Andrew
Tyrie, rh Mr Andrew
Vara, Mr Shailesh
Vickers, Martin
Villiers, rh Mrs Theresa
Walker, Mr Charles
Walker, Mr Robin
Wallace, Mr Ben
Warburton, David
Warman, Matt
Watkinson, Dame Angela
Wharton, James
Whately, Helen
Wheeler, Heather
White, Chris
Whittaker, Craig
Whittingdale, rh Mr John
Wiggin, Bill
Williams, Craig
Williamson, rh Gavin
Wilson, Mr Rob
Wilson, Sammy
Wollaston, Dr Sarah
Wood, Mike
Woodcock, John
Wragg, William
Wright, rh Jeremy
Tellers for the Noes:
Simon Kirby
and
Sarah Newton
Question accordingly negatived.
24 Nov 2015 : Column 1255
24 Nov 2015 : Column 1256
24 Nov 2015 : Column 1257
24 Nov 2015 : Column 1258
HMRC Office Closures
4.17 pm
Hannah Bardell (Livingston) (SNP): I beg to move,
That this House condemns the proposed closure of HMRC offices in Scotland and throughout the UK; believes that this will result in a reduced service to the public; is concerned about the potential loss of tax yield; is further concerned at the loss of jobs and expertise in local communities; further believes that this will undermine efforts to reduce the tax gap which currently stands at £34 billion; also believes that this proposal will undermine the ability of SMEs to access information and advice and that the proposed closure programme is flawed and counterproductive; and calls on the Government to halt its programme of HMRC office closures.
The UK Government’s recent announcement of the planned closure of 137 local Her Majesty’s Revenue and Customs offices across the UK is part of their continued drive to rain down a regime of austerity cuts on our family of nations.
HMRC employs 8,330 people across Scotland, which represents 13% of all UK HMRC staff. Although we do not have the full information from the Government on how many jobs will be lost, the BBC has reported—
Chris Stephens (Glasgow South West) (SNP): Does my hon. Friend agree that it was a democratic outrage that the Government produced a statement on this matter during a parliamentary recess, and that a Government statement was not made at the Dispatch Box of this House?
Hannah Bardell: I could not agree more with my hon. Friend. It is yet more evidence of this Government’s lack of respect for Scotland and for Scottish workers.
Following the announcement, the BBC reported that more than 2,000 jobs could be lost in Scotland. As yet, we have no detail. With your indulgence, Madam Deputy Speaker, I will list the offices that are set to close across Scotland to highlight the scale and impact of the decision: one office to close in Aberdeen by 2021; one office in Bathgate and Livingston, my own constituency, by 2020; one office in Cumbernauld by 2020; two offices in Dundee; three offices in East Kilbride; three offices to close and consolidate into one large office in Edinburgh; and two large offices to close and consolidate into one large office in Glasgow.
Kelvin Hopkins (Luton North) (Lab): I am pleased to say that I support the motion. The motion also refers to HMRC offices throughout the UK. Does she have statistics for the whole of the UK as well as for Scotland?
Hannah Bardell: I do not have them to hand, but I would be happy to hear the hon. Gentleman’s specific views and discuss them with him.
David Simpson (Upper Bann) (DUP) rose—
Ian Paisley (North Antrim) (DUP) rose—
Hannah Bardell: I am going to make some progress.
An office is also going to shut in Inverness, and offices in Irvine and Glenrothes are also in the process of closing. Those closures are distressing news for the employees, their families and the communities affected,
24 Nov 2015 : Column 1259
including in my constituency of Livingston. We must remember that behind every closed office and every job lost are individual folk, some of whom I and my colleagues have met in recent weeks following the announced closures. Many of them have proudly worked for HMRC for 10, 20 or more than 30 years. Many have spent their whole careers in their local HMRC offices and are fiercely proud of the work they do.
Simon Hoare (North Dorset) (Con) rose—
Hannah Bardell: I am going to make some progress. Three of the Scottish centres announced for closure—those in East Kilbride, Cumbernauld and my constituency of Livingston—employ staff who issue specific guidance to the public on access to and eligibility for tax credits. With the prospect on the horizon of the Chancellor returning with his tax credit cuts, it is unthinkable that that support will be withdrawn from our communities.
The budgets of Government Departments and public bodies will suffer as a result of the austerity measures. They will be reduced by the Chancellor, who continues to cut despite the advice of many academics. Indeed, only yesterday, a report by City University said:
“George Osborne could be forced to borrow billions of pounds more than forecast by 2020 if he sticks with spending cuts that will hit economic growth”.
Two academics from City University projected that by 2020 the Government will be forced to report a £40 billion deficit instead of the planned surplus, undermining the Chancellor’s fiscal charter, which dictates that the Government borrow only in times of distress.
Craig Williams (Cardiff North) (Con): Despite the context set out by the hon. Lady and the very difficult economic circumstances, will she welcome the jobs that the consolidation and new office plan will create in Cardiff, the capital of Wales?
Hannah Bardell: New jobs in the hon. Gentleman’s constituency will, of course, be good news for his constituents, but I want to know what the Chancellor has to say to people in Scotland and other parts of the UK who are going to suffer and lose their local tax offices.
Hannah Bardell: Let me make some progress. The City University report is proof that this Chancellor’s attempt to run an absolute surplus is not working and is not credible.
SNP Members were elected on a manifesto that offered an alternative, fiscally credible plan for a modest 0.5% increase in public spending, which would have injected £140 billion into the economy. The proposed closure of HMRC offices will have a disproportionate effect on Scotland, because the vast majority of the UK Government’s ring-fenced Departments lie outside Scotland.
Hannah Bardell: If the hon. Gentleman gives me some time, I would like to make some progress.
24 Nov 2015 : Column 1260
The most recent proposed closure of local HMRC offices will result in Scotland being left with no HMRC offices beyond the central belt of Scotland. The plans fail to understand or take into account the diversity and needs of the Scottish economy. There are a wide range of industries beyond the central belt of Scotland, including farming, fishing, whisky, tourism and, indeed, oil and gas. Many of those industries rely on the ability to work with their local tax offices, given the complexities of their businesses.
Callum McCaig (Aberdeen South) (SNP) rose—
Hannah Bardell: I give way to my hon. Friend.
Callum McCaig: I do not know why people are upset—I have not spoken yet. As a former resident of the great city of Aberdeen and a former worker in the oil industry, my hon. Friend will understand the complexity of an industry that relies heavily on contractors and the need for specialist tax advice. Will she explain to hon. Members the distance between Aberdeen and Edinburgh? They are not just down the road from each other, but those making this decision seem to think that that is the case.
Hannah Bardell: I could not agree more with my hon. Friend. I am aware of the complexities of the oil and gas industry, but I am afraid that the Government and Conservative Members do not seem to appreciate them.
The world of work is changing, and many people across the UK are choosing to start and develop their own small businesses. In particular, women are choosing to take charge of their own destiny and start their own businesses, many of them from home. A network of good tax support is essential to support those businesses, run by men and women, if they are to thrive.
I was recently visited by a constituent who has a farming business. He impressed on me the importance of access to local HMRC services and face-to-face support. Industries such as farming often operate a year in arrears to very tight margins, and I and my colleagues have grave concerns about the impact on them and a wide range of other sectors, not least small and medium-sized enterprises.
Huw Merriman (Bexhill and Battle) (Con): I called my local tax offices today to see whether I could pop in to speak to them. For the past year they have been unwilling to allow anyone to see them face to face. People can contact them only by phone, so it makes no difference if they are based in the region or locally.
Hannah Bardell: The hon. Gentleman makes my point very well.
David Simpson: Will the hon. Lady give way?
Hannah Bardell: I have just got to my feet again, so let me continue. John Allan, the national chairman of the Federation of Small Businesses said:
“Our members have repeatedly told us about difficulties getting practical help from HMRC when complying with their tax requirements. The current online offering is limited, often hampered by poor broadband connectivity, and the phone help line is hard to navigate, with long waiting times.
24 Nov 2015 : Column 1261
Over the long-term, this modernisation programme must bring substantial benefits and efficiency savings. In the short-term however, members will be concerned that the closure of these tax offices will simply compound existing problems.
The Government need to reassure businesses that disruption is kept to a minimum. This should be used by HMRC as an opportunity to deliver services that are easy to access, provide clear and consistent help tailored for smaller businesses and provide the certainty they need for their tax affairs.”
If the Chancellor will not listen to the SNP, perhaps he will listen to the Federation of Small Businesses.
These closures have been happening for some time. In March 2013, the UK Government announced that they were to close all of their 281 inquiry centres by June 2015, and it was reported that closures would result in the loss of 1,300 jobs. A consultation on plans to streamline HMRC inquiry and support services through the use of telephone consultations occurred in 2012, and HMRC piloted the new service in the north-east of England from June to December 2013. In October 2014, HMRC announced plans to close 14 offices across the UK by December 2015. It was reported that that would affect 453 civil servants, and a further 690 administrative employees had been offered voluntary redundancy.
The Public Accounts Committee said in the first half of 2015, following the closures, that only 50% of calls from the public were answered by HMRC, down from 73% in the last financial year. Tam Dolan, the PCS branch chairman in Dundee, said:
“This decision is baffling. HMRC have trained staff doing an excellent job, receiving more calls than they can handle. For PCS members in Dundee, making these staff redundant while recruiting elsewhere sends a message that Dundee doesn’t feature in HMRC’s long-term plans.”
Simon Hoare: The hon. Lady is being typically generous with her time. In the sunny uplands of Scottish independence, what detailed analysis would her party, as a Government, have undertaken as to the quantum of HMRC staff and offices it would have in a newly independent Scotland?
Hannah Bardell: The hon. Gentleman is getting a little ahead of himself; I will come to that.
Ironically, during the referendum many argued that independence for Scotland would result in job losses in public services. It was lauded as the Union dividend, and we in Scotland were told by the then Chief Secretary to the Treasury, Danny Alexander, who sadly is no longer in his place:
“That dividend is our share of a more prosperous future. It is the money that will pay for better public services and a fairer society.”
In July and August 2014, the Scottish Labour party tweeted that 3,200 jobs at HMRC were
“just one of the reasons that being part of the UK is best for Scottish jobs…and 1,400 jobs at HMRC in Cumbernauld are dependent on us staying in the UK.”
That was clearly not the case. I hope that those on the Labour Benches, who will also no doubt have constituencies affected by these closures, will reflect on those comments and think carefully about who can be trusted when it comes to jobs in Scotland.
The tax gap in 2013-14 was estimated to be £34 billion, which amounts to 6.4% of total theoretical tax liabilities. Small and medium-sized enterprises account for the
24 Nov 2015 : Column 1262
largest portion of the overall tax gap—some £16.5 billion ––followed by large businesses with some £9.5 billion. We in the SNP take the view that the vast majority of SMEs actively want to contribute to society by paying tax and that a high proportion of the SME tax gap will have been lost through errors and miscommunications.
Mr Alan Mak (Havant) (Con): Will the hon. Lady give way?
Hannah Bardell: I shall continue. The UK Government’s plan to slash 137 local HMRC offices across the UK will inevitably have a knock-on impact on the ability of SMEs to access information and advice on tax.
I would like to give my personal thanks to Gary Stein and his PCS colleagues who met me, my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) and MSP Angela Constance immediately after the closure announcement. I know that other PCS colleagues held similar meetings across Scotland and the UK. Gary and his PCS colleagues are working hard to engage staff and management in offices in West Lothian and have made clear their concerns about morale and the range of issues that I have highlighted. It cannot remain unsaid how valuable our local unions are in this process, and I am sure that it is not without sinister intention that the Government have marched ahead with their undemocratic Trade Union Bill, which would mean that the important work that our unions do in such situations would be made ever more difficult. Never has it been more vital that we have good engagement with the workforces who deliver essential public services.
Lady Hermon (North Down) (Ind): Will the hon. Lady give way?
Hannah Bardell: I would be happy to do so.
Lady Hermon: I know that the hon. Lady is storing up the best until last, but in the meantime I am grateful to her for allowing me to intervene. We have a serious issue in Northern Ireland. We are the only part of the United Kingdom to share a land frontier with another EU member state, which gives rise, very unfortunately for HM Treasury, to fuel smuggling and the loss of a huge amount of revenue along the border with the Republic of Ireland. The announcement of the closure of HMRC offices in Northern Ireland has serious consequences, so will the hon. Lady reflect on that before she calls on someone else to intervene?
Hannah Bardell: I share the hon. Lady’s concerns, which will be shared across Scotland and other parts of the UK. My local PCS representatives spoke about what they felt was a perfect storm brewing. The greater the pressure we put on our public services and the more we squeeze them, the more likely it is that there will be major breakdowns in the system.
I am going to finish up. [Hon. Members: “Oh!”] I am sure that the hon. Member for Upper Bann (David Simpson) can save his intervention for speeches by other colleagues. I urge all parties across the Chamber to support our motion and ask this Tory Government in the strongest terms to think again on these nonsensical and ill-conceived HMRC closures.
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4.32 pm
The Financial Secretary to the Treasury (Mr David Gauke): I am delighted to be able to respond to this debate, because protecting the country’s tax revenues is a key part of the Government’s long-term economic plan, and because we have already made great steps in modernising the way in which tax is collected.
The changes announced on 12 November are an important part of HMRC’s operational modernisation programme, designed to create a modern, efficient organisation that continues to protect this country’s tax revenues. Modernising and improving the efficiency of HMRC, enabling it better to tackle evasion, drive down avoidance and improve compliance, has been a key Government objective since 2010.
We have made substantial investments to achieve that aim, not least the provision of an added £800 million in the summer Budget, which will help HMRC to recover an additional £7.2 billion. As a result, we have succeeded in driving down the tax gap as a percentage of total liabilities from 7.3% in 2009-10 to 6.4% in 2013-14. This fall represents an additional £14.5 billion in cumulative tax collected. Over the last Parliament, HMRC secured about £100 billion in additional compliance yield, including a record level of £26.6 billion in 2014-15. We have also made important cost reductions to the operational side of HMRC, and I make no apology for that. HMRC cannot be immune from the requirement that its resources are spent wisely.
Mr Gauke: I shall give way to the very patient hon. Gentleman.
David Simpson: I thank the Minister for giving way. It was friendly fire for the SNP, but it did not accept it.
The Minister will acknowledge the disappointment in Northern Ireland about the fact that 10 offices are closing. We do not have the full numbers for those who will lose their job or when the redundancies will happen. Further to the comment by the hon. Member for North Down (Lady Hermon), we are vulnerable at the best of times, but with the land border this will make it even worse.
Mr Gauke: First, this is about offices, not about staff. On the numbers of people likely to be employed—for example, in Northern Ireland—it should not be taken that because offices are closing, the total number of staff employed by HMRC in Northern Ireland as a whole will be reduced. Of course, HMRC is aware of the specific issues with smuggling and is determined to address them. Let me reassure the hon. Gentleman about numbers of staff. It should not be taken from the announcement of office closures that there will necessarily be a reduction in staff in Northern Ireland at all.
Mr Jim Cunningham (Coventry South) (Lab): Does the Minister not realise that when offices are closed, that has an effect on staff? With the best will in the world, there will be redundancies. Can he give us the numbers of staff affected? More importantly, I have schoolteachers in my constituency who want to sort out their pension problems. They use the HMRC hotline but they cannot get through—nobody responds to them. What is the Minister going to do about that?
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Mr Gauke: The point I am making is that of course the closure of offices has an impact on some of the staff working in those offices. To answer the hon. Gentleman’s first question, by 2027, when the process will have been completed, approximately 4,000 of the existing 58,000 people employed by HMRC will not be within reasonable daily travel distance to an HMRC office. I want to be completely straightforward with the House of Commons. That is the scale by 2027.
On customer service, I agree that HMRC’s standards need to be high, and there have been times in recent months when they have not been at an acceptable level. I am pleased that performance is significantly better than it was in April, May and June this year. It is still not as high as we would like it to be, but it is above the average standard over the past six or seven years. We still have further to go.
In order to ensure a high level of customer service and to make sure that we bring the yield in, it is important that HMRC’s resources are deployed efficiently and effectively, and it is important that we ensure that services can be delivered in the most efficient way possible.
Sir Simon Burns (Chelmsford) (Con): On staff numbers, my hon. Friend will be aware that the office in Chelmsford will be closing and will be based in Stratford in east London—20 or 25 minutes’ train journey from Chelmsford. Can people who work in Chelmsford take some reassurance from what my hon. Friend has said that the redeployment of staff from Chelmsford to Stratford is a viable proposition?
Mr Gauke: Yes, I think I can provide that reassurance to my right hon. Friend. An organisation that can make better use of technology and improve the way it works will find that there are some activities that it currently performs for which it requires large numbers of staff, but that it will not necessarily need those staff members in future. There are, however, a number of things that HMRC does that will mean that it requires those staff members. HMRC will become a more highly skilled organisation. It will need highly talented people to be able to ensure that we get the money in. My right hon. Friend provides a good example. There may be people currently working in, for example, Chelmsford who have skills that HMRC needs. They will be able to work in Stratford. I can point to other examples of similar circumstances throughout the United Kingdom.
Philip Davies (Shipley) (Con): I do not disagree with the overall picture that my hon. Friend paints, but the decision to base the regional hub for Yorkshire in Leeds rather than in Bradford is crass. If it can be shown that locating the regional hub in the Bradford district will be cheaper for the taxpayer and offer better value for money, and that the calibre of the staff could be accommodated in and attracted to that base, will my hon. Friend give a commitment to revisit this decision and look at what the Bradford district can offer?
Mr Gauke:
I welcome the fact that my hon. Friend supports the view that we should move to a smaller number of regional centres. I am conscious that there are different views on locating the hub in Leeds and Bradford. HMRC’s analysis is based on the fact that it
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has large numbers of staff who live and work in, for example, York, Harrogate or Sheffield. Returning to the point made by my right hon. Friend the Member for Chelmsford (Sir Simon Burns), if those people are to be redeployed, it is substantially easier for them to go to Leeds, because there is a direct train service to Leeds, than it would be for them to go to Bradford, for which they would have to travel into Leeds and change, and their commute could then be beyond what would constitute reasonable daily travel. In fact, I should have said Hull rather than Harrogate, but there are similar points as regards staff living in Harrogate, and in Doncaster, in that it is easier to get to Leeds than to Bradford. As always, I am more than happy to listen to the arguments made by my hon. Friend the Member for Shipley (Philip Davies), and by others. Indeed, I am to have a meeting with Bradford MPs over the course of the next week or two to hear the arguments that they wish to put.
Mr Gauke: I am spoilt for choice, but I give way to the hon. Member for North Antrim (Ian Paisley).
Ian Paisley (North Antrim) (DUP): On a very specific point, the Minister will be aware that there is a special investigations unit in Northern Ireland dealing with serious and organised crime gangs and extra-special tax affairs of certain individuals. That unit, which was based at Moira house, is faced with closure. Where will it now be based to deal with these specific issues for Northern Ireland?
Mr Gauke: There are a handful of specialist centres around the United Kingdom as a whole, but the intention with Northern Ireland is to work out of one main office in Belfast.
I welcome the fact that HMRC’s expenditure on its estates fell from £371 million in 2010-11 to £255 million in 2014-15, and that these plans will generate further savings of £100 million a year by 2025.
Mr Gauke: Let me just make this point and then I will take plenty of interventions.
That will allow HMRC better to concentrate on its core task of revenue collection. Yes, there are savings for HMRC in reducing its estate costs, but it has made it very clear to me that regardless of what the spending review settlement will be tomorrow, it would move in this direction because it believes that the best way in which it can deliver services and collect tax is through regional centres. That is the important point.
Neil Gray (Airdrie and Shotts) (SNP): I pay tribute to the staff of HMRC, who do a very tough and challenging job in collecting the taxes that pay for our vital public services. The Minister has mentioned his recent concerns about customer service, and I have had constituency correspondence from HMRC confirming that that has not been adequate to date. Can he explain, in specific terms, how cutting office numbers, thereby removing the local knowledge and memory of staff, increases the quality of customer service that people can expect?
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Mr Gauke: It might be helpful to the House if I set out a little history in terms of how HMRC has operated. When it was formed in 2005, it had 572 offices spread all over the country. That is an inefficient way of doing business in the 21st century. Reorganising that network of offices was a policy priority even then, and that is why, following several reorganisations, the number was reduced to 393 in 2010.
It now stands at 170 offices, ranging in size from 5,700 people to fewer than 10. That is a start, but it is still not enough in terms of finding efficiencies.
The changes announced last week represent the next stage of HMRC’s estate transformation programme. Over the next 10 years, the department will bring its employees together in 13 large modern offices, equipped with the digital infrastructure and training facilities they need to work effectively. The new high-quality regional centres will serve each and every region and nation in the United Kingdom, creating high-quality skilled jobs and promotion opportunities in Birmingham, Belfast, Bristol, Cardiff, Croydon, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Stratford.
Mr Gauke: Let me just make this point and I will then give way.
There are significant advantages to such a system. The new offices will have the capacity to host multiple lines of businesses and have senior jobs on site. They will offer employees the opportunity to build their careers and skills in one office, and encourage upskilling. They will be in locations with strong transport links and close to pipelines of talent. They represent the way in which business is done in the 21st century.
Mr Jim Cunningham: The Minister has been very generous in and good about giving way. He mentioned that 4,000 employees may be affected by 2027. Is he saying that he can redeploy all those employees?
Mr Gauke: To return to that point, I gave the statistic that 4,000 of the current 58,000 people employed by HMRC will be outside a reasonable daily travel distance by 2027, as HMRC has acknowledged. I am afraid that there will have to be redundancies for those people, assuming that they are still working for HMRC, over the course of that period. I would make the point that the vast majority of HMRC staff—I recognise that this is difficult for those who are not in such a position—will clearly be able to work in the regional centres I have mentioned.
David Mowat (Warrington South) (Con): Does the Minister agree that the current level of customer service in HMRC is unacceptable? The speech of the hon. Member for Livingston (Hannah Bardell) would have made sense were it not for the fact that, currently, about 40% of calls are never answered. It is not even that they are answered after 40 minutes; they are never answered. Does he agree that regional centres enabling us to flex the number of staff must form a coherent approach to getting calls answered, which cannot be done with 190 centres?
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Mr Gauke: My hon. Friend makes an important point. I am pleased to be able to tell him that the numbers are not quite as bad as that at the moment—80% of calls are getting through—but we need to ensure that quality is higher. The point is that it is easier to provide flexibility when there are fewer centres.
For example, people can be moved from processing jobs. As I said earlier, some processing jobs will not be necessary in future, but a lot of the compliance jobs will be necessary. If we want people to continue to work for HMRC by upskilling them—moving them out of processing jobs by getting them involved in more highly skilled compliance work—that will be easier to deliver if they are already working in the same building, with the same people and with training facilities. That is why it is absolutely the right measure to ensure that there are opportunities for existing staff.
Mr Gauke: I am again spoilt for choice. I give way to my hon. Friend the Member for Taunton Deane (Rebecca Pow).
Rebecca Pow (Taunton Deane) (Con): I believe that 3,000 extra staff were laid on to help to handle phone calls at weekends, and I welcome that. May I put in a bid for the Minister to reassure us that we will still have human beings at the end of the telephone in this great new system, which I fully support?
Mr Gauke: Yes, there will be human beings. It is true that, following the problems earlier this year, HMRC brought in an additional 3,000 people to work on the telephones. Those people have been trained up and are now deployed. That explains why there has been a significant improvement in performance over the past few weeks, although there is still more work to do.
Kelly Tolhurst (Rochester and Strood) (Con): I commend the Government on making it a priority to clamp down on tax evasion. That contributed to the collection of an extra £11.9 billion in the last tax year. The Anchorage House site in Chatham in my constituency has long played a key role in closing the tax gap. Will my hon. Friend meet me to discuss the future of the large number of dedicated and skilled workers?
Mr Gauke: I am certainly happy to meet my hon. Friend. I have had a request from my hon. Friend the Member for Rochford and Southend East (James Duddridge) to discuss this matter. Again, I am happy to meet him and I suspect that my hon. Friend the Member for Southend West (Sir David Amess) would also like a meeting. I am happy to meet them. I think that HMRC is right to move in this direction, although I appreciate that it creates certain issues. Some of the constituents of my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) will have the option to work in the Maidstone office, which will stay open for four years longer than the Chatham office. I am sure that a number of them will take that up.
Chris Stephens:
The Minister has been most generous. Many MPs and tax experts support the view that a visible and local HMRC presence is essential to maintaining
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confidence in the tax system. Does he not believe that the measures that have been announced by HMRC will open the way for more tax avoidance?
Mr Gauke: No, I do not. As I have made clear, the number of HMRC officers has been falling since its creation in 2005, including over the past five years, and we have seen the closure of inquiry centres, as has been touched on, but HMRC’s success in dealing with tax avoidance and evasion over that period has been marked and has improved. The truth is that HMRC deals with tax avoidance and evasion principally through sophisticated data analysis and by bringing together highly skilled people. The more that we can do of that, the bigger the difference we will make.
Bob Stewart (Beckenham) (Con): If HMRC requires visibility, is any consideration being given to mobile offices in vans, like mobile libraries? For example, Northern Ireland has one big office in Belfast, but it could send vans down to Armagh, Enniskillen or Londonderry.
Mr Gauke: HMRC’s “needs enhanced support” service was brought in as a partial replacement of the inquiry centres. My hon. Friend raises an interesting point about HMRC’s presence. However, it has a strong record in dealing with avoidance and evasion, there has been a substantial increase in prosecutions and it is hard to open a newspaper without reading reports of the wealthy facing significant tax bills because HMRC is successfully closing down tax avoidance schemes. That shows that HMRC is reducing this behaviour.
Mr Mak: I am heartened by the Minister’s confirmation that reducing the tax gap and protecting tax revenues remains a key priority. Will he confirm that the progress in that area has been strong since the Government took office, resulting in more than £57 billion extra tax revenue being collected compared with 2005-06?
Mr Gauke: My hon. Friend is right to say that our record is strong, and we remain absolutely committed to that priority.
Mr Gauke: If I may, I will make a bit of progress. I am conscious that I am being generous to the people who wish to intervene, but I should also be generous to those who wish to take part in the debate.
Mr Speaker: Of whom—I know that the Minister will find this helpful—there are no fewer than 19. I point out very gently, because the Minister has been generous in taking interventions, that his speech, probably as a result of that, is significantly longer than that of the person who led the debate. I am sure he would not want that to be the case.
Mr Gauke: I certainly would not, Mr Speaker.
HMRC has done this the right way and told staff first. It has kept people fully abreast of its proposals for a number of months, and it has held events up and down the country to ensure that it works with staff. As I said earlier, this is a locations announcement, not a workforce announcement, and the Department’s policy is to keep redundancies to an absolute minimum.
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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): Will the Minister give way?
Mr Gauke: I will not. I have listened to Mr Speaker and I take his words very seriously. I will make progress.
I say to the hon. Member for Livingston that the changes that HMRC is talking about, such as trying to find efficiencies through centralisation, are not unique to HMRC or the UK Government. The Scottish Government have also brought forward proposals to rationalise their estates. They brought forward proposals to close up to seven of Police Scotland’s 10 control rooms, and we hear of plans to close regional fire stations, following the consolidation of local fire authorities into one national body. There have been cuts to the number of court buildings across Scotland, and the number of incorporated colleges was cut by almost half. I am sure that the Scottish Government had good reasons for doing that, but so do we, and it is right that we take such steps.
In conclusion, if we want HMRC to do its job effectively, we must ensure that it is fit for the challenge. We must be willing to modernise, find efficiencies, target resources, and make long-term strategic decisions. That is precisely what HMRC is doing by transforming itself into a smaller, more highly-skilled organisation, with modern, digital services, and a data-driven compliance operation that will deliver more for the taxpayer at lower cost. What would the opponents of change prefer? Do they want to rely on a structure that in many respects dates from before the internet era, or to pump in more money without examining where it is going? It is surely right that HMRC carries out efficiencies, targets its resources, and concentrates on delivering for the British taxpayer. That is the policy it has embarked on, and it is already increasing revenue yield and closing the tax gap. That is the policy that the changes will help achieve, and I urge the House to reject the motion.
4.57 pm
Rob Marris (Wolverhampton South West) (Lab): I salute the Minister’s efforts to make a good fist of things, and the efforts of this Government, and the previous coalition Government, to clamp down on tax avoidance. More should be done, but they took good steps. We need a well-functioning HMRC because we need taxes to pay for the goodies that we and our constituents want. We need a well-functioning HMRC to assist business and to maintain the confidence of taxpayers. We need a well-functioning HMRC for effective anti-money laundering steps, to clamp down on tax evasion, and to protect revenue.
It is desirable for HMRC to act efficiently, and technology is changing what it and other large organisations do. For example, 80% of self-assessment returns are now done online, and that availability of information from HMRC—including specialist knowledge—is greatly aided by the internet. There is a difficult balancing act for HMRC between providing information and guidance to businesses and individual taxpayers, and not providing tax advice, and sometimes that is difficult for staff. Like other Members, I pay tribute to the overwhelmingly hard-working and skilful staff at HMRC around the United Kingdom. It is no criticism of them that we still have a considerable tax gap. Having more staff is likely to help close that gap.
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The National Audit Office estimates an 18:1 return on employing extra staff—that means that £1 more in salary means £18 more in revenue. There is, of course, a law of diminishing returns in that scenario. HMRC itself, through its chief executive, estimates a return of 11:1.
Mark Tami (Alyn and Deeside) (Lab): My hon. Friend mentions valued staff. Does he agree that, as the Minister said, thousands of valued and very experienced staff will not be able to relocate and will therefore be lost to the Revenue?
Rob Marris: I agree, and I will come on to that in a moment. We have to look at the debate, and at what is happening with HMRC, in the context of the economy overall and the Government’s finances. In the past five years, national debt has gone up 55%. Instead of it taking five years to sort out the deficit, the Government’s own estimates say it will take 10 years. GDP per capita has stalled. The balance of payments deficit is at the highest it has been in peacetime, at 5% of GDP. Productivity has stalled. Home ownership is markedly down. It is now said that we have the fourth lowest rate of home ownership of any European Union member state. Correspondingly, net household debt is rising alarmingly. That is the economic context; we need to protect revenue.
There are problems, of course: the tax gap, to which I referred; an insufficient number of collectors; and an insufficient number of staff dealing with evasion and artificial avoidance measures. There is the difficulty—created, I have to say, by the previous Labour Government —of the disastrous contract with Mapeley, which is based, I think, in the Bahamas. The ownership of the leases of HMRC offices was transferred to Mapeley in 2001. As far as I am aware, the proposals we heard on 12 November do not address that issue in any way, except to say that we are dumping all the offices. Nothing has been said about what will happen to the leases and so on. Perhaps the Minister, in closing, could tell us a bit more about the intersection between the plans and the wretched leases with the wretched Mapeley.
Staff numbers are markedly down in recent years. According to the Office for National Statistics, between 2007 and 2010, under the previous Labour Government, the number of HMRC staff went down 9%. Under the five years of the coalition Government it went down a further 24.4%—a cumulative drop of 31.4%.
Alison Thewliss (Glasgow Central) (SNP): The hon. Gentleman may have been contacted by local trade union representatives in his area. The Public and Commercial Services Union came to see me. It understands that HMRC is currently spending in the region of £70 million on overtime. Does he agree that that indicates that HMRC needs more, and not fewer, staff?
Rob Marris: I agree. There are problems with the workforce, to which several hon. Members have referred. The chief executive of HMRC wrote to me on 12 November, saying:
“We expect that 90% of our current workforce will be able to either work in a regional centre or see out their career in an HMRC office.”
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That says to me that the chief executive of HMRC reckons 10% will either not transfer or will be made redundant. That is worrying.
Reference has been made this afternoon to response times. In the first two quarters of 2015, 12 million calls went unanswered—half of all calls to HMRC. Only 39% of calls were answered within five minutes. In the third quarter of this year, after an infusion of staff, the rate of answered calls went up to 76%. That is a great improvement—except that the target is 80%, and in 2014-15 the answer rate was 72.5%. I have to say to the Government, and particularly to the Chancellor of the Exchequer, who has a family business, that this is the worst of statism. If HMRC were a business, it would have gone bust with that appalling customer service, but because none of us has any choice but to pay taxes, it remains in business. It should not do so. It certainly needs transforming, but cutting the number of staff does not seem to me, or my party, the way to do it.
On anti-money laundering, London is thankfully a major world financial centre, but we have a huge problem with the regime set up to deal with money laundering and to counteract it. The average HMRC fine in 2014-15 for money laundering was £1,134, according to Transparency International, which I thank. That seems a remarkably low figure, although it is not helped by the fact that 14 different regulators are involved in accountancy. If that is not sorted out, HMRC staff cannot do their job properly in relation to anti-money laundering, let alone tax evasion.
As has been said, since June 2014, HMRC has not had any face-to-face walk-in centres. There are a few teams of mobile advisers—a man in a white van dashing around Northern Ireland or northern Scotland, up to Caithness or wherever—for those who desperately need a face-to-face interview, but that is a very unsatisfactory state of affairs, and not one that encourages the taxpayer to feel confident that they are getting the service they should from HMRC. It is extremely worrying that the number of offices is being reduced from 170 to 13.
Paul Blomfield (Sheffield Central) (Lab): My hon. Friend will recognise that this is a massive programme involving 56,000 staff, the closure of 140 offices and relocation to 20 sites that have yet to be acquired, all within five years. In the 2015 civil service staff survey, almost 80% of HMRC staff thought their management were unable to manage change effectively. Does he agree that there are huge risks in the programme, and that it is potentially a disaster waiting to happen?
Rob Marris: There are huge risks, partly to do with insufficient funding, insufficient staffing and an insufficient number of offices. I regret to say that in my constituency, Crown house—the second and final HMRC office in my constituency—will close. The only silver lining for people in my region is that the specialist office in Telford, Shropshire, down the road, will continue to be HMRC’s IT headquarters.
As a result of these relocations and closures, it is likely that HMRC will haemorrhage staff. It employs a lot of specialist staff. Unlike in many other Departments, an awful lot of staff in the Treasury are very mobile, as there is a ready outlet to the private sector, which often pays more.
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Chris Stephens: Does the hon. Gentleman agree that HMRC will have to publish an impact assessment in respect of the social and economic changes and staff with a disability or caring responsibilities?
Rob Marris: I do agree, but I will say more on that in a couple of minutes. Views vary on whether the closure programme is wise. Last week, the Financial Secretary to the Treasury and I again met Stephen Herring from the Institute of Directors, who broadly—this is paraphrasing his position—welcomes this kind of move because he thinks that technology has transformed, and should further transform, how HMRC operates, and that it should be driven by business efficiencies and so on. The Association of Chartered Certified Accountants is broadly in favour of this sort of change, too. Its head of taxation said it was
“reasonable to restructure the offices and we support there being higher skills”.
Correspondingly, the Public and Commercial Services Union, which does a great job representing its members in HMRC and across Government, has grave misgivings —to say the least—about the programme, as does the Association of Revenue and Customs, which is part of the FDA union and represents senior people in HMRC.
Judith Cummins (Bradford South) (Lab): Does my hon. Friend feel that adequate and meaningful consultation, with full regard to the facts, was undertaken on this decision?
Rob Marris: I do not, but again, I will say more in a couple of minutes.
At one end of the spectrum, the IOD says it broadly supports this type of change, and at the other end, the unions say they have grave misgivings. The president of the Chartered Institute of Taxation—hardly known as a supporter of the Labour party, the SNP or any political party—has said:
“Taxpayers and tax professionals alike will be anxious that a public body that is struggling to meet its public-facing service targets has announced that it is about to lose many staff and close its local offices.”
The Institute of Chartered Accountants in England and Wales—I do not know what the position is in Scotland—says that the timing of the changes
“could stretch HMRC to breaking point”,
and that the restructuring of HMRC could be disruptive and could distract its leadership.
Susan Elan Jones (Clwyd South) (Lab): Does my hon. Friend agree that the distribution of well-qualified civil servants around the country will alter fundamentally, and that it is simply not on to say to well-qualified civil servants in north Wales that they have to go to Liverpool, no tax offices being left in north Wales at all?
Rob Marris: I tend to agree with my hon. Friend. I cannot make any commitment from the Front Bench that a Labour Government would keep every tax office open, but to keep this issue in proportion, in 2010 we had about 393 tax offices collecting an average of well over £1 billion each. Any business that was bringing in that amount of money would be kept open.
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David Mowat: I am listening carefully to the hon. Gentleman’s argument. Perhaps he could tell us, on behalf of the Opposition, how many tax offices he thinks we should have. Do we go back to 310, or whatever the number was, or is 170 about right, or should it be even lower? What is the hon. Gentleman’s number?
Rob Marris: This is a classic case of this Government putting the cart before the horse. They announce the closure programme before they have got adequate information. We need a public consultation on this kind of change; we need a business consultation; and we need parliamentary scrutiny, by the Public Accounts Committee and the Treasury Select Committee, for example. Only when that process has been gone through, could I—or, I would venture, other hon. Members—form a view about how many HMRC offices should be distributed around the United Kingdom, given the changes brought about by technology and the desire for efficiency, and, balanced against that, the desire for a customer-facing service.
Imran Hussain (Bradford East) (Lab): My hon. Friend is generous in giving way. I accept that there has not been meaningful consultation and not enough scrutiny of the financial case. Does he agree with me, following what was said by the hon. Member for Shipley (Philip Davies), that where an alternative financial, economic and social case can be put, it should be reconsidered?
Mr Speaker: Order. Before the hon. Gentleman, who is an experienced and versatile Member, replies, I remind colleagues that the convention—a fairly long-standing one—is that the Opposition Front-Bench spokesperson for the party whose Opposition day it is not would ordinarily make a Front-Bench speech of about 10 minutes. The hon. Gentleman is a little over that. I am conscious that 18 Members wish to speak, and this is not a conventional Opposition day but the SNP’s Opposition day, so a brief contribution from the Labour spokesman is absolutely right and proper, but we need to get on to Back-Bench debate pretty sharpish.
Rob Marris: I am grateful, Mr Speaker. In fact, I had finished my speech but for the intervention. I shall respond to it briefly now. I absolutely agree with my hon. Friend the Member for Bradford East (Imran Hussain), and I think the Minister was very open in responding to the hon. Member for Shipley (Philip Davies). That is precisely the sort of investigation we needed before these sweeping changes were announced. There should be consultation, investigation and much more publicly available evidence.
Mr Speaker: The hon. Gentleman confirms his reputation as a gentleman. It is very much appreciated that he took what I said literally. We shall have to start with a five-minute limit. I call Mr Philip Davies.
5.13 pm
Philip Davies (Shipley) (Con):
I am in a difficult position, because I did not agree with much of what the hon. Member for Livingston (Hannah Bardell) had to say in respect of her overall analysis of the situation.
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I tend to agree with the Minister’s view: it is preferable to save jobs rather than save buildings, if the choice comes down to that. However, I think the way in which HMRC has gone about this has been rather cack-handed, so I do not feel able to support the Government either. I shall have to reflect further before the Division at 7 o’clock.
I want to focus on the decision in West Yorkshire. In Shipley, a tax office employing 924 staff is due to close. In Bradford there are two further offices, one with 358 employees and the other with 632. HMRC currently employs a total of 2,300 people in the Bradford district. To close down all the offices in Bradford and locate a regional hub in Leeds makes absolutely no sense.
The Minister will say that of course everyone is going to be a nimby and argue for their own areas but he must look at the bigger picture, and I accept all that. I would not decry any of it. My starting point is this: what produces the best value for money for the taxpayer in the United Kingdom? That should be at the forefront of what the Government are trying to do, but what they are actually doing, in a rather bizarre way, is locating a regional hub in a place that will be more expensive for the taxpayer than a very feasible alternative. If this is all about value for money for the taxpayer, why on earth should the Government make that decision? They should be making decisions based on what will be cheapest for the taxpayer.
Let me explain to the Minister why it would be more sensible to base a regional hub in Bradford rather than Leeds, and draw his attention to the flaws in the Government’s decision. Accommodation costs in Bradford are at least 20% lower than those in Leeds. That, too, would be a considerable saving for the taxpayer, and I do not think the Minister should turn his nose up at it. Most of the staff who will be moved would commute over shorter distances, because so many existing workers are from the Bradford district, and it would be much better for most of the staff to stay there.
The Minister may or may not wish to confirm this, but the decision seems to have been made on the basis that the only way to recruit top-quality staff, or staff with a certain ability, is to locate the offices in Leeds rather than Bradford. Not only is that insulting to Bradford, but it is based on no facts whatsoever. It is complete and utter bunkum. Saltaire, in my constituency, contains one of the most technologically advanced businesses in the country, Pace International. It is the biggest provider of set-top boxes in the world, and it does not seem to have experienced any problems recruiting high-level and high-quality staff to the Bradford district. If HMRC’s argument made any sense, the Minister would be saying that companies like that could never locate in the Bradford district, and that they would have to go to Leeds to acquire staff of the necessary calibre. HMRC’s thinking has been flawed from the start.
If that has not persuaded the Minister, I suggest that he visit any of the stations on the Airedale line in the morning, and then visit Leeds station during the rush hour. If he does so, he will find legions and legions of people—thousands and thousands—who live in Airedale, in the Bradford district, and who would presumably prefer to work there but are making the journey into Leeds to their jobs. They are already attracted to the Bradford district. They are already living there. If the Minister and HMRC’s argument made any sense, they
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would all be living in Leeds. If that were the place to be, they would not be living in Bradford. Bradford is a place where many people choose and prefer to live, and it is ridiculous of HMRC to argue that the only way to attract quality staff is to base an office in Leeds.
It seems to me that this is all about what is in the best interests of the London-based HMRC staff. I am delighted that the hon. Members for Bradford East (Imran Hussain) and for Bradford South (Judith Cummins) are present. We will all work together, and I hope that the Minister will listen to the arguments and change his mind.
5.18 pm
Chris Law (Dundee West) (SNP): Thank you, Mr Speaker, for giving me an opportunity to contribute to the debate. The time constraint just goes to show how important the motion is. I hope that in future there will be time for us to debate this important issue seriously.
More than 800 staff are employed at HMRC’s two facilities in my constituency, Sidlaw House and Caledonian House. When I met some of the staff last Friday, they confided in me their fears about the recent announcement of significant job losses, which is just the latest in a series of devastating attacks on public service jobs that Dundee has endured at the hands of successive Westminster Governments. That is completely at odds with what is happening in Dundee just now. The city is undergoing a £1 billion regeneration project—one of the most extensive in these islands—and employment is on the up, bucking the national trend. At the stroke of a pen, however, this Westminster Government have single-handedly put at risk the progress the city has recently been making to create and protect jobs. This has been done without public consultation or ministerial sign-off.
Unlike Scottish Government civil servants, HMRC staff will not be covered by a ministerial commitment to no compulsory redundancies. At Caledonian House, for example, we understand that 130 jobs are to be stripped from the city. I am told that the work carried out there predominantly relates to corporation tax and compliance. Ten years ago, there were more than 200 HMRC staff there. The office now occupies half the space, and it looks as though it could be boarded up by 2018.
Skilled employees, some of whom have 30 years’ experience and have provided decades of loyal service, have been abandoned by an organisation to which they have dedicated their whole career. The office currently has only two members of staff at grade 6 or 7. I disagree with the Minister’s statement that training would continue. There used to be 10 staff at those grades as well as four trainees, of whom there are now only two.
Staff at Caledonian House are being told that the best outcome they can hope for is a possible transfer to the new Edinburgh or Glasgow centres. If—I repeat, if—HMRC chooses to re-employ those staff, which I am told is by no means automatic, the impact on them and their families will be dramatic. Most HMRC employees in Dundee will be well outwith an hour’s commute of the new regional offices in Edinburgh and Glasgow, which is what HMRC defines as “reasonable daily travel”. So by HMRC’s own definition, it will be asking staff to do something that it does not consider to be reasonable.
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Caledonian House is set to be shut down and boarded up by 2018, as I have said, yet we are being told that the new regional centres in Edinburgh and Glasgow will not open until 2020-21 at the earliest. That raises another question. What plans, if any, does HMRC have for the 130 staff at Caledonian House? In a letter that I recently received from HMRC’s chief executive Lin Homer, she stated:
“As Caledonian House is some distance away from the new regional centre, our employees will not automatically move to the regional centre once this office closes.”
So there we have it, in black and white: HMRC can offer no guarantees of job safety to existing employees at Caledonian House. They will be forced to apply for a job at the new regional centres. If that is not a betrayal of a loyal and dedicated workforce, I do not know what is. At Caledonian House alone, there are 10 couples working under the same roof, so there will be an impact not just on sole employees but on couples. This will have a devastating effect on the lives of those families.
The rationale for closing Caledonian House early is shrouded in mystery. HMRC has stated:
“The closure date for Caledonian House reflects the timing of when we will restructure the work that is currently located there.”
However, two senior officials who visited Caledonian House on Tuesday 17 November could not tell staff how those restructuring plans would play out. What are we to take from this? One local union representative told me:
“Mixed messages or misinformation are the only assumptions that can be made.”
Neil Gray: Does my hon. Friend share my concern that last year in the independence referendum the Better Together parties were quick to point out that the only way of securing HMRC tax jobs in Scotland was to vote no? Was that a betrayal?
It is difficult to avoid the conclusion that HMRC is making this up as it goes along. There are 650 people working at Sidlaw House who have been offered nothing more than empty promises about a potential move to the Department for Work and Pensions to work on universal credit. We know that the DWP is undertaking its own potentially far-reaching estate review in the face of what are likely to be swingeing cuts in tomorrow’s autumn statement, which could very well see it, too, pulling out of the city altogether. The employees at Sidlaw House deserve better. They deserve to know the truth.
Dundee cannot afford to lose these highly skilled jobs. The plans as they stand represent an absolute hammer blow for the city, with at least 130 skilled jobs being cut by a Tory Government with no mandate in Scotland. As I have said, there is also no clarity about the 650 jobs at Sidlaw House, or whether they will be transferred to the DWP. Families across the city will be devastated by this news and worried about the future. I cannot stress my opposition to this strongly enough.
5.24 pm
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con):
As a newly elected member of the Public Accounts Committee, I recently had the opportunity to look
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closely at HMRC’s efforts to increase the amount of tax it collects and how it plans to do better. Our latest report, published on 3 November, made it clear that it is our opinion that HMRC has continued to fail in its customer service standards, and that if it is to collect much more of the tax due to the Treasury, modern, fit-for-purposes systems that support the Government’s “Digital by default” agenda must be in place.
At the moment, HMRC’s 58,000 employees are spread across 170 offices, many a legacy of the 1960s and 1970s. Their staff numbers range from fewer than 10 to some 6,000 people. To meet the customer service standards and increase tax revenues, the service needs to be providing its customers with modern services, at a lower cost to the taxpayer. As the Minister mentioned, this year HMRC recruited 3,000 additional staff to customer-facing teams. Those staff are providing services in the evenings and at weekends, building capacity outside normal working hours, which helps the taxpayer who is trying to sort out her tax payments. That is a great step forward: a major government body is changing its working practices to meet its customer demand. Many more customers now want to work out their tax payments online, at a time of their choosing. HMRC’s investment in digital services, simpler and more user-friendly portals and work with accountancy software designers to make small business financial packages automatically link into HMRC’s reporting systems is freeing up staff to deal with more complex tax problems.
Rebecca Pow: Are not 80% of customers already filling in their tax forms online? That proves exactly what my hon. Friend has been saying about modernising being the right approach.
Mrs Trevelyan: I thank my hon. Friend for her intervention, because what she says is exactly right. We have to be mindful of that situation as HMRC moves forward in this digital world. HMRC collected £518 billion from UK taxpayers in 2014-15, an increase of £12 billion on the previous year. Over the past five years, a continuously increasing tax take has been matched by a reduction in running costs from £3.4 billion to £3.1 billion. I believe the Chancellor is totally committed to supporting HMRC to do its job better, and the Budget in July gave it a further £800 million to invest in compliance work over the next five years and collect an additional £7 billion in tax take.
There will, however, remain a tax gap, and challenging and overcoming that will continue to need the most modern systems and highly qualified staff. In search of such, the move to modern, regional centres across the UK will bring together the skills and the efficiency of resource and talents to maximise tax collection. HMRC expects the majority of its existing staff to be able to move to the regional centres, with a 10-year phasing to minimise redundancies. There will eventually be a modern, digitised organisation with fewer staff, but I have every hope that the programme of change is being well managed—I will be continuing to monitor it, as will the PAC.
I have some concerns about the regional centre plans. For example, I question the need for two London-based sites, in Stratford and Croydon, given that there is no base in East Anglia, where I would have thought running costs were lower. In the north-east, we already have a
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major HMRC centre at Longbenton in Newcastle, which supports a wide variety of tax-collecting divisions. The changes in staffing levels and working hours are starting to improve customer service there, and it is key that we make sure HMRC maximises the investment in its quality of staff and effectiveness across the UK to get the maximum benefit. HMRC’s modernisation of its efficiency and digital service provision is vital if the service is to continue to reduce that tax gap in order to help us to pay for the public services—the goodies, as the hon. Member for Wolverhampton South West (Rob Marris) called them—we all want to see, to transform its services to customers and to be able to clamp down further on the minority who are still trying to cheat the system.
5.28 pm
Peter Dowd (Bootle) (Lab): On 12 November, HMRC made its “Building our Future: location strategy” announcement. As far as I am concerned, that is the precursor to the end of 50 years of my constituency’s links with the civil service as a major public employer. More than 2,500 hard-working, committed, loyal and productive staff at four sites will be affected by the announcement, of whom almost 700 are my constituents. Many of them are my friends, and many of them work in specialist and complex areas of investigation and administration. Regrettably, I found out about the detail—I use the word “detail” very loosely—in a very short letter from the chief executive. It was sent at 2.14 pm on 12 November, which was when Parliament was in recess. It said:
“I am writing to let you know that HMRC has today announced the next step in our ten-year modernisation programme to create a tax authority fit for the future, committing to high quality jobs and the creation of 13 new regional centres serving every region and nation in the UK.”
Members should consider how it feels to tell that to the hundreds of people who will lose their jobs, and to the thousands who will be moved out of my town centre. It seems that every Tom, Dick and Harry knew about the change before I did, and that is disrespectful not to me, but to the thousands of people in my constituency who are affected.
On reading the letter, it almost felt as if I should be grateful to HMRC for continuing to employ people anywhere to collect tax, and as if the service was expanding rather than contracting. I do not know how it managed to do that, but it did.
As I understand it, almost 170 offices will be closing, and they will be replaced by 13 regional centres and four specialist sites over the next five years, although some existing sites will remain open for longer. By 2021, HMRC will be operating out of just 35 locations. For staff in Bootle, the news is particularly shocking.
Litherland House is expected to close in 2018-19, followed by the Triad tax office and St John’s House in 2019-20. Comben House will also close. Those closures will have a significant and, in many cases, devastating impact on large numbers of people, staff and families. The implication in the letter is that staff should be grateful for having a job, even if it has a major effect on their lives, which is an absolute disgrace.
Many staff will face additional costs, with car parking charges and so on, and a detrimental effect on their family lives. They will have to travel to a regional centre,
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the location of which they have not yet been told. HMRC has announced that it will move to these regional centres, but it will not say where those centres will be. It will be devastating news wherever it is if it is not in the centre of my town. Many questions must be asked, but before I ask some of them, let me just quote Accountancy Live, which is a web-based professional site. It says:
Tax advisers and professional bodies are sceptical about whether HMRC’s plans to close 137 offices…cut real estate costs and save £100m, will deliver improvements in customer service levels, amid concerns that the changes could stretch the tax department to breaking point.”
Margaret Ferrier (Rutherglen and Hamilton West) (SNP): Does the hon. Gentleman agree that the cuts will put HMRC under even more pressure at a time when more resources are needed to militate against the ongoing problems that both HMRC and Concentrix are causing? Numerous constituents have contacted me, suffering from the inadequacies of both departments, and I am sure that those problems will only be exacerbated by the cuts.
Peter Dowd: The hon. Lady is absolutely right. It is a fantasy to suggest that, by closing all these offices, we will be able to collect more tax and to tackle fraud.
Let me put a few questions to the Minister. When will the locations of the new regional centres be announced? Has an equality impact assessment been carried out on all the areas affected, particularly the four sites in my constituency? When did HMRC establish which sites were to close, and why was the decision not subject to consultation with Members of Parliament, trade unions, the Treasury Committee, and the Public Accounts Committee? Will the impact of additional costs be factored into the departmental deals, as there has been a pay freeze for God knows how long? What level of community or local business consultation has taken place ahead of the announcements? As far as I am concerned, absolutely none has taken place. Have the following losses to HMRC been taken into account? What about redundancies, income tax, local business tax, increase in jobseeker’s allowance, income support claims, national insurance contributions? The list goes on.
In my constituency specifically, what will happen to the 136 benefits and credits staff currently based at the Triad? When Litherland House closes, how will the other Bootle offices accommodate the staff? What will be the cost of the temporary building adjustments needed until 2020? What will be the cost of altering the software in order to move profiles around sites during the transition period? The questions go on, but we have had not one answer. I demand answers to those questions.
5.35 pm
Sir David Amess (Southend West) (Con): I wish to make the case not only for Alexander House in Southend to remain open and keep its jobs, but for it to expand. I am beginning to think that my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) will support the idea of Southend becoming the regional site.
Like the hon. Member for Bootle (Peter Dowd), I knew nothing about the planned closure. My hon. Friend the Financial Secretary and I have had a private
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chat and I do not blame him. He is an excellent Minister and we have a very strong Treasury team. My hon. Friend the Member for Rochford and Southend East (James Duddridge) and I share responsibility for Southend and the building is in his constituency, but I think that just as many of my and his constituents work there. I have been on the back foot on this issue, but not anymore—I am on the front foot now. I remind my hon. Friend the Financial Secretary that he visited Alexander House two years ago. He, my hon. Friend and I had a wonderful tour of the building and he learned at first hand about its strong tradition and the loyalties among its staff. It has superb expertise and I think it is the second or third biggest employer in the borough of Southend. My hon. Friend the Financial Secretary seemed very impressed with everything he heard. Indeed, Her Majesty the Queen visited the building a few years ago and I know that she was also very impressed with everything she saw.
I absolutely support and accept the overall strategy. Our Treasury team is doing a wonderful job in sorting out the public finances in the light of the terrible mess we were left with in 2010. However, I was born in Stratford and I hate to be in the position of pitting one area against another. The hon. Member for West Ham (Lyn Brown) is a splendid colleague, but Stratford is getting everything. It got the Olympic games—I chaired the Bill for that—and it now has my football team, West Ham, so I am loth to stand by and remain silent. My hon. Friend the Member for Berwick-upon-Tweed spoke about East Anglia and questioned the logic of having the office in Stratford. I do not understand, either. I would have thought that, on economies of scale, Southend was entirely the right place for it to go.
As it stands, Southend will lose 1,265 jobs, which is absolutely devastating. I am also told that the Southend base will continue as a transitional office for staff from other nearby offices that are due to close before Southend. When my hon. Friend the Financial Secretary or my hon. Friend the Exchequer Secretary sum up the debate, I do not know whether they will say for how long Southend will be a transitional office, but I imagine that once those other employees have moved to Southend they will not want to leave, because, as we all know, it is this country’s premier seaside resort and the alternative city of culture 2017. I know from my discussions with the local authority that Southend will offer the Treasury a very attractive deal if my hon. Friend the Financial Secretary agrees to have Southend as a regional site.
I am delighted that my hon. Friend the Financial Secretary has agreed to meet my hon. Friend the Member for Rochford and Southend East and me. I hope we will have a detailed discussion about travel arrangements and possible redundancy payments, but I ask my hon. Friend the Financial Secretary to think again. I hope that I and my hon. Friend the Member for Rochford and Southend East will be able to persuade him to have the regional site in Southend.
5.39 pm
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP):
I am pleased to have the opportunity to take part in this debate and to put on record the profound disappointment and, indeed, anger felt by my constituents, who have for years worked incredibly hard at Cumbernauld tax office. I want also
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to express the huge disquiet felt across the town at these proposals to close down our biggest employer and relocate good-quality jobs elsewhere. All that comes, as other hon. Members have said, with little in the way of explanation and even less in the way of consultation.
On any view at all, the announcement made two weeks ago about the HMRC offices is of enormous significance and has the potential to cause immense disruption to the staff affected, to the communities where those tax offices are currently based and to the services that HMRC provides in collecting taxes. It is astonishing to me that the Government think that such a major announcement does not merit so much as a ministerial statement.
I have received no correspondence from HMRC, so I feel like I have been missed out a little compared with honourable colleagues. However, my colleague Jamie Hepburn MSP received a letter similar to that sent to my hon. Friends, full of vague management-speak rather than information. There were no parliamentary debates until we secured this one. PCS representatives were not consulted on the criteria used by HMRC for site selection or on outline decisions, and they agree with neither. That is not good enough at such a huge moment for HMRC and its staff.
HMRC claims that £100 million of estate savings will be generated each year by 2025, despite not knowing where these brand-new city centre sites will be and how much they will cost. If HMRC has such confidence in the model it proposes, the supposed savings that it will make and the claimed benefits to service standards, it should have nothing to fear from extensive scrutiny, so let us have that extensive scrutiny. Will the Government agree to a full debate on, and scrutiny of these detailed proposals here in Parliament, to both public consultation and full consultation with PCS, and to the pausing of implementation while all that is under way?
To say that the months leading up to the announcement have been a frustrating and worrying time for hard-working and dedicated staff in HMRC offices across the UK would be a grave understatement. Up to 1,600 people in Cumbernauld will be directly impacted once we factor in IT staff provided by contractors, as well as catering and cleaning staff. Most frustratingly, between woolly press releases, vague correspondence and contradictory information at staff meetings, many questions remain unanswered. HMRC’s letter to my colleague Jamie Hepburn, which I think was almost identical to that received by the hon. Member for Wolverhampton South West (Rob Marris) and others, said that
“90% of our current workforce, including the majority of those working for us in your constituency, will be able to either work in a regional centre or see out their career in an HMRC office”.
The hon. Gentleman raised several issues arising from that letter. I would also ask, how big is the majority of staff who will continue to be able to work in HMRC offices? There is a grave lack of clarity.
The Government have said that there will be no compulsory redundancies. Yet, on the other hand, workers in Cumbernauld have been told that no voluntary packages will be available to them. Given that we know that the Government require a cut in the workforce in the west of Scotland in order to fit them in the new office, people are rightly asking whether the Government are seeking to lose staff on the cheap, hoping that they will jump without having properly to compensate them.
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Staff also ask whether it is coincidence that rules on acceptable travel distances in the event of relocation have recently been tightened to their detriment and why travel allowances have been limited to three to five years. What about those who already commute from a considerable distance east or north of Cumbernauld, many of whom are closer to Edinburgh? Why are they not being allowed to choose the Edinburgh hub ahead of Glasgow? Will there be options such as home-working or other creative solutions? While measures on retraining and redeployment could be positive, we need to see so much more detail before we can judge how meaningful they are.
Most importantly, people need to know when exactly they will be expected to move. Is it soon, towards the end of the five-year period or some time in between? Is their job moving with them or are they moving to a new job in terms not only of location but of role? HMRC claims that people will be better able to develop careers up to senior levels, but my constituents fear that their good-quality roles will be replaced with poorer quality work.
On so many levels this does not seem a well thought-through plan, and it should go back to the drawing board. What is particularly perplexing in the context of Cumbernauld is that some of the proposed regional centres will hold as few as 1,200 staff. Cumbernauld hosts between 1,500 and 1,600, so why not retain it if that is efficient enough as part of the new model?
5.44 pm
Rebecca Pow (Taunton Deane) (Con): I welcome the opportunity to speak in this debate. I also welcome the modernisation of HMRC. It is right that the service is streamlined. Value for the taxpayer and customer service must be at the heart of our reforms, and I truly believe that it is possible to save money and improve customer service. At the end of the day, like many things in business, it comes down to efficiency and productivity, both of which have proved increasingly difficult to achieve in the current system, as has been pointed out.
It is imperative that we collect the taxes that are due and crack down on tax avoidance. People in my constituency of Taunton Deane often raise that with me, and Members from all parts of the House are concerned about it, which is why we need a system that will get to grips with problems, especially tax avoidance. Bringing together a highly skilled workforce based in specialist buildings will help to meet that challenge. I have sympathy for people who work in offices that are going to close, but the existing offices are old-fashioned, and many of them are in buildings built in the 1960s and ’70s. They are stuck in the dark ages.
Rebecca Pow: I am going to plough on, because we have been told that we cannot speak for long.
A move out of outdated offices, many of them in London, will help to achieve major savings on those antiquated properties. It is the kind of common-sense approach that all businesses take to achieve cost savings and to improve efficiency. I have been assured that it is anticipated that many staff will move to new regional centres. Bristol has been proposed as the centre for the south-west, but I would like to suggest that the county town of Somerset—Taunton, in the heart of my
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constituency of Taunton Deane—be considered for a regional centre. I would welcome a discussion on that, and I have been contacted by the powers that be in Taunton Deane. There is a wonderful location for such a centre on junction 25 of the M5 in our new strategic employment site, providing easy access for everyone, everywhere.
Rebecca Pow: I am going to plough on.
Streamlining office buildings is not the only component of the modernisation programme, as we have heard. There is a full programme of measures, including investment in online services; new compliance techniques; and other initiatives that make it easier for taxpayers to access the system. We are all keen to pay our taxes. The benefits of those measures, as I have said, have come into play, as 80% of customers complete their self-assessment online, saving time and money, and moving us towards a 21st-century system.
I have been approached by many constituents about the difficulty of accessing the tax office. I have intervened in such cases and, once I have done so, the service has been good. However, I welcome the upgrade and I fully expect that it will make life easier. Indeed, the 3,000 extra staff who came on board at the weekend to handle phone calls will help. As I have said, I applaud the opportunity for more personal contact where appropriate.
To sum up, major investment in a new, modern system with highly skilled staff, many of whom are already working for HMRC, and many of whom we will train, will bring in more revenue at less cost to the taxpayer, so the streamlining of HMRC, once it beds in, will be a win, win, win.
5.48 pm
Ian C. Lucas (Wrexham) (Lab): I say to the Minister that this was an absolutely appalling announcement. It was appalling in the way it was done. I was sitting in a conference at 2.14 pm—I thank my hon. Friend the Member for Bootle (Peter Dowd) for reminding me of the time—with two Tory Ministers talking to us in north Wales about rebalancing the economy when I received a missive, not from a Minister or the Government but from a civil servant telling me that 350 people in my constituency in Wrexham would be made redundant or transferred from north Wales to Liverpool, where they would be in hot competition with individuals from Bootle trying to find jobs. I was told by email what the Conservative Government think of north Wales.
Never has there been a sharper contrast between rhetoric and reality. This Government supposedly talk about rebalancing the economy. Other colleagues in the Chamber have made the point that the sites identified and set out in the letter that was sent to us do not yet exist. This was an ideal opportunity for the Government to take a sensible approach to rebalancing the economy with taxpayers’ money, by shifting jobs out of areas that are economically successful and expensive, such as London or Cardiff, to other areas, such as north Wales. In Wrexham there are places available to house highly skilled workers providing a first class service in a new online age. The House need not take my word for it. We have in Wrexham high quality service companies
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such as Moneypenny, which provides virtual office services, and DTCC Avox, which provides company search facilities not just within the UK, but right across the world. They are expanding and bringing jobs to Wrexham in order to be more competitive.
This Government do not know their backside from their elbow. They do not recognise that already we have 350 highly skilled people in Wrexham who are doing an excellent job. In addition, we have people in the local economy who have been identified by the private sector as being particularly skilled at providing exactly the services that this Government or any Government need to bring in more money to eliminate the deficit that the Minister told us in 2010 would be gone by today but is still there because of the economic incompetence of the Tory party.
Philip Davies: The hon. Gentleman made the point, as did the hon. Member for Bootle (Peter Dowd), that the sites were not known yet. A site is already available in the Bradford district that HMRC could move to, whereas in Leeds there is no identified site yet. Does the hon. Gentleman agree that it is very bad negotiation for the Government to say that they are going to go to a particular place without a site, because if they do identify a site the landowner will have them over a barrel when the negotiations take place?
Ian C. Lucas: I am grateful to the hon. Gentleman, and I commend him—which, I think, is a first in the 14 years I have been here—for his excellent speech. The points that he made mirrored many of the points I have been making and intend to make. It makes no sense whatsoever for the Government to approach the issue in the way they have.
I shall speak specifically about Wrexham because I am here to represent my constituents. It is incredible that the only HMRC service in Wales will be in Cardiff city centre. Cardiff city centre is boom town. The announcement from HMRC was followed last week by the BBC announcing the creation of its new centre for Wales in Cardiff city centre, so HMRC had better hurry up and find a site or there will be no room left in Cardiff.
The Minister is a reasonable man. I find it incredible that he has been in the Treasury since 2010, because he is a reasonable man. I ask him please to look at the announcement again. I mean it seriously. I cannot understand the rationale for the announcement economically, politically, intellectually or in any sense. He should listen to the sensible debate. I am grateful to the SNP for bringing the topic to the Floor of the House and I will certainly support the motion today.
We desperately need a fundamental rethink, because the Government are talking about our money—our money, taking jobs away from a place like Bootle! They should be using public money to support economic development in the parts of our country that need it most. That is common sense, I say to the hon. Member for Taunton Deane (Rebecca Pow). I ran my own business, and if I did it pursuing policies like this, I would have been bankrupt before I started.
5.55 pm
Huw Merriman (Bexhill and Battle) (Con):
In opposing this motion, I wish to applaud HMRC’s excellent work over recent years. Thanks to its endeavours, there has
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been a reduction in the tax gap to its lowest level of 6.4%. That is a long-term trend showing that the targeted approach to tackling non-payment is working. However, the issue facing HMRC today is that in attempting to calculate and pay their taxes, taxpayers are spending 30 minutes or longer waiting to discuss their affairs. In the first half of 2015, 50% of callers were not answered at all.
It is clear to me that the current tax centre arrangements are not working and need modernising. It makes huge sense to replace the numerous local offices, where staff levels range from 6,000 employees to just 10, with regional centres that will give a more balanced and even coverage. This follows the trend of other service operators in moving to a regional model. Indeed, it is not just service centres that are moving to regional, or indeed country, models. Last Friday, listening to the First Minister of Scotland on an excellent “Desert Island Discs”, I was struck by her reasoning for moving Scotland’s police towards a one-country force. I therefore ask why it has taken so long for HMRC to move to this type of model. Banks were setting up current account centres when I was a 16-year-old working as a cashier for Abbey National in my holidays. [Interruption.] It was many years back.
In an increasingly technological age, it is outmoded to continue to argue, as this motion tacitly does, that the effectiveness of an operation is down to the number of workers, or their location, rather than the completion of the work itself. In many public-facing industries, technology means that human input is no longer required or is required less. In reducing and streamlining its staff numbers, I welcome HMRC’s intention to invest in technology to make itself more efficient. In an age when many of my constituents elect to complete their work online, it makes more sense to move funding to the areas where HMRC is able to target avoidance.
In my constituency, where we have two offices that will be replaced by a regional centre in Croydon, for the past year it has not been possible for my constituents to go and discuss their tax arrangements: that walk-in service has been unavailable. I therefore cannot see how they will be inconvenienced by the fact that the person they speak to on the phone is no longer in Hastings but in Croydon.
It is of course always regrettable when new service models, driven by new technologies, and the preference of the public to work online rather than deal face to face, lead to the potential for redundancies. As is the case for any employee faced with the uncertainty of redundancy, I have the greatest sympathy for those impacted, and I am glad that our economy is performing strongly enough to give confidence and optimism to those who may be rejoining the jobs market. However, I contend that it would be wrong to hold back modernisation, to use resources that can otherwise be better targeted in the sophisticated fight to win more tax receipts, and to fail to address the shortcomings in customer service. I therefore welcome these changes to HMRC and will vote favour of them today.
5.59 pm
Liz Saville Roberts (Dwyfor Meirionnydd) (PC):
The Government have been dismantling their tax services in Wales for 15 years, and the “Building our Future” location proposals are the final nail in the coffin of a tax service that used to operate a very effective network
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for taxpayers across Wales. Not so long ago, there were offices to be found in 22 towns and cities. Fast forward five years from today and the Government propose that there will be only one centre, and that will be in south-east Wales.
HMRC’s Porthmadog office at Ty Moelwyn in my constituency is once again earmarked for closure. It is the home of the tax office’s Welsh language unit. This is not just about offices, but about staff. There was no mention of the Welsh language unit in the mail merged letter I received during the recess. The office in Gwynedd is well placed to attract and retain fluent Welsh-speaking staff. It offers that rare thing—a naturally Welsh-speaking workplace. Importantly, it also serves the region of Wales where demand for Welsh-language services is highest. As one of its users, I urge every Welsh speaker to take advantage of using the office, even those who lack the confidence to discuss financial matters in Welsh, not for the good of the language, but because the Porthmadog staff are good at their job.
Beyond Porthmadog’s specific and limited Welsh language remit, HMRC’s commitment falls far short of the statutory requirement, according to the Welsh Language Act 1993, to treat the Welsh and English languages as equal when providing public services in Wales. I am currently working on behalf of a constituent who has been told that he cannot use Welsh to resolve a chapel’s tax affairs. Business customers tell me the same about their businesses. Others complain of waiting for 40 minutes and more before the telephone system will allow them to access the service in Welsh.
The proposal is that the service can be maintained just as effectively in Cardiff. The county of Gwynedd is home to 77,000 Welsh speakers, which is 65.4% of the county’s population; Cardiff has fewer than half that number of Welsh speakers. The Government are intent on moving the service from a rural region where Welsh is the language of everyday life and civic administration to an urban centre 150 miles and four hours’ drive away, which is about as far from its likely users as it is possible to go and still be in Wales.
The tax office has had the honesty to admit that it is not realistic to expect workers from Porthmadog to travel to south-east Wales. Workers at Wrexham and Swansea are being offered the option of transferring to Liverpool or Cardiff. That sounds fair until we recall that former reorganisations offered workers the option of moving to workplaces that are now in turn threatened. This is in the month when it was announced that unemployment in Wales rose by 3,000—news that was described by the Secretary of State for Wales as a “disappointing set of figures”.
The closure of the offices is a body blow to plans to devolve tax powers to Wales. On the one hand, the Tory Government extol the virtue of Wales taking more control over our taxes—Plaid Cymru has proposed that for years—yet, on the other hand, the means of administrating such powers is shuffled across the border to England. The level of reorganisation proposed should be subject to proper public and parliamentary scrutiny at UK level, as well as with the PCS Union.
There are specific issues unique to Wales that must be addressed. First, changes to how Welsh language services are provided should be the subject of a language impact review, as is customarily required for public sector Welsh language schemes. Secondly, the administrative
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requirements of increasing tax devolution should be identified and the views of the National Assembly for Wales sought.
I urge the Government to reconsider the impact of their proposals on services in Wales, on services to Welsh speakers and on services to the nation as a whole in the light of the devolution agenda, and in particular to reconsider the significance of well-paid public sector jobs in a low-wage economy such as that of Dwyfor Meirionnydd.
6.3 pm
Mike Wood (Dudley South) (Con): Moving more of HMRC’s work out of central London, which has some of the world’s most expensive office space, will enable it to make substantial savings. It is right that HMRC makes whatever savings it can on its property costs so that the money that it does have can be used to improve customer service and maximise tax revenues. It cannot be sustainable for its 58,000 full-time employees to be spread across 170 offices around the country, many of which, as has been, said are little more than a legacy of the 1960s and 1970s. That is highly inefficient.
However, while recognising the need to modernise and reform, we have a responsibility to make sure that HMRC’s staff are treated fairly. I therefore hope that everything possible will be done to retain skills and expertise within HMRC by making sure that as many of the workforce as possible are redeployed. In particular, I emphasise the need for support for the local workers in Brierley Hill in my constituency who choose to transfer to the Birmingham regional centre, and for support and retraining for those who do not transfer to the new centre. I hope that in implementing the changes, HMRC’s management will work closely with colleagues to see how many Brierley Hill and Merry Hill staff might be taken on by the Department for Work and Pensions when the Merry Hill office is transferred to the DWP.
My constituents in Dudley South expect the same high standards from HMRC as they expect from banks and retailers. This programme will help meet those expectations. People in my constituency will welcome the creation of a regional centre in the west midlands, with the high-quality jobs and skills such a centre brings. I am pleased that as part of the modernisation programme, HMRC plans to work with universities and local colleges to attract the best and brightest talent. Although I recognise the importance of Birmingham as Britain’s second city, I urge HMRC not to rule out the black country as a suitable location for the west midlands regional centre.
Quite rightly, Members and residents expect HMRC to increase tax revenues, while cutting running costs, as it has done over the last five years. An additional £11.9 billion was collected last year and an additional £57 billion has been collected over the past decade. Total tax revenue has increased in each of the past five years, during which time HMRC has reduced its running costs from £3.4 billion to £3.1 billion, including £210 million in sustainable cost savings last year alone. However, HMRC cannot rest on its laurels; it must continue to build on these significant achievements. We expect a lot from HMRC.
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The changing demands on the organisation mean that ways of operating that might have been appropriate in the past might not be appropriate for the future. Like all organisations, HMRC must continue to adapt if it is to be as effective and responsive as we all want, while operating as efficiently as we must all surely demand. We owe it to HMRC’s leadership to allow them the independence they need to make the changes that they have decided are necessary to meet the challenges. That is why I will support the Government and oppose the motion this evening.
6.7 pm
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP): Thank you, Madam Deputy Speaker, for allowing me to speak in this extremely important debate.
It has been announced that the Hawbank Stores site and the East Kilbride Plaza site in my constituency are due to close in 2021. The Queensway House site is due to close in 2026, but that proposal is tentative and depends on whether better lease terms can be agreed.
The restructuring of HMRC is a direct result of the Treasury’s demand for a 30% cut to its budget to satisfy the Chancellor’s austerity agenda, which the majority of the people of Scotland did not vote for. The result is that many people in my constituency face uncertainty and anxiety over their future because of the Westminster Government’s ideological drive to cut public services.
The East Kilbride tax office and its workforce are a significant and long-standing institution in the local community and in the economy of my constituency. Everyone in my constituency is related to or knows someone who works there or has worked there. In fact, my grandmother worked as a tax office clerk in East Kilbride some 30 years ago.
Some workers may have the opportunity to be relocated to the proposed regional offices. That will be of no consolation to those who lose their jobs and neither will it negate the anxiety in the interim, as people wait to find out their fate.
At a time when tens of billions of pounds are still lost to tax evasion, these cuts make no sense. They are likely to have a detrimental impact on society and the economy at a local and national level. Removing those jobs from the local area does not only affect the employees involved because it has a wider impact on the whole community. It is likely to have a significantly adverse impact on local businesses and other jobs, and cause great difficulty in promoting economic growth. We want to encourage companies and services to locate to our constituency, not to leave. For those workers who are moved to regional offices, the additional and enforced commute is likely to impact on their personal lives by reducing the time that they can spend with their families. That is likely to have additional financial implications owing to extra travel and the bearing it could have on childcare.
The closures are counterproductive and send a clear message that the Government are going soft on tax collection and tax evasion. It is appalling and draconian that three offices are proposed to close in my constituency. Oscar Wilde famously wrote:
“To lose one parent may be regarded as a misfortune; to lose both looks like carelessness.”
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I suggest that to lose three tax offices is unforgivable, and if the closures go ahead, it will be ingrained forever that the Conservatives are no friends of the people of East Kilbride, Strathaven and Lesmahagow.
I urge the Minister to return to the drawing board—he has been described by some as “reasonable”—and to consult, review, conduct impact assessments, and urgently to meet me and local staff, my colleagues and devolved Governments, and my hon. Friends who have spoken today.
Madam Deputy Speaker (Natascha Engel): Order. I am sorry but I must drop the speech limit to four minutes to ensure that we accommodate everybody.
6.11 pm
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP): The hon. Member for Wrexham (Ian C. Lucas) mentioned that this announcement had been a surprise. The skilled staff of the HMRC office in Inverness were anticipating some changes, but instead they received a hammer blow. The plan to close 137 local offices and replace them with 13 regional centres by 2027 hid the news that that will happen in Inverness in 2017-18—hardly time to draw breath on the decision. HMRC employs 8,330 people in Scotland, which is 13% of all UK HMRC staff—hardly a dividend worth retaining if that is the way we are to be treated.
The Public and Commercial Services Union has said that 11,000 full-time equivalent staff posts had been cut from HMRC since 2010, and that any further cuts would be “absolutely devastating.” Its general secretary, Mark Serwotka, stated:
“Closing this many offices would pose a significant threat to the operation of HMRC, its service to the public and the working lives of staff, and the need for parliamentary scrutiny of the plans is undeniable and urgent.”
I am delighted that the SNP has initiated this debate in the House to provide just that.
In my constituency, more than 50 staff face losing their jobs. Many are women and over 50 years old, and—most importantly—all are skilled in dealing with complex tax problems for people across the UK. Not only do they save money for HMRC and the taxpayer, but they save businesses from going into administration and provide people with vital advice. I have met those workers, and I was impressed with how flexible they can be, and how they operate in a virtual team. They have been retrained many times in the past.
The Government talk about creating a more modern HMRC, but why have they not taken time to look at Inverness, the fastest growing city in Scotland? The hon. Member for Dudley South (Mike Wood) spoke about the expense of London, but there is nothing expensive about Inverness. It has great people and a great facility, yet that is being taken away. That is not the best way to deal with the issue. There is no evidence of any assessment of the impact on staff with disabilities or caring responsibilities, or of the social, economic and environmental effects of this move.
Chris Stephens: Do not the points raised by Members from across the House show that, given the lack of a basic impact assessment, the proposals should be ripped up and we should start again?
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Drew Hendry: I completely agree with my hon. Friend, who is the vice-chair of the parliamentary Public and Commercial Services Union group and knows what he is talking about. There has been no assessment. Skilled workers in my constituency have dedicated their lives and careers to working for HMRC, and they have been left cold by this announcement. They have been hung out to dry. It is absolutely vital that there be a review focusing on the people who have spent many years training to do a job that it is very hard to do from a call centre elsewhere. To exploit their skills would be the right thing to do; to dismiss the skills and the people and throw them on the scrapheap is the wrong thing to do.
It is ludicrous for such a massive change to be made without any public or parliamentary consultation. The Minister has an opportunity to look again at this proposal. From around the Chamber he has heard, and will continue to hear, the stories of people who have devoted themselves to making HMRC work. There are still huge challenges ahead for HMRC. It is time to halt the plans and do something different: something that values the people working in the service, values the collection of revenue, and makes sure that the decision made is sensible for the people of Scotland and all the nations of the UK.
6.16 pm
Louise Haigh (Sheffield, Heeley) (Lab): First, it is nice to see the Treasury Minister on the Front Bench. It is a shame, however, that he did not feel it was necessary to come to the House of his own accord to account for his unprecedented reorganisation of HMRC. I congratulate the Scottish National party on securing this important debate.
One issue that has not been covered so far is that of HMRC staff in lower bands who rely on tax credits to supplement their income. To travel from Sheffield to Leeds, as they will have to in future, some employees will receive an excess travel allowance. However, the allowance is tax deductible and could take them over the threshold for tax credits, meaning they lose their entitlement to that lifeline. Is the Minister aware of this issue, and will he look into the specific cases of those on tax credits employed by HMRC who may lose out as a result of this decision?
It is difficult to imagine that in a county such as Yorkshire—the largest in England, in which person could be up to 100 miles from Leeds—there will not be significant disruption for staff and taxpayers alike. What are the enhanced transitional arrangements to deal with HMRC being “rationalised”, in a county of our size, into one regional centre? What steps has the Minister put in place, not just for the tax official in my constituency who will have an 80-mile round commute—way beyond the one-hour suggested guideline—but for the small business owner living in Grimsby who wants face-to-face tax advice and will now face a 150-mile round trip for the privilege? The Minister and I both know it is unlikely that that person would make that trip. As a result, individuals will continue to be overpaid or underpaid, wasting HMRC’s time. In the past year for which figures are available, mistakes in the calculation of pay-as-you-earn led to almost 5 million people being mistakenly overpaid or underpaid. Almost a quarter of all tax investigations remain open more than 12 months later, and 3,800 are open over three years after being opened.
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These issues are not new to the Government. In 2011, the Select Committee on the Treasury found that there were
“Unacceptable difficulties contacting HMRC by phone”;
it recommended that HMRC improve the service at contact centres, and the better targeting of letters that threaten serious consequences against individuals. That recommendation is particularly relevant. Many hon. Members have constituents who will have been contacted recently by the US multinational Concentrix, a company contracted by HMRC to handle some of its functions relating to tax credits. The performance of Concentrix has been little short of abysmal. A report by the National Audit Office in July revealed that the £75 million contract has resulted in savings of just £500,000—somewhat short of the £285 million that was projected. Tax credit recipients are bearing the brunt of the failing contract; tax credits have been wrongly stopped by Concentrix, and people have simply been unable to get in touch with it, leading to serious financial hardship.
In response to the same Select Committee report, the Government said that
“HMRC conducts full reviews before any changes are made to the opening hours of its face to face enquiry centres. The recently introduced changes”—
“in opening hours were made only after extensive public consultation, including a full equality impact review.”
They also said that the physical presence of HMRC is based on a geographical picture of the areas of higher tax risk across the country. In this unprecedented reorganisation, however, there has been no public consultation. The new offices’ locations have been based not on a picture of tax risk, but instead on wherever is most convenient to the Government in each region. I hope the Minister will correct me on this assumption and answer some of my questions. More broadly, the Opposition hope that the Government will recognise that the closures are the falsest of false economies, and will serve only to reduce tax take and damage further the relationship between HMRC and the businesses that sustain our economy.