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Gershon Review (Great Yarmouth)

Volume 459: debated on Wednesday 2 May 2007

It is a pleasure to serve under your chairmanship, Mrs. Dean. It must be unique for me to follow the other Tony Wright—my hon. Friend the Member for Cannock Chase (Dr. Wright)—but this one is slightly younger.

I am pleased to have secured this debate. I have been putting in for it for a long time, and the procedure of the House means that Members have to take pot luck. Clearly, the day after the strike in the public sector about the job cuts is a timely occasion. It was difficult to secure this debate because it covered different Departments, from the Inland Revenue to the Department for Work and Pensions and the criminal justice unit. It was difficult to find who could respond to my questions and the issues that I want to raise. I am pleased that my hon. Friend the Financial Secretary will respond to the debate on behalf of the Treasury.

I want to set the scene and to explain why the issue concerns me. Great Yarmouth is, unfortunately, a place with higher than average unemployment. In 1989, it reached 19.7 per cent. unemployment—one in five people. Since 1997, 10 years ago, the number of people unemployed has fallen from the heady heights of 4,850 down to 2,934—a massive drop of some 40 per cent. However, we have to move on and it is clearly not good enough that we are still in the top 50 unemployment blackspots in the UK. That makes uncomfortable reading when we consider the views of departments when they consider relocating civil service jobs from Great Yarmouth to an area that has relatively low unemployment. In Norwich and other areas, unemployment stands in the region of 3.5 per cent.

In December 2003, the Chancellor of the Exchequer made a statement on the pre-Budget report. In respect of the Lyons review, which we were considering at the time, he said that

“we will relocate out of London and the south-east 20,000 civil service jobs—to the benefit of the regions and nations of the UK.”—[Official Report, 10 December 2003; Vol. 415, c. 1065.]

Clearly, that came on the back of the announcement that we had to reduce the number of civil service posts across the scheme of things, and there might well have been reasons for that. However, it gave us hope for the future that a place such as Great Yarmouth, with offices at lower than average costs and space in its departments, would be ripe for the move from London and the south-east and that some of the civil service jobs in and around Great Yarmouth would be reinvigorated. Unfortunately, the reverse has happened.

Since the announcement, part of the review has considered the number of civil service jobs across certain clusters. We are in cluster 11 for Her Majesty’s Revenue and Customs, which takes into account Dereham, Norwich and Great Yarmouth. I can understand the need to consider such matters, but I cannot square that with the fact that jobs are being moved away from the most deprived area in East Anglia, with the highest unemployment in the region, to a fairly affluent area. We need to take that on board. I am sure that when Gordon made his announcement on the Lyons review and on the Gershon review, he did not anticipate that we would lose jobs from already deprived areas.

We can do a number of things about the situation. About 18 months ago, I held a debate in this Chamber to talk about Jobcentre Plus and the difficulties with the roll-out of the new system. The Minister who responded to the debate made it clear that

“As we take forward our plans to centralise benefit processes, some buildings, including Yarmouth house”—

in my constituency—

“will no longer form part of our network.”—[Official Report, Westminster Hall, 23 November 2005; Vol. 439, c. 447WH.]

That was the end of one of the Government’s properties. Fewer than a dozen people now work for that office, and we know that its end will come soon.

That takes us on to the question of HMRC. There are huge concerns in Havenbridge house about the proposed reduction in the number of jobs and the relocation of a number of them. It has been quite an education to consider the jobs at Yarmouth house that we might lose, because we have to consider what the effect will be on the families of those who are employed in those departments; on my constituents, who have many difficulties; and on the economy. Since I secured the debate, I have received a number of letters from my constituents who work in those departments, which shows the strength of feeling.

When the staff surveys were carried out, the most startling thing was that the vast majority of people who were asked for their views were given the option:

“Considering everything I am satisfied with my job”.

A large proportion—more than 50 per cent.—said that they were satisfied with their job. Another question was:

“Considering everything, I am satisfied with this department at the present time”.

That was agreed with by 32 per cent., while 44 per cent. disagreed. Overall, there was relative satisfaction with the job.

However, since the decision was made about the reduction—I know that there have been guarantees and consultation, that everything will be reviewed and that there are no plans to close the department—staff have felt that the situation is somewhat different. I can understand why they would assume that decisions are already in the pipeline and that it is a fait accompli. Clearly, if the estate has to be reduced—bearing in mind that we have Yarmouth house and Havenbridge house—that will cost an awful lot of money. If it is reduced to such a level by outsourcing the jobs to Norwich, Lowestoft, Peterborough and other areas, it will clearly no longer be viable for the department to maintain the office, so it would be closed for cost reasons.

I want to concentrate on HMRC, as the staff have put forward their views. Although the changes to the benefits office have had a devastating effect in Great Yarmouth, on my constituents and on the staff, HMRC is relatively new. The building houses 130 to 140 staff, a number of whom have been told that they will be moved. I want to read one or two notes from members of staff about their concerns. Somebody who works in the business support team says:

“I have been involved with educating employers and the self-employed, our evaluation sheets prove that employers who receive education are much more confident—the evaluation sheets of customers I have educated myself show 97 per cent. are more or much more confident. If staffing and locations are reduced this will affect employers and the self-employed living in rural areas—they will have to travel greater distances for education so more cost to them in travelling and time, that’s if the education is still available.”

That is the advice that they would give the business community, bearing in mind that we always try to attract new businesses to the area and the department needs to give them help and advice. That is just one example.

As for flexible working, one of the big issues raised with me is how many parents work in the department. Sometimes both parents work there. The Government’s desire—a right one in many cases—to get mothers back into work is one that I certainly support, but here we are going against the grain. One of the benefits of working for the department is its flexible working patterns. Staff can work around their lifestyle, their children’s schooling or any difficulties they might face if they have an elderly parent at home.

I have a letter that provides a picture of a number of the letters that I have received on the issue:

“The effects on my family will be fairly devastating, as both myself and my partner work for HMRC in Great Yarmouth; also, we both use part-time flexible working to look after our three children. There are not other jobs in this area that offer the flexibility to enable us both to work and look after our children. Working in another location is not feasible, as the next nearest office is in Norwich, and in our rural location this can mean up to an hour’s travel each way.”

The job cuts will mean taking away a family’s flexibility to work. The possibility of getting another job for both parents is probably negligible. Even though one of the household might well be able to relocate to Norwich, it will prove extremely difficult for them to continue. We are already taking away money from that household.

The other issue, of course, is what will happen to the local economy. Another letter says that

“my family income will be reduced by half if I lose my job. My husband is also a civil servant and facing a job cut… My daughter’s life will be affected, as we will have no income to do things, get books, help her at school or buy clothes… I shop locally, go regularly to swimming and take my daughter…to a local dance class.”

There are other ongoing issues of the knock-on effect on the local economy. If we take away an individual’s earning capabilities, they can no longer spend money locally. That has a knock-on effect throughout the system.

As I said, it can take people up to an hour to travel to Norwich and an hour to come back, so it will add time to the working day. One thing that people are saying to me is that, at a time when we are considering environmental problems, we are going to add to our carbon footprint. Asking people to travel to work and back, rather than working in their locality, is certainly a consideration, albeit one that has been raised on a couple of occasions.

Staff morale is pretty low in some respects, due to uncertainty about what is happening. Somewhere along the line, we must balance what is considered acceptable in today’s society and what needs to be done for the economy. Although I can accept that we need to move jobs around, our inability to do so without affecting families who already find it difficult at times to balance their lives will remove their ability to earn over time.

The other question is cost. People who must travel to and from Norwich for work could incur a burden of up to £50 in costs. In a low-wage economy, it is proving difficult for people to balance the books at the end of the day, so that would have an extreme impact on what we consider acceptable.

I began by talking about the economy and the problems that we face in Great Yarmouth. We are talking about losing 250 positions, as another 50 jobs were cut from criminal justice when the local police station moved to Norwich, again because of the need to cut back on costs. Although I met with the managers, it became clear that that was an irreversible decision based on cost-cutting. The total job cut of 250 is totally unacceptable. When the Chancellor announced that he was moving jobs from the south-east to other regions, I fully expected us to benefit; I certainly did not expect us to lose positions. Perhaps the Minister will suggest that decisions have not been taken to close particular offices, and certainly not the HMRC office, but when we consider it, the fact is that the costs of keeping open an office with very few people in Great Yarmouth could lead to it closing altogether. That would certainly set us back.

I set the scene earlier by speaking about the Government’s tremendous work in reducing unemployment and increasing employment opportunities. We have seen the benefits in Great Yarmouth, and the loss to our economy of those jobs would send out the wrong message. Indeed, the other side of the coin is that the offices of HMRC and the Department for Work and Pensions are often used by schools for work experience, to encourage youngsters to go on to further education and to get good jobs in the economy. That is another part of the equation that we are removing in Great Yarmouth.

It is sad that we are in this position, especially bearing in mind that it affects an economy that has struggled for years. We are on the way up, and it will be a kick in the teeth if both the DWP and HMRC join the criminal justice board in removing their offices for good. We will probably not get them back again. I ask the Minister to consider seriously not only what can be done to ensure the security of departmental offices in Great Yarmouth, but what else could be transferred from London and the south-east to replace some of those jobs. Perhaps people could be given the opportunity to transfer from one civil service job to another. That would secure the economic future of Great Yarmouth. The staff are very professional. The tragedy is that staff with more than 20 years’ experience are being moved away from their jobs—they have taken redundancy and their jobs have been given to lower-salaried individuals. Unfortunately, once such experience is lost, it will never return.

Service delivery to the public will be affected over time as well. I have anecdotal evidence of the time delays that result from such job cuts. People calling for crisis loan applications can stay on the phone for hours. I have a worksheet for 10 to 13 April that says of people calling for crisis loans:

“Been ringing since 9.00 am yesterday… Unable to get through… Has tried for almost two weeks, one day tried for three hours constantly on the redial button—line engaged”.

The system is not working, and my constituents—both customers and staff—are bearing the brunt of it. I should like the Minister to consider the matter seriously, not only taking on board what the Gershon review said about relocating jobs, but looking at the benefits if some jobs were relocated out of London and the south-east into the Great Yarmouth area. I ask him to stop the movement of any more jobs from Great Yarmouth to Norwich and to secure the future of HMRC in Great Yarmouth.

Thank you, Mrs. Dean. It is a pleasure to respond to this debate, which my hon. Friend the Member for Great Yarmouth (Mr. Wright) has successfully secured, with you in the Chair. He is an MP who is incredibly proud of his home town, and he has spoken strongly and consistently in the House for its people and its interests in the 10 years since he was elected to represent them.

My hon. Friend said that he was looking for someone to respond to his Gershon-wide interests, and it falls to me to do so, though he concentrated particularly on Her Majesty’s Revenue and Customs. I will do so as well, as it is clearly the Department for which my colleagues and I, as Treasury Ministers, have direct responsibility.

My hon. Friend set out powerful arguments that picked up on the concerns of staff, and his concerns about the improving but still underperforming economy of Great Yarmouth. He rightly paid tribute to the dedication of the staff in the Department and to the job that they do for HMRC and for the tax paying public in general.

I begin by assuring my hon. Friend that there is no fait accompli. There is a review of HMRC’s jobs and office arrangements, but, in somewhat characteristic fashion, he has secured this debate before the review has even begun. I shall ensure that the comments and points that he has made today are included in the review, and that he has the opportunity to play an active part at each stage of the process.

There will be a clear process. My right hon. Friend the Paymaster General has ensured that we approach the questions in an open, systematic way and that we take great care to incorporate the views of local communities, staff, HMRC unions and MPs. Let me emphasise that no decisions have been made on the future of Great Yarmouth or, for that matter, any other HMRC office in the eastern region. The Paymaster General and I, particularly because of this debate, will examine any recommendations that reach Ministers through the process.

For my hon. Friend’s benefit, let me spell out what the process is and how it may relate to Great Yarmouth. In November, HMRC explained to MPs and to staff how the review process will work. Basically, it will have three phases. The first phase is the initial analytical or diagnostic work. In essence, it will develop options and proposals for rationalisation and more efficient working—which are, of course, expected of us—and the potential closure of offices. That normally takes about two months, and work will begin in about August this year on the cluster of Norwich, East Dereham and Great Yarmouth offices.

The second phase, which we term the feasibility phase, stretches over about three months and includes an eight-week consultation period. Specifically, we will seek the views of MPs and staff on the proposals that have been developed. I suspect that we will aim to start that phase for Great Yarmouth, Norwich and East Dereham some time in the autumn. Then there is the publication of the consultation findings, recommendations to Ministers for decision and, finally, an implementation phase that in some cases could take up to two or three years depending on the nature of the changes.

I shall go on in a moment to give my hon. Friend what assurances I feel I can give him at this stage. I hope that they will be useful to him, to his constituents and to some of the staff in the HMRC office, particularly those at Havenbridge house in Great Yarmouth. We understand the concerns that he expressed, and we know that they are shared by the staff who work in the Great Yarmouth office. Staff members are concerned about the extra travel time that may be involved and the availability of transport links to other centres. He also made a point about the environmental impact of greater commuting distances.

My hon. Friend mentioned Yarmouth house. I am aware of the decisions that the Department for Work and Pensions has taken. In speaking up for HMRC, I might say that perhaps those decisions were not taken as part of a systematic and open review process such as the one that my Department is determined to follow. Throughout the process, Ministers and senior managers in HMRC have been and will be committed to being as open as possible with staff. We will explain the options available to individuals and explore how their expectations and concerns may be matched with the central and essential need to make our operations more effective.

I shall briefly give the background to the review before I go on to the reassurances that I can offer at this point. It is clear, following the merger of Customs and Excise and Inland Revenue, that there is more office accommodation than the new unified tax department needs. We estimate that we probably have 40 per cent. more than we actually need. When that is combined with significant changes to what is expected of a tax agency and authority these days in relation to developments in the taxation system, changes in the economy and changes in customer demands—more online filing, for instance—it is clear that we are facing a period of change. Also, like all parts of government, we are required to make efficiencies and to conduct our operations as efficiently as possible to reduce unnecessary cost—taxpayers expect us to do that. A combination of factors underlie the review process that we will undertake later in the year.

I thank my hon. Friend for that response to my queries. Will he also guarantee that he will compare the cost of office space in Great Yarmouth with that of other department estates such as those in Norwich, Peterborough and Lowestoft? I believe that the Great Yarmouth costs are substantially lower, which would result in a lower cost base should the building be used for other civil service positions.

I can indeed give my hon. Friend that assurance. Obviously, that will be an essential aspect of the early analysis that will be required. The comparative cost and size of the office space that is available at the three sites in Norwich, Great Yarmouth and East Dereham will be part of the calculations.

In the short time that I have remaining, I shall try to give my hon. Friend one or two other assurances. First, in conducting the reviews to reduce office accommodation, the board plans to focus on back-office functions, not on public inquiry facilities. As the departmental Minister, the Paymaster General has made it clear that the network of inquiry centres must be maintained. If an inquiry centre needs to close—for example, because a lease cannot be renewed—she has asked the board to re-provision a facility as near to it as possible.

My hon. Friend quoted from correspondence that he has received from staff members. They are particularly concerned about flexibility of working patterns and family life. May I give him an example? HMRC will shortly announce decisions on its review of urban centres in the south-east. As part of the staff support process, managers will meet their staff to discuss whether the moves that result from the decisions are reasonable in the light of their circumstances and, if not, HMRC will provide work for them in a location that is within a reasonable daily travel distance or it will consider other arrangements such as alternative hours or home working. Staff will not be made redundant as a result of the announcements; that is entirely in line with the current no-redundancy agreement with the trade unions.

My hon. Friend is also rightly concerned about the economic and job situations in Great Yarmouth. I have reviewed the figures. Great Yarmouth has an unemployment rate three times the regional average, and twice the level of Norwich—a stark contrast. I shall ensure that the fullest analysis of the situation is part of the diagnostic phase of the review. I shall also ensure that it figures in the consultation, and that we take account of developments and the decisions of other Government Departments—the Court Service, the DWP and the probation service—that are located in Great Yarmouth.

I welcome this debate. It is very much part of the work in progress that the Department would wish to do with my hon. Friend, as the local MP, throughout the review process. It is an important contribution to the work that we will do as we prepare for the review. I offer him the opportunity at an early stage to meet the senior managers who are responsible for the review process. Their briefing would be of benefit to him, but such a meeting would also allow them at the earliest stage to hear the points and concerns that he is anxious for the review to take into account. If he wishes to do that, I will be happy to set up such a meeting at his convenience.

11.30 am

Sitting suspended until half-past Two o’clock.