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HMRC Office (Kettering)

Volume 462: debated on Wednesday 4 July 2007

I thank Mr. Speaker for granting permission for this important debate and I welcome the newly appointed Minister to her post. She will respond to the debate in due course, but I want to leave her in no doubt whatever about the strength of feeling among staff at the local tax offices in Kettering, which is shared by local residents. They are outraged at the proposed closure of Kettering’s tax offices. Those offices have many loyal and dedicated staff who have provided an excellent service to the people of the borough of Kettering and further afield in north Northamptonshire over many years.

I had the privilege, perhaps unusually for a Conservative Member of Parliament, of joining the staff on their picket line on 31 January, such was the strength of local feeling. I had the privilege to present on their behalf a petition to the House on 26 February, with more than 400 signatories protesting at the closure plans. I also attended a meeting in Her Majesty’s Treasury on 10 May with officials including Mr. Michael Hanson and Mr. Brian Redford. I now have the privilege of opening this important debate.

In the main tax office in Kettering, there are 78 staff in total. Fifty-nine of them, or 75 per cent. of the work force, are female. Of those 59 women, 32 are part-timers, which is 54 per cent. In total, part-time staff in the Kettering tax office comprise 42 per cent. of the work force. Closure of the office would not only be a bitter blow to the local economy; it would very badly affect, in a totally unfair way, female employees. If Her Majesty’s Treasury has not already conducted an assessment of the inequality as regards the effects on male and female employees of the planned closure, I very much hope that it will do so in short order.

Kettering and north Northamptonshire are a part of the country that will probably have, in the next 15 to 25 years, one of the fastest rates of growth for houses, population and jobs of anywhere in the United Kingdom. According to the Government’s own plans, in north Northamptonshire, which includes Kettering, Wellingborough, Corby and east Northamptonshire, there will be an additional 53,200 houses by 2021, of which 13,100 will be built in Kettering borough. Also according to the Government’s own plans, an additional 43,100 jobs are needed in the local economy. North Northamptonshire needs from Her Majesty’s Treasury a vote of confidence that those plans will be successful and that the tax advice needs of all the new small and large businesses that are to be created in the local economy will have their own dedicated tax office nearby. It seems absurd that at a time when the Government are pushing through those housing expansion plans, they are in effect giving a vote of no confidence in the local economy by threatening to withdraw Kettering’s own tax office.

The staff are rightly outraged, because they are being told that they will be relocated to Northampton or Leicester, but it simply will not be possible for many of the staff to be relocated to those locations. As I said, many of them are female and, because of their child care responsibilities, work part-time. Many will have to give up their jobs at a time when the number of people unemployed in north Northamptonshire is approaching the number unemployed in 1997. Indeed, in the constituency of my hon. Friend the Member for Wellingborough (Mr. Bone), the number unemployed now exceeds that in 1997.

I am grateful to my hon. Friend for securing this exceptionally important debate. What he knows but perhaps the Minister does not is that my local tax office in Wellingborough is due to close as well, leaving no tax office in north Northamptonshire and adding to the number of people unemployed in Wellingborough.

That is an excellent point. I believe that some 170 staff are employed both in Wellingborough and in Kettering. The sensible thing for Her Majesty’s Treasury to do would be to combine those offices at the present Cytringan house location in Kettering, rather than relocating staff from Kettering and Wellingborough to Northampton. The reason for that is that north Northamptonshire is a major growth area, and people, businesses and individuals simply will not want to travel to Northampton to obtain expert tax advice.

Northampton is about 16 miles from Kettering, which does not sound a long way, but between the two towns is the A43 road, which I have to tell the Minister is the most dangerous and congested road in the whole county of Northamptonshire. At peak times in the morning and evening, it is like a linear car park from Kettering to Northampton. The travel time will be more than an hour. That is significant because in the meeting at the Treasury on 10 May to which I was invited, Mr. Brian Redford, the senior Treasury official there, said:

“An hour travelling time could be wholly unreasonable for a woman working part-time with caring responsibilities.”

I checked that with him at the time and it is exactly what he said. The point is that that will affect at least 32 of the 78 staff in the Kettering tax office at present.

The other alternative, which seems to have emerged rather later in the day, is relocating staff to Leicester. Leicester is even further away from Kettering than Northampton. It is possible for people to travel to Leicester by train, whereas there is no rail link to Northampton, but the car parking charges at Kettering station are already £5.50 a day. The train journey plus the travel to Kettering railway station plus the travel from Leicester railway station would in many cases take more than an hour and again would be impractical for most of the staff based at the Kettering office.

Of course, it is not only the staff who face those long and difficult journeys; it is also the people in Kettering who want to be able to speak to those tax experts about their complicated tax affairs. I have to tell the Minister that it is completely unreasonable to expect residents in Kettering to have to travel to Northampton to obtain the tax advice that they need. It would be even worse to insist that residents of Kettering go to the tax office in Leicester.

I know that the Treasury is saying, “Well, if we close the tax office in Kettering, we will have a customer-facing service that will be able to meet all the needs of local residents”, but I have to put it to the Minister that although I can see why she is saying that, the depth of expertise that exists in the Kettering tax office simply will not be available at a front-facing, limited customer facility in Kettering. In any case, the Treasury could obtain the economies that it needs by merging the two tax offices in Kettering and the tax office in Wellingborough on the existing Cytringan house site in Kettering. That building is a wonderful location on the outskirts of town. The cost of running it must be lower than that of running any tax office in the middle of Northampton or Leicester, and there is room for expansion and for files, storage and other facilities.

Other organisations in Kettering are looking into establishing offices nearby, such as the borough council, the fire service and the police service, as will other public services in the future. There is potential to develop a real public service centre that will be easily accessible for residents in Kettering both now and in the next 15 to 25 years, in which time the local population will increase by between one third and one half. The tax office needs to accommodate not only the existing needs of local residents, but the tens of thousands of new people who will live in north Northamptonshire and the businesses that will set up there in the next 15 to 25 years. Following my conversations with Treasury officials on 10 May, I do not believe that they appreciate the size of the growth in the north Northamptonshire economy or the demands that will be placed on tax advisers.

There is also the green issue to consider. Requiring the Kettering tax staff to travel to Northampton or Leicester is not environmentally friendly. Yes, they could get the bus to Northampton, but that is likely to take an hour and a half in peak times and it will be difficult to get to some of the proposed offices. Travelling by car along the A43 would be very environmentally unfriendly. It is possible to take the train to Leicester, but there are certain transport problems first with getting to Kettering railway station and then with getting from Leicester railway station to the office. In this era of climate change, requiring 170 staff from Wellingborough and Kettering to travel to disparate locations is not very environmentally friendly.

I am worried about the effects that closing the tax office will have on local customers, who need access to the excellent service that they have been able to use for so long. In welcoming the Minister to her new post, I add that she could establish her mark at the Treasury and win a lot of plaudits from the residents of Kettering if she were to consider the potential closure of this tax office and urge the Treasury to think again. This is a special case; yes, I would say that, as the constituency MP, but I genuinely do not believe that the Treasury appreciates the expected rate of growth in the north Northamptonshire economy in the next 15 to 25 years. Withdrawing Kettering’s tax office from the town at this time would send completely the wrong signal to its residents. We need more public investment in Kettering, not less, and to retain the loyal and dedicated civil servants who have provided such an excellent service to local people for so long.

I congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing the debate on this issue, which is so important for the whole of north Northamptonshire. We all know that he fights valiantly for his constituents, but he has hit on an issue that affects many people and is not even in the Government’s interests. I also welcome the Minister. We are lucky to have such a highly respected Minister answering the debate, and I know that she listens to arguments. I add that we are not trying to make any party political points today. Also, I must declare an interest as a non-practising chartered accountant.

I have visited Cytringan house in Kettering. On the outside, it looks slightly like a Gestapo headquarters, because of the fencing, but inside it is a modern, out-of-town office that could easily be expanded. That is where the Government have got things wrong. It cannot be financially sensible to keep two highly expensive offices in Northampton open while closing three relatively cheap offices elsewhere in the county. It would be more obvious to have a centre at Cytringan house, although I do not want to lose my tax office on the Embankment. I do not know whether the Minister has the same problem as me: every Friday, about a third of my surgery is taken up with people who have problems with tax credits. When they go to the Embankment, they get advice that they find useful. We have a high level of deprivation in north Northamptonshire, and to expect people to travel by public transport to Northampton is unfair and means a loss of service to people in my area.

We are not asking for something special. The average public expenditure per head of population in the east midlands is £6,334, whereas it is £7,184 for the UK as a whole, so each citizen in north Northamptonshire gets, on average, 12 per cent. less public expenditure than the rest of the UK, yet we are talking about withdrawing public expenditure yet again from the Wellingborough, Kettering and Corby areas.

My hon. Friend touched on an important issue when he noted that many of the people who are employed on the Embankment could not travel to Leicester or Northampton. Never mind the green issues, which are real; it is ridiculous to ask young women, who may have families, to travel that distance and back every day. One might say that Northampton looks to be only a few miles away on the map—that is probably how the accountants do it; they probably say, “We’ll just have those two and knock those off”—but there are no easy transport links. It is much easier for my constituents to go to Kettering. The tax office there is just down the road from the hospital, so they could go to the hospital to have their hand fixed and then along to the tax office to have their thumb screwed. It is in a good location for both my hon. Friend’s constituents and mine. Indeed, it is not a bad location for people from Northampton, because they can just pop along the A14.

The matter needs to be reconsidered. We are not saying that there should not be rationalisation, but we do not think that the Government’s proposal is sensible. I hope that the Minister will look favourably on our comments.

It is a pleasure to be here with you in the Chair, Mr. Conway. It is even more of a pleasure for me because it is a real honour to be speaking from the Front Bench again after my chequered career of recent years. I compliment the hon. Members for Kettering (Mr. Hollobone) and for Wellingborough (Mr. Bone) on their speeches, and thank them for their kind comments and welcome. However, I must warn them that in every Department in which I have served, I have been responsible for programmes in which various Government and public sector organisations have undergone thorough reviews of the way in which they provide services and, in particular, the locations from which they provide them. What we are asking Her Majesty’s Revenue and Customs to do as part of this programme is a very sensible and normal practice in government.

I congratulate the hon. Member for Kettering on securing the debate and on the way in which he presented his case. I would have been proud to have made such a speech when I was elected in 1992 and made representations to a Conservative Government about very similar issues. I assure him that having listened to his speech, I shall also read carefully in the record the case that he has made.

When the Inland Revenue and Customs and Excise merged, the Treasury recognised that the new, merged organisation had significantly more office accommodation than it needed. Indeed, HM Revenue and Customs told us that it had about 40 per cent. more office accommodation than it needed to support its operations across the regions. The annual cost to the Department of accommodation in the urban centre of Northampton is about £1.3 million. I hope that the hon. Gentleman agrees that the Revenue and Customs board is charged with the responsibility of reducing unnecessary cost. Both hon. Gentlemen have acknowledged that they are not against reorganisation per se, but against its affecting their constituencies.

Beyond that, Her Majesty’s Revenue and Customs is making significant changes to the way that it carries out its business. That has a further impact on these locations and the way in which staff are organised. Many customers now choose to telephone the offices or use the internet to file returns or make their claims, so it is right that the senior management examine all their operations to ensure that they are run as efficiently as possible. In some work areas, they see that need as best being served by concentrating work in larger units where the processes can be streamlined. In other areas, a more mobile work force are seen as the best solution to meet customer needs. Finally, there must be an emphasis on improving compliance by matching resources to the risks that HMRC deals with in particular locations. HMRC is ahead of schedule on its general efficiency programme, having made a reduction of 11,000 posts through a combination of restricted recruitment and voluntary early retirements.

Both hon. Gentlemen made the point about the advice that is available through these offices and on which their constituents rely. I emphasise that HMRC’s approach is to reduce its use of office accommodation by concentrating on the back-office functions and making them as efficient as possible, rather than on the public inquiry facilities. One of my predecessors in the Treasury, the Minister of State, Department of Health, my right hon. Friend the Member for Bristol, South (Dawn Primarolo), who was speaking in this Chamber a few moments ago, made it clear that the network of inquiry offices must be maintained. Where an inquiry centre is to close because a lease cannot be renewed, for example, HMRC has been asked to re-provide the facility as close as possible to the current inquiry centre. That will be the case across Northamptonshire.

A point was made about the reliance of local businesses on a local HMRC presence. Very little of what HMRC is carrying out locally is related to local business need. The HMRC plans are predominantly about reorganising the back-office function and do not affect face-to-face services. The skills set of the staff in those front-facing offices will be maintained.

The new department has been asked to draw up plans to improve services and reduce costs over the next five years—that includes the current one. The Government will invest significantly in each of the next four years to improve Revenue and Customs services. That will involve up to £1.5 billion-worth of resources.

As part of the review programme, a number of commitments have been given by my right hon. Friend, and we will stand by those: all inquiry centres are to be maintained; staff will not be compulsorily moved from an office ahead of the completion of the review for that office; and staff will not be required to move to an office that is beyond a reasonable daily travelling distance.

The two offices in Kettering that have been mentioned accommodate nearly 100 staff, and I understand the concerns that staff will have. In the entire urban centre, it is expected that over the next three years about 10 per cent. fewer staff will be needed than are currently employed. That is not a reflection on the staff currently working in Kettering; I join the hon. Member for Kettering in saluting the skills and experience that they have and the service that they provide to the public. It is worth bearing in mind that the number of public sector jobs in Kettering has increased by more than 2,000 in the past 10 years and the number of such jobs in Northamptonshire has increased by nearly 13,000 in the same period.

I will examine the statistic that the hon. Gentleman cited about the unemployment—I will do the same with regard to all his comments—because I was particularly drawn to it. I understand the concerns that people working in the area will have if the offices relocate. Such concerns relate to the following: the extra travel time that will be involved for some; the availability of transport links from people’s homes; the environmental consequences of more journeys being made by road; and the impact on the local economy. He has raised exactly those issues.

For just those reasons, I have asked HMRC’s senior management team to undertake the process of consultation in each of their offices, and to assess the impact of the proposals on customers, staff—that includes equality issues, which I shall discuss in a moment—local communities and diversity. I have asked that issues of equality and diversity be explored as part of that feasibility process. I am always happy to welcome Conservative Members to the debate on equality—they are welcome recruits—to ensure that equality is maintained.

Only after the completion of a detailed impact assessment reflecting those factors is a decision taken on whether to close an office. HMRC intends to provide as much flexibility as it can for staff to work part-time hours, alternating working patterns within the constraints of rationalising its office network. All proposed changes of location or work will be subject to a discussion between the individual member of staff and their manager to see whether arrangements can be made to support staff in their work-life balance.

Throughout the programme, the senior management in Revenue and Customs are committed to being open with staff, explaining the options available to individuals and exploring how their expectations can be matched with the need to make the operations more efficient. These are not easy decisions and they can be made only once all the facts are known.

HMRC recently announced decisions on its review of urban centres in outer London and the south-east. I wanted to cite that example to both hon. Gentlemen. As part of the support process in implementing those decisions, those staff will go through a detailed process with their managers. I can report that as a result of the representations made during the outer London and south-east consultation process and further feasibility work that was undertaken by HMRC, the initial proposals set out for consultation were revised. My point is that we are listening to the representations, and where a strong case is made, we are prepared to reconsider the proposals.

I am most encouraged by the Minister’s remarks. The obvious solution to this problem is to combine the tax offices in Wellingborough and Kettering at Cytringan house in Kettering. When she studies the statistics, that will leap out at her. Staff are uncertain, so I must ask her when the decision is expected.

I am coming to that in a moment. I shall want to consider the words that have been said in this debate, and the representations that have been made by both hon. Gentlemen, both today and previously, such as in the letters that the hon. Member for Kettering has written. The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Corby (Phil Hope), has also written on this matter and we have received a wide range of representations from trade unions and the public. I shall want to consider all those things carefully. I cannot yet give the hon. Gentleman a time frame because I am still catching up on what the issues are and I want to understand them before a decision is made.

The proposals are still under consideration and consultation. Final decisions have not yet been made. All the information that has been provided during the consultation, including the petition that I understand was presented to Parliament, will be considered before an announcement is made.

I welcome this debate as part of our commitment to consult before taking final decisions. This is a long-term programme that will deliver a more responsive and efficient service for taxpayers and claimants in the long term. We have placed a heavy responsibility on HMRC and I have been pleasantly encouraged to see the care that is being taken over these decisions by the senior management team. The consultation exercises are the vehicle for taking into account the views that have been expressed today by hon. Members, and the views of staff, trade unions and the public. I am pleased that the hon. Gentleman raised these matters today.

Order. Before I call the next debate, may I apologise to the Chamber for the fact that from time to time we hear the loudhailing from outside? I shall report it to Mr. Speaker, but hopefully it will not distract us from our deliberations.