Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Alan Campbell.]
It is a privilege, Mr. Bercow, to serve again under your chairmanship.
The House and the wider public will know that Her Majesty’s Revenue and Customs is undertaking a regional review, and we know the results of the initial stages of that programme. The next stage is the core of the matter that I wish to debate today. It is aimed at rationalising offices in smaller towns and cities throughout the United Kingdom. In Northern Ireland, that could affect locations such as Coleraine in my constituency, Ballymena, Enniskillen and Londonderry, with almost 500 jobs being put at risk.
Coleraine is the only town with two tax offices, both of which could be closed. Those two offices have 80 employees in post. Most people appreciate that HMRC staff throughout the UK engage in a task that is not only worth while but vital. They try to ensure that the appropriate revenue accrues to the Treasury, particularly in Northern Ireland where, in some sections of the community, evasion is more rife than in other parts of the UK.
The Northern Ireland Assembly has for several years supported the principle of decentralising public sector jobs, but it seems that the regional review is contemplating moving in the opposite direction. On the face of it, it would appear that most jobs will be centralised in the Belfast area. If they do move along that route, it will have significant adverse financial and social consequences.
Virtually all those employed in the Coleraine offices will be offered posts in the Belfast area, which is between 90 minutes and two hours travelling time away during peak hours. That will necessitate an assisted travel allowance being paid for three years. That will amount to about £1.5 million. I do not include the redundancy payments, but if that were to be contemplated, it would cost more than three times that amount.
In addition, there is the thorny question at the core of my contention, which is about the requirements of section 75 of the Northern Ireland Act 1998. At the moment, they do not apply to the rest of the UK, but we in Northern Ireland are only too well aware of them. Under section 75, HMRC has to establish whether specific sections of the community would suffer as a result of the rationalisation programme. I shall give a few examples.
Approximately 58 per cent. of HMRC staff in the UK are female. The female complement in my constituency is 64 per cent. I suspect that the other offices at risk have a similar proportion. The point is that females will be specifically disadvantaged by relocation, as many of them are carers and some are mothers with young children. The prospect of an additional three and a half to four hours travelling time a day on top of their normal work load would undoubtedly cause hardship and create unnecessary family stress, which is completely at odds with the requirements of section 75.
I turn to the age structure of HMRC’s staff. The proportion of staff in my constituency over the age of 35 is 81 per cent. The national average is 74 per cent. Again, the additional travelling time caused by rationalisation would make the elderly staff complement more prone to illness and stress. Again, that is in contravention of section 75.
Over the past five years, HMRC’s staffing in Northern Ireland has been shown to be under-representative of the Protestant community. Indeed, that is the case in much of the public sector in Northern Ireland. According to the Equality Commission for Northern Ireland, the staff is 55 per cent. Roman Catholic and 45 per cent. Protestant. The closure of offices in a town such as Coleraine that has a predominantly Protestant population would make the task of trying to create a more balanced work force even more difficult. Again, section 75 requirements would not be met.
Much of Northern Ireland outside the Belfast travel-to-work area is rural. It has a higher than average ratio of people registered as disabled, in both rural and urban areas. Fern house in Coleraine is fully compliant under the Disability Discrimination Act 1995; that would be a prerequisite for the disabled population of Coleraine. However, for disabled people as consumers to have to travel the journey that I have outlined would be completely unacceptable.
I understand that the two buildings currently occupied by staff in Coleraine are leased. I hope that the Minister will address directly the question that I am about to put, as well as dealing with the general concept. I understand that several freedom of information requests have been made to the Department, seeking to establish the terms of the leases of those two buildings. To date, that information has not been released.
It is a simple question. What is the current rent? Once that has been established, we will be in a position to say whether it will take 15 years or even 20 years in savings of the rental merely to cancel out the assisted travel allowance, let alone the other factors that I have mentioned. Amalgamating those two offices would be a better option—or a least worst option—than closing both.
The north coast and the north-west of Northern Ireland have been particularly hard hit with redundancies over the past two years, in both the public and the private sectors. We need stability, as the Northern Ireland Assembly seeks to generate inward investment.
I note the approval, from a sedentary position, of the Minister of Enterprise, Trade and Investment in the Northern Ireland Assembly. I accept that in the spirit in which it was given.
During the past year, decisions have been taken about Northern Ireland’s Driver and Vehicle Agency; much of its work is being transferred to the Driver and Vehicle Licensing Agency in Swansea, south Wales. That is resulting in job losses in Northern Ireland. Even then, some job saving was managed by non-location-specific work being transferred from Swansea to Coleraine. I ask the Minister to say whether it will be possible to do likewise in respect of HMRC.
Finally, I understand that a recent Treasury Select Committee report expressed concern that the current tax gap, with underpayments of VAT, direct tax and national insurance contributions and a deterioration in the performance of self-assessment, may be linked to the overall reduction in the head count that has already taken place under the HMRC review. For those reasons, I hope that the Government, even at this stage in considering the progress of the review, will be able to come to a more satisfactory conclusion. The problem is affecting hard-hit communities in a way that could make unemployment much more likely and re-employment even more difficult in an area that is already experiencing hardship.
It is a pleasure to sit under your chairmanship this morning, Mr. Bercow.
I congratulate the hon. Member for East Londonderry (Mr. Campbell), or East Derry—he can take his choice—on securing this debate. Like him, I recognise the potential impact of the pending changes to the Revenue and Customs estate in Northern Ireland. For many of us, part of the issue is: are those changes effectively estate-driven, and blind to the performance issues facing Revenue and Customs, almost blind to the job implications for people currently working for Revenue and Customs and indeed blind to the implications for the areas in which the affected offices are located?
It has already been said that there are standing commitments in Northern Ireland to decentralisation. If I am honest, I would have to say that everyone seems to be for decentralisation but few are for doing anything about it. It is the usual story: everybody wants to go to heaven, but nobody wants to die. When I was Minister of Finance and Personnel in Northern Ireland, I sent missives around, commissioned a review on office accommodation strategy and asked all my fellow Ministers to offer up candidates for decentralisation. I received three indications of possible candidates for decentralisation, which were effectively non-starters in terms of their impact.
Therefore, I am not trying to be dishonest, saying to the Minister, “We have a perfectly wonderful active policy of decentralisation and we want you to do the same”. That is not the fact, and the Minister has her own experience of being in office in Northern Ireland, so she knows the resistance and talented inertia that can exist within the civil service system regarding such matters.
However, a number of localities, not least in my constituency, have seen job losses, some in the private sector and some in the public sector. Those jobs were previously decentralised back in the 1990s, and they have been lost in the past few years. They were decentralised within the Northern Ireland civil service—under direct rule, I hasten to add, before the hon. Member for Belfast, North (Mr. Dodds), who is the current Minister of Enterprise, Trade and Investment in Northern Ireland, thinks that I am being pointed in my presentation.
Some of the remaining civil service jobs in my constituency, namely in Foyle house in Revenue and Customs, are now under threat because of this so-called rationalisation. That rationalisation seems to have the effect of sucking jobs in Revenue and Customs away from the west of Northern Ireland and on to the eastern sea board. That is a pattern that we need to avoid. People see that as centralisation in a particular direction, and as geographic concentration. That affects not just the reasonably equal job opportunities that people throughout Northern Ireland have every right to expect, but, materially, the performance and effectiveness of Revenue and Customs.
When we lose the existing network of local offices, Revenue and Customs will lose the effective rate of contact and access that it has with local taxpayers, local businesses, local tax advisers and local accountants. That will make a real difference to the performance and effectiveness of Revenue and Customs. It is a good thing when some people appreciate being able to access and contact a tax office—[Interruption.] I notice that the hon. Member for Upper Bann (David Simpson) dissociates himself from those remarks; perhaps he is in a constituency position that gives him some comfort to do so. I certainly know, however, that it is not just people working in Foyle house in Derry who are concerned about the changes, but people whose work leads them to rely on the contact with, availability of and access that they have to Foyle house and some other tax offices in the region. That level of availability is not something that should simply be tossed aside. It seems that this process is effectively driven by estate policies and estate agendas, rather than by service effectiveness and performance.
The changes in relation to Revenue and Customs, and the impact on the capacity of Revenue and Customs in Northern Ireland, are not just happening in isolation; I refer to the wider issues of public sector job distribution in Northern Ireland. In that context, we should not ignore the changes in relation to, say, the Assets Recovery Agency. That agency was particularly successful in its work in Northern Ireland. It has been able to address the local Mr. Bigs and the ostentatious affluence from questionable sources that people have been able to demonstrate in Northern Ireland, in ways that would not interest the Serious Organised Crime Agency. Many public representatives in Northern Ireland are concerned that the impact that we have seen on illicit moneys and on money laundering—some pretty mature money laundering fronts have developed in Northern Ireland—will not continue. The ARA was having an effect on that, and was able to draw on the expertise, assistance and intelligence of other agencies, including Revenue and Customs. Given that we will potentially lose out in the shake-up of ARA, I would have thought that a case could be made that the experience in Northern Ireland and the insights in Revenue and Customs in Northern Ireland could be used to good effect to continue the pursuit of those moneys and potential revenues through Revenue and Customs and other means.
Under the new regime in SOCA and in policing, in terms of how the models work, police will essentially deal with level 1 crime, SOCA will be interested in level 3 crime, and nobody will really pursue the illicit means and moneys involved in level 2 crime. It is almost as if a tax band system has been created for the criminals in Northern Ireland, many of whom are essentially just the privatised paramilitaries. They will know that if they effectively stick within band 2, they will get away with things because nobody in particular will pursue them. That would be a dreadful signal for us to send at a time when we are trying to ensure that everything about Northern Ireland is more legitimate and more stable.
We have capacity, intelligence, means and hard-working personnel available. If we are simply going to toss those resources aside, that would be wrong. Will the Minister therefore ensure that whatever other adjustments are made to the Revenue and Customs estate strategy across the UK more widely, particular attention is paid to the specific circumstances and issues in Northern Ireland, to determine how best those are to be tackled across the range of Government interests? It cannot be in the interests of Revenue and Customs to do otherwise.
In Northern Ireland, Revenue and Customs has been part of the Organised Crime Task Force, which has had road shows. A direct rule Minister and people from Revenue and Customs have been going round telling businesses what they have to do and what they can do in relation to money laundering and other aspects of organised crime. In the aftermath of all that publicity, all those road shows and all the motivating effort to help business, the signal coming from the Government is essentially that they will do less about such activity, and the means and the tools that they have will be left, or made, redundant in some of the reforms.
May I say to the hon. Gentleman that I agree with him entirely in what he says about the ARA, the work that it has done and the problems and concerns that have now arisen, given SOCA’s new role and so on, and the gap in chasing organised crime that he refers to? Does he not agree that that pursuit of organised crime is even more important in the context of the great outcry and the spotlight on the enormous amounts of money lost through fuel laundering, smuggling and all the rest of it? Also, does he not agree that there is great concern within Northern Ireland about this transfer from the ARA to SOCA along the lines that he has mentioned?
I thank the hon. Gentleman for that point. He raises another dimension: revenue issues in Northern Ireland in respect of fuel smuggling and other criminal activities. Of course, there is the issue of Northern Ireland having a land border, with legitimate businesses conducting their affairs on a cross-border basis, as well as some illegitimate businesses conducting their affairs on that basis too. Again, that points to the need to ensure that Revenue and Customs has services and offices in Northern Ireland that are attuned to all the factors and circumstances in play so that they can understand what is going on.
The hon. Member for East Londonderry mentioned the Treasury Committee report, which cannot be ignored. We all know that questions have been raised about self-assessment and the terrible problems with tax credits. Indeed, Northern Ireland no longer has its own tax credit office, and we all have to ring Frank in Preston if we want anything done; if we do not get Frank in Preston, it is hard lines, and the problems remain. We have to wonder why the answer to all these problems is supposedly to rationalise the estate in ways that will only strain the performance capacity and the flexible intelligence of the Revenue and Customs system.
I have mentioned issues particular to the Northern Ireland economy and revenue base, but the skills, experience and insights offered by the work force in the existing offices in Northern Ireland can also serve Revenue and Customs more widely. Just as many of us in Northern Ireland have our tax affairs dealt with by an office in Wales, offices in Northern Ireland can serve other regions in the UK. That is true not least in respect of money laundering, and I return to the implications of the concentration on SOCA. Under the proposals, level 2 crime and illicit financial activity will essentially be given a bye ball. The issue of Revenue and Customs needs to be addressed if the Government are serious about levying legitimate tax and pursing illegitimate activity where they can.
I hope that the Minister and her colleagues will reflect more widely on the implications of the proposals. We are not simply making an appeal for jobs in our constituencies, although it would not be honest to deny that that is a dimension of what is happening here, because it is a real and legitimate concern. We are talking about people who have given good service in difficult circumstances and sometimes not in the best premises. If the estate in Northern Ireland is to be rationalised, that must be based on safeguarding performance and effectiveness at Revenue and Customs more generally and ensuring that there are proper working conditions.
When the hon. Gentleman refers to jobs, does he agree that the loss of jobs flies in the face of Government policy? The Government encouraged females to return to part-time work, but the current proposals fly in the face of that. We are talking about the economically inactive taking up different jobs in the Province, but the Government are kicking the feet from under these ladies, who have made the effort to return to part-time work, but who will lose their jobs.
I fully take the hon. Gentleman’s point.
The workers we are talking about have been told that there might be retraining opportunities for them, but when they have asked questions about those, they have been given bizarre, evasive and confusing answers. As the hon. Member for Upper Bann said, these people have made their way back into the work force, taking advantage of retraining opportunities that were previously available and fitting their jobs in with their other responsibilities. We cannot turn around and tell them that they will be released altogether, albeit with limited opportunities for retraining, or that they can travel two or more hours each way every day to and from their job. Essentially, that is a let-them-eat-cake response.
The workers on whose behalf we are speaking face various challenges and difficulties and they have been told that offers of retraining are available to them, but those offers cannot be available to all of them. It is great to offer people retraining, but there is a reduced number of jobs, so the idea that everybody is being offered relocation is somewhat dishonest. That is not a satisfactory answer, and these employees and their families deserve more than a let-them-eat-cake response from their employers.
It is a pleasure to serve under your chairmanship, Mr. Bercow. I congratulate the hon. Member for East Londonderry (Mr. Campbell) on introducing this timely debate and enlightening us about the special problems of Northern Ireland. We all know and accept that tax offices across the land are affected in similar ways to those in Northern Ireland, and that includes those in my constituency. I should add that it is difficult for Members of Parliament to take up the cudgels on behalf of tax officers, as opposed to groups such as nurses, because they are not always the most popular people in the land.
Tax offices are currently the object of the Gershon savings, which were announced without a clear plan in 2003. At the time, my hon. Friend the Member for Twickenham (Dr. Cable)—a man gifted, as we all know, with exceptional foresight—said that it was all very well announcing big global savings, but that it was not so easy to know how they would be implemented in practice, particularly when they affected individuals’ jobs and individual communities.
The general assumption behind the Gershon savings is that they are about efficiency and having cashable, bankable savings, not about cuts and reductions. With that in mind, we must ask the Minister certain key questions, and one pivotal question obviously relates to redundancies. I am still not clear about the nature of the allegedly benign agreement between the unions and the Government, and I have spoken to the Minister about it at the Dispatch Box. I get different stories from the Public and Commercial Services Union and the Government, and I should like a clear answer on whether we anticipate any compulsory redundancies and whether the Government are budgeting for them. Are the offers to staff so impractical as to amount almost to constructive dismissal, as has been suggested? Do the savings that the Government anticipate include an allowed attrition rate that will arise as a result of people simply throwing in the towel, because they cannot move to the jobs that they are offered?
There are also questions about savings. Obviously, big savings are possible, particularly in relation to the buildings. Given the number of buildings that are going, the savings could be considerable. In my constituency, it is said that savings of £230,000 will follow from the change in use of the building and the emptying out of most of it, although we are told—there is a certain vagueness about this—that more detailed information on savings will be available only when the closure timetable is announced.
That leads me to speculate, as the hon. Member for East Londonderry did, that there is a certain amount of uncertainty about the savings on property. What will be the capital dividend from the release of the property? Will the revenue savings that are engineered depend on the sale of the asset or on finding a new tenant? Some buildings in town centres are obviously highly valued, but not all are. There are also the costs of removal and de-installation.
Furthermore, a lot of the property that we are talking about is not freehold and is covered by the private finance initiative, on which there is an annual charge. Do we need to keep paying that charge or to find someone to take it over? How does that charge affect the disposal value? In other words, we need a clear account of the Government’s intention towards the estate and of how much everything will cost.
Another issue is the reduction in service. The Government claim that there will be no reduction; but unquestionably, the service will be less local, with fewer inquiry points, and there will be incalculable damage to public confidence in the tax service, because it will not be as accessible. That is especially true in Northern Ireland and in a town such as mine, which has lots of small businesses, as well as elderly people and migrant labourers who have complex tax affairs. All their cases need resolution. There seems to be no overwhelming case for centralisation, particularly in an age of IT, when networks between different buildings can often be very sophisticated.
That brings me to my final point, which other hon. Members have touched on: what about the localism agenda and the work-life balance that is so desired, for female employees in particular? What about helping disabled people back into work? Is there any upside to the centralised processing that is being suggested, such as the lean system, from which the Government hope to get most of their savings? That has not been properly assessed. A passage from the National Audit Office report on accuracy in the processing of income tax, which was produced in July 2007, comments on the centralised system:
“The Department’s initial experience of Lean working suggests that significant improvements in the accuracy and efficiency of processing Income Tax are possible. Early results suggest some improvement in the quality and productivity of work, but lead times in completing work have increased. No firm conclusions could be drawn on how Lean working had affected accuracy rates at this stage. Close scrutiny of emerging trends will be important in identifying any unforeseen effects and in assessing action needed to sustain improvements”.
That is not exactly a clean bill of health for the centralisation system.
We are talking about improvements to the service, but how can we have an improved service if employees, including those who are disabled, travel for two hours before arriving at work, stressed out? I see the Minister shaking her head, but she knows that people travelling from certain parts of the Province will travel for that long. If they must sit for an hour, as the rest of us must, trying to get into the city of Belfast, that will add to their stress. How will that assist the progress of the centralisation?
I was coming to precisely that point. Clearly, how staff are treated affects the way that the workplace functions, including its efficiency. Deskilling, which is what we are really talking about in this case, will not necessarily lead to a gain in efficiency; it can mean that problems that do not involve standard tax cases take longer to sort out. Plenty of documentary evidence suggests that HMRC does not have brilliant success with its current forms and procedures. There are anecdotal stories to the effect that such an approach can lead to the stockpiling of post, when post is simply left in cupboards and treated as not having been received, which significantly reduces processing times. It can lead to the “computer says no” syndrome, with which I am familiar: when someone asks why their letter about tax credits was not received, they are told, “It wasn’t received on our computer.” Unquestionably—this is the point that the hon. Member for South Antrim (Dr. McCrea) just touched on—staff will become demoralised. All research tends to show that, in such highly centralised institutions, absence rates are higher and there are recruitment problems. That is perfectly well documented.
In the office that is being closed in Southport, the office staff, as in Northern Ireland, are mostly female and many have caring responsibilities, but most of them have good knowledge of the area. When the office was previously scheduled for closure, they all won their appeals. I question what will happen to those people with caring responsibilities and to those who are disabled when they have to move. I fear what will happen; I assume that many of those people will simply throw in the towel and look for work elsewhere. That will be a loss not only to them but to the Revenue. Those employees make the point that their local knowledge helps to clear up problems that would be difficult to solve otherwise. It makes it easier for them to track down evasion in the area.
I suppose that a cynic might not be surprised to see the Government abandon some of their own agenda of localism, work-life balance and keeping disabled people in employment. It is more of a surprise to see them spurn efficiency. My conclusion, about which I am quite sincere, is that HMRC is acting in somewhat of a panic, to a higher, unreasoned political imperative. It simply must do something to get the savings that Gershon has said can be made. I used the word “political” in connection with the imperative, and it has been noted with some bitterness in my area that certain constituencies, notably Blackburn, are unaffected by closures of tax offices. If we act in such a rush, we end up with ersatz savings, pseudo-efficiency and, in consequence, a lot of unnecessary human anxiety.
It is a pleasure to serve under your chairmanship again, Mr. Bercow, and to speak in the debate. I congratulate the hon. Member for East Londonderry (Mr. Campbell) on securing it. It might not attract the greatest attention among all the Treasury events that are occurring today, but it is nevertheless important to the hon. Gentleman’s constituents and others. He set out his case with great skill on behalf of those of his constituents who are employed in Coleraine and other offices in his part of the world.
The hon. Gentleman raised several important questions about the practicality of the Government’s proposals for the reorganisation of HMRC offices in Northern Ireland. He also raised some of the specific issues that relate to Northern Ireland, such as section 75 of the Northern Ireland Act 1998. I also congratulate the hon. Member for Foyle (Mark Durkan) on raising issues that relate to organised crime in Northern Ireland and the impact that some of the proposals might have in that respect.
The Minister has great knowledge of and, it would be fair to say, fondness for Northern Ireland from her time as a Minister there. We all look forward to her response to points specific to Northern Ireland, as well as to her comments on the other issues that have been raised. She has debated them before; she and I took part in a debate on reforms of HMRC offices in the midlands on 18 July last year. Indeed, many of the points that have been raised today were raised in that debate.
In preparation for today’s debate, I looked back at what I said on that occasion, and I want to reiterate a couple of those points. First, I do not think that anyone will disagree that efficiency is no bad thing. It is right for the Government to seek to make efficiencies and to deal with inefficiency. On occasion, that will require a reduction in the head count, and I do not want to shy away from that aspect. However, several hon. Members have today raised an important concern about supposed efficiencies that result in a reduction in the quality of the service being provided.
We should examine whether the changes that the Government propose will cause a decline in customer service. To repeat a point that I made in the previous debate, I feel that the word “customer” is not always the appropriate term for taxpayers. In last year’s debate, I drew attention to the concern raised by the Institute of Chartered Accountants in England and Wales and the Chartered Institute of Taxation that some head count reductions and supposed efficiency savings were causing a decline in customer services.
I agree with the hon. Gentleman that the reduction in the quality of service is an important matter, but is not the reduction in the quality of life of staff in HMRC offices equally important? If the proposals go ahead, staff in my constituency who work at Moira house in Lisburn will have to travel on the M1—a very congested motorway—into Belfast and find parking. Some of those people are young mothers with children. Should not we take into account the impact on the quality of life of staff in places such as Moira house before we take such decisions?
The right hon. Gentleman sets out his case very well, and I do not want to dispute what he says. Indeed, I shall return specifically to the point about the impact on staff and morale. He other hon. Members have made that point very well.
A number of targets are set out in the HMRC’s 2004 public service agreement. Some relate to customer service and experience, which were assessed as suffering slippage in the 2007 departmental annual report and the 2007 autumn performance report. In particular, the departmental report highlighted the indicator of an 80 per cent. response rate of businesses and individuals who said that they achieved success at the first point of contact but that that was not sustained. That will be of concern to customers within Northern Ireland and elsewhere in the UK. Furthermore, last month’s Treasury Committee report, referred to by the hon. Members for East Londonderry and for Foyle, stated:
“We remain concerned that HMRC’s headcount reductions, office closures and consequent move towards contact centres have proved a source of frustration to customers.”
I would be grateful for the Minister’s comments on that.
Staff morale is, of course, relevant to this debate, given the difficulties that the efficiency reforms will create for them, which feeds into customer service, because staff with low morale are unlikely to provide as good a service as those with high morale. There is concern about morale in Northern Ireland and generally. I suspect that proposals, such as those being discussed today, play a part in that. We have heard about issues with missing data discs and performance on VAT registrations. However, the combination of a variety of Government initiatives, such as the Lyons and Gershon reviews, and tight budgets appears to have an impact on morale. The Financial Times reported, a few days ago, on a staff survey that referred to very low morale in HMRC and, in particular, highlighted a lack of confidence in the leadership of HMRC. Certainly, the HMRC capability review identified leadership as a weakness. What is the Minister’s assessment of morale in HMRC, in Northern Ireland and more generally?
Evidence for strains within HMRC emerged in a report in The Mail on Sunday on 24 February that claimed that HMRC was not pursuing debts of up to £20,000. I do not know whether that report is correct, but it went on to argue that tax collectors were being drafted from Belfast and elsewhere to London to address that backlog. Is that the case?
Another issue directly related to Northern Ireland concerns the status of HMRC’s VAT registration centre in Newry. Some months ago, it was intended that various registration offices, including Newry, would close and that there would be one centre in Wolverhampton. Owing to difficulties in the area, the Newry office was not closed and was maintained to address a backlog of VAT registrations. What is the up-to-date position on the future of the Newry office? Is the intention that it will remain open for much longer? The VAT registration backlog has been addressed to a large extent and HMRC is meeting its target of dealing with 70 per cent. of VAT registration applications within 14 days. In the light of that, is the Newry office safe, or is it more likely to close? There are further concerns about VAT registrations; it still takes about 75 days to deal with high-risk applications. Will the Minister comment on that?
Furthermore, about 23 per cent. of VAT registration applications are judged to be incomplete, which suggests a problem with the process. The Treasury Committee addressed that matter in its recent report:
“We have repeatedly been assured that the headcount reductions and efficiency programme as a whole would not cause a decline in the quality of HMRC’s services. We ask the Government to explain why there has been a deterioration of service in relation to VAT registrations and what measures it will take to bring HMRC back on course.”
That issue applies as much to Northern Ireland as to the rest of the United Kingdom.
In closing, once again, I congratulate the hon. Member for East Londonderry on initiating this debate and setting out his case very well on behalf of his constituents, staff and the wider community using HMRC offices. In July last year, I made the point that we increasingly want some personal contact and that distant contact centres do not always provide the type of service that we want. I would be grateful for the Minister’s comments.
It is a pleasure to see you in the Chair, Mr. Bercow. I have enjoyed your chairmanship. In all honesty, in preparing for this debate, my opening phrase was to be, “I am pleased to have an opportunity to respond to the concerns expressed by hon. Members.” I was thinking about that in the context of what is happening elsewhere today and wondered whether I could say it with sincerity. However, just a few moments into the debate, listening to Members whom I regard in very friendly terms—many of them are friends whom I have got to know over some very difficult years—I can honestly say that it has been a pleasure to listen to this debate and to have the opportunity to respond. I congratulate the hon. Member for East Londonderry (Mr. Campbell) on arranging the debate.
Members’ interest in the reorganisation of HMRC in Northern Ireland has already been brought to my attention through questions to the House and the consultation process that HMRC has developed, for which I am grateful. As others have said, the taxman has never been a popular figure, particularly in Northern Ireland. On many occasions, he has led a dangerous life. However, as the hon. Member for East Londonderry is aware, HMRC has designed a systematic review process—not a panic response. In some sense, it was a response to pressures brought to bear on it by Ministers to ensure that its processes and procedures are as efficient as possible. As a result of those pressures and the Gershon and other reforms, HMRC has developed a very good and thorough process for dealing with the matter, which involves review, consultation and announcements on decisions that are then very carefully taken forward. That process is being implemented across the UK.
The review process for the Belfast urban centre is virtually complete and I expect an announcement to be made to staff and trade unions in the next couple of months. Hon. Members with a constituency interest in the area will be notified at the same time. To meet its requirements under section 75 of the Northern Ireland Act 1998, the importance of which the hon. Member for East Londonderry rightly emphasised, HMRC has undertaken a full equality impact assessment of its proposals for the Belfast urban centre taking into account the particular issues affecting the region. It has worked with the Equality Commission for Northern Ireland to ensure that it does not unlawfully discriminate against particular groups.
I shall come to that in a moment, if my hon. Friend will give me time. I anticipate that the review of clusters, which will include Coleraine and individual offices in Northern Ireland will begin within the next couple of months, supported by a full equality impact assessment for those locations. The issue will not be decided quickly; it will be a process in which the staff, service users, Members of this House and—I am sure the Chamber will want to be reassured—Members of the Northern Ireland Assembly will be involved.
The hon. Member for East Londonderry made a couple of points to which I shall respond. He asked about the rental of HMRC offices in Coleraine and the freedom of information request. HMRC cannot release information about the accommodation costs that it pays to Mapeley, the third-party landlord for much of HMRC’s estate. The information is protected as commercially in confidence. However, HMRC is able to release figures for financial savings on buildings having been vacated once decisions have been made. Those figures are germane to the process, but it is a process that I, as a Minister, require HMRC to carry forward professionally. It is HMRC’s responsibility to negotiate the best savings out of all the changes that it proposes.
The Minister will understand the incredulity that many people will express, because we will be able to establish the cost-effectiveness of any decision only after it has taken place and people either have been made redundant or have to undertake the huge journey that many hon. Members have outlined today.
For people outside the process, there is some truth in that point. However, learning from the way in which the process has been carried forward in other regions, I am confident that HMRC operates the process absolutely properly. In fact, it is gaining savings—I shall turn to them in a minute—by changing the way in which staff work, and they are all important modernisations that HMRC is required to take forward. As the process goes forward, I think that the House will be satisfied that the right decisions are being made.
Hon. Members should visit those offices where changes have been implemented and the process has been completed—in the south-east of England, for example, where similar representations were made at the beginning of that process. Having gone through it all, none the less, staff have been able to move and be accommodated within reasonable travelling times. I shall come on to that issue, which several Members have raised. I know Northern Ireland well, and I am very conscious of the pressures that people are under when they travel there. I therefore encourage hon. Members to have confidence, because HMRC has a real and proper agreement with the trade unions about the way in which it carries the process forward, and it works. I have seen it work and I have confidence in it.
The hon. Member for Foyle (Mark Durkan) made a number of points, and I was very interested to hear his concerns about the impact of changes on the way in which the law enforcement agencies might work. He said that he feared that the review was in danger of sucking jobs to the eastern seaboard, and I can see that that concern is very real for him and for his constituents. However, all I can say to him, as I said earlier about the second review of the smaller offices, which will begin shortly, is that everybody will have an opportunity to contribute to the process and everybody’s views will be listened to before decisions are made. It is not a process whereby decisions have been made in advance, and then we will have a review in which people cannot have confidence. There have been many occasions when proposals have been met with counter-proposals and they have been taken on board.
Frankly, I am not reassured by what the Minister has said, because in effect, the Belfast review will be presented as having resulted in certain givens that will affect, inform and influence the review of offices outside Belfast. She has told us that, in effect, there are two separate equality impact assessments: one for Belfast, which will reach a conclusion, and a separate one for the other offices. The Equality Commission for Northern Ireland has clearly said that the right thing to do is to have one overall equality impact assessment of the current regional review. Why is that not happening?
The Equality Commission said that it would prefer all areas of Northern Ireland to be reviewed together, but it was mindful of the model that HMRC has used to review urban centres in the rest of the United Kingdom, and the earlier timetabling commitments that HMRC had given to staff. The commission had no objection to HMRC continuing with the model involving two processes, examining first, the urban centres, and secondly, the smaller offices, when taking forward the Belfast urban centre review.
I shall turn to the changes that HMRC is making to the way in which it carries out its business, so that it can respond to customer demands and the requirement—
I shall come to several points that the hon. Gentleman made, if he will allow me, and then I shall be happy to give way.
For some years, there has taken place in HMRC buildings very little work that is directly connected to the local community; some contributions have alluded to that this morning. Further, many customers now choose to telephone HMRC offices or to use the internet to file returns or make claims. Throughout the UK, HMRC estimates that it has up to 40 per cent. too much accommodation, but it is right for HMRC to keep its network of inquiry centres, as is happening. I hope that hon. Members accept that we value the face-to-face contact that we know the public appreciate, and HMRC is maintaining it. However, it is also right for HMRC senior management to examine their back-office operations to ensure that they are run as efficiently and effectively as possible. In some work areas, that is best done by concentrating work in large units, but in others, a more mobile work force is seen as the best solution to customer needs.
There must be an emphasis on improving compliance by focusing resources on the risks that HMRC deals with regarding different taxes and customer groups.
The Minister knows from her previous role, in Northern Ireland, that for members of the security forces we have very special arrangements to protect their identity. She knows that those special arrangements for HMRC are located at one of its facilities in Northern Ireland. I do not expect her to expand in detail on the way in which she intends to handle that very special part of HMRC’s work in Northern Ireland in the context of the review. However, can she assure me that those special arrangements for police officers, soldiers, prison staff and others whose security must be protected will continue, that the arrangements will be dealt with not in the context of the wider review and then reconfigured, but in a ring-fenced way, and that they will be properly protected and, I hope, maintained?
The right hon. Gentleman makes a valid point that I shall personally look into as a result of his drawing it to my attention today. If he will allow me, having looked into it, I shall write to him to give him the reassurance that he seeks.
I am happy to confirm that, whatever the outcome of the review for the offices in Northern Ireland, the proposals for the remainder of Northern Ireland, including Newry, which was mentioned earlier, will be subject to a full—that is to say, a public—equality impact assessment. Inquiry centre services will be maintained in their current locations or nearby, and staff will not be required to commute to an office beyond reasonable daily travel. There is an established process for managers and staff to discuss options for their future employment dependent on the outcome of the review. The process is open, transparent and accessible to the trade unions.
I appreciate that. Thank you for pointing it out, Mr. Bercow. I apologise.
The whole moving of jobs issue that the Government are trying to force on Northern Ireland surely flies in the face of Government policy. I raised it earlier with the hon. Member for Foyle (Mark Durkan) in relation to trying to encourage people back to work. Surely it flies in the face of what the Government have been trying to do for a number of months.
I know that the hon. Gentleman is making a serious point, but I do not believe that that is the case. Having been an employment Minister in Northern Ireland, I am familiar with the issues, and I do not believe that the changes proposed for the Belfast urban centre and the review respecting the other HMRC offices will have an impact on employment, although I am aware of his genuine concerns for work in Northern Ireland, as well as those mentioned by other hon. Members.
The hon. Member for South-West Hertfordshire (Mr. Gauke) asked about the processing of VAT registration. I have responded several times to written questions and other questions on that issue, and he will know that the process has improved, so I shall not take up time discussing it now. This debate is not strictly about that subject, although we are talking about HMRC performance in a broader sense.
Several hon. Members are interested in the matter of pressures on individual staff members. Proposals to rationalise work and office space across Belfast, Antrim and Lisburn were put forward for consultation in September last year. Staff, trade unions, Members of Parliament and local authorities have contributed to that consultation, providing information on travel routes, economic interests in the locations, the position of other employers and Departments and individual circumstances that should be taken into account. A report summarising those responses was published in January this year and is available. HMRC is considering all the information provided during the consultation in arriving at its recommendations.
Order. Before the Minister replies, and so that I am not open to the charge of discrimination between one Member and another, I must say to the hon. Gentleman that he too should not use the word “you”. I hope that both hon. Members will take my rebuke in the constructive spirit in which it was intended. I call the Minister.
I say to the House in all sincerity that the changes being made and the improvements that will follow to HMRC’s processes for responding to customers will help in dealing with poverty, particularly now that HMRC plays such an important role in the administration of tax credits. The administration of tax credits has been much criticised in recent years, and the work being done to improve it will bring dividends. If there are concerns about how the plans will sit with the Northern Ireland Assembly, I am happy to visit to see what can be done to ensure that the administration in Northern Ireland follows as closely as possible Government policy elsewhere in Britain. I am happy to take that discussion there to consider what impact the changes might have on Northern Ireland.
I shall briefly outline some of the facts being considered for the Belfast centre. HMRC has nine offices in the Belfast urban centre: seven in the city, one in Antrim and one in Lisburn, accommodating some 1,700 staff in total. HMRC expects to need roughly the same number of staff across the entire urban centre, including those offices, in 2011. Analysis of staff travel times suggests that our Belfast city centre offices are all within walking distance of each other. Any rationalisation of buildings therefore should not pose serious problems in terms of commuting times. In moving to an efficient structure, HMRC is confident that the majority of staff can be relocated nearby with their own or similar work.
Before the right hon. Member for Lagan Valley (Mr. Donaldson) jumps to his feet—I am immediately conscious of his comments—I say to him that I recall the M1 well, having travelled it many times. Even in a police car, with all the advantages that that brings, it can take inordinately long. I understand the concerns of people working outside the city centre about any extra travel time they may face, particularly those who depend on public transport. Even though the analysis undertaken by HMRC to support its recommendations will be extensive, individual staff members will have the opportunity to discuss their circumstances with managers before any decision is taken on their suitability to relocate. Throughout the programme, senior management in HMRC are committed to being open with staff.
The Minister has mentioned the test of reasonableness several times in relation to staff relocations. Does she think that it is reasonable for female staff living on the north coast, many of whom have caring responsibilities, to have to leave home before 7 am and arrive back after 7 pm in order to work at HMRC offices in Belfast?
Travelling from Londonderry to Belfast is a long journey, but there are many people in south-east England who commute. [Interruption.] The comparison is germane. I am reluctant to say that such a commute is unreasonable, full stop. Some may make that choice for career purposes, and I would not want to suggest that they are making an unreasonable decision. All the issues will be considered, and individual staff members’ personal circumstances will be taken into account by their managers as the review proceeds, but we are in the earliest stages. We have not even begun the review of the offices about which the hon. Gentleman is particularly concerned, but I know that he will continue to make such representations.
Managers are 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 and effective. The decisions are not easy, and they can be made only after all the specific facts are known. Once decisions have been announced in the Belfast urban centre, as elsewhere, HMRC will begin relocating staff and releasing surplus accommodation. As I said, I expect the review of clusters and individual locations—the remainder of HMRC locations in Northern Ireland—to begin within the next couple of months. The hon. Gentleman has expressed concerns about the review of individual locations, several of which have been mentioned. I reassure him and other Members that the full equality impact assessment of all the proposals will be undertaken to identify—I have always found this a comprehensive list—any impacts on people’s racial group, age, marital status, number of dependants, sexual orientation, religious beliefs or, in Northern Ireland, political opinion. It is always worth reminding the House of that.
The hon. Member for Southport (Dr. Pugh) raised a couple of points to which I should like to respond, because I do not often get the opportunity and I have a minute or two now. He criticised the lean process. I assure him that I am confident that in Northern Ireland, as elsewhere, the lean process will bring benefits. It works. I have met staff who have gone through the process, and I can see the benefits to management in terms of the ability to bring about improved customer experience by speeding up how HMRC responds to its work load. I am confident that the process will bring new opportunities for staff.
The hon. Member for South-West Hertfordshire was right to draw attention to the assessment of morale in HMRC. It is a cause of concern to me. I suggest that sometimes delay in such processes undermines morale even further. It is important to staff to have some certainty about where they will be and what they will be doing, and that is what I hope HMRC’s review will bring.
The hon. Member for East Londonderry asked about redundancies. HMRC cannot guarantee that there will be no compulsory redundancies or compulsory moves of home, but its intention is to avoid both if reasonably possible. HMRC is working with staff and unions to minimise the risk of compulsory redundancy, but it cannot guarantee that that will not happen, nor do I think the House would wish to impose such a limitation on it.
The Minister was speaking about the morale implications of delay, and I accept her point. Does she accept that in the context of what she is now billing as two reviews in Northern Ireland, there is a morale hit and frustration about what people see as cynical staging? Doing the Belfast urban review first and guaranteeing that the aggregate number of jobs in the Belfast area will remain roughly the same means that the entire efficiency hit on job numbers—about 500—will affect the rest of Northern Ireland. That sort of delay, or pretend delay, which is effectively cynical staging, hits morale big time.
The hon. Gentleman has his point of view. He may call it cynical staging, but HMRC has taken a pragmatic approach that has worked and has paid dividends elsewhere in the UK as it has carried this programme forward. If hon. Members are concerned about the impact, I encourage them to visit regions that have gone through the process.
There is one point that the Minister has not picked up. I recognise that the exercise should be transparent, as she said, and thorough. The document that I received about my tax office shows how thorough it has been on the personnel side, but it is slightly light on the financial side. When making counter-proposals, one needs to know the financial cost of any moves that are being made. One therefore needs to know the accommodation costs that might be imposed not only for the offices that are being closed, or are scheduled for closure, but for those that are being kept open to draw comparisons. If the unions are to make counter-proposals, they need that sort of data—otherwise, the exercise is not open and transparent.
The hon. Gentleman will know that when decisions are announced, financial assessments are also released. It is worth the House remembering that HMRC has saved the not inconsiderable sum of £27 million as a result of the process. It should be congratulated on that and encouraged to make further progress. This long-term programme will deliver a more responsive and efficient service for taxpayers and HMRC customers. I hope that hon. Members will look back on it and say, “Yes, we can see the benefits of what has happened.”