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HMRC Office (Chorley)

Volume 488: debated on Wednesday 25 February 2009

I thank you, personally, Mr. O’Hara—the great man that you are—for allowing this debate. You recognise an important subject when you see one, and there is none more important than Chorley tax office and its potential closure. Of course, I also thank the Minister for giving up his precious time; I do not want him to be known as the Minister of death and doom, but as the Minister of good news, and hopefully at the end of the debate we will hear some. I think that he will be embarrassed by what has happened in Chorley and other offices in the area.

I am disappointed that we even have to hold this debate about Her Majesty’s Revenue and Customs office in Chorley and the mistakes that have been made—common sense says that its closure is not necessary and should be overturned immediately. The Minister may say, “Well, you would say that.” I would reply, “Common sense, prudence, and all the things that this Government claim to stand for, are the reasons why it should not close”. Prudence should be there for all of us. I hope, therefore, that the Treasury has readopted that prudence, common sense and justice. That is what we want for Chorley, and if he is up for that, Chorley will remain open. That is the question. I am sure that he will do his duty and do the best by the people of Chorley. We do not want a Government who are not working for the people of Chorley.

My hon. Friend is making a strong case for the well-run tax office in Chorley, just as there was a case for the well-run tax office in Accrington. Originally, Chorley was scheduled to remain open, as was Accrington tax office. Has he heard any reasonable explanation, either from HMRC, the Minister or his predecessor, why Chorley or Accrington tax office should close?

There is absolutely no good reason for closure, but there is good reason for them to remain open—it would save money.

My hon. Friend has touched on the nub of the matter. Our offices cost less than those in St. Helens and Blackburn. I could name another one—Bolton—but let us stick with the first two. What is between Chorley and Accrington? Some would say Blackburn, but of course St. Helens is there, too. St. Helens and Blackburn were down for closure, because they are inefficient offices and cost too much to operate. The statistics, figures and answers that we received to questions tell us that they cost more to keep open. In fact, St. Helens is an embarrassment to the Treasury—so much so that health and safety officers have concerns about using it. It is not fit for purpose. It was quite rightly down for closure, and yet somehow it has been reopened.

What is the magical factor in all this? The Blackburn office, in the constituency of my right hon. Friend the Member for Blackburn (Mr. Straw), is located on an industrial estate; it is a poor office in the wrong place, which is why it was down for closure. Accrington and Chorley were to remain open, because they are good offices with quality staff, offering quality services—Chorley is an award-winning office. It is a purpose-built tax office built in 1990, not some rundown relic. Why do the Government want to close a second-to-none, purpose-built, award-winning tax office with the best staff and best quality advice? I shall tell the Chamber what the problem is—political corruption. We must be honest. This must be down to political corruption. I cannot think of anything else. It is very strange. What do St. Helens and Blackburn have in common? They have Cabinet Ministers as Members of Parliament. There can be no other reason, and in the end, therefore, the poor Back-Benchers pay the price. What is going on is a disgrace, and the Government should apologise to my hon. Friend and myself.

Does my hon. Friend agree that the Government, particularly through HMRC and the Department for Work and Pensions, seem to be doing their best to make HMRC and DWP staff feel extremely uncomfortable. Is he aware that the staff in Preston have been given notice to clear out of their buildings, obviously to make way for the Tithebarn project, and have been given no indication of where they will be accommodated? Not only are their offices closing with no plans to reopen them and relocate the staff, but staff who will probably keep their jobs do not know where they will be in three years’ time.

I do not disagree with my hon. Friend. Preston is a great modern city, and the tax office employs many people. As he says, we know that Preston is being redeveloped, that the tax office will close and that staff do not know where they will be transferred to or where the office will be. Preston is only up the road from Chorley and across from the office of my hon. Friend the Member for Hyndburn (Mr. Pope) in Accrington. Why do the Government not use some common sense and plan for the people of Preston, so that they can keep Accrington and Chorley open. It would not be far to travel from Preston. It would put an end to the uncertainty hanging over the people of Preston.

We can do things by working together, but we need common sense. The Government should take it on the chin, recognise that they have made a mistake and put right this wrong. I know that my right hon. Friend the Minister is big enough and strong enough and has the ability to say, “We have got this wrong. We will look into it, and put it right.”

The hon. Gentleman, who has been waiting some time for this debate, is making an extremely strong case on behalf of Chorley tax office and others in the north-west, including Crewe, where the tax office has also been earmarked for closure. Does he agree that with the current deep recession it is the worst possible time to put such experienced people on the job scrapheap? The average work experience of staff in Crewe is 23.7 years. Furthermore, £21.5 billion of debt remains uncollected, and the debt management and banking business in Crewe is one of the most efficient at collecting such debt. Now would be the worst time possible to do away with that superb service.

Quite rightly, the hon. Gentleman makes a strong case for why Crewe tax office should remain open. I know that he will continue to press that case. That is on the record, and I am sure that the Minister has taken it on board.

I congratulate my hon. Friend on securing this debate. I cannot really link my constituency with Chorley except that—

Absolutely, and the closure might effect the ability of some to do so. Does my hon. Friend consider that during the consultation process the officials did not take into account the difficulties that people would face in having to move offices? The vast majority of the people affected are fairly low paid and have life balances to consider. Furthermore, we will lose staff with an average of 25 years’ experience. I do not think that officials took into account the life balances and difficulties that will be faced by many families.

My hon. Friend makes a very strong case about life balances. The Treasury claims to take those into account and to be a good employer. We have many fine words, but not much substance behind them. The Government and my right hon. Friend the Minister can provide that substance and take into account the points raised today. It is not his fault—the closures were decided before he took up his position—which is why I plead with him: he can be the man to save face for the Government by putting right this wrong. The mistake was made before he took up his position; I do not blame him, but I do charge him with sorting out the mess. What I am talking about is 77 loyal staff, 54 of whom work full time and 23 part time.

On 29 February, it was announced that Lingmell house would close following the HMRC north-west urban centre review. The local compliance corporation tax operation team undertook the process of identifying 15 centralised sites for its operations. It seems funny that the office was always told that it would remain open, which gave everyone else an advantage. If an office is not earmarked for closure, it cannot lobby. What will it lobby for? That is the problem. We were down to stay open. Those who were down for closure suddenly lobbied and used their political influence. Such was the strength of their lobbying that the offices that were not down for closure are now closed; it is an embarrassment. I know the Minister must be embarrassed by that. Those award-winning offices that were recognised for providing the best service were never meant to close. Suddenly, they are closing. Staff from other offices have channelled their efforts into taking all the best jobs and transfers that are available, and we are left in limbo. Do we really think that that is acceptable? Of course, we do not, and, quite rightly, there is embarrassment.

After that event, in November 2008, five of the 15 sites have been identified. Yet the remaining sites are still being determined. I wrote to the Financial Secretary to the Treasury to outline why Lingmell house would be an ideal location for one of those sites. Even then, I said that other work could be brought in to save the site, which is an area that I should like the Government to explore in more detail. Of course, we get the usual, “Sorry, we are not interested.” My arguments highlight not only why Lingmell house should not have been earmarked for closure in the first place but just what an asset the building could be for a centralised site for the future.

Let us look at the office’s location. The office is within five minutes of junction 8 of the M61 motorway, which provides access to the M65 and M6. It is a five-minute walk from the train station and an even shorter distance from the bus terminal. It is well placed to serve offices within Manchester and other cities such Preston and Blackburn and it is also within an hour’s drive of Leeds. Therefore, it is absolutely central to the north region let alone the north-west. Logistically, one could not find anywhere better. A person can drive into and out of Chorley, or they can get on a train. Yet we want to put more people into Manchester at a time when the Government are saying that they want a congestion charge because the city is so crowded. Why do we want to put more offices in there? Come on, let us go outside the cities and look for regional offices. It is that easy connection between the train and the bus to Chorley that would stop the number of cars coming in from the constituency of my hon. Friend the Member for Preston (Mr. Hendrick). This issue affects not just the constituents in Chorley but those of my hon. Friend the Member for South Ribble (Mr. Borrow). We have seats all around Chorley that benefit because people all live locally, and that is the advantage of this proposal.

I congratulate my hon. Friend on the tremendous work that he has done in this field. A possible solution that has been suggested to me by staff working in the Lancaster tax office is to find new work, such as dealing with tax credits, because there are problems even with Preston. All the Lancashire MPs should meet the Minister to consider whether work can be spread around the region, which could save jobs, rather than forcing people to travel into Preston.

My hon. Friend is being characteristically generous to the Government by suggesting that alternative employment is being offered in Manchester. Some of the alternative employment is in Bootle, which is almost impossible to get to from his constituency in Chorley, and from mine in Accrington.

I agree with both those points, and I will touch on them later. There is other work to go around, and we have also asked whether tax credit work can be put into Chorley.

There is also the standard of accommodation. Our purpose-built office could not be better. It was constructed in the 1990s purely for the tax office. It is one of the newest HMRC offices in the north-west. In fact, a penalty must be paid by HMRC should it vacate the office before the end of its fixed-term contract. I will return to this matter a little later because it is important to get the message across.

Preston and Blackburn are the closest offices to Chorley that will remain open. Offices in Burnley, Accrington, Southport, St. Anne’s, Blackpool, Lancaster and Barrow will close. Those offices were staffed primarily by clerical grade staff. The creation of a corporation tax base in Chorley could accommodate the large number of surplus staff within the north-west. I hope that the Minister is taking this on, because, logistically, the office is central for everyone.

Staff at the office feel that they were deprived of a fair and formal consultation period. Therefore, giving consideration to such a proposal would begin to redress their grievance. I must emphasise the deep frustration of staff at the site who feel that redeployment to other sites around the region is simply not practical. Indeed in response to my parliamentary question on 17 March, the Minister stated that staff at Chorley may be transferred to offices in Bootle, Manchester and Salford. How can any of us get to Bootle? None of those centres is as conveniently located as Chorley. If someone lives in Chorley, it is extremely difficult—if not impossible—to travel to Bootle unless they have a car. Moreover, HMRC is rightly proud of offering flexible working hours and part-time employment. I find it extremely hard to understand how such flexibility can be achieved if someone lives in Chorley and has to work in Bootle. In fact, it cannot be achieved. That is why we want to see substance and not just fine words. It takes 45 minutes to travel to Bootle in a car. To get there on a train from Preston, Chorley or any of our areas is virtually impossible.

I met staff at HMRC in Chorley and they were rightly concerned about the closure and their own future. In particular, they were worried about the lack information available. At this difficult time, people find it impossible to make plans if they do not know whether they will be transferred, or whether their office will stay open. Come on, let us rethink the plans.

The Public and Commercial Services Union has also expressed its concern about the closure programme, saying the ability of the Department to collect revenues and provide tax advice to the public and local businesses would be completely undermined. The Minister may say that we can have a little part-time office, but that is not acceptable.

Access to tax advice to communities across the UK will be damaged by the proposals, hitting businesses and the public in rural towns. Chorley is home to the Tenon Group, which is one of the biggest accountancy firms in the country and is listed on the stock market. We have hundreds upon hundreds of accountants and businesses that operate out of Chorley. Chorley is the 34th richest constituency in the country in terms of disposable income and is home to the 54th richest constituent in the country, and his business is based in Chorley. Therefore, closing the office would be complete madness. I say to the Minister, please reconsider the plans.

In a letter from the Treasury, a previous Minister stated:

“HMRC business units can operate more effectively by co-locating teams in a smaller number of locations”.

That is fine. Let us look at some other locations, which the Minister did in the first place. He thought that that was right at the beginning, so how can it be wrong at the end? Is he telling me that his officials are completely bonkers? Is he saying that they made the wrong decision in saying that Chorley should remain open? I believe that the officials are not bonkers. They are absolutely right because they knew that it was the right office to remain open. The only people who did not agree with that were friends in higher places with greater influence. The officials got it right and they are not bonkers, but I am concerned about political interference.

Given that the Chorley office is the least costly office to run—it costs only £203,739.32 per annum—surely it makes more sense to keep it open. It is less expensive to keep open than the offices in St. Helens and Blackburn. That is the reason why it should not close. There is so much more that we can say. I know that the Minister will want to come back with some positive news. I do not believe that he will let my hon. Friends down once again. Once you have been shafted, you do not want to be shafted twice. Please, do the right thing. I cannot stress enough that something smells unhealthy here. Your top officials and your team went out to look at every office—

Order. I have been listening very carefully, and the hon. Gentleman has sailed close to the wind on a number of occasions. I ask him to be careful of his language.

Okay. I agree with you, Mr. O’Hara—I do not want to be downwind of the smell that has been created.

Officials who took the right decision and did the right planning said, “Chorley, Accrington and other offices are in the right place, providing the right business with high quality.” Those officials got it right, so what has changed? If the office costs less to run and has the best staff, what could have changed anybody’s mind? It is logical not to close the award-winning, purpose-built office that officials say should remain open.

We come back to what I said earlier: something about this is very questionable. What influence and undue influence was exerted to close Chorley and Hyndburn, and to allow Blackburn and St. Helens to remain open? How much will the Minister have to spend on those offices to make them fit for purpose? They were not fit for purpose, and they are still not. I say to him: please go away, take another look at the matter and come back to us. We will not go away. We will quite rightly pursue the Treasury for the truth, openness and transparency that we deserve. We expect to see all the letters, notes and e-mails that have been sent over the closures. It is only right that we should.

I would take the better option, which would keep everybody happy and put some of the spare capacity work—tax credits and other things—into the offices. Finally, we should start with Chorley and look at the other offices after.

I welcome the opportunity to debate this matter with my hon. Friend the Member for Chorley (Mr. Hoyle) and others. They take a keen interest in the question of the future of office locations, but my hon. Friend made quite a serious charge, in a characteristically robust way, and I hope to persuade him that it is wholly mistaken.

My hon. Friend knows that we are requiring Her Majesty’s Revenue and Customs to increase its effectiveness at the same time as making substantial efficiency cost savings. Those savings broadly equate to a reduction in staff of about 25,000 between 2004 and 2011. When HMRC was created in April 2005, the two former revenue departments had around 105,000 staff and two separate office networks in nearly 600 office buildings throughout the UK. There is an obvious imperative for rationalising the office network. HMRC estimates that as a result of new ways of working together and the expected reduction in staff, it will be able to release up to 40 per cent. of its office space by 2011-12. That is driving the process. Of course, it means that some difficult decisions have to be made.

Given the shortage of time, I will go straight to the question of Chorley. Chorley was reviewed as part of the Preston-Blackpool area, taking account of planning for all the offices in the north-west—we heard about one or two of them in the debate. The decision to consolidate work is based on HMRC’s strategic business requirements in the area, which arise from the drive to improve customer services and efficiency, and to vacate surplus accommodation.

I accept that such decisions are often finely balanced, but HMRC has suffered enormously from the uncertainty over the matter for quite a long period. As my hon. Friend said, the decision was announced almost exactly a year ago. The very worst thing that we could do now, especially in the interests of the staff who have been affected, would be to say, “We’ll look again at the decisions.” We will not be doing so, and we need to proceed with the decisions that have been made.

The Minister says that everything is set in stone, but the Government have reviewed Wigan and it will stay open another year, so his time scale is slipping. He also ought to take account of the uncertainty of closing the office in Preston because of redevelopment. Other offices are needed. Surely we should keep the purpose-built office in Chorley because the Preston office is going to be demolished, although it is not his fault that it is being developed.

That was not known when the announcement about which offices would close was made—the expectation is that Chorley will close towards the later part of 2010. None the less, it would be damaging for the organisation and the staff who have been affected by the uncertainty for me to give any suggestion that the decisions will be revisited.

The Preston-Blackpool area has 14 offices and 3,300 staff. HMRC expects its staff requirement by 2011 to be about the same as now. Unlike a lot of other areas, we are not expecting a drop in overall staff numbers in the Preston-Blackpool area, which is good news for those who work there for HMRC.

Initially, as has been said, the proposal envisaged retaining Accrington, Southport and Cop Lane—one of the seven buildings in Preston—but vacating the office in Blackburn. However, more detailed feasibility work during and after the consultation period suggested that a number of changes would produce a better overall result for the business. The main change was that local compliance decided that, rather than moving away from Blackburn, it made more sense to build up the team there—it already had some 80 staff in Blackburn—and pull out of the other locations where it had fewer staff. There were 30 staff in local compliance in Accrington and 35 in Chorley—there are currently 29 in Chorley—so it made better business sense for local compliance to bring people together in Blackburn, where it had a larger presence.

The number of staff in Accrington is 112 and the total in Chorley 77. Will the Minister consider the economic impact of taking that number of white collar jobs out of towns such as Chorley and Accrington in the middle of a recession? Will he at least consider a moratorium until we are coming out of the recession?

No. I need to put some points on the record in response to my hon. Friend the Member for Chorley, and I have not been left with a great deal of time in which to do so.

There were changes to proposals for offices in or around urban centres across the whole north-west. For example, Bolton is to be retained because customer operations and local compliance both decided that it was the best available fit with their strategic plans. The driver for the decisions announced a year ago was that the local compliance operation had a much larger group of staff in Blackburn than in the other two locations. In Chorley, the staff total is currently 66, the second largest group being customer operations. However, for optimum efficiency in customer operations, groups of at least 100 are necessary, so Chorley was always going to reduce in size even on the basis of the original proposal.

My hon. Friend asked about the financial penalties incurred by leaving Chorley early. I am assured that HMRC will incur no such penalties, because of the structure of the agreement with the landlord.

My hon. Friend made his disagreement with HMRC’s decision to vacate Chorley clear, perfectly properly, and others expressed disagreement with other decisions. However, we need to move to new business operating models, most of which depend on bringing larger teams together in a smaller number of locations and introducing new ways of working. That has driven the decisions. HMRC has to use its resources to good effect, but that does not mean that it simply has to look at the running costs for particular buildings and choose the cheapest. Rather, it means looking at what buildings will work best for its business overall.

We are not proposing any reduction in HMRC jobs in the area compared with the current arrangements. The question is how those people can be provided with accommodation to do the most effective job possible. At the end of the programme—

Sitting suspended.