Motion made, and Question proposed, That this House do now adjourn.—(Stephen Barclay.)
I should tell the House that I do not intend taking the full time available, so Members will be spared that.
I thank the Financial Secretary for coming to the House to respond to the debate. I was alarmed and disappointed that I had to apply for this debate and was granted it so soon after the debate on HMRC closures on 29 April in this Chamber. The Minister will know there has been a worrying unilateral change on the part of HMRC, which has decided to close the Walsall office on 20 June 2016. That has been brought forward, much to the shock of people who work there.
This debate is about public servants and those who have worked in the public interest, and how we treat them. If we want society to thrive, we need a balance between the public sector and the private sector. The public sector provides the framework of a good society, doing the things that it is harder for the private sector to do and that the private sector says it wants Government to do. The debate last week showed how important it was for tax to be collected. All that revenue should go into public services, the NHS, education, skills and infrastructure, among other things.
In the previous debate I referred to the tax gap—the difference between the tax owed and the tax collected. The Minister referred to it too in his summing up. In a survey undertaken in 2014, Richard Murphy said that the tax gap stood at almost £119 billion from tax evasion. That figure has not been challenged, and that is the scale of the amount of tax that needs to come back into the public purse. We need to collect that in order to pay for everything the Government have invested in public services.
Today I hope to persuade the Minister of the case for retaining the office and dealing urgently with the issues of HMRC staff in Walsall. What happened to the Walsall office at Pattinson House offends British values and natural justice. Under “Building our Future” it was announced in November 2015 that the office was to close by March 2017. Then on 4 May HMRC decided that all personal tax staff were to be compulsorily moved to Birmingham some six weeks later, on 20 June 2016. A collective grievance had been brought against the office, and many staff fear that this announcement may be a reprisal for the collective grievance and a petition. I am pleased to see my hon. Friend the Member for Walsall North (Mr Winnick) in the Chamber. He and I were in the town centre that day and we saw how the public responded to the petition: some 500 signatures were collected in about an hour and a half, supporting the retention of the office. I do not believe I have had a response to the petition from the Department or from the Select Committee.
The grounds for the collective grievance were that HMRC failed to follow Cabinet Office redundancy protocols, including moving the administrative assistants into redundancy procedures unnecessarily; HMRC denied trade union representation in one-to-one discussions with staff about whether they could practically travel to Birmingham; HMRC failed to carry out an equality impact assessment for the closure; HMRC refused to offer staff the opportunity to move to sites other than Birmingham, despite alternative sites being more accessible for some staff; HMRC ignored evidence of increased journey times for Walsall staff, in favour of an unproven use of a variant of Google maps to estimate journey times; and HMRC refused to subject the closure plans to parliamentary scrutiny or to accept accountability for them. HMRC eventually responded to the grievance, but only to claim that it failed to meet the Department’s test of a legitimate grievance. HMRC refused to investigate the grievance under the Department’s procedures.
It cannot be right that the guidelines have not been followed and that the closure has been brought forward to June. The Minister has said in written answers and to the House that HMRC had given a commitment to staff that they would have a one-to-one meeting with their manager to discuss their options at least one year ahead of their office closure. That clearly has not happened in the case of Walsall. He also said that changing locations was not cutting staff, but the staff in Walsall have been given no choice and some are being made redundant. The Minister has also said that it is an operational matter, but who is the executive of HMRC accountable to? When the Minister said that the Government had asked HMRC to reduce costs, that is a policy matter, not an operational matter. The Minister said that the change would make it quicker and easier for taxpayers to report and pay their taxes online. Does that include those who have offshore accounts?
There are still appeals outstanding. Those who are out of scope for a move do not know what will happen to them. There are still concerns about travel support. The Public and Commercial Services Union has not been consulted. It was just told that a resource planning project had been announced. Now staff have been given six weeks to reorganise their lives and their caring responsibilities, when they were expecting that period to be almost a year.
I want to touch on the impact on Walsall. Walsall South has consistently higher levels of unemployment claimants than the rest of the region and the UK—4.4% of constituents claimed unemployment benefits, compared with a UK-wide figure of 2.5%. An assessment by Coventry City Council suggested that with the loss of quality jobs, almost £1.5 billion would be taken out of the local economy—a figure that I have cited before. Walsall South cannot afford to lose such a sum.
I am pleased that my hon. Friend is putting the case so well. Does she agree that if HMRC’s decision goes ahead, it will have a negative effect on the borough as a whole? It is undesirable. A public body such as HMRC should not act in an arbitrary manner, as my hon. Friend has explained. Would it not be useful for the Minister, when he replies, to try to persuade HMRC to change its decision?
You would think that the Government would be a model for industrial relations, bearing in mind the fact that we pass the legislation in this place; instead, they are becoming the worst employer. More importantly, has my hon. Friend had cases where the public have faced long delays? I had cases like that over Christmas, and I have raised them here many times. At the end of the day, this is about the impact on the public as well as the staff.
I absolutely agree. When unions and the Government are working together, and when unions and employers are working together, there can be a situation where something like the steel industry does not just collapse and we can move forward. We cannot move forward on anything unless we have negotiation and consultation, and that was clearly lacking in this case.
The sad thing about this case is that the majority of the employees are women. The vast majority have worked in the Walsall office for 15 years, and some have worked there for over 30 years. Their average age is 50—yet again, we have women of a certain age being discriminated against, and those with long service and knowledge being ignored. This will have a huge impact on their lives.
Where are the consultation, discussion and negotiation that are the bedrock of a civilised society? Will the Minster look at why some redeployment appeals are still outstanding? It is not clear how many people fall within the requirements regarding reasonable daily travel to Birmingham. What is the position of those who are out of scope? Could staff be offered redeployment in a nearer office, such as Wolverhampton? Could the three administrative assistants be offered promotion? Could long-serving staff be offered enhanced early retirement?
It is in everyone’s interests to have a modern, fit-for-purpose office and up-to-date facilities—the Minister, I and everyone else agree on that. However, I would ask him not to close the office. Given the length of experience there, new work can be taken on. That would save money on rent and relocation.
The staff at Pattison House have given all these years to their country, and there is an accountability issue in terms of HMRC as a non-ministerial Government body. If HMRC is accountable to Parliament, the Minister should be able to look at the reasonable suggestions I have made. He may say that this is an operational matter, but that means that he is powerless in the face of an important department, and HMRC is not then accountable to Parliament. That would make a mockery of the Prime Minister’s anti-corruption summit, which will be held on Thursday, because HMRC should be focusing its efforts on closing the tax gap, not closing offices. There will be no one in HMRC offices with local knowledge who can assist the public to pay their taxes without the help of accountancy or legal trickery.
I hope the Minister will respond positively for the sake of the staff and their families. We owe that to them for their years of public service.
May I begin by congratulating the hon. Member for Walsall South (Valerie Vaz) on securing the debate? I welcome the opportunity to discuss HMRC’s proposals and, I hope, to address some of the points she raised.
Before doing so, it is worth recapping briefly on what we are trying to achieve with HMRC. The organisation provides an essential service to people in the United Kingdom, not only helping hard-working families with the benefits they need, but making sure that the taxes that fund our vital public services get paid. We want to help HMRC do that better. We want it to be faster and more efficient. We want it to cost less but to deliver more for taxpayers and tax credit recipients. We want it to focus on our top priority: tackling tax evasion and avoidance.
We have already done a lot to move in that direction. Since 2010, we have driven down the tax gap—the difference between what HMRC should theoretically bring in and what it actually collects—to just over 6%, which is one of the lowest rates in the world. That progress is important; without it, we would not have collected £14.5 billion in extra tax. The hon. Lady quoted Richard Murphy’s £119 billion estimate of the tax gap. She said that, as far as she is aware, that figure has not been challenged, but it has been challenged repeatedly, and it is not a number we accept by any means. None the less, it is important that we reduce the tax gap.
We have also committed to investing £1.3 billion in HMRC to make sure it can offer the digital services people expect in the 21st century, and we have committed millions more to improve customer services.
By the end of this Parliament, therefore, customers will start to see real improvements, whether that is reduced call waiting times, finding it quicker and easier to pay taxes online, or being able to use HMRC’s special phone line for businesses. Furthermore, by 2020, we expect HMRC to be saving £700 million a year, as well as delivering an additional £1 billion in revenue in 2020-21.
However, we want to go further. We want to save £100 million a year by 2025, by transforming the estate the HMRC works through and by creating a smaller but more highly skilled organisation. When HMRC was formed in 2005, it had 570 offices spread all over the country. That could hardly be termed efficient, and even now, in 2016, HMRC has around 170 offices, ranging in size from 5,700 people to fewer than 10. In the case of the Walsall office, at Pattison House, for example, there are 56 employees.
Back in November, therefore, HMRC announced its intention to finish the job of making itself more efficient. Over the next 10 years, the department will bring its employees together in large, modern offices in 13 main locations serving every region and nation in the UK. Those offices will be equipped with the digital infrastructure and training facilities they need to work effectively. Not only will these new offices encourage people to work more closely together, but they will provide more opportunities for them to develop their careers.
HMRC is fully aware that its most valuable asset is its people, and I commend the hon. Lady for her interest in the arrangements we are making for the around 56 employees of HMRC in Walsall for when the office is closed. I would like to reassure hon. Members that we are committed to making sure that the people in Walsall—indeed in every HMRC office—are supported through the changes and informed every step of the way.
First, I should remind the House that this is about changing the locations, not cutting staff. Although the Walsall office, in Pattison House, will be closed in 2016-17, HMRC hopes that everyone who is able to will transfer to an office in central Birmingham and then to a regional centre in Birmingham that will be home to over 3,000 staff.
In February, HMRC made sure that everyone in Walsall had the chance to discuss, on a one-to-one basis, how this will affect them. In particular, that meant checking whether they will be within a reasonable daily commute of the new office and finding out what support they may need to make the move. That could, for example, include an extra contribution towards travel. It is worth pointing out that someone who lives within a reasonable daily commute of another office could get support for up to three years with any additional transport costs. Those outside the reasonable daily travel requirements could receive support with their fares for up to five years. There is therefore support for individuals, which can be considered on a one-to-one basis. However, we remain confident that most people will be able to travel to the new office in central Birmingham.
HMRC will also be asking its Walsall staff to change their area of expertise. As the hon. Lady will be aware, many of them currently specialise in personal tax. As part of HMRC’s restructure, it will be asking them to put their skills to good use in new roles in debt management. To help them make that change, HMRC will be running a full programme of induction and learning.
To address the hon. Lady’s point about why the process has been accelerated, jobs are now available in Birmingham in debt management. The desire is for those jobs to be filled as quickly as possible, and HMRC believes that the staff in Walsall are well placed to perform these roles. That is the reason this has been offered.
First, if the Minister disputes the figure of £119 billion of tax avoidance, will he drop me a letter to say how he calculates that so that I can put it to the source? Secondly, this has not been communicated to the staff in Walsall, who were not told that they have been given other jobs; all they were told was that the office would close. The Minister has not dealt with why the process was accelerated.
These debt management roles are available in Birmingham, and it makes sense for people currently working in Walsall who are capable of moving to Birmingham to fill them at the earliest opportunity. That is why this has been done. As I say, it was announced in November that Walsall was going to close in the course of the year 2016-17. As these roles in debt management are available, it makes sense to move quickly to fill them.
I am happy to write to the hon. Lady about the tax gap. HMRC publishes its own estimate of the tax gap that is based on considerable work and makes use of highly skilled statisticians. The National Audit Office has described it as “credible”, if I remember correctly. Mr Murphy’s estimates are well known to be controversial—let us put it that way—so this will not come as a surprise to him. He is very well aware that HMRC’s estimate of the tax gap is very different from his. I will set out in my letter some of the reasons why HMRC believes that Mr Murphy’s estimate is not credible. I have debated this issue on a number of occasions, so it would be more than a pleasure to set it out once again.
As my hon. Friend the Member for Walsall South (Valerie Vaz) emphasised, the staff feel strongly that the closure has been dealt with in an arbitrary manner. They are clearly not satisfied, despite what the Minister is saying about full consultation. As I said earlier, this is having a negative effect on the borough as a whole.
I note the hon. Gentleman’s points. This was announced in November last year. PCS was present for the announcement and has been engaged throughout this period. I do not accept that HMRC has acted in an arbitrary way. There has been consultation and a series of one-to-one meetings.
Let me pick up on a point raised by the hon. Member for Walsall South about the administrative assistants in cases where there are no suitable roles within debt management. A personal tax team within HMRC is working with those individuals to see whether they are suitable for promotion to a higher grade and, if so, whether they could be offered posts within debt management.
It is necessary, in the view of HMRC—a view that the Government support—to move towards fewer offices where there is an ability to concentrate staff and to have greater flexibility as to the work that they undertake. It will also ensure that there is greater availability of career opportunities within the regional centres. That is the direction that HMRC is going in—we support that—and it does require staff to be moved from some of the smaller offices to the regional centres, in this case to Birmingham.
This is the first time I have heard the term “debt management” in this regard. As a previously practising lawyer, I know what that means. In effect, these staff have been deskilled. They are going from personal taxation into debt management, which is just chasing debts.
No, I do not accept the description of debt management as a deskilled role. Debt management often involves making judgments on whether, for example, a business should enter into a time-to-pay arrangement, which is a highly skilled and sensitive role. HMRC’s assessment is that the teams in Walsall are well placed to be retrained to perform this role within debt management. Debt management is not an unskilled role within HMRC.
As far as I am aware, there is no suggestion that people will be put into a lower grade as a consequence of these changes. In a couple of cases, HMRC is looking at whether the move will involve a promotion for those members of staff, but there is no suggestion that anyone would have a reduction in pay. As I outlined earlier, this has to be worked out on a one-to-one basis. Staff may find that they are getting a contribution for up to three years for their additional travel costs as a consequence of a move.
I think a significant number of jobs are available. The question is how many of the Walsall staff are in a position to move to Birmingham. There is no suggestion of those who are capable of moving to Birmingham entering into redundancy. Jobs are available for Walsall staff. As I say, the jobs in debt management should not be demeaned, criticised, or suggested to be of a particularly low-skilled nature.
We are determined to keep moving forward in helping HMRC do its crucial job more and more effectively. That is why we are supporting these changes, which put the interests of taxpayers at the heart of what HMRC does. HMRC is working closely with all the staff who will play their part in this important reform, and it is determined to continue to do so throughout the process. I hope that hon. Members will join me in commending the work that HMRC does. Although I may not have persuaded the hon. Member for Walsall South, I wish to reassure her that HMRC will continue to work with staff based in Walsall. These changes will help to move HMRC forward to become a more effective, efficient and successful organisation.
Question put and agreed to.