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Fiona Mactaggart (Slough) (Lab)
I beg to move,
That this House has considered the performance of Concentrix in dealing with tax credit claimants.
This is the first time that I have spoken in a debate in this Chamber that you have chaired, Mr Nuttall, and I look forward to it.
Just hours after I successfully persuaded the House of Commons Backbench Business Committee to table this debate, Concentrix’s contract was ended. I called for this debate because the company has bullied people who depend on tax credits and targeted single mothers, many of whom have had their tax credits stopped without fair notice. Concentrix is paid by results, which means that it has a financial incentive to stop payments. Its decisions are frequently made on the basis of wrong information, and people who depend on tax credits to make ends meet have been left without funds for weeks while errors have been corrected, causing hardship for them and their children.
I thought that this debate would focus on those shocking failures, and that I would use the time to share how the lives of my constituents, and the constituents of many Members here, have been made miserable by the cavalier way in which Concentrix has used the flimsiest of excuses to end tax credit claims, and by its shocking customer service, which has left claimants hanging on to telephone calls for hours without resolution. However, since then, there have been many parliamentary opportunities to highlight such stories. I am glad that the pressure from me and other MPs has led the tax authorities to end Concentrix’s contract. I am particularly glad that the National Audit Office is to look into its operation. As a former member of the Public Accounts Committee, I am confident that the NAO will get to the bottom of whether Her Majesty’s Revenue and Customs or Concentrix is responsible. I think it possible that we have sometimes blamed the company when we ought to have blamed the Government.
Christina Rees (Neath) (Lab/Co-op)
I congratulate my right hon. Friend on securing this important debate. Concentrix took the approach of stopping payments without warning. Many single mothers in my constituency have told me that they discovered that their payments had stopped only by checking their bank accounts. Does she agree that HMRC should not have given Concentrix the authority to stop payments, and that the process must stop?
Fiona Mactaggart
I think that the best thing that we can do with this debate is ensure that lessons are learned from this failure, and that the whole Government act on them. It is time to get answers from the Treasury about the extent to which it, rather than Concentrix, is responsible for the failure.
Mr Jim Cunningham (Coventry South) (Lab)
My right hon. Friend has done a great service in securing this debate. I had a problem, to say the least, over Christmas with a family who had no income for about eight weeks. We spent most of the Christmas period trying to get that family some money. Does she not agree that these matters should not be farmed out to private companies? They are far too sensitive. The Government should have another look at this, and the responsibility should be taken in-house. It should also be noted that HMRC has taken on another 30 staff; that is one heck of a cost as well. Another company that should be investigated is Capita, which is doing exactly the same thing because it has been set targets.
Fiona Mactaggart
My hon. Friend is right that we need to work out what Government should do. I will deal with that point later, but it is clear that part of the problem with Concentrix is that if people were notified, they often did not believe what they were told, because the Treasury insisted that Concentrix use its own branding on the letters, so people got letters from some company asking for extensive data. I would have treated that as phishing and thought, “This is someone trying to scam me.”
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I congratulate my right hon. Friend on securing this debate. She is absolutely right that we need to learn the lessons from this mess. Many of my constituents have been left in utter financial disarray by having been left for a time with no income. Does she share my belief that we need reassurances from the Minister that the Government will take every step necessary to sort out this shambles and help those who have been left in a mess?
Fiona Mactaggart
Indeed. Not only that, but the Government ought to ensure that it does not happen again. There is a risk that it could, not just in the Treasury but in other Departments. The reason why I persisted with this debate after the Treasury abandoned the contract is that I believe that this is an opportunity to learn lessons that should be spread throughout Government.
Kate Green (Stretford and Urmston) (Lab)
My right hon. Friend is right to point out that this is not just a failure of practice by Concentrix but a policy failure by Government. The deliberate intention of the contract was clearly to target single parents, on the basis of assumptions that they were living with a partner and not reporting it. That is an acute, intimate and sensitive issue, and it is important in such cases that practice is handled with great care. There is absolutely no evidence of such care. This is returning to the attitude that single women bringing up children must not be respectable and need to be investigated. Surely that is something that the Government need to rethink and re-learn.
Fiona Mactaggart
My hon. Friend is absolutely right. It was a gendered contract, and the Government did not stop to think—or maybe they did think about it, and thought that women in such circumstances should be blamed. All Members here will know that their constituents feel harassed, scared and pinned up as targets as a result of how things have been done. It is not acceptable in a civilised society to treat mothers in that manner, and it is mothers who have been treated badly.
Catherine McKinnell
I agree that the majority of my constituents who have been in touch are single mothers, but single fathers have also been affected. One constituent who came to me looks after two children and works 16 hours a week, and he received no money for six weeks. Ultimately, it is the children in those households who suffer. The Government must ensure that this does not happen again.
Fiona Mactaggart
My hon. Friend is absolutely right. One consequence for a number of children is that they have lost their entitlement to free school meals, so they have suffered doubly as a result of what has happened to them.
Andrew Selous (South West Bedfordshire) (Con)
The right hon. Lady is being extremely generous in giving way, and we are all grateful to her. I had a case in which a single mother was accused of living with a former tenant who had moved out in 2014. Does the right hon. Lady not agree that although issues must be investigated, to do so on the basis of allegation, without evidence, and to stop payment, is not really a satisfactory way for Concentrix or anyone else to operate?
Fiona Mactaggart
The hon. Gentleman is absolutely right. I will try to make some progress, so that he can see what I want to say about that kind of issue. Decisions were certainly made on the basis of inadequate evidence, in a way that I believe was actually illegal under the Tax Credits Act 2002, and should not have been permitted.
Fiona Mactaggart
I am trying to make progress, but I will give way once more.
Ms Eagle
My right hon. Friend is being extraordinarily generous. I have had many cases in which precisely that has happened. Single mothers in Wallasey have been accused of living with a previous tenant in a house that they happened to rent at a particular time—allegations so absurd that they had not even thought of them. Their benefits have often been stopped for weeks and weeks, and they have had no access at all to funding, which has forced many of them to go to food banks. What kind of Government allows that to happen?
Fiona Mactaggart
My hon. Friend is right that we need to focus on the responsibility of the Government, because that is what we Members of Parliament can most influence. The first lesson for the Government is that payment-by-results contracts should be avoided. Concentrix staff were under pressure to perform—we are told that they were expected to open 40 to 50 new investigations a day—so they regularly proceeded on totally flimsy evidence.
I spoke to Concentrix about the source of the evidence it received, because I could not really believe that a company would proceed on the basis of such information —“Somebody else once rented this flat”, “The electoral register has this person on it”, “Someone has had their post sent to this address,” and so on. The director of Concentrix told me:
“HMRC provide Concentrix with the claimant cases that they believe qualify for review.”
So the source of the evidence is HMRC. He continued:
“These cases are selected by HMRC based on its own internal system which flags where there may be the potential for fraud or error. There were 1,497,000 cases provided from the Authority based on their initial assessment of risk or error and fraud.
Concentrix subsequently runs a further series of checks to substantiate the potential risk of fraud and error and to refine the list of cases that are then checked. In the latest campaign, Concentrix deselected 80% of the cases originally provided to us by HMRC. This means we contacted 324,000 and the remaining 1,173,000 were not worked by Concentrix.”
According to him, HMRC even pressed Concentrix to investigate cases in which it could not name the alleged co-resident.
We have been blaming Concentrix for using flimsy evidence when I think that the source of that flimsy evidence is actually HMRC. My first question to the Minister is: where is the so-called evidence sourced from? Is it the Post Office, credit agencies or out-of-date electoral registers? Is it true that the Treasury pressed Concentrix to pursue cases with so little data that the alleged co-resident’s name was not even known? When tax credit claimants were written to about the investigation of their case, the alleged co-resident was not named in that letter. Many of my constituents have said, “How can I prove a negative?”. Of course, if they had got through on the telephone, they would have been told the alleged co-resident’s name, but getting through on the telephone was not straightforward, as we all know.
I remind the Minister that section 16 of the Tax Credits Act 2002 gives the power to amend or terminate an award where there are reasonable grounds for believing that an award is wrong or that there is no entitlement. It also gives the power to request information or evidence where there are grounds for believing that the award might be wrong. That law is clear. It was confirmed in an Upper Tribunal judgment by Judge Wikeley that the burden of proof for stopping a tax credit award lies with HMRC, but that was reversed in these cases: the authorities proceeded to close claims without reasonable grounds that they could evidence. They demanded excessive evidence from applicants who sought to disprove allegations that they had claimed the wrong amount for childcare or were living with an unnamed partner.
Angela Crawley (Lanark and Hamilton East) (SNP)
I raised the important question of Concentrix back in February. One of my vulnerable constituents, a single mother of three, was put on trial and lost her tax credits for six weeks over Christmas, only to be informed that she had no case to answer. I ask the right hon. Lady to join me not only in condemning the practices of Concentrix, which she is doing more than capably, but in calling on the Government to renounce this terrible, abhorrent practice entirely.
Fiona Mactaggart
The point is that if we do not manage to get answers from the Minister, we will end this contract but will be walking into the risk of future contracts making the same kind of mistakes, including targeting single mums in a way most of us find completely unacceptable, and breaching the law that provides the power to end benefits and so on. This situation really is not tolerable, and it is up to us to ensure that it never happens again in any aspect of Government administration.
Hywel Williams (Arfon) (PC)
I am grateful to the right hon. Lady for raising this important issue. I, too, have constituency cases with which I could regale this Chamber. Does she agree that there is a fundamental danger in a model that has a private organisation, which is accountable to its owners and has a duty to make profits for them, providing a public service, where the accountability must be to the public and the first duty must be to provide the public with a full and proper service?
Fiona Mactaggart
The hon. Gentleman is right. Civil servants are trained to conform with the law. How can Ministers ensure, in this contract or in any future contracts, that there is not a parallel reinterpretation of the law by a private company? When the Minister was informed about the Wikeley judgment, as I hope he was, what did he do to ensure that all future decisions would conform to the law? Civil servants are generally trained in a culture where the law is the guide to how they work; I am concerned that Concentrix staff were not operating within such a culture. There is a real risk of letting out similar contracts in future that do not operate within such a culture.
Chris Law (Dundee West) (SNP)
Does the right hon. Lady agree that the problem is not just with this contract but with all results-based contracts in which there is essentially a commission? Atos was under a similar contract and we all know the terrible damage it did to sick and disabled people. Although it is welcome that we are ending the Concentrix contract in May 2017, the UK Government now need to stop all such contracts and fundamentally review the entire process.
Fiona Mactaggart
The hon. Gentleman is right that we should stop such contracts, but we also need to find out the extent to which there has been a failure of policy underlying the Concentrix contract. I agree that the very nature of the contract—having a private company asking for those details—was inappropriate. So was the payment-by-results aspect, for example, and the fact that when the company was under pressure there was no way of bringing in civil servants to help by answering the telephone and so on. Such problems are inherent in that kind of contract, but some of the difficulties must have been created by the way the Treasury and HMRC operated. They provided the company with totally flimsy evidence and suggested it should be investigated. In effect, they ran a campaign against parents who were doing the terribly difficult job of bringing children up on their own. We should be ashamed of ourselves for targeting that group of people, who are resilient but in some ways vulnerable. The job of broader society is to help them in their task of bringing up the next generation.
Many claimants received a letter requiring council tax records, a year’s worth of bank statements, pay slips, childcare costs, divorce papers and household bills. Many people, as I would have done, treated such requests from a private company as probably a phishing exercise by a fraudster. Those people discovered within 30 days that their conclusion was an expensive mistake: their tax credits were stopped. All my constituents who had their tax credits stopped eventually had them restored.
I stress that it happened eventually. It was often after hours on the telephone and the intervention of my staff. Those hours on mobile phones cost an enormous amount for some of these people, who at the time had no money to speak of apart from the meagre wages they earned from their part-time jobs.
Paula Sherriff (Dewsbury) (Lab)
I thank my right hon. Friend for securing this important debate. My constituent’s tax credits were stopped erroneously. She was down to her last £5 and was told to send in documents by recorded delivery. She had to decide whether to feed her children or send the documents. The Government really must rethink their policy and respond to such people, so that we know it will never happen again.
Fiona Mactaggart
The problem is that the Minister and his civil servants cannot imagine what it is like for someone to have to choose between feeding their son or daughter and posting an important letter that will get next month’s money in. They cannot imagine a parent having so little money that that is the choice they face. When people’s tax credits were stopped, they were eventually restored. Although they can get additional bank charges and so on paid back—I have managed that on behalf of constituents—they often cannot redeem their credit history, which makes the rest of their life more expensive, so there are serious long-term consequences.
Kate Green
Does my right hon. Friend agree that the Government should reconsider the situation wherein, in the face of error by Concentrix, my constituents were asked to apply for a mandatory reconsideration of the decision? That is disgraceful. The fault was not theirs.
Fiona Mactaggart
Indeed, and if we look at the figures for mandatory reconsideration we can see that it is overwhelmingly decided that our constituents were in the right and the decision makers in the wrong.
It is striking that the process was also expensive for those who complied. As my hon. Friend the Member for Dewsbury (Paula Sherriff) pointed out, sending precious documents by registered post costs money, as do printing inks. People also have to pay fees to have documents reissued. Yet in every case HMRC had initially decided that the application was justified. We are not talking about initial applications for tax credits; we are speaking on behalf of people who are trying to continue to receive them. The burden of proof has to be on HMRC.
Catherine McKinnell
My right hon. Friend is making a vital point. Several of my constituents were asked by HMRC to prove a negative—something that was not, in fact, the case—and had no way of doing so. Some of the people they were accused of living with were not alive.
Fiona Mactaggart
Indeed. There is an important principle in the UK’s administrative law that public authorities act on the basis of evidence and law, and that if they dispute someone’s claim, they should have a good reason. The HMRC charter says that people have a right to be treated as honest. Well, the lone parents who were targeted did not feel that they had that right. Nearly a third of claimants applied for a mandatory reassessment, and they were overwhelmingly successful. Will the Minister guarantee that in future the Government will put acting legally before getting money out of citizens who do not have any? That is the question at the heart of this debate: illegal action has screwed money —excuse my language—out of citizens and damaged their ability to do their main job, which is to look after their families.
HMRC implies that the reason for dropping the contract is a sudden decline in the level of customer service, in particular the backlog of 200,000 incomplete cases and the terrible performance of Concentrix’s telephone service. Concentrix responded by saying that the case numbers were far above predicted rates. In August this year, they were nearly five times the forecast rates, which were developed by HMRC. One contributor to the backlog was HMRC’s automatically terminating 45,000 cases—guess when? In the week beginning 8 August. Where do mums and dads go in that week? They go on holiday, because it is the only time they can take their children on holiday, because otherwise they are at school. The Government have form when it comes to sending out such letters and starting consultations at the beginning of August. If the Minister can say that one of the things he is going to do is ensure that this nastiness in August will end, I think we would all be pleased to hear it.
Why were the predictions of the number of cases so brutally wrong? Why was the letter sent out on 8 August to terminate all those cases on the grounds that they had not fulfilled their information returns? In management terms, it would be more sensible to spread such a policy across the year, so that when someone does not respond to an information return they get a notice at the time. I do not believe that all the cases were started in August. I do not believe that thousands and thousands of people made their first tax credit application in the week beginning 8 August, yet so many of their cases were terminated in that week, causing extreme chaos in a situation that was already brutally chaotic.
It seems to me that the discovery of a service failure just after I sought this debate and just after the Department was called before the Work and Pensions Committee does not bear looking at. A cursory look at Mumsnet web chats, at the Child Poverty Action Group’s advice logs or at all the letters that the Minister and civil servants have received from MPs would have made it clear that the company’s performance has been unacceptable for a long time. Will the Minister ensure that any new contracts with private companies will permit a swift end if performance is substandard and ensure that the Government get information about the standards that are achieved in a timely fashion?
The current contract states that if Concentrix delivers less than 97% accuracy, its commission will be reduced, but I have discovered that in this case accuracy does not mean making the right payments to the right people; it means jumping through the hoops devised by HMRC. Let us have a real definition of accuracy, which is that the right payments should go to the right people and should not go to the wrong people. We all accept that people should not be paid tax credits wrongly, but accuracy must be judged on the real results, not on some process that is extremely burdensome.
I am concerned about the fact that, as my hon. Friends have said, the burden has particularly hit women and mums. What equality impact assessment was done at the start of the contract? We know that David Cameron called such assessments “bureaucratic nonsense”, but it seems to me that this issue is crying out for one, because someone should have thought about the fact that mums would be targeted. Of course, some dads were drawn into the net, and I am not denigrating their experience in any way, but it is not acceptable for Government policy to lay a particular burden on mothers in such circumstances.
Angela Crawley
Does the right hon. Lady agree that the UK Government have prioritised austerity measures? More than 80% of women have been adversely affected by this austerity-driven Government’s welfare reforms and cuts.
Fiona Mactaggart
Not only are more women affected than men, but they are affected by more costs than men. Four fifths of the savings that the Government have made through their so-called austerity programme have been contributed by women. One thing for which I was really proud of the previous Labour Government was that they increased the amount of resource that went into women’s purses compared with men’s wallets. Through measures such as child tax credits, they dealt with maternal poverty pretty effectively. The current Government are doing their jolly best to reverse that progress.
Lilian Greenwood (Nottingham South) (Lab)
My right hon. Friend is making an incredibly powerful speech. However, this is not just about mums, important as they are; it is about the impact on their children. My constituent Sinead is a single parent. She went from receiving £122 child tax credit to absolute zero. She is paying off a crisis loan and that is impacting on her relationship and her ability to be a great parent to her five-month-old child. There is also Caroline, whose two children are in nursery. She is thinking of quitting her job because she cannot now pay the nursery fees. This issue is having an impact on children as well as mothers.
Fiona Mactaggart
My hon. Friend is absolutely right. Indeed, for most of the victims of this situation, there has also been a significant effect on their self-confidence and on their reputation. Some get these letters at very stressful times in their lives—following a difficult divorce, while they are trying hard to separate themselves from a violent partner or after childbirth. The behaviour of Concentrix just added to their stress.
Christina Rees
My right hon. Friend has been very generous in giving way. She talked about the burden of proof. One woman claimant in my Neath constituency came in to see me because her payments had been stopped, as she had not replied to a letter that she had not received and there were no follow-up letters. Where does the burden of proof lie there?
Fiona Mactaggart
The law is clear that the burden of proof lies with the Government and they need to have a proper reason to believe these things. As we know, however, many of the reasons why investigations were initiated were not what any court would describe as proper. That is a fundamental problem.
The Government announcement of the termination of the contract sought to reassure
“customers who have had their tax credits stopped that we will prioritise their cases, and make sure that they are processed as quickly as possible.”
That was a nice thought, was it not? However, Concentrix has informed me that, just on mandatory reconsideration cases, which were returned to HMRC on 19 September, nothing at all was done until 3 October. So not only is Concentrix operating on the basis of really flimsy information; it is also telling lies to Parliament and to the Government, because I do not consider that to be prioritising cases and making sure they are processed “as quickly as possible.”
I hope the Minister will answer the specific points that I have raised. This contract has been something that, frankly, we should all be ashamed of. The way that we have treated the mums and dads on low pay who are bringing up the next generation has been shameful. And actually, although I asked for this debate about the performance of Concentrix, the responsibility for this situation fundamentally lies with the Treasury and HMRC. The process is clear. Again, I quote Concentrix:
“Whilst the initial decision to halt an individual’s tax credit claim may, at the end of the process, prove to have been unnecessary”—
it did not feel “unnecessary” to the victims—
“the process is set by HMRC. Whether it is Concentrix managing this process or HMRC directly, the same hurdles and challenges are experienced because of the information held by HMRC at the outset.”
It seems to me that this goes to the heart of the Government’s use of information about citizens. The Government have a responsibility to assist citizens in giving them the information they require in order to assess their entitlement to something such as tax credits. The Government did that at the beginning of a tax credit claim, but their process for doing that as a tax credit claim continues is fundamentally flawed, and those flaws were made worse by the way that Concentrix operated.
I come to the conclusion that there are certain tasks that the Government simply should not delegate to a private company or to anyone else, and the collection of taxes and the issuing of tax credits is one of them. I hope that this will be the last experiment in that vein. I want to pay my taxes to the Government; I do not want to pay taxes to some company that I do not understand. Equally, I want to receive tax credits therefrom.
In future, no policy that has a disproportionate impact on women, especially those struggling to bring up a family, should be tolerated by the Government. I hope that the Minister will say that when things like this are contemplated in the future, Ministers will consider which groups in society will be disproportionately affected by their policies, in order to ensure that they do not continue to target women in the way that, frankly, this Government have throughout their existence.
Several hon. Members rose—
Mr David Nuttall (in the Chair)
Order. As hon. Members can see, this is a very well subscribed debate. I intend to start the wind-ups shortly after 10.30 am, which means that from the outset I will impose a two-minute limit on all speeches.
Chris Law (Dundee West) (SNP)
Mr Nuttall, it is a pleasure to serve under your chairmanship.
Over the last few months, I have heard innumerable distressing accounts from people living in my constituency of Dundee about how the failures of this US multinational contractor are driving families immediately into poverty, driving them to food banks, driving them—in some cases—into losing their homes, and driving individuals from my constituency to make calls saying they feel suicidal because they feel they have nothing left to live for.
Unsurprisingly, this is not the first time that Government outsourcing has failed to meet expectations. In the past, we have seen that results-based contracts do not improve the quality of public services. I am sure that everyone in Westminster Hall today remembers Atos, whose shambolic and cruel tests were designed to strip away benefits from sick and disabled people. Under its contract, Concentrix is paid on a payment-by-results model when tax credit claims are cut; in other words, the more tax credit payments Concentrix puts a stop to, the more commission it pockets.
In July, the Social Security Advisory Committee recommended that
“appropriate safeguards are needed to preserve justice for the claimant.”
So far, and as my constituents’ cases prove, that is clearly not being achieved. To add to that, Her Majesty’s Revenue and Customs is continuing to cut jobs right across the UK, while at the same time privatising and outsourcing contracts. HMRC departments that are already understaffed have been left to pick up the pieces; they have spent months dealing with backlogs of claims and errors.
The contract with Concentrix has not been renewed, which is a step in the right direction. However, this Government need to go further. They should not only put an end to the Concentrix contract immediately but call time on awarding any public contracts on a payment-by-results basis. We all need to remember that those of us who have the privilege to be Members of this House are here to serve the public. In that spirit, we need to ensure that organisations that are allowed to act on our behalf demonstrate a similar commitment to service, dignity and respect, rather than to profit. Payment-by-results contracts should have no place in the delivery of such important services—
Mike Wood (Dudley South) (Con)
Like many colleagues, I have seen a substantial spike in the number of tax credit inquiries following the letters from Concentrix. Our constituents expect action to be taken to ensure that benefits and tax credits are paid to the right people, and not to people who should not qualify for them. They also expect that process to be fair and sensitive. It is clear, however, that that has not been the case with Concentrix. So I am relieved—indeed, delighted—that the contract with Concentrix will not be renewed. However, we need to consider a number of questions, many of which were raised by the right hon. Member for Slough (Fiona Mactaggart), about whatever contract or system replaces the current Concentrix contract.
The first question is about the letters coming from Concentrix, including the form and style of those letters. In addition to letters that a number of my constituents have shown me, I have seen one of the letters that a member of my family received. Frankly, I would not have assumed that that letter came on behalf of the Government. It was of very poor quality; the letterhead looked as if it had been scanned in or computer-generated; and to all extents and purposes it looked like a scam, and I would have been very reluctant to responded officially to it.
We have spoken about the burden of proof and where it should lie. We also must consider the standard of proof. Concentrix has been treating the standard as beyond the realm of possibilities instead of on the balance of probabilities, and that is entirely inappropriate, particularly given what it calls the evidence. Data from credit searches and the like may be useful intelligence for starting further investigations, but they are not, in themselves, evidence. I am pleased that the contract is not being renewed, and I hope that the Minister will be able to give us some reassurance.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairmanship, Mr Nuttall.
Since 6 September—just six weeks ago—I have had 11 constituents bring their complaints to me. In one case, Concentrix did not believe a young woman because it saw money from someone with the same surname going into her account. It refused to believe that it was because she handled her mother’s bills. Just because she was helping out her ageing mother, that lady had to pawn her late father’s jewellery so that she could put food on the table for her family. Another constituent’s tax credits stopped after the Concentrix system incorrectly calculated that she had worked under the threshold; it even ignored a letter that she provided from her employer. As of today, she has been without payment for nearly four months.
It is degrading to not be believed and trusted, to be considered to be cheating the system, especially when evidence and sound reason to the contrary are given. When someone is working hard to make ends meet, it is deeply insulting and demoralising to have the floor unjustly ripped out from under them.
Fortunately, the message seems to be getting through, because Concentrix has, indeed, been given the boot, but the Government’s new approach, which has ended up with their having to hire hundreds of staff into the Revenue, will end up costing millions—talk about a false economy. That is the problem of a Government who know the cost of everything and the value of nothing; the presumption is of guilt, not innocence; the currency is suspicion, not trust, and those who need and are entitled to help are made to feel like cheats.
Theresa May claims that she wants to build a country that works for everyone, yet her Government consistently undermine some of the basic binds that are supposed to hold our country together. There is no excuse or reason for that. Let us hope that lessons are learned and that, from now on, systems are built to reduce insecurity in people’s lives rather than leaving them on the edge of survival.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate my right hon. Friend the Member for Slough (Fiona Mactaggart) on bringing the debate to the House. Like many right hon. and hon. Members, I have been inundated with desperate calls from constituents who have had their tax credits cut. Although blame has been apportioned to Concentrix, the company was being forced to meet targets because the contract involved payment by results. I have seen constituents reduced to tears after being accused of misdemeanours in a very humiliating and degrading way in relation to their applications. On investigation, it was found that they were not at fault at all, so all their anxiety was unfair and totally unwarranted.
Let us be clear that the fault lies with HMRC, which set the targets and placed the policy and operational failure at the door of Concentrix. The failure lies with HMRC because over the years it has been peddling a cost-cutting exercise and closing offices. We have seen that in Northern Ireland. We have seen competent staff forced to centralise in other locations. HMRC has not been doing its job properly. It has been targeting the wrong individuals—the poor and the vulnerable. Will the Minister specify what will happen to the contract? Will it be outsourced again? Frankly, I believe that HMRC needs to row back and have a much more friendly, sympathetic and humanitarian attitude towards claimants, particularly those who have been reliant, in a very unnecessary way, on food banks.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Nuttall. Right hon. and hon. Members have already highlighted numerous ways in which our constituents have been badly affected and I want to highlight just one more. Constituents are suffering ongoing problems, even when mistakes by Concentrix are acknowledged and credits are reinstated. Having built up big debts to friends or family members, or even to childcare providers who agreed to keep working on the expectation that debts would be settled on the resolution of the tax credit problems, my constituents are now being told that they will get their back payments over the course of a year. That does not really help, because the major debts are due now. Will the Minister explain why HMRC cannot make the back payments now? It is not fair on our constituents and it is not fair on those who have had to help out when the Government have failed in their duty.
I agree that this was a rotten contract from the outset, with a commercial organisation making decisions about a claimant’s past eligibility and getting payment by results. The contract even specified how many cases— 2 million, I think—were expected to be modified, even before a single piece of evidence was considered.
Back in July 2016, the independent Social Security Advisory Committee said that the payment model would:
“potentially create a conflict of interest”.
The only bit I can quibble with there is “potentially”. It was a clear conflict of interest. It becomes hard to square information from our constituents with what we are told about the performance of the contract. I read somewhere that only 120 cases had breached the contract terms, yet I think we have had almost 120 examples of awful cases in the debate so far, so either the systems for monitoring contract performance are not up to scratch, perhaps because they rely too much on the company the performance of which is being measured, or they are monitoring the wrong things entirely.
I hope that the Government will explain what more they will do to resolve the mess, because they are not doing enough yet. Once cases are brought back in-house, they should stay there. We should not repeat the same mistakes again.
Jessica Morden (Newport East) (Lab)
I congratulate my right hon. Friend the Member for Slough (Fiona Mactaggart) on the excellent case she has put. Like many right hon. and hon. Members, in the past few months my office has dealt with dozens of cases every week of people who have found themselves in increasingly desperate situations as a result of Concentrix investigations, and I would like to make it clear that I welcome the decision not to renew the contract. I hope that it leads to the work coming back in-house.
Some of my constituents are victims of domestic abuse and have gone to refuges and then been rehoused. Although their support workers have told Concentrix of the change in their circumstances, it has not been logged. One constituent’s brother was accused of being her partner, and another constituent was accused of co-habiting with a former tenant. Many have been drawn to the discretionary assistance fund administered by the Welsh Government and to food banks. Yes, in the medium term we need scrutiny of how that has happened, of why it has not been monitored and of the payment by results model.
HMRC staff have been drafted in to help, but there are clearly not enough of them. All credit to them, but they have suffered huge cuts over the past few years. It clearly will not take 21 days to deal with some of the cases—I have heard that it will take up to six weeks. We need to clear the backlog now, because there is much distress out there and people have suffered. We need the Minister to give a clear steer about which cases are the priority. Yes, we urgently need to learn the lessons, but we also crucially need help now for those affected, with more staff to turn cases around.
Sammy Wilson (East Antrim) (DUP)
We must acknowledge the number of people who have been hurt as a result of this debacle, but it is important to point out two things. First, the history of tax credits and the way in which people have been dealt with extends well beyond the current contract. During much of my political career, before the work was ever contracted out, I have had people come to me about their difficulties with tax credits and with HMRC. So it is not a new problem; this is a complicated benefit and the issues go back some time. The contract was made by HMRC. The referrals were given to Concentrix by HMRC. The guidance was given by HMRC and the company acted on it. If there is any fault to be attributed, it has to be shared with the people who issued the contract in the first place.
The second thing is that HMRC has treated the workers in Concentrix diabolically. They found out in the news that they were losing the contract and therefore their jobs. That is no way to treat workers, many of whom were dedicated and simply acting on the information and the guidelines given to them. They were trying to do their job to the best of their ability.
Whether this matter is contracted out or kept in-house—I have no difficulty with contracting out some services—problems will persist so long as the attitude, the wrong information and guidance and the bureaucratic rules of HMRC continue.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
I congratulate my right hon. Friend the Member for Slough (Fiona Mactaggart) on securing this debate. Like many other hon. Members, I have been appalled by the nature of the complaints that my office has received from worried constituents faced with extreme hardship following action by Concentrix to suspend their tax credits. I accept that some providers may want to conduct checks to ensure that money is being paid to the right people, but it is wholly unacceptable to stop money being paid to parents without evidence while checks are carried out. The action taken by Concentrix has caused extreme hardship for many of my constituents and people across the country. They use the money to provide food and essentials for their children and families, and to be without for a long period of time is unacceptable and has resulted in many families resorting to food banks and in some cases going without. That is utterly shameful.
Of the many cases brought to my office, one relates to a constituent who had her tax credits stopped because Concentrix believed she had an undeclared partner. Following much stress and my constituent providing extensive evidence that she did not have an undeclared partner, it transpired that the basis of the action by Concentrix was an out-of-date record of a previous tenant at her address.
While Concentrix has to bear its share of the responsibility for the hardship faced by many people in recent months, HMRC also has to bear its share for allowing things to get into this mess. Does the Minister accept responsibility for HMRC’s lack of scrutiny? What lessons will be learned before anyone else is engaged to do the work? I am particularly interested to know whether HMRC is considering retaining this work in-house rather than using the targeted payment-by-results model that has caused so much hardship and stress to so many in my constituency and across the country.
Owen Thompson (Midlothian) (SNP)
We have all had cases of people who have been vindicated after their lives have been turned upside down. They may have had their payments reinstated and even sometimes their bank charges refunded, but what about the high-interest payments they have had to make to payday lenders? What about the jobs they have lost because their childcare provider cancelled due to lack of payment? Where is the justice in those situations?
In one case, a working mother of four in Midlothian lost her job because her childcare provider cancelled on her. She put out an appeal on social media to ask complete strangers to send her five-year-old son birthday cards so that he could have something of a birthday. She was so ashamed at not being able to provide her children with anything other than a basic ration pack from a food bank. How can that situation be justifiable? Members from all parties in the House have highlighted similar cases across the country featuring single parents. Those situations are not coincidental and they were preventable. The strategy has been utterly shameful.
One thing that is clear from the Concentrix experience is that it achieved nothing and created a mess that has damaged people financially and emotionally—a mess that has been and continues to be expensive to correct. Additional resource is being appointed within HMRC and the civil service and the suggested cost of the Concentrix contract is reputed to have been £75 million so it seems fair to end my contribution by asking how much of that money will be clawed back to directly compensate those affected most.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
As constituency MPs, we are all aware of the hardship and suffering caused by Concentrix. By definition, people receiving tax credits are on low incomes and are not able to cope with a sudden drop in that income. Concentrix’s “Shoot first, ask questions later” approach, in which recipients have been accused of living with people they have never heard of, it takes more than an hour for their calls to be answered, and it is suggested that they get by on payday loans while Concentrix sorts out its mistakes, caused anxiety, distress and extreme hardship. In many cases, we have had to make personal referrals to food banks, so that people can feed themselves and their children. We all have examples from our postbags and inboxes of shocking cases in which families have been left struggling to make ends meet.
By way of example, I want to put on record some of the highlights—perhaps I should say lowlights—of the many cases I have had to deal with in recent weeks, and show the pattern of incompetence that has been exposed. More than three quarters of the cases I have dealt with have been of people accused of living with the previous tenant at their address. In one case, a constituent found after asking their neighbours that the person they were suspected of living with was in prison.
It is worth pointing out that with a handful of exceptions, all the cases that have come to my attention have been raised by women, and two thirds are from single mothers. In nearly two thirds of the cases, constituents found their tax credits stopped without any prior warning. When they contacted Concentrix, they were told that letters had been sent to them weeks previously but not replied to, hence the stopped payments. The occasional letter going astray in the post is one thing, but Concentrix is apparently sending letters into some black hole, never to be seen again. Advice given over the phone has been inconsistent and often contradictory. My constituents have reported that, as have my staff.
Mark Durkan (Foyle) (SDLP)
I share Members’ frustrations about dealing with Concentrix in the constituency cases that come to us, but our frustration is nothing compared to the distress and desperation caused to many constituents. Let us be clear: as the right hon. Member for Slough (Fiona Mactaggart) indicated, we need to look closer to Parliament when asking some of our questions. The fact is that the contract was conceived by HMRC in a spirit of suspicion and hostility towards its customers. It said that it wanted to handle the high-risk renewal cases in this way, and it intimated to Concentrix that it was disappointed that Concentrix had screened out 80% of the cases referred to it as likely to be high risk and did not pursue them further. Perhaps that is one of the reasons why HMRC is taking the contract back. It perhaps feels that it could make a hotter and heavier pursuit than even Concentrix could.
The right hon. Lady also touched on the significant spike in August, when even more calls to Concentrix were waiting and even more call queues could not be dealt with. That came from HMRC’s direct move to remove 45,000 people from tax credits. Some of those people were supposedly under investigation by Concentrix as high-risk renewals, but HMRC moved against them because of the annual declaration process. We have two separate processes going on, and the one thing in common is the victim: the claimant. Did Ministers know that HMRC was striking off people when they were going through the high-risk renewal claim?
The other issue I want the Minister to address is the law. The right hon. Lady raised the question of the burden of proof, but Concentrix insists that HMRC is saying that the 30-day cut-off on non-compliance is absolute and in statute. Do we need to change that law?
Dr Rosena Allin-Khan (Tooting) (Lab)
For too long, Concentrix left families in vulnerable situations, wondering where their next meal would come from or how they would make their next rent payment. I have heard from multiple Tooting residents—all of whom are single mothers—of the stress that Concentrix caused them by stopping their tax credits via false claims that they had a partner living in their property. My constituents found those claims so difficult to disprove, and subsequently struggled to make ends meet for many months on end.
One constituent came to me in early August. She is a single mother of a 14-year-old girl, and her tax credits were stopped by Concentrix due to her supposedly having a partner living with her—a partner who did not exist. She was left with £4 in her bank account to last her 16 days. As if that was not bad enough, two days later she was informed by the council that her housing benefit was being stopped due to her supposed change of circumstances. That left her unable to afford her rent and reliant on food banks. As if that was not bad enough, HMRC then demanded almost £4,000 in back payments for this change of situation. Some may say she was lucky: it took only one month for HMRC to overturn the termination of her tax credit and housing benefit. As we have heard, many others across the UK have had to spend many more months waiting for that result. However, I would say she is not lucky. No mother, father or carer should ever be left with £4 in their bank account and no knowledge of when they may be able to put food on the table again.
People deserve not only answers from Concentrix, but to know from our Government that such situations will not happen again. We have a duty; we need to reassure those who put their trust in us that we will not allow this to happen to any other family. We have a duty to protect our citizens, and that protection comes in many forms. With respect to Concentrix, we have failed in our commitment. Will the Minister today reassure us that this will not happen again?
Patricia Gibson (North Ayrshire and Arran) (SNP)
Like other Members in the Chamber, I am all too aware of the significant number of people caused great hardship by the withdrawal of tax credit payments. Many of them are in my constituency of North Ayrshire and Arran. Some of my constituents have had payments stopped because the claimant has been incorrectly accused of sharing a home with a non-existent partner. Tax credits have been suddenly and unexpectedly withdrawn, with the claimant even having difficulty in securing any kind of explanation, however misguided and mistaken that explanation turns out to be. Claimants are on the phone for hours over weeks and weeks, and are caught up in a grotesque bureaucratic nightmare. The system seems to mock their hardship, leaving them to rely on food banks.
There can be no doubt that the system is a mess. Concentrix’s indiscriminate and groundless accusations of fraud directed at low and middle-income families is completely unacceptable, and cause huge emotional distress, financial hardship and utter despair. Now we know from reports that Concentrix’s misconduct could be in breach of the Data Protection Act, since claimants’ details have been known to have been sent to the wrong address. The allegations are extremely serious and must be fully investigated by both Concentrix and HMRC. Outstanding cases must be dealt with urgently. Only then will the hardship caused end. I urge the Minister to indicate how and by when that will happen. Concentrix’s contract expires in May 2017, but the suffering continues right now. Urgent action is needed to protect claimants from this appalling situation.
Paula Sherriff (Dewsbury) (Lab)
I, too, have been inundated with calls from desperate constituents who have had their tax credits stopped owing to accusations that they are living with another person. So far, every single one of the cases investigated has been proved false. The undue stress and pressure placed on parents is beyond belief, and the Government must take responsibility. I thank the few Government Members who have turned up to listen to the debate.
One woman had food in her freezer to feed her child, but the money on her electricity meter ran out, and the food defrosted and had to be thrown away. Another said that she was not bothered about feeding herself, but it broke her heart to see her children go hungry. People have been seriously let down by the failings of Concentrix, a company appointed by and acting under the watch of this Government. All the people affected deserve answers as to how and why such a situation was allowed to happen.
We are starting to see a slow trickle of reinstated payments, but in some cases the back pay has not been paid, the bills that were building up are turning into court summonses, and debts are growing. Unfortunately, people are having to turn to payday loans and loan sharks. The dilemma my constituents face is whether they ask for another mandatory reconsideration to investigate the missing back pay and risk having their payments stopped again. I simply cannot express my feelings of anger towards those responsible for this monumental failure and for the damage done to thousands of needy families across the country. It is not good enough simply to say that the contract will not be renewed. We need an urgent investigation into how this happened in the first place. Furthermore, we need to know that all the cases still open will be resolved urgently, and we need complete assurance that this will never be allowed to happen again.
Ms Angela Eagle (Wallasey) (Lab)
Julie Molyneux, a constituent of mine, was accused of working for only 15 hours, when she had worked 16.5. She phoned HMRC and was told to phone Concentrix. She phoned Concentrix and was told to phone HMRC. She went round and round in circles. Her tax credits were stopped for eight weeks and she was forced to live on £63 a week, with two children to look after, one of whom is disabled. It was acknowledged that a mistake was made, but it has still not been put right.
Hayley Jones was accused of living with a previous tenant. She tried to get through to the system for a week without any luck. She finally got through, but was put on hold for an hour and a half. When she told them she had sent in all the relevant documents, they denied receiving them. She was left without money for eight weeks. She had no money at all and four children to support.
Paula Bee was informed—this was new to her—that she was living with an ex-partner, when he was living somewhere else. She had to try to track him down so she could supply a copy of his rent agreement. What did not get paid as a result of that? People have been unable to get through to the telephone helpline. When constituents do get through, they are placed on hold for more than an hour, in the worst case. Operators are rude to them when they are trying to resolve problems. Single women are told that they are living with other people, and it always turns out to be previous tenants. Concentrix says it has not received forms. It says people should ring HMRC, and HMRC says they should ring Concentrix. Nobody responds to letters for a very long time.
This situation has to stop. It has to be put right. My constituents who have been affected must have it put right now.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate the right hon. Member for Slough (Fiona Mactaggart) on securing this debate, and I congratulate all the Members here who have demonstrated real compassion and understanding on this matter. The Minister might not have been on the other side of phone calls from constituents, but it is worth making the point that people who phone our constituency offices are at desperation point—at their wits’ end. Indeed, our constituency office staff are finding it extremely difficult to deal with people in dire need of help. I hope the Minister will take that into account when considering my further points.
We have all faced a number of these cases. On 14 September, I asked the Financial Secretary to the Treasury what the turnaround time would be for dealing with cases, and I was told four working days. On 29 September, in a phone conversation with HMRC, we were told it would be two to three weeks before cases were looked at. On 4 October, I was told the four-day period had been dispensed with. That is not good enough. I have a constituent who set up a food bank, but who is now a customer of that food bank. I know of a mother who cannot afford childcare and had to resign from her job, a mother who cannot afford lunch money to send her children to school with, and a mother who had to sign herself out of hospital after a suspected heart attack to deal with the issue. These are really serious matters, so I have a list of suggestions that the Minister might take on board so that these people can achieve justice immediately.
HMRC should provide a free phone line for people to use. It is ridiculous that people spend between 8p and 10p a minute to speak to HMRC and hold on for hours. On hardship payments, I understand that HMRC will call people, but they get two call-back chances. If HMRC does not get someone in those two phone calls, they will not get the hardship payment. When people have a small sum of money, and have to decide whether to feed the children, or top up or reconnect the phone, what do people do? They do what we expect them to do: they feed their children. Such situations must come to an end.
The call-back service that is provided should be there for people to use. People could leave a voicemail or press a button in order to get a guaranteed call back from HMRC. Our constituents should not be chasing HMRC for money that is rightfully theirs. It is not their error.
On the posting of documents, HMRC should distribute postage-paid envelopes to our constituents, so that they bear no cost when sending documents back to HMRC to have cases processed. On the contract that has been cancelled, of course that is welcome, but I want to look further into that contract. Did it reach its natural conclusion? Did the Government simply decide not to renew? What compensation is available to our constituents for the situation in which they find themselves as a result of a contract that has not served the Government well?
Melanie Onn (Great Grimsby) (Lab)
My understanding is that the maximum compensation is £100, which is a paltry amount when people have been plunged into debt and uncertainty.
Ms Ahmed-Sheikh
I agree. On the £100 payment, there is a lot of haziness around it. Some of my constituents have not taken up the payment because there is no clarity around whether it is repayable or not. Again, that has to be dealt with. As I have said, if someone does not receive the phone call offering them £100, they do not get it, so if someone does not have a phone because they choose food over contact with HMRC, they do not get anything.
We do not have much time and I want to give time to the Minister to answer these important questions. Apart from the suggestions that I made on what HMRC should immediately do, these are my key questions for the Treasury: what is the latest guidance given by HMRC bosses to call handlers on how long a person can wait for the tax credit payments to be restarted? How many cases have been resolved, and how many are outstanding? On the impact on victims, what estimate have the Government made of the average cost to each customer in lost payments? What assistance is there to help claimants meet the costs of requesting a mandatory reconsideration?
What are the criteria for offering emergency interim payments? Are all victims eligible, or only those whose cases have been highlighted through the MP hotline? Why has the existence of those payments not been publicised? It is not in the wider public domain. How many victims satisfy the criteria, and how many have been offered the payment?
Why did the contract between HMRC and Concentrix incentivise the company to cancel tax credit payments? What a disgrace! Of course that is a conflict of interest, as suggested by the independent Social Security Advisory Committee in July. Why was the contract so badly managed? Will the work be brought back in-house following the end of the contract, or will a new external contractor be sought? Please will a Minister do the right thing by our constituents and give them the money that they need, and rightfully deserve?
Peter Dowd (Bootle) (Lab)
It is a pleasure to serve under your stewardship, Mr Nuttall. I start by thanking my right hon. Friend the Member for Slough (Fiona Mactaggart) for enabling Members to consider this matter, as well as hon. Members from across the House who have attended and spoken. I counted 24 interventions or speeches, and there was a theme in the words that were used time and again—words such as “shameful”, “shocking”, “distressing”, “desperation”, “anger” and “despair”.
Like other hon. Members, I have received many letters and phone calls from constituents who, to their shock and bewilderment, have found their child tax credits stopped, with little explanation and with few avenues of recourse. Under the Government’s contract with Concentrix, thousands of innocent mothers—the vast majority are working mothers—were in effect branded fraudsters and cheats. At the drop of a hat, they saw money that they desperately needed for their children taken away, notwithstanding their entitlement to it. Yet the company is not solely at fault—the Government are, too. Despite the protestations that the Minister will no doubt make today, the Government gave Concentrix a contract that was a licence to harass and was open to abuse. It does not take Sherlock Holmes to work out that if a company is paid commission to find tax credit error and fraud, it will start with the easy targets so as to turn an even easier profit.
What is more shocking is that the victims, which is what they are, did not have the means of fighting back. They were disfranchised. Hon. Members have spoken of their need to intervene personally in many cases to get movement. The whole process was deeply flawed and, as has been suggested, operated on the presumption that people were guilty until proven innocent—a concept completely alien and contradictory to our values, and our sense of justice, fairness and decency.
Under the system, the occupant of a household was sent a letter by Concentrix accusing them of not meeting the standards for child tax credit. The letter demanded that they get in touch to present evidence of their living arrangements. Having received the letter, some constituents attempted to call Concentrix, only to find the number busy, a point that has also been made. When Concentrix did not hear back from the person, who may not have received the letter in the first place, another letter was summarily sent, stopping tax credit payments. As far as I am aware, at no point was a Government Minister consulted or asked to sign off the process—can the Minister tell us otherwise? Instead, a private foreign company, whose sole interest was profit, was allowed to withdraw tax credits on behalf of the British Government. That is what makes the contract so unique: the vast power Concentrix had to act on putative information.
Jon Thompson, the chief executive of HMRC, confirms that in this novel approach, it was the first time such checks had been carried out by an external provider. Even Atos did not have the power to withdraw benefits. Concentrix had carte blanche. The Government were in fact planning to renew the contract for a job well done. They did not care to ask why Concentrix had so many savings on its books, or to listen to the complaints of many of our constituents. It was the Labour party that originally called the National Audit Office to investigate and the Labour party that has pushed for oversight and demanded action for the thousands of families who have still not received repayments from Concentrix.
We see the austerity cuts hitting women hardest, and the Government changing women’s pension age. Now we see the Government contracting private companies to take away money from single working mothers. We cannot help but ask what this Government have against women. What do they have against hard-working single mothers? It comes down to a lack of care. In essence, the Government are happy to outsource important processes affecting people’s lives to private corporations to make a profit. So be it, but not without the proper checks and balances being in place.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
The hon. Gentleman has focused on the failures of Concentrix. Although many of us will accept some of his points, does he also accept that the main focus of the difficulties is HMRC and how it managed the contract?
Peter Dowd
The hon. Gentleman makes a fair point that needs to be looked at.
When all is said and done, this is a question of the performance management of a Government contractor, and a clear lack of oversight by the Government. On behalf of the many people affected by the debacle, I would like to performance-manage the Minister by asking the following questions. First, who was overseeing Concentrix’s contract? Secondly, how was the oversight conducted? Thirdly, how often was it reviewed? Fourthly, what were the penalties for mismanagement of the contract? Fifthly, when did the penalties kick in? Sixthly, what penalties are left on the contract? Seventhly, will Concentrix be paying back any money to the Government? Eighthly, how many people have been affected? Ninthly, what actions have the Government taken proactively to compensate those people? Tenthly, have the Government sent out formal apologies to those affected? And finally, when will the last person who has had their child tax credit withdrawn receive repayment? Those key questions need to be answered and acted on. We do not want any shilly-shallying from the Government.
Melanie Onn
Would my hon. Friend add two further questions: whether Concentrix has applied for any more contracts in the last month, and whether it will be prevented from bidding for any future contracts with this Government?
Peter Dowd
Those are important questions, which I am sure the Minister will pick up on in his response. I fear that unless the Government get to grips with their commissioning processes, we will be back here in six or 12 months’ time, looking at another company that has abused a Government contract for profit and, in so doing, deprived some of the most vulnerable people of much-needed financial support. The situation needs to be sorted; otherwise, I fear the fiasco will be repeated and the Minister will be doing an encore in due course.
Mr David Nuttall (in the Chair)
Order. I ask the Minister to leave, if possible, a couple of minutes at the end of his speech so that the right hon. Member for Slough (Fiona Mactaggart) has time to wind up the debate.
The Economic Secretary to the Treasury (Simon Kirby)
It is a pleasure to serve under your chairmanship today, Mr Nuttall, in my first debate in Westminster Hall. I give the Financial Secretary’s apologies: she is on a Bill Committee and cannot be in two places at once. I have listened carefully to what has been a very interesting debate and will do my best to answer all the questions.
I congratulate the right hon. Member for Slough (Fiona Mactaggart) on securing the debate and take this opportunity to thank all right hon. and hon. Members for their efforts, not just in the debate but during the past few weeks, supporting constituents and bringing to our attention the difficulties that constituents are experiencing with their claims for tax credits. I reassure hon. Members that we are making every effort possible to resolve those difficulties as soon as possible and to make sure that the support provided through tax credits reaches those who really need it. There is no doubt that last month we were falling short in the level of customer service that we were providing to claimants, and I am very sorry about that.
In our efforts to tackle error and fraud in tax credits, we had engaged Concentrix to investigate claims and it did help us to drive down error and fraud to almost the lowest level since tax credits began. However, faced with a high volume of calls, Concentrix struggled to provide the kind of service that people had a right to expect—indeed, the kind of service stipulated in its contract. That led to a stressful time for a lot of people, including some of the most vulnerable, as they struggled to reach Concentrix to resolve any queries about their entitlement to tax credits. Let me be clear that that was not good enough, which is why we stepped in to get things back on track.
Ms Angela Eagle
Where did the information, particularly on cohabitation, come from? So many of our constituents have been accused of cohabiting with the previous tenant of their usually rented property. Were the data HMRC-matched or did Concentrix do it all on its own?
Simon Kirby
I am going to reach that point later. Very briefly, HMRC provided third-party data to Concentrix, which then chose who to pursue from those data.
Neil Gray (Airdrie and Shotts) (SNP)
We have heard today of constituents who have lost employment, college courses and access to childcare, and have been forced to go to food banks and take out payday loans, which inflicts stress and trauma not only on the parents but on the children. Having admitted that it was the responsibility of HMRC as well as Concentrix, will the Minister commit to expanding the compensation available to reflect the hardship and trauma inflicted on those people?
Simon Kirby
I will make some progress, and if the hon. Gentleman listens carefully, he may well hear some things that are helpful to that question. Before I turn to those points, let me outline what we are doing.
First, as my hon. Friend the Financial Secretary announced in the House last month, HMRC is not passing any new cases to Concentrix. We have been very clear that the contract will not be renewed beyond the end date of May 2017. Secondly, staff at HMRC are, as we speak, making every effort to resolve all open cases to ensure people get the payments they need and deserve. HMRC took back 181,000 outstanding cases from Concentrix and it has already dealt with more than 149,000—82%—of them. I would like to reassure everyone whose case remains open that we are making every effort to complete those cases within the next couple of weeks. It really is a priority.
Simon Kirby
I will not give way.
Thirdly, anyone who does not agree with Concentrix’s decision has a right to ask for a review called a mandatory reconsideration. HMRC has allocated its own staff to carry out such reviews within 21 days of the request. It is a large organisation with flexible staffing, so it is able to deal with peaks and troughs of demand. The hon. Member for Aberavon (Stephen Kinnock) mentioned the issue of extra costs, but I am confident that there will not be any.
Patricia Gibson
Given the extra work being created for HMRC to clean up the mess created by Concentrix, does the Minister have any view on the fact that one third of HMRC staff will be cut by 2021?
Simon Kirby
As I said, HMRC has a large number of staff, who are flexible and deal with the peaks and troughs of demand. If HMRC, after receiving the relevant information and reviewing the case, finds that the claimant is entitled to tax credits, they can expect to see that money in their bank accounts within four working days.
Lastly, we are working with hon. Members to help their constituents who are struggling to resolve any issues. We have extended opening hours and have put extra advisers on the tax credits hotline for MPs, which is now handling about 200 calls a day. I am pleased to inform hon. Members that my hon. Friend the Financial Secretary, following last month’s drop-in session, will be holding another session tomorrow in the House of Commons Library.
Angela Crawley
The news that HMRC will not renew the contract with Concentrix is welcome. Those responsible for these reprehensible practices should be held to account. When these services are brought back in-house, we must ensure that the blanket, baseless accusations and sanctions that have been applied will stop and that compensation will be made for the Government’s mistake. Will the Minister take the opportunity to apologise to my constituents and the women and men up and down the country who have experienced the Government’s failure?
Simon Kirby
None of us in this Chamber wants anyone not to receive money that they are entitled to, especially if they are parents with young, vulnerable children. It is up to all of us to help our constituents and ensure we once again provide a fast and efficient service to everyone.
Let me turn to some of the issues that were raised. I do not have a lot of time, so hon. Members will have to bear with me. I acknowledge the points made by many hon. Members about the contract. HMRC will be undertaking a lessons-learned exercise, and it will share those lessons across the Government. It is clear that they will help to inform other contracts in the future.
Mark Durkan
In that lessons-learned exercise, will HMRC look at the question of the so-called high-risk renewal scheme, which is at the very heart of all the troubles that our constituents have suffered?
Simon Kirby
There will be a number of reviews, and all lessons learned will be looked at in an open-minded manner. We will consider all elements of what has gone wrong and try to ensure that the mistakes, which have clearly happened, are not repeated.
I have talked about how the data are given to Concentrix. It is up to Concentrix to choose who to contact from those data. The £100 hardship payment is important. It is available to everyone, not just through the MPs’ hotline. It is not necessarily a one-off payment; future payments can be made if there is a delay in the decision. I encourage people in hardship to apply for it, because it is there to help people while we sort out this mess.
The hon. Member for Foyle (Mark Durkan) talked about the 30-day cut-off period. I can tell him that most customers have been able to provide the information required within 30 days. There was a question about money being clawed back from Concentrix. Concentrix is not paid for wrong decisions, and payment is reduced where it fails to meet performance standards. That is still happening. At the end of the day, it is paid to do a job, and if it does not do the job, it is not paid for it. I have noted the comments about letters being lost.
In conclusion, I thank everyone here. This has been a short debate, and it would have been nice to have more time for contributions. I am here to listen, and I have listened very carefully.
Fiona Mactaggart
I thank the Minister for that response. This is probably my first experience of leading a debate in which everybody apart from the Minister has agreed with one another. I thank all hon. Members who contributed.
I am particularly concerned about the Minister’s account—I know he is not the Minister responsible, but I hope he will pass this on to the Financial Secretary—which implies that this is just a recent phenomenon, because it is not. It has existed for a long time; it is not just a recent failure. I also do not accept that Concentrix should be wholly blamed. I note that the Minister said it is up to Concentrix to choose which information to use. I would like him to write to me after this debate to tell me whether it is true that HMRC pressed Concentrix to use data on cases in which it was not even able to name the claimed partner. That shows that HMRC is responsible for this oppression of women. The Minister did not note in his response the concern expressed by many Members that this is a gendered policy—
Mr David Nuttall (in the Chair)
Order.
Motion lapsed (Standing Order No. 10(6)).