Finance (No. 2) Bill

Debate between Jim McMahon and Chris Stephens

Committee: 2nd sitting: House of Commons
Tuesday 19th December 2017 Commons Chamber

[Jim McMahon]

I think that where the hon. Gentleman was trying to get to—I will be generous—was that these things are symbolic and that symbolism in politics is quite important. However, to me, it is more symbolic that 46% of women have to skip a meal so that their children can eat. It is quite symbolic that women continue to be underpaid compared with men, and it is symbolic that the decisions the Government are taking disproportionately affect women on low incomes—the people who are trying to keep households together and who are raising the next generation of young people, who, because of this Government, will not have better life chances than the generation that went before them.

[Chris Stephens (Glasgow South West) (SNP)]

Will the hon. Gentleman confirm that it is also important that it was women politicians and women workers who campaigned and argued for the Equal Pay Act 1970? Will he also confirm that outstanding equal pay cases are at an all-time high?

[Jim McMahon]

That is absolutely right, but let us be honest: the Government are not in listening mode. They do not want to take into account what could have been constructive new clauses—new clauses 6 and 7. What they want to do is to maintain their stubbornness and their silence. They think that if they ignore this issue, there is not a problem in society, when we know that there is.

In terms of the pressures on income that many people in our communities face, the new clauses go beyond just gender inequality, and talk about disability and race as well. The Prime Minister has been clear that she wants to address the discrepancy in terms of opportunity, incomes, housing and the criminal justice system with members of the ethnic communities in this country. However, when we look at the way the Government have approached the Budget, the evidence just does not support that. If we look at the public sector, for instance, little effort is being made to widen participation in public sector jobs to members of the ethnic minority communities. In my constituency, a third of residents are predominantly Pakistani and Bangladeshi, but they are nowhere near properly reflected in the make-up of public services. In towns such as Oldham, where industry has, by and large, been hollowed out, the public sector is the place where people go for decent-quality, well-paid and, previously, quite secure employment. If people are restricted from entering those jobs, for different reasons, that has a material impact on their ability to lift themselves out of poverty, to get on in life and to do well.

When the coalition Government came into power, it was interesting that one of their very first acts of many that devastated towns such as Oldham was to cut the funding that went to Remploy. Remploy had a network of factories across this country that used to support people into supported employment. Those were not sympathy jobs, in the way I heard people say they were at the time; they were real jobs, and they produced goods of quality that people wanted to buy. In Bardsley, in my constituency, that meant a full factory employing 114 people making windows that they would sell to industry, housing associations and the private market.

HMRC Closures

Debate between Jim McMahon and Chris Stephens

Thursday 2nd November 2017 Westminster Hall

[Jim McMahon]

That is a good point. One of the biggest gaps in the whole Brexit conversation is not only the transactional relationship with Europe and what our future relationship will be but the biggest deficit in all our debates—what type of United Kingdom will we be at the end of Brexit? What type of Britain do we want? What will our communities look like? How will our economies be framed in the future? It strikes me that there is a complete absence of a direction and a vision for what type of Britain there can be after Brexit. I feel that in Oldham.

The frustrating thing about the HMRC relocation from Oldham to Manchester is that there was no value-for-money assessment. A wider review was done, which said, “If you close x number of offices, you will save money for the public purse”, but no financial assessment was made of the decision to relocate from Oldham to Manchester. That was admitted by the Minister in a February written answer to me.

Let us think about this: if the relocation was meant to be about value for money and about saving money for the taxpayer of this country, why would HMRC relocate from a town where the average office cost is £70 per square metre to a city centre where the average cost is £120 per square metre? Why would HMRC not do an assessment? If we need to rationalise the number of offices in a conurbation, surely we assess the cheapest and most efficient place to put the ultimate office when all the others have been merged into that one. However, that did not take place.

I am pretty sure that part of the reason why that did not take place is the same reason why we have seen the county court closed and relocated from Oldham to Manchester, and why we have seen our magistrates court closed too. It is because the people doing the assessment, or the people who are making the decisions, do not live in Oldham; they do not even live in the north of Greater Manchester. The people making the decisions live in the affluent suburbs, closer to where the offices will ultimately be located when the decision is made. That is fundamental: what voice did staff have in the conversation?

[Chris Stephens]

The hon. Gentleman raises an important point. Does he agree that local knowledge is vital and that in terms of minimum wage compliance, an office in Oldham would know who the rogues were in Oldham, not elsewhere in the country?

[Jim McMahon]

The hon. Gentleman makes a very fair point. The relationships among other local service providers are equally important—the local authority and the local police in Oldham know what is going on in the community. Those localised conversations can no longer take place because the facility is not in the town as it used to be. It is ridiculous that Phoenix House, where HMRC was based in Oldham, is right outside the Oldham Central stop of the Metrolink tram line that takes just 18 minutes to get to Manchester city centre. It would have been very easy to make Phoenix House the new regional hub if there was a desire to do that, but the truth was that it was not even on the list for consideration because it was assumed that the regional hubs had to be in the city centre, at the expense of the town. That is shameless.

The Government tell us that times are hard, austerity bites and we have to live within our means, so surely there is a greater onus on them to maximise every bit of public investment where there is capital or revenue, and to provide proper scrutiny of where the investment goes, to make sure that the money is spent in the most efficient way for the taxpayer. The Government themselves have said that they did not do that. At best, that is approaching bad administration. The very basic things that I would expect a Government to do when spending public money—ensuring that it has the best effect—have not taken place.

What does that mean for a town such as Oldham? The loss of 2,000 staff by the local authority, on top of staff losses at the county court, the magistrates court, the police service and a range of other public institutions in the town, means that there are fewer people going out at lunchtime to buy a sandwich and supporting the local retail environment. There are fewer people going out shopping and using the bars and restaurants after work. There is less footfall in the town generally of people supporting the local economy. None of that was taken into account. We ask what was the local economic impact assessment; the answer is “there wasn’t one”.

If the Government are serious about having a stronger Britain after Brexit, about ensuring that public money is used to the best effect and about ensuring that our towns can be as strong as our cities, it is important to have a new approach. That new approach has to be to ensure that central Government decisions take into account the economic decisions at a local level. We also need to ensure that there is joined-up government. Government Departments that do not talk to one another are doing estate reorganisations in HMRC, the Department for Work and Pensions, local authorities and sub-regional government. No one has asked the basic question, “If we’re being forced to reduce staff and to reconfigure office accommodation, would it make sense to come together in Oldham and share office provision in that town, to support the local economy?” The conversation is not taking place.

It is too late for Oldham. That callous, reckless decision has been made; it has not provided value for money to the taxpayer and it has kicked Oldham when it was already struggling to get up from the ground. But there is still a chance to do the right thing for the towns that have not yet seen their office closed. I urge the Government to do the right thing.

--- Later in debate ---

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the Chair, Mr Davies. Like other hon. Members, I thank you for your guidance and support and your interest in this area. First, I refer the House to my entry in the Register of Members’ Financial Interests and my position as chair of the Public and Commercial Services Union parliamentary group. As you are aware, Mr Davies, we have been here debating HMRC office closures many times, and each time I and other Members have asked HMRC to think again and pause for thought.

The debate was opened superbly by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), who rightly thanked HMRC staff for their contribution. I will give some statistics to back that up. He rightly mentioned the low staff morale in HMRC as a result of the way in which management have handled the issue.

What was most telling in the contributions so far—it is the common thread—was the social and economic impact that the closures will have in towns and cities across the UK. We heard from the hon. Member for Keighley (John Grogan), and my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) talked about East Kilbride being Centre 1 for tax collection services in Scotland and the UK, and the lack of consultation by HMRC with parliamentarians. We also heard from the hon. Members for Oldham West and Royton (Jim McMahon), for Stockton South (Dr Williams) and for Bradford East (Imran Hussain), who continued the theme of the social and economic impact that the closures will have in their communities.

The starting point was 12 November 2015, when HMRC announced plans to close nearly every office—approximately 170 in the HMRC estate—and replace them with 13 regional centres and four specialist sites, mostly based, as we have heard, in major UK cities. The plans were titled “Building our Future” and if implemented in full would involve vast areas of the UK being left with no local HMRC office, including restricting the department to two offices and one specialist site covering the entirety of Scotland; two offices and one specialist site covering the entirety of the midlands; two offices and two specialist sites covering the entirety of London and the south-east of England; two offices covering the entire north-west of England; two offices covering the north-east of England and the great region of Yorkshire, Mr Davies; one office covering the entirety of Northern Ireland; one office covering the entire south-west of England; and one office covering the entirety of Wales. Like many hon. Members, I am gravely concerned that, if the plans are not halted, they will leave vast areas of the country with no nearby HMRC office. I am also concerned that, more than 15 years on from the troubled private finance deal that HMRC entered into with the contractor Mapeley, significant risks remain in the handling of the contract. The Department has learnt nothing. A National Audit Office report draws attention to the fact that HMRC has not negotiated

“any break points in the 25-year leases it has signed so far for regional centres in Bristol and Croydon.”

Of course, there have been some changes to those plans—not all of them for the better. Let us go through them in turn. The original proposals meant there would be no physical presence in East Anglia. HMRC has subsequently decided to retain a presence in Ipswich, first as a specialist site but potentially to include broader work streams. Plans to close the only Welsh-language unit have also been dropped, with staff now co-locating with the Department for Work and Pensions—that is a point I will develop later in my contribution.

The estate negotiations on the location and buildings for the proposed Manchester regional centre are taking longer than HMRC initially anticipated, meaning that the regional centre will now open at least a year late, and possibly even later than that. When it eventually opens, it will do so in two phases. The overall capacity of the regional centre is in a state of flux, forcing the Department to extend the existing leases of three major sites in Manchester.

There have also been problems in Northern Ireland; the opening of the Belfast regional centre has been subject to significant delay. In other areas, closures have been brought forward, including at Blackburn, Bolton, Netherton and St Helens in the north-west; Derby, Worcester and two sites in Solihull in the midlands; and York in the north. Those closures, with point-blank notice, cause significant stress, upset and practical difficulties. That is not an efficient way to run a Department.

As a direct result of staff leaving the Department because of the office closures, HMRC is losing a vast amount of irreplaceable experience. Based on data provided to the Public and Commercial Services union by HMRC, in 2017 alone the Department will lose the equivalent of more than 17,000 years of staff experience, and the vast majority of that comes from customer compliance work.

We believe that the “Building our Future” proposals are completely driven by the deadlines within the STEPS contract of 2021 and that those are flawed. The existing proposals should be put on hold until appropriate parliamentary scrutiny, public consultation and socio- economic impact assessments are carried out.

[Jim McMahon]

Does the hon. Gentleman agree with my suspicion that the end was decided before the criteria that support it?

[Chris Stephens]

I do, and I think it has been driven by cost. One other area is that while I and my hon. Friends were campaigning in our constituencies to get re-elected, HMRC, during purdah, was signing contracts, and it did not wait until after the election to inform the House of those changes. I sympathise with the point that the hon. Gentleman made. Of course, during the process, we had the Concentrix disaster. HMRC had to terminate its contract early because Members of Parliament from right across the House had major complaints about how Concentrix was dealing with its business.

In the National Audit Office’s report, the key findings stated that:

“it will be longer until HMRC starts to realise savings. In the long term, it still expects its new estate to reduce its running costs. It now estimates cumulative efficiency savings by 2025-26 of £212 million, reduced from the £499 million estimated in its strategic outline case in November 2015. By 2025-26, HMRC expects its annual running costs to be £83 million lower than they are now”.

Whether it is £83 million, £212 million or even £499 million, those are drops in the ocean compared with the Government’s own accepted figure for the tax gap of £36 billion. The figure researched by the Tax Justice Network and PCS puts the tax gap at £119 billion. A major reorganisation and rationalisation of the most vital Government Department, putting at risk the very ability to carry out the tax collecting function for savings that are not properly costed, is irresponsible management and governance.

The Scottish Government are consulting today on the Scottish approach to taxation, to accompany gradual increases in its taxation powers. HMRC’s plans could well result in the severe limiting of HMRC expertise based in Scotland, which will become even more important as the Scottish Parliament debates increases in taxation.