Queen’s Speech

Lord Smith of Clifton Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Smith of Clifton (LD)]

My Lords, it is a pleasure to follow my erstwhile academic colleague the noble Viscount. I want to concentrate on consumer affairs, which were an aspect of the speech by the noble Baroness, Lady Hayter.

Some 30 years ago, the late Lord Grimond of Firth gave a lecture at City University on changes then taking place in commerce with the introduction of computerisation into retailing. He was passing a branch of an insurance company in which he had a small life policy he was thinking of cashing in. He entered and inquired of the assistant whether he could be sent an updated valuation if it was paid up. She asked him to wait a minute while she did the calculation on the computer. This upset him. He wanted the details to arrive in the post some days later. Having the valuation there and then was not part of the consideration he was making. He hoped to turn it over in his mind before coming to a decision and was disoriented by being stampeded with the immediacy of the information provided. It short-circuited the process and usurped the opportunity to ponder his course of action.

Those of a certain advanced age will sympathise with Jo Grimond’s discomfort at having to amend his previous biorhythms. Computerisation has brought benefits, as my noble friend Lord Clement-Jones said, but it has also brought disadvantages to the consumer, and these are what I want to bring to your Lordships’ attention.

IT can be and is being used to the public’s disadvantage, as I know from two recent experiences of my own. The first case concerns HMRC. The Daily Mail, Sunday Times, Observer, Financial Times and other newspapers have drawn attention to Her Majesty’s Treasury’s intention to give HMRC powers to have direct access to private current accounts of those deemed to be defaulting on their tax liabilities. I believe very firmly that tax dodgers should be pursued and made to pay up. However, from my own recent experience, I do not believe HMRC is functioning adequately to be allowed direct access to personal bank accounts at this stage.

Although, as a pensioner, my tax position is fairly simple, I nevertheless always get a firm of chartered accountants to prepare and file my tax returns to ensure their accuracy. They, in turn, advise me of any shortfall, which I then pay to HMRC. For the year 2012-13 they told me that I should pay £992.62, which I promptly did, well before the deadline set.

I was surprised, therefore, to receive a demand for the same amount from HMRC. I checked my documents—my cheque stub and my bank statement—which clearly showed money had left my account. I telephoned HMRC’s Leeds office. After waiting 40 minutes my call was answered. I had all my documentation to hand so I could provide the necessary information. After much trouble at the other end, it was discovered that my cheque had in fact been paid into the Cardiff HMRC collection office, which is where I had usually sent it. I asked why HMRC did not have a computer system that linked up its various branches automatically as a matter of course. I received no answer. I asked for a written confirmation that the money had been paid, and was told that it was not HMRC practice to issue receipts as it would not be necessary now that the situation had been cleared up—ha ha.

The next week I received another demand for the same amount, plus a £49 penalty for late payment, with threats that debt collectors would call if I did not pay. I received similar demands for the next four weeks. HMRC has no control over its computer system, which dementedly and endlessly sends out demands for weeks on end. This was to someone classified in the official jargon as a “frail, old” pensioner who had always been assiduous in paying his tax well before the deadline. I was innocent, receiving neither an apology nor a receipt which I could have shown the bailiffs while being harassed by this out-of-control computer juggernaut.

I wrote to the chief executive of HMRC on 8 March last, complaining of the treatment I was receiving. I wrote again on 20 March, complaining I had received yet another tax demand. My original letter of 8 March was acknowledged on 14 March, promising I would receive a reply by 3 April. Hardly surprisingly, HMRC failed to meet its own self-imposed deadline. I emailed the HQ reminding it, and received a reply dated 10 April which sought to explain what had happened and apologised, but it accepted that its telephone contact system did not meet industry standards.

As a member of your Lordships’ Economic Affairs Select Committee, I saw the HMRC’s inadequacy in chasing up large corporations who pursue aggressive tax avoidance schemes. The committee reported that HMRC had a lack of resources to do this. Yet HMRC seems to have enough spare capacity to aggressively harass innocent OAPs like me. The proposed new powers, apparently, would enable HMRC computers to hack into my current account, transferring £992.62 for weeks on end. Until and unless HMRC can guarantee this could not happen these new powers should not be approved.

My second example concerns British Telecom. My home landline was out of service for 10 days from 23 November last. I received my usual quarterly payment request, but no deduction had been made for this contractual failure by BT. I phoned to ask why, only to be told that no refunds were made unless requested by the subscriber. BT has the records on computer and deductions should be made automatically, in my view. To add insult to injury, I was told I was entitled to a rebate of a paltry £3.17. When I queried this, I was referred to an account manager, who restated BT policy without any attempt to explain let alone justify that policy, which is tantamount to attempted theft. He wrote a template reiteration:

“I am sorry you are unhappy with this condition of service, however this is the case ... This means we have reached deadlock”.

He suggested that I take my complaint to the communications ombudsman, which I did on 20 May. I received no acknowledgement, despite two requests from me, until Sunday 1 June—at least they work out of hours. The reply requested nine items of information, almost all of which were contained in my original letter, and the rest could have been obtained from the computerised records of BT. In addition, it was suggested that I should take my complaint to Ofcom.

I responded immediately, saying that it was the ombudsman's job to utilise the information conveyed in my letter—why should I have to repeat it? I also asked why BT had suggested in the first place that I make contact with the ombudsman, which, for its part, thought I should go to Ofcom with my complaint. None of this adds up. I have yet to receive a reply from the ombudsman. Like almost all regulators it leaves very much to be desired in the service it provides.

I am being pushed from pillar to post by these agencies. Clearly, there is a conspiracy of attrition which hopes that procrastination will dissuade complainants: is it worth it for £3.17? Yes, it is. How many thousands of £3.17s are there? Unclaimed amounts get transferred across to profits at the end of the year, swelling the remuneration packages of BT senior management. It is tantamount, as I said, to theft.

It is quite clear from these two examples that the failure to utilise computers to facilitate customer-friendly services should be exposed for what it is: an attempt to obfuscate, prevaricate and procrastinate in the hope that complainants will give up through sheer exhaustion. This must stop forthwith, and Her Majesty’s Government should address this issue.