Concentrix: Tax Credit Claimants

Angela Eagle Excerpts

Tuesday 18th October 2016 Westminster Hall

[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.

[Ms Angela Eagle (Wallasey) (Lab)]

Will my right hon. Friend give way?

[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.

--- Later in debate ---

[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.

--- Later in 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.