Concentrix: Tax Credit Claimants

Debate between Catherine McKinnell and Fiona Mactaggart

Tuesday 18th October 2016 Westminster Hall

[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.

[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.

--- Later in debate ---

[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.