HMRC (Scotland)

David Gauke Excerpts

Tuesday 22nd July 2014 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) on securing the debate. He continues to make a firm, clear and eloquent case on what is, understandably, a hugely important issue for him and his constituents: the future of the HMRC office in Cumbernauld.

Before dealing with some of the detailed points the hon. Gentleman raised, I would like to explain some of the context behind the changes occurring in HMRC staffing. As hon. Members will be aware, HMRC is currently reshaping itself in order to become a more modern, flexible and cost-effective organisation that can deliver better and more personalised services for customers, increased tax revenues through greater compliance activity and, crucially, better value for money for the public.

In order to provide the best possible value to the taxpayer, HMRC has had to downsize. In fact, it has been steadily reducing the number of employees since it was formed nine years ago. Over that time it has reduced its staff levels from around 97,000 full-time equivalents in 2005 to around 60,000 now. On top of that reduction, and as part of its increased work on digitisation, HMRC will soon be implementing a new system whereby it will scan incoming post. The rational behind that change is that it will remove the need for sorting and transportation. Instead, correspondence will be moved to where it can be dealt with instantly, ensuring that taxpayers’ queries are dealt with more quickly and effectively.

However, a consequence of that change will be that fewer staff will be needed to handle post, which will have an impact on HMRC’s five regional post rooms, as the hon. Gentleman mentioned. I should point out, however, that with regard to business presence and work force size, the recent changes have not had a disproportionate impact on Scotland. In April 2011, around 13% of HMRC’s work force were based in Scotland, and at the end of last month, following the significant reductions it has achieved across the UK, the proportion of its work force based in Scotland remains around 13%.

As it reduces in size, it makes sense that HMRC will need to bring its people together into larger sites where they can work more flexibly and more easily share the costs of office space and IT. In May 2012, HMRC made the concluding announcement about the estate changes it would be making during the spending review period. That saw, as the hon. Gentleman has said, a number of its offices across the country announced for closure, but at the same time it was also confirmed that there would be 16 strategic locations nationwide until at least 2020. Two of those are in Scotland—Edinburgh, encompassing Bathgate and Livingston, and Glasgow, encompassing Cumbernauld, East Kilbride and Paisley.

[Pete Wishart]

The HMRC office in Perth was, of course, closed in the past year under this Government’s stewardship. How many jobs has HMRC lost in Scotland under this Government, how many offices have closed and how many jobs does the Minister foresee going in the course of the next five years?

[Mr Gauke]

I reiterate that the changes in Scotland reflect those across the United Kingdom. The proportion of jobs is identical to what it was three years ago. It is the case that HMRC has reduced significantly in size since 2005, and it is anticipated that it will continue to do so across the United Kingdom. We have stated that we anticipate that staff numbers will fall to about 54,000 by the end of this financial year, although, to be fair, HMRC is expanding its staff in particular areas. There is no reason to believe that Scotland will be disproportionately affected by further reductions. That has not been the history of what has happened in the past.

HMRC continues to review its business, work force and estates needs, and is currently in consultation on a proposal to close a further 12 smaller offices during 2015, two of which are in Scotland—namely Glenrothes and Irvine. Those are all smaller offices and HMRC, for the reasons I stated previously, believes that it makes more sense, and will deliver better value to the public, to bring those staff into larger workplaces. I should make it clear, though, that the consultation on those decisions will, of course, include the consideration of equality impacts and will involve HMRC’s employees, their trades unions, Members of this House and other local interests.

It is also worth bearing in mind that, while the number of general business roles has been reducing in size—as HMRC tries to increase compliance-related yield—the number of roles in that specific area is increasing. Hon. Members may be aware that in June, HMRC advertised up to 2,100 vacancies primarily in compliance roles—up to 680 of which will be based at offices in Scotland. Many of those will be at the newly opened compliance centre in Edinburgh, and HMRC’s debt management and banking business aims to create up to 170 jobs in Cumbernauld, as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East has pointed out. Therefore, as HMRC’s work moves forward, new opportunities are opening up for its work force, including in the Cumbernauld constituency.

The hon. Gentleman referred to the September referendum and the future for HMRC staff should there be a vote for the Union to come to an end. Neither the Scottish Government nor the UK Government know for sure what will happen if the people of Scotland vote to leave the UK. In the event of a majority vote in favour of independence, both the UK and Scottish Governments agree that negotiations would be needed. Both Governments have agreed that negotiations to establish a new Scottish state cannot begin unless—and until—there is a yes vote in the referendum. That does not mean, however, that representatives of the UK would or could facilitate everything that the Scottish Government have said they hope to achieve through independence.

If the people of Scotland were to vote to leave the UK, the negotiations that would follow would be unprecedented, highly complex and incredibly detailed. There are too many unknown factors at this stage to say how negotiations would proceed and how long they would take. As the hon. Gentleman will know, the Scottish Government’s White Paper set out what they would like to happen if Scotland became an independent state; it is not a blueprint or a legally enforceable document, and it cannot predict the outcome of the negotiations between the UK and the new Scottish state. In fact, much of what is included in the White Paper depends on the agreement of the UK Government and numerous other public bodies and organisations. In this instance, I therefore cannot get into any detailed discussion of what might happen should such an event occur. However, the hon. Gentleman was quite right to raise, on his constituents’ behalf, concerns about uncertainty for HMRC employees in the event of Scotland leaving the United Kingdom. I am sure that I speak for the vast majority of Members of the House when I say that I hope that those negotiations never come to pass.

To return to specific HMRC matters, HMRC as an organisation has to work within its resources and to fit its future shape. Its plans to deliver an increasingly modern service for its customers, while increasing tax revenues, depend on making changes to its structure and the size of its work force. The changes to date are making an impact and helping it to provide a much better service for the rest of the United Kingdom. In fact, last year it secured nearly £24 billion in additional compliance revenues—a record—and it achieved its best ever customer service levels, and all that was done by about 2,000 fewer staff, who oversaw £235 million of efficiency savings. The staff are doing an excellent job. Although I sympathise with the hon. Gentleman about the job losses in his constituency, which he mentioned, and with the staff themselves, we need to make sure that our services continue to provide the best possible value to the public. We remain committed to a consultative approach to ensure that any changes are managed in the very best way possible.

May I just make one further and final point, Mr Speaker? As the last speaker before the summer recess, I am the last hon. Member to speak from the Dispatch Box or indeed anywhere in the House and to turn to the Table to see the reassuring presence of Sir Robert Rogers. I know that the House has already had an opportunity to pay tribute to him, but I will just put my thoughts on the record. He has brought to his position an enormous amount of authority and a great love for this House. In an environment that can sometimes be a little heated, he has been a consistent embodiment of a sense of fairness, decency and not a little kindliness. In his distinguished career, he must have listened to many thousands of speeches delivered by many hundreds of right hon. and hon. Members. As the deliverer of the last of those speeches—and, I hope, on behalf of the many hundreds who have spoken before me—may I thank him for his outstanding service and wish him a long and happy retirement?

Question put and agreed to.