HMRC Office Closure (Walsall)

David Winnick Excerpts

Tuesday 10th May 2016 Commons Chamber

[Valerie Vaz (Walsall South) (Lab)]

I should tell the House that I do not intend taking the full time available, so Members will be spared that.

I thank the Financial Secretary for coming to the House to respond to the debate. I was alarmed and disappointed that I had to apply for this debate and was granted it so soon after the debate on HMRC closures on 29 April in this Chamber. The Minister will know there has been a worrying unilateral change on the part of HMRC, which has decided to close the Walsall office on 20 June 2016. That has been brought forward, much to the shock of people who work there.

This debate is about public servants and those who have worked in the public interest, and how we treat them. If we want society to thrive, we need a balance between the public sector and the private sector. The public sector provides the framework of a good society, doing the things that it is harder for the private sector to do and that the private sector says it wants Government to do. The debate last week showed how important it was for tax to be collected. All that revenue should go into public services, the NHS, education, skills and infrastructure, among other things.

In the previous debate I referred to the tax gap—the difference between the tax owed and the tax collected. The Minister referred to it too in his summing up. In a survey undertaken in 2014, Richard Murphy said that the tax gap stood at almost £119 billion from tax evasion. That figure has not been challenged, and that is the scale of the amount of tax that needs to come back into the public purse. We need to collect that in order to pay for everything the Government have invested in public services.

Today I hope to persuade the Minister of the case for retaining the office and dealing urgently with the issues of HMRC staff in Walsall. What happened to the Walsall office at Pattinson House offends British values and natural justice. Under “Building our Future” it was announced in November 2015 that the office was to close by March 2017. Then on 4 May HMRC decided that all personal tax staff were to be compulsorily moved to Birmingham some six weeks later, on 20 June 2016. A collective grievance had been brought against the office, and many staff fear that this announcement may be a reprisal for the collective grievance and a petition. I am pleased to see my hon. Friend the Member for Walsall North (Mr Winnick) in the Chamber. He and I were in the town centre that day and we saw how the public responded to the petition: some 500 signatures were collected in about an hour and a half, supporting the retention of the office. I do not believe I have had a response to the petition from the Department or from the Select Committee.

The grounds for the collective grievance were that HMRC failed to follow Cabinet Office redundancy protocols, including moving the administrative assistants into redundancy procedures unnecessarily; HMRC denied trade union representation in one-to-one discussions with staff about whether they could practically travel to Birmingham; HMRC failed to carry out an equality impact assessment for the closure; HMRC refused to offer staff the opportunity to move to sites other than Birmingham, despite alternative sites being more accessible for some staff; HMRC ignored evidence of increased journey times for Walsall staff, in favour of an unproven use of a variant of Google maps to estimate journey times; and HMRC refused to subject the closure plans to parliamentary scrutiny or to accept accountability for them. HMRC eventually responded to the grievance, but only to claim that it failed to meet the Department’s test of a legitimate grievance. HMRC refused to investigate the grievance under the Department’s procedures.

It cannot be right that the guidelines have not been followed and that the closure has been brought forward to June. The Minister has said in written answers and to the House that HMRC had given a commitment to staff that they would have a one-to-one meeting with their manager to discuss their options at least one year ahead of their office closure. That clearly has not happened in the case of Walsall. He also said that changing locations was not cutting staff, but the staff in Walsall have been given no choice and some are being made redundant. The Minister has also said that it is an operational matter, but who is the executive of HMRC accountable to? When the Minister said that the Government had asked HMRC to reduce costs, that is a policy matter, not an operational matter. The Minister said that the change would make it quicker and easier for taxpayers to report and pay their taxes online. Does that include those who have offshore accounts?

There are still appeals outstanding. Those who are out of scope for a move do not know what will happen to them. There are still concerns about travel support. The Public and Commercial Services Union has not been consulted. It was just told that a resource planning project had been announced. Now staff have been given six weeks to reorganise their lives and their caring responsibilities, when they were expecting that period to be almost a year.

I want to touch on the impact on Walsall. Walsall South has consistently higher levels of unemployment claimants than the rest of the region and the UK—4.4% of constituents claimed unemployment benefits, compared with a UK-wide figure of 2.5%. An assessment by Coventry City Council suggested that with the loss of quality jobs, almost £1.5 billion would be taken out of the local economy—a figure that I have cited before. Walsall South cannot afford to lose such a sum.

[Mr David Winnick (Walsall North) (Lab)]

I am pleased that my hon. Friend is putting the case so well. Does she agree that if HMRC’s decision goes ahead, it will have a negative effect on the borough as a whole? It is undesirable. A public body such as HMRC should not act in an arbitrary manner, as my hon. Friend has explained. Would it not be useful for the Minister, when he replies, to try to persuade HMRC to change its decision?

[Valerie Vaz]

I agree. The Government seem to do some things well—impose contracts on junior doctors, summarily change employees’ contracts, and dismiss them with no consultation and no negotiation.

--- Later in debate ---

[Mr Gauke]

These debt management roles are available in Birmingham, and it makes sense for people currently working in Walsall who are capable of moving to Birmingham to fill them at the earliest opportunity. That is why this has been done. As I say, it was announced in November that Walsall was going to close in the course of the year 2016-17. As these roles in debt management are available, it makes sense to move quickly to fill them.

I am happy to write to the hon. Lady about the tax gap. HMRC publishes its own estimate of the tax gap that is based on considerable work and makes use of highly skilled statisticians. The National Audit Office has described it as “credible”, if I remember correctly. Mr Murphy’s estimates are well known to be controversial—let us put it that way—so this will not come as a surprise to him. He is very well aware that HMRC’s estimate of the tax gap is very different from his. I will set out in my letter some of the reasons why HMRC believes that Mr Murphy’s estimate is not credible. I have debated this issue on a number of occasions, so it would be more than a pleasure to set it out once again.

[Mr Winnick]

As my hon. Friend the Member for Walsall South (Valerie Vaz) emphasised, the staff feel strongly that the closure has been dealt with in an arbitrary manner. They are clearly not satisfied, despite what the Minister is saying about full consultation. As I said earlier, this is having a negative effect on the borough as a whole.

[Mr Gauke]

I note the hon. Gentleman’s points. This was announced in November last year. PCS was present for the announcement and has been engaged throughout this period. I do not accept that HMRC has acted in an arbitrary way. There has been consultation and a series of one-to-one meetings.

Let me pick up on a point raised by the hon. Member for Walsall South about the administrative assistants in cases where there are no suitable roles within debt management. A personal tax team within HMRC is working with those individuals to see whether they are suitable for promotion to a higher grade and, if so, whether they could be offered posts within debt management.

It is necessary, in the view of HMRC—a view that the Government support—to move towards fewer offices where there is an ability to concentrate staff and to have greater flexibility as to the work that they undertake. It will also ensure that there is greater availability of career opportunities within the regional centres. That is the direction that HMRC is going in—we support that—and it does require staff to be moved from some of the smaller offices to the regional centres, in this case to Birmingham.