HMRC Inquiry Centre Closures

Ian Lavery Excerpts

Tuesday 4th March 2014 Westminster Hall

[Ian Lavery (Wansbeck) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Dr McCrea. This debate focuses on the Government’s proposals to close all HMRC inquiry centres in the UK. Inquiry centres provide a vital public service, allowing taxpayers to access free expert advice from highly skilled HMRC staff. In 2012, some 2.5 million people visited those offices, where they could take advantage of free phone and internet access, and 340,885 of those customers made a face-to-face appointment to get help complying with their tax duties and receive advice on their benefit entitlement.

Last month, Her Majesty’s Revenue and Customs announced that a “needs enhanced support” service model would be rolled out, resulting in the closure of all 281 HMRC offices by the end of June 2014. The taxpayers most likely to be prevented from accessing the proposed new service as a result of the cost are the unemployed, those on low incomes such as migrant workers and pensioners, and child benefit and child tax credit claimants. Such taxpayers rely heavily on the free service currently provided by HMRC staff at inquiry centres.

The closures will also put the 1,300 jobs of those who work in the centres at risk as a result of compulsory redundancies. Staff in the offices are faced with an impossible decision about their future as the Department rushes to implement the closure of the offices in four short months.

[Jonathan Ashworth (Leicester South) (Lab)]

I apologise for coming in to the Chamber a few minutes late. My hon. Friend is making a powerful case. One of the offices affected is in Leicester, where a number of staff jobs are now at risk. Does he agree that the Government must put in the time to negotiate properly with the workplace unions, particularly the Public and Commercial Services Union, and do all they can to ensure that if they insist on closing the offices—although I hope they do not—the staff will be redeployed?

[Ian Lavery]

I fully agree, and I am sure my hon. Friend will agree that closing 280-odd offices—the service is provided up and down the country—will cause huge problems, mainly for people who are least well off but also, of course, for the staff themselves.

[Graeme Morrice (Livingston) (Lab)]

I congratulate my hon. Friend on securing this important debate. He will be aware that my constituency has an inquiry centre due for closure. I have been approached by constituents and members of PCS expressing concerns related to job losses and the impact that they could have on members of the public, particularly the most vulnerable. Does he agree that if the Government are serious about addressing the problem of underpaid and undercollected tax, the proposed closure programme is the wrong way to go about it?

[Ian Lavery]

I agree that the Government are going about it in entirely the wrong way. PCS, the union representing the HMRC workers, has agreed with HMRC that all members should have the opportunity for a formal one-to-one to help them consider their options. However, HMRC has withdrawn from that agreement in an attempt to pressure people into making decisions without information about applying for jobs and voluntary exits. That shows contempt for staff and puts huge pressure on people to leave by demoralising the work force.

[Mr Mark Williams (Ceredigion) (LD)]

I have four constituents who work at the Aberystwyth office and who will be affected in the way that the hon. Gentleman suggests. Before he moves on from customer service, does he agree that there are particular concerns about how the new service, in so far as it is a new service, will be delivered in rural areas? Access will be denied to many of our constituents by virtue of the fact that huge tracts, in my case of rural west Wales, will be covered by a diminished service, and arguably a more costly one.

[Ian Lavery]

I will certainly come to that later in my speech. The hon. Gentleman makes a valid point.

I am fairly positive that the Minister—perhaps he can indicate that this is the case—met PCS representatives this morning.

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

indicated assent.

[Ian Lavery]

The Minister nods positively. I am pleased: perhaps he can assure me that support will be given to staff who are uncertain about their future and that compulsory redundancies will not be made.

[John McDonnell (Hayes and Harlington) (Lab)]

We are all grateful that the Minister met the union, but let us be clear: he met the union only after this debate was announced. There has not been full transparency in the sharing of information with the union by management about the various options going forward. The Government introduce changes, but it is best to do so in a negotiated way rather than by imposing them, as this management seems to have done.

[Ian Lavery]

Again, I thank my hon. Friend for a positive intervention.

The pilot scheme has been rolled out not just in my constituency, but in my region—the north-east area. In June last year, 13 offices in the north-east of England were closed, including Royal Sovereign house in my constituency, in Morpeth. They were closed as part of a pilot of the new needs-enhanced support service model. If the closures of all 281 offices throughout the UK go as planned in June, I hope that HMRC does a better job of letting the public know than it did in our region last year.

I have heard examples of people travelling miles, only to find their local office no longer open to the public. In one prime example, an 85-year-old man used two buses to get to Scarborough, only to find the inquiry centre closed. Staff were actively prevented from assisting him: I repeat that they were actively prevented from assisting an 85-year-old gentleman. Another member of the public was trapped inside Gilbridge house in Sunderland, while trying to look for the inquiry centre, which had been closed. Many taxpayers decided to travel outside the region to inquiry centres that were still open, just so they could get face-to-face advice.

A recently widowed elderly woman turned up at Gilbridge house office for assistance with a tax form she needed to complete on behalf of her late husband. She told a member of HMRC staff that she simply did not feel that she could discuss her affairs over the phone, that she was afraid of completing it herself, just in case she did anything wrong, and that she could not grieve properly while she had this worry on her mind. I use this specific example, because staff are particularly concerned about the prospect of mainly older customers getting the support they need to complete the R27 form over the telephone, as these appointments need time. They not only need time; they need empathy, understanding and a common touch. It is common for staff, so they tell me, to keep a box of tissues handy on their desk for such occasions. It is hard to see how this kind of personal service can be replaced over the phone or on the internet. What assurances can the Minister give that such people, who will be in a particularly vulnerable state, will not be disadvantaged by the new service?

There are also problems involving equality issues. It is clear that the pilot scheme could not possibly identify the equality impacts on customers and staff, due to the demographics of our north-east region. For example, migrant workers make up 25% of all inquiry centre customers. However, the percentage of these customers is much lower in the north-east of England than it would be in other regions, such as London, which is a prime example. The consultation carried out by HMRC last year did not present equality data about customers. The document was not produced in different languages, which is of particular concern considering the high number of migrant workers who use the service. Only 11% of staff work part time in the north-east, compared with a national average of 36%. For example, 45% of workers in Wales and Scotland work part time. Only 7% of staff declared a disability in the north-east, compared with 27% based in Wales. Some 30% of inquiry centre staff in London and south-east are black, Asian and minority ethnic, compared with just 2% in the pilot area. How can the pilot area possibly identify the equality impact these closures will have on the country as a whole?

It is also worth mentioning, while considering the equality implications of this decision, that in October 2013 three appellants supported by the Low Incomes tax Reform Group won their appeal against the HMRC’s requirement that they must file their VAT returns online. A tax tribunal found that HMRC’s regulations that required online filing of VAT returns without providing exemptions for older people or disabled people, many of whom live in parts of the country that are too remote for broadband access, breached the appellants’ human rights and were unlawful in EU law.

If we consider the intervention of the hon. Member for Ceredigion (Mr Williams), it is important that ordinary people can access those services. It does not matter whether those people live in London or in rural areas where access is extremely difficult. It was identified early in the pilot that a significant number of customers will not be able to call contact centres or interact with the website owing to the cost and low mobile or internet access in many parts of the UK. The taxpayers who are most likely to be prevented from accessing the proposed new service owing to the cost are the most vulnerable members of society. They are not able to afford a landline or a mobile telephone, and even if they own a mobile telephone it is often on a pay-as-you-go facility with a minimum amount of credit reserved for emergency calls only. Those taxpayers include the unemployed, people on low incomes, migrant workers, pensioners, people on child benefit and child tax credit claimants. Those taxpayers rely heavily on the free service that is currently provided by our inquiry centre network because their tax queries are often complex.

Low earners, for example, often work in multiple jobs to provide for their family, which means that the tax code is often incorrect. They visit the HMRC inquiry centres to use the free phones and free internet facilities or to receive face-to-face support and advice. HMRC agreed that an alternative access solution needed to be found if the new model was to be rolled out nationally. It is therefore concerning that the decision to move to the new service model and to close the inquiry centres has been made despite HMRC not having found those solutions.

Can the Minister reassure me that solutions have been found? If not, why has a decision been made without the Department having been able to resolve those important issues? Even in areas that have decent mobile phone coverage, taxpayers need to be reassured that contact centres will be sufficiently staffed to handle their calls. If the closures go ahead, people will no longer be able to walk into their local inquiry centre and receive face-to-face assistance on tax issues that are often complex. Instead, they will have to call a contact centre. A member of staff will then vet them and determine whether to refer them to another adviser. Only if that two-tier adviser deems it appropriate will a taxpayer classed as needing enhanced support be given access to face-to-face advice. Call handling levels have consistently been criticised by the Public Accounts Committee and the National Audit Office. There are figures that prove conclusively that people will find it extremely difficult to contact the centres.

The fact that we are removing HMRC offices from local communities is one of the most important issues. HMRC is effectively moving its presence away from people who are supposed to pay, which will make closing the tax gap even harder. It will make tax compliance more difficult, both for those who want to comply but cannot get access to the information they need and for those who intentionally want to slip under the radar because they are disengaged with the tax authority at a local level. Those concerns have been raised by a large number of stakeholders in the public consultation exercise, including by the Association of Taxation Technicians, Citizens Advice, Gingerbread, the Institute of Chartered Accountants in England and Wales, Lancaster city council, Milton Keynes council, TaxAid and a number of individual taxpayers. What work has HMRC done to estimate the amount of money that could be lost in uncollected tax owing to large numbers of taxpayers being prevented from engaging with the Department?

I conclude simply by asking the Minister to reconsider the decision to close the offices. There is a real danger that if the plans go ahead, some of the most vulnerable people in society will lose their access to HMRC’s services. Hundreds of quality jobs will be lost, and the Government’s attempts to tackle the tax gap will be seriously set back. It would surely benefit society and the economy if the Government would concentrate on closing the tax gap, not tax offices.

--- Later in debate ---

[Mr Gauke]

It is important that HMRC communicates the closure of inquiry centres. It has written to all Members of Parliament on the matter and will take other steps to ensure that our constituents are aware of the changes.

Inquiry centres are not universally distributed across the country, and large parts of the UK are not even served by them. My hon. Friend the Member for Ceredigion (Mr Williams), who is no longer in his place, raised the position of rural areas. Rural areas do not tend to be well served by inquiry centres at present. There has been a sharp decline in the use of inquiry centres. Visitor numbers have halved from more than 5 million in 2005-06 to just over 2 million in 2012-13, and the number of face-to-face appointments also dropped by four fifths to 140,000 last year.

[Ian Lavery]

Is it not the case that individuals who wish to have a face-to-face meeting will be vetted on the telephone, and then someone will adjudicate whether they need one?

[Mr Gauke]

I will turn to how the new service will work in a moment, if the hon. Gentleman will bear with me. HMRC’s in-depth research further revealed that nine out of 10 of those who visited an inquiry centre last year did not require a face-to-face appointment and would have been able to resolve their queries through a phone call or by visiting the HMRC website.

[Ian Lavery]

On that point, will the Minister give way again?

[Mr Gauke]

I am keen to answer the hon. Gentleman’s question, but I will give way.

[Ian Lavery]

Where on earth did that information come from? Surely, people who wanted a face-to-face meeting had one and thought it beneficial. Where do the statistics that the Minister has just mentioned come from?

[Mr Gauke]

They are the result of research undertaken by HMRC. Matters can often be resolved over the telephone rather than in a face-to-face meeting. The hon. Gentleman rightly highlighted a case in which an 85-year-old gentleman caught two buses to attend an inquiry centre. If it is possible to drive that service more easily over the telephone, so be it, but there are circumstances in which a face-to-face meeting will be appropriate, so that will be provided.

HMRC’s research has highlighted that up to 1.5 million customers need extra help with their tax and benefits affairs. Many of them need help only for a specific event in their lives, such as when they approach retirement. Others may have low literacy skills, or a mental health condition may make it difficult for them to cope with their affairs. The new, more accessible service will be tailored to the needs of customers who require extra help. Specialist help will be provided over the telephone by extra support advisers who have the time, skills, knowledge and empathy to handle customers’ inquiries at a pace that suits them, and who can identify when a customer needs extra help. If a customer’s query cannot be dealt with over the phone, they can arrange a face-to-face meeting with a team of mobile advisers based across the United Kingdom. Such meetings can be arranged at a time and place convenient to the customer, and extra help will be delivered through HMRC’s voluntary and community sector partners who have been provided with extra funding so that they can support more customers and refer them directly to the new service.