HMRC Closures

John Grogan Excerpts

Thursday 2nd November 2017 Westminster Hall

[John Grogan (Keighley) (Lab)]

I want to make one central point, which is to do with the eight location principles that the Revenue used to decide where the regional hubs should go. All of the proposed regional hubs will be in big, successful cities, such as Leeds, Glasgow, Birmingham and Cardiff. One could argue that, in those cities, a big HMRC office will crowd out private investment. Alternative choices would have been a lot cheaper and would have pump-primed the local economies. In west Yorkshire, if the regional centre had gone to Bradford, rather than Leeds, where there is a severe danger of crowding out, it would have acted as a pump-primer, boosting the local economy.

I do not know whether management consultants or HMRC bosses thought up the eight principles, but they include sustainable large sites, a talent pipeline, single location career paths, a catchment for a mix of business activity, digital infrastructure, facilities for HMRC’s people and robust long-term infrastructure. Only one of the eight—market rates—has anything to do with cost and savings to the HMRC. Obviously, in some of the smaller towns, rents are a lot cheaper. Given that the driving force of the review is meant to be to reduce costs, that seems odd.

[Chris Stephens (Glasgow South West) (SNP)]

Does the hon. Gentleman agree that there should have been an assessment of the social and economic impact that the office closures will have on the local economy? In many towns and cities in the UK, the HMRC office is the largest employer.

--- Later in debate ---

[John Grogan]

That was going to be my next central point. It seems very negligent that such social and economic impact assessments have not been carried out. It is no secret that one of the long-standing offices is in your constituency of Shipley, Mr Davies, which neighbours my constituency of Keighley. When we met the bosses of the Revenue, we were shocked that no such assessment had been made.

[Dr Drew]

I thank my hon. Friend for being so generous in giving way. The Government and the previous Government always said that rural proofing would be part of policy making. Was there was any attempt to rural-proof this decision?

[John Grogan]

I have studied the eight points carefully, and there does not seem to be any rural proofing, which one would expect of this exercise.

There is a relatively new boss at HMRC. It will be interesting to see how much the Government will own this process and how much they will say that it is all to do with HMRC. I think the call for a moratorium is very reasonable, as it would allow us to go back and carry out some economic impact assessments. If the Government press ahead with the broad policy of regionalisation—there are many question marks against that—at the very least they should locate these offices, which are big economic drivers, in areas that would benefit from the boost that they would bring.

I join many other Members in saying that there is still time to halt this process and in asking HMRC to look again. That needs to be done, and only the Government can give those instructions to HMRC.

--- Later in debate ---

[Mel Stride]

The hon. Gentleman has asked precisely the same question that the hon. Member for Bootle (Peter Dowd) asked, so I have already dealt with that.

[John Grogan]

The Minister is being extraordinarily generous in giving way. Is he not at all concerned about crowding out private sector investment in some of the big cities? To follow on from the powerful speech of my hon. Friend the Member for Oldham West and Royton (Jim McMahon), is the Minister not in danger of putting himself on the side of big city United Kingdom and ignoring smaller towns and cities? Is that not a bad political move to make?

[Mel Stride]

The hon. Gentleman raises the issue of crowding out private sector investment, but I am primarily concerned about the possibility of crowding out tax collection. If we do not have hubs that are fit for the 21st century, that are bristling with new technology, talent, and well-qualified, well-trained individuals working collaboratively from those units, we will be less effective at bringing the money in.

The tax gap was mentioned; it stands at 6%, a record low. Under Labour in 2005 it was around 8%. If it was 8% today, we would have £11.8 billion less coming into the Treasury, which is enough to pay for all the police forces in England and Wales, so these things matter. I understand why Members here are vexed about their constituency—I totally get it—but we cannot allow that to trump the really important job of bringing our tax collection into the 21st century, and making sure that it is effective, so that we keep our public services going.