0845 Phone Lines (DWP)

Debate between John Healey and Mark Hoban

Wednesday 21st November 2012 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I congratulate the right hon. Member for Wentworth and Dearne (John Healey) on securing this debate. He focused most of his remarks on 0845 numbers, but they are not the only numbers the Department uses. As I explain, I will give a more balanced picture of the telephone situation than the one he gave in what I thought was a selective presentation of the information.

The Department has set out clear principles for the provision of telephone services. Indeed, they were set out when the right hon. Gentleman was a member of the previous Government in 2008. There are four clear principles. First, calls to claim benefits should be free to the customer. Secondly, there should be a consistent approach across the Department, both for clarity and equity. Thirdly, the approach should make sense from the customer’s point of view, rather than being driven by product lines or organisational structure. Fourthly, it must be sustainable in terms of future business models and changes in the telephony market.

To enact those principles, calls to claim benefit are free and utilise 0800 numbers. The right hon. Gentleman said that crisis loan calls were not free, but they are. Other calls that typically take less time to resolve are made to 0845 numbers. Their use means that the customer is charged the same amount regardless of their geographical location or that of the DWP office they are calling. The exact cost will vary depending on the caller’s phone number and the service provider. I will give more detail on that later.

The Department provides customers with a facility to make a free telephone call to claim the state pension, pension credit, jobseeker’s allowance, employment and support allowance, crisis loans and other emergency payments. These calls are free of charge from all major landline providers. The right hon. Gentleman talked about the Ofcom changes making it free to call these numbers from a mobile. The Department has already made that change. As a result, eight of the UK’s largest mobile phone operators—O₂, Orange, Vodafone, T-Mobile, Hutchison 3G, Tesco Mobile, Virgin Mobile and Cable and Wireless—allow their customers to make those calls for free already.

The Department uses 0800 and 0845 numbers, rather than the geographical 01 and 02 numbers, to enable the operation of a virtual telephony network across the UK. This network has been in place for working-age benefits and crisis loans since 2008, and allows callers to be directed to the next available adviser with the appropriate skills to answer a customer’s inquiry. For example, someone ringing from their home in Rotherham or Barnsley to make a claim for jobseeker’s allowance might be connected to an adviser in Dundee, Derby or Poole. They will be directed to the first adviser available, rather than left hanging on the telephone waiting for the call to be answered in their local benefit or contact centre. Furthermore, should that person wish to make an inquiry about their benefits later on, that call would be answered by the first available adviser in a centre, wherever that centre might be, rather than left waiting for someone in their local centre to answer.

The use of these numbers gives the Department the flexibility to manage the peaks and troughs of the different types of inquiries it receives nationally. Calls can be routed to additional centres, as and when volumes require, and advisers are trained to handle more than one type of inquiry. This method of handling customer calls has proved to be much more efficient than the previous system, under which calls were directed to specific offices without the facility to reroute them to meet customer demands. It is designed to help facilitate and speed up the response to telephone calls. The use of geographic numbers would undermine the ability of the business to manage effectively the significant volume of calls received each year, and would result in a less efficient process.

Let me deal with the issue of costs. Charges for 0845 numbers vary depending on the service provider, personal contract and time of day a call is made. As a result, the costs to consumers are beyond DWP control. About 75% of calls to the DWP originate from landlines. If calls to 0845 numbers fall within the terms of a customer’s call plan, they are free. BT, the largest landline provider, charges 7.95p a minute, plus a 13.1p connection fee, where the call is made outside the inclusive plan. The right hon. Gentleman implied, without really making it explicit, that he thought the Government were benefiting from the cost of 0845 calls. We do not receive the termination payment. Other major landline providers charge between 6.63p and 10.22p a minute—also with connection charges—while the charge varies for calls from mobiles.

The right hon. Gentleman also raised the issue of 03 numbers. Depending on the service provider and the contract or call plan, many customers would currently pay more to contact the DWP if 0845 numbers were simply replaced by 03 numbers, so that would not be an easy solution to the problem. He needs to recognise that the situation is more complex than that.

[John Healey]

The caller pays the termination charge, so if the Government do not receive it, and most organisations using the service receive the access charge component, who receives the value of the termination charge?

[Mr Hoban]

The people or organisations hosting those 0845 numbers are the ones who earn the components of those calls.

Let me turn to the duration of calls. In line with the departmental principles that I outlined at the outset, calls to claim benefit should be free, because they are longer on average than calls to other numbers. For example, between April and October the average duration of calls by working-age customers to our free 0800 numbers was 25 minutes and 28 seconds, while the average duration of calls to our 0845 numbers was seven minutes and 42 seconds. We have sought to use our resources to ensure that those making the longest calls—mainly to claim benefits—can make them for free. Again, that is an important distinction that we need to recognise. Duration of calls is a factor that we have taken into account for those lines used to make claims, because there can be quite lengthy discussions between DWP claimants and call centre agents.

We have touched on the cost of 0845 calls and what would happen if we replaced them. The estimate is that replacing 0845 numbers with a free service would cost in excess of £12 million, because of changes to contracts and significant migration costs, including changes to branding and marketing. It is unlikely that mobile phone operators would agree to extend the scope of the current agreement for free mobile calls to the DWP’s 0800 numbers to cover such an increase. The right hon. Gentleman talked about the number of unemployed people in his constituency. Spending £12 million on migrating to 0800 numbers would mean £12 million less to spend on the Department’s other activities. He is a former Treasury Minister and he will know about the priorities and difficult choices that Governments have to make about where money is spent. If we spend more money on free telephone calls, someone else somewhere in the system has to bear that cost. I want to ensure that as much of our taxpayers’ money as possible is spent on getting people into work, rather than on looking at further changes to the telephony service, particularly given that the longest calls made by people claiming benefits are to freephone numbers.

The right hon. Gentleman was slightly dismissive of the mitigation measures we have put in place to help customers. We will offer to terminate a call and ring the customer back if they are concerned about the cost. That service is available, and I think it is well known. I would encourage people who are concerned about the cost to use that service.

We also provide customer access phones in Jobcentre Plus. I suspect that if they were put in a soundproof booth in the corner, the right hon. Gentleman would accuse us of hiding them from claimants. I have known him long enough to suggest that that might be a line of attack that he might take. We ensure that the phones are visible and that they can be used. As part of our strategy, we are also encouraging more people to use online facilities to seek information and guidance. We have launched a new online service for jobseekers this week, which will help to improve the quality of service. We are trying to increase the number of ways in which claimants can contact the DWP without necessarily having to use the telephone service, and as we continue to develop our digital strategy, that will become an important part of how we deliver benefits. It is also a key part of universal credit.

In conclusion, we recognise that the issue about customer waiting times is an important one. That is why we have recruited more staff and trained them on 0845 benefit inquiry lines. The working age and pensions service lines have a central network management team that can move work around the network in real time to bring a balance of service delivery on all service lines. We are also trying to improve our call answering metrics. In line with the principles set out by the previous Government, which we have followed, we have ensured that calls in which people are making claims are free, to 0800 numbers, and that customers know that there are alternatives out there if they feel that the cost of calling an 0845 number is prohibitively expensive. We are taking the right action, and we want to continue to promote such alternatives to our claimants.

Question put and agreed to.

Draft European Union Budget

Debate between John Healey and Mark Hoban

Thursday 12th July 2012 Commons Chamber

[Mr Hoban]

I am pleased to have this opportunity to discuss the 2013 EU budget.

As Members will know, the economic climate in the EU has changed dramatically in recent years, and the situation remains fragile. The uncertainty in the euro area is the biggest challenge facing the EU economy, and there is a risk that it will affect growth and jobs in Britain. That is why we have pressed the euro area to address both the immediate challenges and the long-term systemic issues that it faces. In the midst of one of the biggest debt crises to hit Europe, this Government and Governments across the EU have made difficult decisions in order to consolidate their public finances and implement structural reforms.

The EU budget, funded by EU taxpayers, cannot be immune from the changes that are sweeping across Europe. An ever-increasing EU budget is not the way in which to fix Europe’s problems, and it is time for the EU to live within its means. That requires a strict reprioritisation and the targeting of areas that support growth and reduce the waste and inefficiency that has become characteristic of EU spending.

[John Healey (Wentworth and Dearne) (Lab)]

The Financial Secretary mentioned supporting growth. As he will know, as part of the preparation for the EU’s next budget period there are proposals for “transition regions” status, which could benefit at least 11 regions in this country. We in south Yorkshire are aware of the benefits that it could bring by supporting local jobs, businesses and growth. Are the Government in favour of the concept of transition regions?

--- Later in debate ---

[Mr Hoban]

I am surprised that the right hon. Gentleman has raised that point, given that the amendment tabled by a member of his own Front Bench calls for a more restrained budget and given that one of the consequences of a cut in the budget would be a further constraint on spending. Our main priority is to deliver a freeze in the multi-annual financial framework, and we need to establish which measures in the budget are consistent with that. However, we do need to focus on jobs and growth, and the biggest challenges in that regard are often presented by the newer accession states when the gap between their economies and those of countries such as the UK, France and Germany is at its widest. We need to focus on spending in the areas where there is the greatest potential for those countries to yield real fruits in terms of economic growth and jobs.

[John Healey]

I am not entirely sure whether that was a yes, a no, a maybe, or an “I don’t like to say.” The Financial Secretary will know that the qualification for transition regions status is a GDP that is between 75% and 90% of the EU average. Some parts of our country require that extra help; they need more balanced growth, and support for jobs and businesses. Does the Financial Secretary support the concept—I am not asking about the quantum—of transition regions in the next EU budget period?

[Mr Hoban]

The negotiations on regional funding are a matter for my colleagues in the Department for Business, Innovation and Skills, and I am sure that they will respond to the points that the right hon. Gentleman has made. Our overarching priority is to ensure that our spending in the EU gives us value for money, and the overall settlement for the next seven years and the multi-annual financial framework must reflect that. He may wish to participate in the debate on the preparations for the framework which will take place in European Standing Committee B when the House returns in September. That is one of the many opportunities for debate provided by my hon. Friend the Member for Stone (Mr Cash) in his role as Chairman of the European Scrutiny Committee.

--- Later in debate ---

[Mr Hoban]

My hon. Friend makes a powerful point. We need to view expenditure issues in the context of the impact of our contribution and how it is linked with the rebate, but I do not want this to turn into a debate entirely about structural funds. There will be many other opportunities to discuss those.

[John Healey]

rose—

VAT on Air Ambulance Fuel Payments

Debate between John Healey and Mark Hoban

Wednesday 11th July 2012 Commons Chamber

[Mr Hoban]

I do not have that information available but I will ensure that either my colleagues in the Department of Health or I write to the hon. Lady with it.

The second review that is being undertaken looks at the tax position of health care charities. The Secretary of State for Health is required by the Health and Social Care Act 2012 to lay a report before Parliament on matters that might affect the ability of providers of NHS services to carry out their activities. That report is expected to cover the full range of different providers, including charities, and will include taxation issues. Treasury officials will be actively involved in the review.

I therefore suggest that, rather than having a separate, Treasury-led review, the most efficient way forward is for the existing engagement to continue, and for the Department of Health and the Treasury to work collaboratively to consider the tax impacts of different funding models as part of the wider work already in hand.

[John Healey]

rose—

[Mr Hoban]

Perhaps the right hon. Gentleman will tell us whether he looked at the matter when he was a Treasury Minister.

[John Healey]

The Minister mentions the review under the 2012 Act, but it is a review of charities that carry out NHS services. The whole point about the air ambulance services is that they are not NHS services, although they play a great role in emergency health support. Therefore, they are unlikely to be covered by the second review. The Minister says that the review proposed in the motion is useful, but will he accept the motion and conduct the review it urges on him? I am still not clear about that.

[Mr Hoban]

I appreciate the right hon. Gentleman’s knowledge—he is a former shadow Secretary of State for Health—but my point is that the Treasury is working with Department of Health officials to ensure that the matter is covered by the review. I can confirm that, if it is ultimately not covered, the Treasury will carry out its own review. However, rather than having three reviews into air ambulances, I believe that two are sufficient if the second covers the tax issue. We are working with the Department of Health to ensure that that is the case. I can confirm to hon. Members that there will be a review and that the Government will not vote against the motion. Indeed, we believe it raises valid issues.

It would be possible in principle to introduce a refund system for air ambulance charities’ non-business activities, although it is important to consider that in the context of broader public spending, as I am sure my hon. Friends appreciate.

To refer to a point made by my hon. Friend the Member for Rugby, it is important for us to consider carefully how air ambulance charities can provide a better service by improving efficiency, and not just through refunds and tax breaks. Effective co-ordination of services could bring cost reductions that far outweigh the scale of a VAT refund on fuel. I am sure the House will join me in applauding such innovation and agree that we should continue to do all we can to improve this excellent service further. As my hon. Friend said, the air ambulance based in his constituency delivers a co-ordinated approach to providing the service across Warwickshire, Northamptonshire, Leicestershire, Derbyshire and Rutland. It has made significant cost savings and earned the transformational change award at the Orange national business awards last year.

I hope I have set out clearly my reasoning on why a change to the VAT law is impractical. I believe the best review on a level playing field for providers is being done by the Department of Health, but, as I have made clear, if that does not fully cover air ambulances, the Treasury will conduct its own, separate review.