Tax Credits: Concentrix

Lord Davies of Oldham Excerpts

Wednesday 14th September 2016 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, the House will be grateful to hear that the contract is to be terminated, but it is quite clear that Concentrix will still be involved over the next seven months, despite its deplorable record. We should recognise just how badly affected those who are dependent on tax credits have been through the operations of this company.

Only yesterday, the House assented to the Finance Bill, in which cuts to corporation tax and capital gains tax which benefit relatively few were agreed, but today, we have this appalling story of ordinary people—there are 4 million and more people dependent on tax credits—vulnerable to the operation of an American company which provides a public service for profit and has made very many mistakes. We need to hear from the noble Lord about not just the patch-up over the next seven months but the future operation of tax credits.

[Lord Young of Cookham]

I am grateful to the noble Lord for his comments. I begin by apologising to all those who have been distressed by an unacceptable level of service, to which the noble Lord referred. I know from my experience in another place how distressing it can be if families who are, by definition, on low incomes, suddenly find that a flow of income is stopped. Referring to the action now being taken, a priority is to deal with those cases where payments have been stopped. As I said, HMRC has now seconded another 150 staff to tackle the backlog of cases, to see whether we can get them up to date. As for the future, the contract will not be retendered. At the moment, the bulk of the work is being done by HMRC and, as from next May, it will do all the work. Looking ahead, over the next six or seven years, those on tax credits will move over to universal credit, and that system will incorporate the lessons we have learned running the procedures under tax credits.