HMRC Estate

Louise Haigh Excerpts

Tuesday 10th January 2017 Commons Chamber

[Jane Ellison]

I have had a number of conversations with, in particular, some of the hon. Lady’s colleagues who are based in Scotland, and I am, of course, always happy to meet any parliamentary colleague to discuss anything. No change in the plan for that regional centre is envisaged, but some of the challenges relating to West Lothian have been brought to my attention.

[Louise Haigh (Sheffield, Heeley) (Lab)]

Sheffield staff are already commuting considerable distances to their HMRC office because of previous office closures. Does the Minister not agree that HMRC can ill afford to lose 5,000 experienced staff at this time?

Given that HMRC has struggled to find suitable property in the suggested locations, may I ask the Minister to reassess the proposed locations on grounds of cost, ability to retain experienced staff and impact on customer service? Will she reassess them on the basis of evidence, rather than simply deciding which location in each region is easiest for Whitehall civil servants to get to?

[Jane Ellison]

I am pretty certain that that was not the rationale for the choice of locations. Very careful discussions took place. I will, of course, read the report and reflect on it, as will we all, and, as I have said, HMRC intends to respond in detail, but a great deal of thought went into choosing the regional centres. I acknowledge that some people will not be able to move because the distances will be too far to travel, and we certainly want to retain experienced staff. Those who will not be able to move will have a number of different levels of experience, but if we can retain their skills and ensure that they are at the service of the taxpayer through other Departments, we will obviously try to do so.

Outsourcing and Tax Credits

Louise Haigh Excerpts

Friday 4th November 2016 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the change in Government policy in relation to outsourcing and tax credits.

[The Economic Secretary to the Treasury (Simon Kirby)]

rose—

[Simon Kirby]

Not yet.

I can confirm that there has been no change in Government policy on outsourcing. I suspect that the hon. Member for Sheffield, Heeley (Louise Haigh) has asked this urgent question in the light of the recent concerns surrounding the Government’s outsourcing contract with Concentrix.

Her Majesty’s Revenue and Customs places the utmost importance on providing a quality service to its customers. As the Government have made clear, high standards were not met in recent months by Concentrix, the company HMRC had engaged to help us in the important work of tackling fraud and error in the tax credits system. Once this became clear, HMRC took steps to rectify the situation and deployed HMRC staff as quickly as possible. From that point, no new cases were passed to Concentrix, and HMRC took back 181,000 individual cases that were being managed by Concentrix. I can reassure the House that not only have all the 181,000 cases been finalised, but HMRC has now restored the expected quality levels of customer service to ensure people receive the tax credits to which they are entitled. HMRC continues to review outstanding cases in which a mandatory reconsideration has been requested, and it has taken steps regarding the future of the contract with Concentrix.

On 14 September, the Financial Secretary to the Treasury informed the House that HMRC would not be renewing the contract with Concentrix. Last week, she informed the House that HMRC is currently in discussions with Concentrix to agree a negotiated early exit to the contract. These commercial discussions continue. I want to be clear that HMRC will not go back to the market to seek another partner to replace Concentrix and provide additional capacity to challenge error and fraud in the tax credit system. There has, however, been no change in Government policy on outsourcing, which can be an appropriate way to deliver both quality public services and savings for the taxpayer. I assure the House that HMRC is committed to learning the lessons from the problems that have arisen over the past months, supported by the independent review of the National Audit Office.

[Louise Haigh]

Thank you, Mr Deputy Speaker, for granting this urgent question. I think we all agree that the continuing fallout from the debacle surrounding Concentrix will not be going away soon.

Last Thursday, the day after a debate in this House, the chief executive of HMRC announced to the Treasury Committee:

“We will not go back into the market for this kind of thing”.

He also said:

“We will not be going back to the market to seek a third party to help us in any way with this kind of thing”.

He was obviously referring to the outsourcing of tax credits. This announcement was unequivocal, and it represented a considerable shift for the Government and their policy on welfare. The implications of such an announcement for private sector involvement in our welfare state are profound.

The contract between Concentrix and HMRC has revealed the grotesque consequences of the profit model in our welfare state. The chief executive of HMRC now clearly agrees that the private sector has no place in the delivery of welfare. He is absolutely right, but it is still embedded deep within our social security system. The company Maximus is still operating a £500 million contract to deliver the work capability assessments for personal independence payments conducted by Atos that are causing deep distress for thousands. If having a trade-off between profit maximisation and the principles of our welfare system has been deemed inappropriate for those on tax credits, why is it considered appropriate in other sensitive areas of our welfare state?

By setting this precedent, is the Treasury not accepting that, when it comes to the sensitivities around welfare, the private sector is uniquely incapable of determining the best interests of individuals on welfare? If not, what were the principles underlining the unequivocal announcement that there would be no longer be any third party involvement? Will this extend to the operation of universal credit? If not, many will see these words as a cynical manoeuvre to raise the hopes of many who should never again have to deal with a company that has so singularly failed them in the delivery of welfare.

Furthermore, I seek clarity on something the Minister’s colleague said in a debate in this House last month. The Financial Secretary said of the way in which Departments do something, that

“there are circumstances in which the use of a private company offers a cost-effective way”.—[Official Report, 14 September 2016; Vol. 614, c. 910.]

Are we now right in thinking that, after this announcement, the Government do not believe that those circumstances extend to our social security system?

Finally, I want to press the Minister to release the key characteristics used by HMRC to profile the individuals whom Concentrix was then unleashed to target. Given the unprecedented distress that the targeting by key characteristics has caused and the commensurate levels of error that they evidently caused, it is very clearly in the public interest that they are now released. I would be very grateful if the Minister gave me a firm commitment this morning to provide me with that information.

[Simon Kirby]

Clearly, there are lessons to be learned from this—[Interruption.]

Concentrix

Louise Haigh Excerpts

Wednesday 26th October 2016 Commons Chamber

[Rebecca Long Bailey]

I completely agree with my hon. Friend. It is hard to believe that the number of fraudulent tax credit claimants suddenly increased so dramatically in those two years. What is clear, however, is that there is an ever-growing evidence base suggesting that Concentrix has been unfairly and unjustly stopping people’s tax credits, leaving them in financial difficulty, along with the anxiety that that causes.

I am pleased that the Government have accepted that the contract was not working. Indeed, they were forced to concede that point in an answer to a parliamentary question asked by my hon. Friend the Member for Sheffield, Heeley early last month. The response revealed:

“Since mid-October 2015 there has been 120 instances where Concentrix has not fully met the performance standards set out in the contract out of a total of 1625.”

Following mounting pressure from Opposition Members, the Government announced that they would not renew the Concentrix contract when it ends in May, and that they would redeploy 150 members of Her Majesty’s Revenue and Customs to clear the backlog of cases.

[Louise Haigh (Sheffield, Heeley) (Lab)]

My hon. Friend is making a powerful case. Is she aware that it was not actually until October last year that the Government started monitoring the performance of Concentrix, as was revealed to me in a parliamentary answer just a couple of weeks ago? That shows exactly why they have removed the contract now, because before that they did not even know whether Concentrix was performing the service standards laid out in it.

[Rebecca Long Bailey]

My hon. Friend makes a fantastic point. A whole section of my speech is devoted to particular clauses in the contract that may or may not have been enforced by HMRC and the Government. I will come on to that in due course.

Labour welcomed the announcement that 150 members of staff would be redeployed and that the contract would not be renewed, but we still had serious concerns that Concentrix would continue to handle cases and that the Government had not stated that they would bring the operation back in-house. Following further pressure from Labour and the Public and Commercial Services Union, the Government backed down and PCS confirmed last week that the operation will, indeed, be brought back in-house, with Concentrix staff in Belfast being transferred to HMRC.

We of course welcomed that action, but it does not even begin to address the wider issues. How did this situation arise? When did the Government first become aware of it? What action did they take? How will they ensure that it does not occur again? Most importantly, when and how will the victims be compensated? Media reports were surfacing as far back as 2015 in relation to erroneous tax credit decisions pursuant to the contract, and, as I have outlined, the figures indicated an unusual spike in appeals. The red flags were there and they should have been acted on.

I would like to direct the Minister to the contract between HMRC and Concentrix, which provided a number of tools that the Government had at their fingertips. Section I3.1 of the contract provides that where HMRC is concerned with the delivery of service, it can investigate. Was HMRC concerned, and if so, when? If the Minister cannot answer just yet, I will, to help her to pinpoint the information, illustrate further machinery in the contract that would have helped the Government and HMRC to find out about any problems pretty swiftly. Section E7.1 and schedule D provide for reviews of the contract’s effectiveness. Schedule D4.1 states that “prior to…Go Live”, HMRC would work with Concentrix to establish and agree a “robust Governance Framework” including contract management, communications, quality and assurance, payment risk management, performance management, change control and, most importantly, reporting. Will the Minister confirm the details of that “robust Governance Framework” for the benefit of the House?

If the Minister cannot do so, I can reassure her that fall-back options were still available. Schedule D12.1 states that HMRC would have full access to individual cases and, further, that Concentrix was under an obligation to let HMRC observe its working methods. Pursuant to that provision, were individual cases reviewed by HMRC, and did HMRC investigate the methods used by Concentrix? If so, how often did that happen and what were the findings of those investigations? It is clear that the Government had the tools that they needed to monitor service delivery, but perhaps they simply did not use them. The Minister will confirm in due course.

If the Government had found failings after exhausting the quite reasonable dispute process in the contract, they could have exercised the break clause found at section G3 by giving only three months’ notice. Will the Minister confirm whether and when that was considered, and tell us the outcome of that consideration? If, however, her answer to all my contractual questions is, “I don’t know,” I would ask whether she is really sure that HMRC had the capacity to monitor the contract effectively. She will be interested to know that PCS is due to publish a report on HMRC shortly, which suggests that

“the department is at breaking point…staff are hugely demoralised, 25% want to leave the department immediately or within a year and the department scores below average in all of the measures on the Civil Service’s annual staff survey.”

The report does not paint a happy picture.

--- Later in debate ---

[Jane Ellison]

Of course it is not acceptable—not at all. I would add that, as hon. Members may be aware, the opening hours of the MPs’ phone line have for some weeks been extended to cope with the larger number of calls coming through that route.

[Louise Haigh]

In her response to that urgent question, the Minister reassured the House that queries would be dealt with within four working days. We know that that simply is not the case, and many of my constituents have been waiting for weeks to hear back from Concentrix or HMRC about their tax credit award. Will she update the House about the deadline for dealing with these cases?

[Jane Ellison]

I will come on to that, but the hon. Lady has provided me with an apt moment to be clear about what I said on that day. I said that once we had established the facts of the case, people should be paid within four working days. Clearly, some cases are complex and need further details to be provided. In response to the urgent question, I said that once we had established the facts, an automated process would authorise payment to be made within four working days. That is the timeline to which HMRC is working.

As I have said, it is absolutely critical that we get the right information, establish the facts and get payments started again. To that end, HMRC took back from Concentrix 181,000 incomplete cases, and staff have been working hard to resolve them. I can update the House by saying that 178,000 of the 181,000 cases have already been finalised, which represents 98% of them. HMRC has already written to the people concerned in the other 2% of cases, and it should conclude those cases by the end of this month. I want to place on the record my thanks to HMRC staff for their efforts in that regard. HMRC staff are also taking on reviews that are requested of any decision made by Concentrix.

--- Later in debate ---

[Jane Ellison]

That is exactly right, and today’s debate is timely as it allows us to focus on that. I am now going to give way to the hon. Member for Sheffield, Heeley (Louise Haigh), who has done so much work on this matter.

[Louise Haigh]

I am grateful to the Minister for giving way—she is being very generous. As we have heard, the contract altered last year. Will she confirm how the contract was altered last October, and that it was altered because Concentrix was unable to make enough money out of it before then?

[Jane Ellison]

If the hon. Lady will forgive me, I will write to her on that. As commercial discussions are ongoing it would be best to write on something as detailed as that, and I am happy to do so.

--- Later in debate ---

[Louise Haigh (Sheffield, Heeley) (Lab)]

We are extremely hopeful that this sorry state of affairs marks the beginning of the end of payment by results in our welfare system. It has no place there, it creates perverse outcomes, and it has ruined the lives of thousands of people. Our social security system should be there to support people in their time of need, not to allow unaccountable conglomerates to make easy money chasing the voiceless and the vulnerable. Now is the time to draw a line under the grotesque profit model in our welfare system, because that model has failed: it has failed the individuals it was set up to help; it has failed employees; and it has failed the taxpayer.

All of us have horrific stories of individuals who have fallen foul of Concentrix. In my constituent’s case, her tax credits were cancelled while she was in a coma. Rather than answering for these failures, which lie squarely at the Government’s door, Ministers have preferred to throw this hapless contractor under the bus. However, as one senior Concentrix employee wrote to me:

“Every single action we took was directly informed by HMRC and was compliant in full with their guidance… there will be no investigation because there are paper trails after paper trails showing that we have only ever followed client instructions on amending claims.”

I was pleased to hear today that that is no longer the case and that there will be an investigation, because from start to finish this has been a mess entirely of the Government’s own making, and one for which they have not yet answered.

The company that conducted the trial that preceded Concentrix, Transactis, incorrectly removed entire awards regardless of evidence provided to the contrary. Despite the alarm bells that should have been ringing loud and clear in their ears, Ministers decided to push on. It was the beginning of a pattern that is now all too familiar.

Ministers have still not answered for structuring a contract that put maximising revenue at its heart in attempting to assess error and fraud—not accuracy, not meeting quality service standards, and certainly not customer service, but making as much money as possible off the backs of the vulnerable. Ministers have not answered for the measures they included in the contract to maximise revenue. HMRC “profiled”—that is the Government’s own word—1.4 million vulnerable individuals and then unleashed Concentrix to carry out its dirty work.

We do not know—they will not tell me, despite repeated requests—what indicators the Government used to establish which groups to target. Given what we have heard today, it is clear who was in that demographic: single mothers with children. It is some measure of justice that it was women like that—thousands of them across the country—who brought this contract crashing down with their articulate, brilliant campaign.

That is not the only issue with the contract, because the process also turned the burden of proof on its head. HMRC was asking tax credit claimants to prove that their claim had not been made in error. They were asking people to prove a negative, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) explained so eloquently. The Tax Credits Act 2002 clearly states that HMRC can amend or terminate tax credit awards only if it has significant grounds for believing that they are erroneous. It does not allow them to shift the burden of proof on to the claimant to disprove that a tax credit award has been made erroneously. That led one young mother to say to me, in tears, that she felt that she was being “treated like a criminal” and that Concentrix was treating her as “guilty until proven innocent.” One mistake like that would have been unacceptable, but 11,000 people had to apply for mandatory reconsideration in the past year alone. That cannot simply be passed off as a mistake; it was the deliberate design of the contract itself.

HMRC employed a contractor with just 500 staff to target over 2 million people. That meant the company’s pressured, poorly trained and low-paid staff were being instructed to open dozens of highly sensitive cases every day, leaving the phone lines permanently engaged, as we have heard. Concentrix staff have told me that the call volumes were such that the company would have needed to triple its staff in order to answer the phones.

Astonishingly, despite the failure of the trial, despite the highly sensitive nature of the contract, and despite the sheer volume of individuals a completely untested private sector provider had been designated to pursue, we now know that the Government did not actually monitor the performance for the first year of the contract. HMRC had no idea how many performance failures the contractor was incurring. Once it started monitoring that, it soon found out: over 120 breaches in the space of just nine months; and 13 black performance failures. Ironically, HMRC is up for an award this year for analysis and use of evidence. I very much hope that this is not viewed as best practice across Whitehall.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend share my concern that the chaos she is outlining will end up costing the taxpayer a whole lot more than any money that was saved in the first place?

--- Later in debate ---

[Louise Haigh]

That is a major concern, not least because HMRC has now had to allocate hundreds more staff to deal with the backlog that Concentrix caused, because this was failure on a monumental scale from start to finish. It seems that Ministers did not pay the blindest bit of notice until the scandal reached the media, because we now know that HMRC was about to renew the contract before the scandal hit.

The Government have traded on welfare as a dirty word, and now they are seeing the despicable consequences of their political attacks: single parents and families who have done nothing wrong being ruthlessly pursued by an unaccountable US firm for profit. Could this contract have been drawn up had the Government not fuelled a contemptible narrative about those on low pay and those who rely on tax credits to get by?

We welcome the fact that the National Audit Office will be investigating the drawing-up of this contract. Can we be assured that that will include the management of the contract and the profiling assumptions underpinning it? Will the NAO release any impact assessment that must have accompanied the contract? Will the Minister assure us that any compensation awarded will not be counted towards tax credit awards?

[Kevin Foster]

Does the hon. Lady agree that the National Audit Office is independent and works for this Parliament, not for the Government? Therefore, the NAO would structure how it conducted its inquiry, not necessarily a Minister. That is the core of what we want: somebody independent who will get to the nub of this and present evidence to this Parliament, not necessarily the Government.

[Louise Haigh]

I completely agree, and it is vital that this is an independent review, because, as we have heard on both sides of the debate, these problems originate from the Government themselves. However, we need to know that this information will be published, and if the NAO does not do that, we would call on the Minister to publish it alongside this inquiry.

Above all else, if the Government’s rhetoric is worth a penny, they will surely pledge to call time on contracts such as this, which target innocent single parents and families, and encourage the private sector to profit from them. That has no place in our welfare system.

--- Later in debate ---

[Simon Kirby]

Some of the information used was very poor—some of it applied to people who no longer lived at the address—but, at the end of the day, the review will provide lessons for us all to learn.

The hon. Member for Paisley and Renfrewshire South said that the evidence was flimsy. HMRC sent Concentrix cases to review if it thought that they were worth checking because there was an indication that the tax credits claim might be incorrect. Concentrix and HMRC will never be able to screen out all cases that do not involve error or fraud through data analytics alone. That is why—this point is important—HMRC and Concentrix write to customers to ask for more evidence to inform decisions.

The hon. Lady asked for an apology. At a sitting of the Work and Pensions Committee on 13 October, the chief executive of HMRC apologised for the worry and distress caused to claimants. On behalf of the Government, I echo that apology today.

The hon. Member for Stretford and Urmston (Kate Green) said that she thought that the letters were unconvincing and misleading. This is an area in which there are lessons to be learned. It was said that customers could not provide the evidence requested. Most people were able to provide the information asked for, but we want to make it easier and cheaper to supply information in the future, so we are looking at ways of improving the customer journey on tax credits.

[Louise Haigh]

Will the Minister give way?

[Simon Kirby]

I will keep going, if I may.

The hon. Member for Stretford and Urmston also asked whether the contract unfairly discriminated against women. It is important to note that as of April 2016, 88% of single claims were made by women, and 80% of single claims sent to Concentrix to check with regard to high-risk renewal were from women. I recognise this—

[Simon Kirby]

I will not—I have to respond to a lot of people.

I recognise that sensitivity is needed on tax credit claims and that claimants should be treated with dignity and respect. The hon. Lady also asked about penalties. The figures that will and have been deducted from payments, and the detailed calculations, cannot be disclosed at this point as they are commercially sensitive, but the amounts will be fair and appropriate.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) said that Concentrix was getting a rap on the knuckles. I point out that it is actually losing the contract.

My hon. Friends the Members for Torbay (Kevin Foster) and for Gloucester (Richard Graham) made particularly thoughtful and considered contributions. They have obviously given the matter great thought.

The hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) asked whether the contract was ended only because of poor call handling. That was not the case. The poor call handling had an impact on customers and resulted directly in tax credits being stopped. She also mentioned the downsizing of HMRC. An extra £800 million has been announced for HMRC. Using a private company in this way offered a cost-effective method of reaching a large number of people.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) asked whether this situation spelled the end for outsourcing. This is about cutting down on errors and some fraud, but HMRC will evaluate each case on its merits to deliver value for money for the taxpayer. It is fair to say that the lessons learned from this situation will help to inform future contracts.

[Louise Haigh]

That is the central point. As my hon. Friend the Member for Garston and Halewood (Maria Eagle) said, the information was duff, and was acted on incorrectly, because the contract was designed to incentivise Concentrix through profit to incorrectly target people and strip them of their tax credits. Will the Minister commit to reviewing payment by results across our welfare system?

[Simon Kirby]

I will not commit to that. The hon. Lady’s points will be picked up by the NAO. Not all the information was duff, but there are clearly lessons to learn from the exercise.

The hon. Member for Foyle (Mark Durkan) talked about the 30-day cut-off. Tax credit regulations require a claimant to be given a minimum of 30 days to respond to a request for information. The hon. Member for Dundee West (Chris Law) mentioned training. I assure him that Concentrix staff are trained in the same way as HMRC staff.

The hon. Member for Garston and Halewood (Maria Eagle) asked about unresolved cases. I am not sure whether the Financial Secretary was in the Chamber to hear that, but if the hon. Lady writes to my hon. Friend, she will, I am sure, do her very best to help to resolve those cases. The hon. Lady also asked about the significance of August. August was a particularly busy time.

Tax Credits: Concentrix

Louise Haigh Excerpts

Wednesday 14th September 2016 Commons Chamber

[Jane Ellison]

I have laid out the arrangements we are putting in place. The contract ends next spring. In the meantime, HMRC will support Concentrix on the outstanding cases—in particular, looking at more complex cases and supporting back-office functions while Concentrix staff focus on resolving already open cases. It is important to have a bit of perspective. Concentrix has assisted the Government and, indeed, the taxpayer in correctly identifying a lot of claims as either erroneous or fraudulent. It is important to keep the matter in perspective, but HMRC has made clear its operational intention not to continue the contract beyond the spring.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I thank the Minister and HMRC for reacting so quickly to issues and concerns raised in the House, but several questions remain. What estimate has been made of the current backlog needing to be dealt with by Concentrix and HMRC? How should those people currently being dealt with contact Concentrix—through the current helpline or by contacting HMRC directly? Why were these appalling failures not acted on before they were revealed in parliamentary questions, if HMRC was monitoring the contract so closely? Will HMRC bring the contract back in-house in May next year? Will the Minister today commit to a review of all payment-by-results contracts, which are completely inappropriate in our welfare system?

[Jane Ellison]

I am aware that the hon. Lady has been very active on this—she has asked a number of parliamentary questions and has shown considerable interest in the issue. It is important to note, and the performance figures support this, that it is only really in recent weeks that performance has not been acceptable. It is not that this has been an acute problem for a considerable length of time. However, performance has not been acceptable in recent weeks.

People should contact the number on the letters they have received. I am aware that there have been problems getting through on the phone in recent weeks, and have tested it out for myself. We are putting in additional resources to allow Concentrix to focus on answering the phones and dealing with outstanding cases while additional HMRC staff resolve some of the back-office issues and some of the complexities, so that people can focus on the immediate issue.

Some more mandatory considerations are coming in, but we think there are around 2,500 cases in the system still to be dealt with at the moment. We expect more to come in because it is that time of year, after people who have not supplied additional information as they were requested to have seen their tax credits stopped. We feel that, with that additional resource, we can resolve that quickly, and that is my focus.

Article 50: Parliamentary Approval

Louise Haigh Excerpts

Monday 11th July 2016 Commons Chamber

[John Penrose]

As I just said, the important thing—I hope this reassures my right hon. Friend—is that my right hon. Friend the Member for Maidenhead has been clear that Brexit means Brexit. That means that the destination, on which he and I both agree, is not in doubt. There are questions on how we get there, precisely how to run the negotiations and the precise timing of what gets addressed and when, and I hope that both he and I will allow our soon-to-be-installed new Prime Minister time to lay that out. I am sure that she will do so at the first opportunity.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I thank you, Mr Speaker, for granting this urgent question and my hon. Friend the Member for Bishop Auckland (Helen Goodman) for asking it.

The outcome of the EU referendum represents the most momentous constitutional change that our country has faced in the post-war era. Now is the time to take a considered view on the future of the negotiations and for the new Government to lay out the timetable, including when they anticipate that article 50 will be triggered. It should not be triggered, however, until there is a clear plan in place about what the UK will be negotiating for and how it will be achieved.

The Government have already indicated that they will consult the devolved Administrations and the Mayor of London, and they must do the same with Her Majesty’s official Opposition. That is the only way we can develop a consensus about what the country’s negotiating plan should be, and that should be put to a vote in this House.

The priority must be to ensure that the Government’s negotiating team, undertaking the most substantial set of negotiations on our behalf in modern history, are fully equipped, fully resourced and fully prepared to extract the best deal possible for Britain in the Brexit negotiations. There are 170 trade agreements that now need to be renegotiated, but it is suggested that only 20 people across the whole of Whitehall have the requisite experience to negotiate.

We have deep concerns that the autumn statement, which outlined drastic cuts for Whitehall long before Brexit materialised as a realistic possibility, is no longer fit for purpose. That is why Labour is saying to the Government that, while discussions about article 50 are vital, it is clear that what comes next matters even more. It would be an abdication of responsibility if our civil service negotiating team does not have the resources it needs and is instead forced to spend vital time implementing brutal budget cuts at home when it should be batting for Britain abroad. Let us properly resource our civil service and together develop a consensus for the future of Britain.

[John Penrose]

I am pleased to hear the hon. Lady say that there is an opportunity for cross-party consensus. It will be much more powerful for this country in any negotiations that it undertakes, not only with other EU member states, but with other countries around the world, if they know that the political parties and the people of Britain are speaking with one voice and that we are anxious to be an outward-looking, international country that is aiming to establish new links around the world. I welcome the hon. Lady’s comments on that.

I also agree with the hon. Lady that it is important that we have a clear timetable as soon as our new Prime Minister is in place, if only because—she is right to point this out—the details of the timetable have to be geared to maximising our negotiating leverage. We know where we are going; the question is how we get there. Clearly, the order of play—the order in which issues are addressed—and the timing have to be planned out incredibly carefully, to make sure, as she said, that we get the best deal possible.

The final point on which I agree with the hon. Lady is that about devolved Government. She is absolutely right to say that we need to make sure that the devolved Administrations are involved as well, so that this is not merely a question of cross-party consensus in Westminster. It has to be a question of consensus, as far as it is possible to achieve it, right across the UK.

Automatic Registration: UK Elections

Louise Haigh Excerpts

Wednesday 29th June 2016 Westminster Hall

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I add my congratulations to the hon. Member for Midlothian (Owen Thompson) on securing the debate, not least because, to my relief, his is a constituency that I can pronounce. I am grateful for the opportunity to respond to the debate and be part of moving the issue forward, as progress has been far too slow.

As has been said, this debate is incredibly timely because of the issues caused by the last-minute surge in voter registrations in the run-up to the referendum, which were discussed in the House earlier this month, and because of the general confusion about the entire registration process. Significant numbers of people simply do not know whether they are on the electoral register, whether they have to register every time or why they were not on the register for this important election. Many people just expect to be on the electoral register because they pay their council tax, because they interact with Government and because the Government know about them.

The debate is relevant today because, despite the recent surge, registration rates are still desperately low. We know the statistics from the excellent work that my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) did in bringing her ten-minute rule Bill before the House earlier this year. She mentioned the stark difference between pensioners in the shires and young men from ethnic minorities. I understand that a forthcoming study from the Electoral Commission will reveal that many millions of people are still missing from the electoral register.

I know the Minister will agree that we must do everything we can to encourage as many people as humanly possible to be on the register. That is why it was so important and so right to extend the deadline for registration in the run-up to the referendum, although perhaps some of us might regret that now. It is therefore perplexing that the Government have missed so many opportunities to improve registration rates. They were far too late to encourage the registration of students in university towns, despite having an excellent model on offer from Sheffield University. As far as I am aware, no action has been taken to deliver further pilots of online voting, as recommended by the Speaker’s Commission on Digital Democracy. We have had only a half-hearted commitment to reviewing e-balloting for trade unions, which would undoubtedly improve our industrial democracy. The Government are still proposing to use a completely out-of-date electoral register for the proposed boundary review.

I hope we can make significant progress with automatic voter registration. Significant work has already been done by organisations such as Bite the Ballot, which produced an excellent report, co-written by Oliver Sidorczuk and Dr Toby James, on the “missing millions” who have been mentioned. The Electoral Commission itself has put forward three credible options for automatic registration: automatically registering 16 and 17-year-olds, updating home movers’ details and confirmation matching. I state no preference for any of those methods today, but I urge the Government to explore them all and establish which will most significantly increase registrations while guarding against electoral fraud as far as possible.

As we know, automatic registration would bring many significant benefits. The register would be more complete, obviously: we would not see the peaks and troughs of registration that we currently have, which are a problem not only for elections but for statistical purposes and for exercises such as boundary reviews. There would be less confusion about whether people are on the register; the system would be significantly cheaper than the current one, as demonstrated by the example of Victoria, which has been mentioned; it would be more convenient for citizens; it would almost certainly be more up-to-date; and it would provide high-quality data that could be used by and shared with other agencies.

On that last point, devolution provides an opportunity to drive data sharing across the public sector and to deliver experimentation and innovation in our public services. It is right to devolve power down to local authorities so that they can take decisions as close as possible to where they are delivering services. We should seize the opportunity to finally break down some of the barriers between Departments and agencies, to ensure that whenever someone interacts with Government they are viewed as a whole person, not just dealt with in one Department’s silo. Automatic registration could play a major role in that. I completely support the comments of the hon. Member for Edinburgh East (Tommy Sheppard), and I press the Government to bring forward new data-sharing protocols.

There are obviously challenges, not least electoral fraud and the need for a clear opt-out from the open register, but they can be worked through by learning from Administrations who already operate such systems successfully. The Law Commission has published a thorough interim report on electoral law and plans to publish a draft Bill for Parliament to consider next year. Will the Minister update us on progress on that, and on the Government’s response to the Law Commission’s report?

Will the Minister also update us on the progress of the Greater Manchester trial? It is absolutely right that devolved authorities have the control and power that they need to drive registration, and I very much hope the Sheffield city region will be given the option to trial such a scheme. Will the Minister confirm what conversations or offers have been made to other devolved areas? Will he consider requiring local authorities to put information about polling stations online? It is frankly ridiculous that that information is not digitally available to voters on polling day.

The Law Commission has said that current electoral law is an “unworkable mass” and that it is “complex, voluminous and fragmented”. Devolution and the fallout from the referendum present a prime opportunity to review that situation and consider options such as automatic registration. I hope the Minister will grasp that opportunity with both hands.

The vote last Thursday revealed the deep dissatisfaction in this country with the political establishment and the status quo. Despite politicians’ best attempts to be as accessible and as grounded as possible, we are seen as exactly the opposite. We are viewed variously as corrupt, immoral and sometimes merely irrelevant. Tragically, that general attitude culminated in the brutal murder of one of our finest colleagues less than a fortnight ago. We in this House have a duty to fix that, to improve the climate in which we debate ideas and to reach out to those alienated by our political debate. The people who are excluded from the process as it currently stands are exactly those we need to prioritise and reach out to. Fundamental electoral reform is now an immediate necessity, and automatic voter registration must be a part of it.

Bank of England and Financial Services Bill [Lords]

Louise Haigh Excerpts

Monday 1st February 2016 Commons Chamber

[Mr Gary Streeter (South West Devon) (Con)]

I, too, will be brief, as I wish to catch the eye of the occupant of the Chair during the next debate.

I am pleased to be able to support a Bill that, in my view, takes our regulatory system in the right direction. However, the Bill does not deal only with the Bank of England. It also contains clauses relating to related personal finance matters, and I want to focus on those.

Last week, I met colleagues in the cross-party debt management working group to discuss the growing problem of consumer debt, which currently stands at 142% of overall household income. I believe that the Bill provides an opportunity to effect what would be a small legislative tweak to bring about an urgently needed change in the sector. The Minister gave me some hope that she was thinking along the same lines when, towards the end of her speech, she spoke of taking more action on behalf of consumers, but we shall have to see what happens in Committee.

Debt management is becoming an increasingly inefficient industry, and consumers are getting a bad deal more often. Some debt management schemes charge the debtor, while others are free to the debtor and charge the creditors. The quality of service offered by debt advisers varies greatly, as do the costs. As we know, most people, when they reach the point of desperation and realise that they have a problem and need help, do not sit down and research the sector in depth for 24 hours, but opt for the first helper who crosses their path. If it turns out to be a provider whom they must pay, that is often because they do not know that free help is available.

Free debt management plans, such as those offered by organisations such as PayPlan and Christians Against Poverty, may not be the solution for everyone, but their availability to those who can and want to repay their debts is important, and is becoming increasingly threatened. “Fairshare operators” such as those whom I have just mentioned have arrangements with creditors providing voluntary contributions that allow services to be provided for consumers without charge. Fairshare revenue, which is paid as a percentage of the debt repayments, has reduced as a consequence of a fall in consumers’ average disposable income, which has restricted the capacity to take on more economically viable cases. Those operators will ultimately have to reduce the number of new cases that they take on as funding become increasingly unsustainable.

Unless we correct the position, consumers who get themselves into difficulty will inevitably need to increase their use of providers who charge high fees for the same service, which may amount to up to half the debt repayment. If the plan provides for someone to pay £70 a month, a further £35 may have to be paid to the debt management plan company rather than reducing the debt. That significantly increases both the time and the cost involved in solving the problem. One solution would be the introduction of a new system—as the Minister knows, a small amendment has been tabled to this effect, which could perhaps be considered in Committee —whereby all debt advice operators must offer a sustainable debt management plan that is free to the consumer and funded by creditors at a lower cost than is the case at present.

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is vital that we tackle the debt advice and lending industries. We have a fantastic “buddy” in Sheffield called Sheffield Money, which is trying to do just that. However, the Office for Budget Responsibility has estimated that the measures in last year’s Budget will increase unsecured individual lending by £40 billion by 2020. Does the hon. Gentleman share my concern about that?

[Mr Streeter]

Regardless of the amount by which personal lending increases, what is important is the availability of help for those who get themselves into difficulty, and we may see an increase in the number of people in difficulty if interest rates rise towards the end of the year. I know that that would cause pain to a great many of our constituents, so it is important to get the system right now.

With a supportive FCA framework already in place, a fairly minor amendment to the Bill could effectively set a fee structure that would activate the provision of free debt management plans by authorised firms. I hope that my Front-Bench colleagues agree that action is needed soon, and that the Bill represents a timely vehicle for the necessary change.

I believe this to be a truly cross-party issue, and that the Bill needs to be amended to give people in debt more security and access to free, high-quality plans that help them to manage their finances. If interest rates do go up any time soon, the debt management sector may be called on to give even more support than it provides now, and this is therefore a good time to strengthen the system.

HMRC Office Closures

Louise Haigh Excerpts

Tuesday 24th November 2015 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

First, it is nice to see the Treasury Minister on the Front Bench. It is a shame, however, that he did not feel it was necessary to come to the House of his own accord to account for his unprecedented reorganisation of HMRC. I congratulate the Scottish National party on securing this important debate.

One issue that has not been covered so far is that of HMRC staff in lower bands who rely on tax credits to supplement their income. To travel from Sheffield to Leeds, as they will have to in future, some employees will receive an excess travel allowance. However, the allowance is tax deductible and could take them over the threshold for tax credits, meaning they lose their entitlement to that lifeline. Is the Minister aware of this issue, and will he look into the specific cases of those on tax credits employed by HMRC who may lose out as a result of this decision?

It is difficult to imagine that in a county such as Yorkshire—the largest in England, in which person could be up to 100 miles from Leeds—there will not be significant disruption for staff and taxpayers alike. What are the enhanced transitional arrangements to deal with HMRC being “rationalised”, in a county of our size, into one regional centre? What steps has the Minister put in place, not just for the tax official in my constituency who will have an 80-mile round commute—way beyond the one-hour suggested guideline—but for the small business owner living in Grimsby who wants face-to-face tax advice and will now face a 150-mile round trip for the privilege? The Minister and I both know it is unlikely that that person would make that trip. As a result, individuals will continue to be overpaid or underpaid, wasting HMRC’s time. In the past year for which figures are available, mistakes in the calculation of pay-as-you-earn led to almost 5 million people being mistakenly overpaid or underpaid. Almost a quarter of all tax investigations remain open more than 12 months later, and 3,800 are open over three years after being opened.

These issues are not new to the Government. In 2011, the Select Committee on the Treasury found that there were

“Unacceptable difficulties contacting HMRC by phone”;

it recommended that HMRC improve the service at contact centres, and the better targeting of letters that threaten serious consequences against individuals. That recommendation is particularly relevant. Many hon. Members have constituents who will have been contacted recently by the US multinational Concentrix, a company contracted by HMRC to handle some of its functions relating to tax credits. The performance of Concentrix has been little short of abysmal. A report by the National Audit Office in July revealed that the £75 million contract has resulted in savings of just £500,000—somewhat short of the £285 million that was projected. Tax credit recipients are bearing the brunt of the failing contract; tax credits have been wrongly stopped by Concentrix, and people have simply been unable to get in touch with it, leading to serious financial hardship.

In response to the same Select Committee report, the Government said that

“HMRC conducts full reviews before any changes are made to the opening hours of its face to face enquiry centres. The recently introduced changes”—

in 2011—

“in opening hours were made only after extensive public consultation, including a full equality impact review.”

They also said that the physical presence of HMRC is based on a geographical picture of the areas of higher tax risk across the country. In this unprecedented reorganisation, however, there has been no public consultation. The new offices’ locations have been based not on a picture of tax risk, but instead on wherever is most convenient to the Government in each region. I hope the Minister will correct me on this assumption and answer some of my questions. More broadly, the Opposition hope that the Government will recognise that the closures are the falsest of false economies, and will serve only to reduce tax take and damage further the relationship between HMRC and the businesses that sustain our economy.

Finance Bill

Louise Haigh Excerpts

Monday 26th October 2015 Commons Chamber

[Mr Baker]

In ascending order of difficulty, there are another four things the Government could do. The first is to do what new clause 7 would impose on them, which is to negotiate within the existing EU framework to deliver a zero-rating on tampons and sanitary products. The second would be to renegotiate the power to set such taxes. I commend that to the Minister, and I hope he will comment on the Government’s willingness to repatriate all tax powers, particularly VAT, back to this country. The third is to legislate, notwithstanding the European Communities Act. It seems to me that that would be a bold move, but I would certainly support it to end the problem swiftly, and I hope that Members on both sides of the House would support that. The final thing that could be done would be for us to leave the European Union and, as my hon. Friend the Member for St Albans (Mrs Main) said, decide for ourselves in this House matters of taxation that apply to all our constituents.

This evening, I want to listen extremely carefully to what my hon. Friend the Minister says. It is quite clear that we can no longer go on saying that this issue of the taxation of tampons and sanitary products is too difficult to push through all the member states and the European Commission. Clearly, action must be taken that is robust and dynamic. I must say to those who criticise us for being Eurosceptics that we know we are taking a risk. Unlikely as it seems, the Commission and the member states may well rise to the occasion and solve the problem. Well, good on them if they do. I should be very glad indeed to see no tax on these products right across the European Union.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I imagined that the hon. Gentleman and some of his colleagues would welcome the Government’s being able to report to the House in February or March next year whether it was the Commission, other member states or poor negotiating powers that had failed to achieve this measure. Would he not welcome such transparency?

[Mr Baker]

I remind the hon. Lady that I have added my name to the new clause. My point is that this situation cannot continue any longer, and I hope the Minister will say that the Government accept the principle that tampons and sanitary products should be zero-rated. I hope they will explain why they are not able to bring such a measure before the House, and that the Minister will commit robustly to advancing this cause in the interests of women in the UK and across Europe this year and in future. We should get the whole thing cleared up as soon as possible.

Tax Credits

Louise Haigh Excerpts

Tuesday 20th October 2015 Commons Chamber

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I am pleased to follow the hon. Member for Erewash (Maggie Throup) because I see a very different situation. I genuinely believe that the different situations that we see and the consequences of the tax credit cuts that the Government are introducing speak volumes about the choices that the British people face.

I want to take up the challenge set by the right hon. and learned Member for Rushcliffe (Mr Clarke). He rightly said that those of us on this side of the House are not an Opposition. I agree with him: we are an alternative. I want to set out what being an alternative means and why we would take different decisions on tax credits.

First and foremost, as my hon. Friend the Member for Streatham (Mr Umunna) pointed out—I am sad he is not here—the order in which change happens is crucial to the impact that it has. There is general agreement in the House that we all want to see a higher wage, lower welfare economy and higher productivity. Surely the test of every change the Government make should be whether it will achieve those things. The simple answer is that this change will not.

The evidence from the Institute for Fiscal Studies shows that none of the Government’s changes to mitigate the impact of the cuts will raise family living standards. As the right hon. and learned Member for Rushcliffe pointed out, employers are raising wages. I am a little more cynical than him and suspect that they are doing so because changes in the law are coming, rather than out of benign munificence and a recognition of the benefits to productivity of paying a higher wage.

Nevertheless, the order in which the Government are undertaking the changes will make all the difference to the people in this country. They could decide to change the order and introduce the so-called living wage first, then look at the tax credit cuts. That would make a difference because of one matter that was sorely absent from the Exchequer Secretary’s contribution. I am surprised that he did not mention it, given that he used to be an expert on it. He is presiding over an economy in which personal debt is rising at an alarming rate. The Minister looks quizzical. He says that the burden of the Government’s changes is being distributed equally, but the burden of personal debt is not equally distributed in this country, as we see at first hand in our communities. We see families for whom borrowing on a credit card or from friends and family, or taking out a payday loan, is the only way that they can make ends meet.

[Louise Haigh (Sheffield, Heeley) (Lab)]

My hon. Friend is making a fantastic speech and I, too, am confused about why the Minister is looking so perplexed. The Office for Budget Responsibility stated that because of measures introduced in the Chancellor’s Budget, unsecured borrowing will rise by £45 billion by the next election. My hon. Friend’s point is pertinent to the debate.

[Stella Creasy]

The Minister kept talking about the amount of public debt that he wanted to attribute to each household, but average unsecured personal debt is now £10,000 per household. Given the vulnerability to which families are exposed when they have that level of unsecured debt, will the changes make it more or less likely that such personal debt will rise? No one in the House would argue that the changes as currently constituted will not lead to a rise in personal debt to families, and we know the consequences of that. I pay tribute to the hon. Member for South Cambridgeshire (Heidi Allen) who honestly and openly set out the consequences of debt. She explained the worries she has when she sees families who are struggling with debt, and Labour Members share those concerns.

--- Later in debate ---

[Louise Haigh (Sheffield, Heeley) (Lab)]

It has been astonishing to hear Conservative Members stick to their desperate defence of their indefensible policy of slashing tax credits for millions of families when they know that they are neither economically justifiable, nor socially defensible. These cuts are just one more example of the Government’s policy of moving public debt, which originated in the financial sector, off their books and on to the lowest-paid and middle earners, who simply cannot afford it. Rather than moving away from an economy based on debt, which the Chancellor said that he wanted to do, he has in fact created one.

Unlike this Government, I believe that economic common sense and social solidarity not only go hand in hand, but are the bedrock of a healthy and functioning society. We cannot have a healthy functioning economy if our fiscal policy is to transfer debt from the public purse on to the unemployed, the lowest paid and middle income individuals and families, and if secured debt becomes unsecured and unaffordable. The Chancellor should know where that leads because the Governor of the Bank of England has spelled it out for him.

Over the summer, Mark Carney warned that household debt was one reason why the recession was deep and the recovery so grudging. If enough people are highly indebted, that can have big macroeconomic impacts, so that lending standards become irresponsible to reckless. Those are some of the same risk factors that led to the global credit crunch in 2007. The structural flaws remain, but we now have one very clear difference. We have a Chancellor who is exacerbating the structural flaws by heaping public debt on to the low paid, and who acts without regard to the personal economic nightmare he is visiting on the homes of working families. That is why the Labour party is so fundamentally opposed to these measures.

An inclusive and healthy economy cannot be built while we are hurting working people. It can only be built by investing in them and supporting them. Our party believes in that to our soul, so while the Tory party spends millions on branding itself as the party of working people, those working people who have been let down by the Prime Minister will know that the Labour party is working for them.