HMRC Estate Transformation

Mel Stride Excerpts

Tuesday 29th January 2019 Commons Chamber

[The Financial Secretary to the Treasury (Mel Stride)]

With permission, Mr Speaker, I would like to make a statement relating to Her Majesty’s Revenue and Customs estate transformation.

In the 2015 spending review, the Government announced HMRC’s locations programme to transport the Department’s office accommodation across the United Kingdom, moving from 170 legacy offices to 13 regional centres over the space of 10 years. I am pleased to report to the House that HMRC has now successfully secured sites for each of these 13 regional centres. This is a significant milestone in the Department’s trajectory towards serving the taxpayer from buildings that facilitate more efficient and technologically adept working across every region and country of the United Kingdom. This year will see two regional centres open in Belfast and Bristol —the first to follow the pilot in Croydon and to learn from the Department’s findings there. I will be receiving the keys from the developer on behalf of Her Majesty’s Government in the handover next month in Bristol.

The HMRC offices in 2015 varied hugely in size, quality and accessibility of location, but HMRC has since worked towards offices that are well equipped and large enough to offer serious career progression in city centre locations that allow for travel across the country as well as the recruitment of local graduates. The higher standard of building, designed to support digital, flexible ways of working, is an integral component of HMRC’s broader plans to better provide service to the taxpayer at a lower cost. It is by making better use of technology and working differently that HMRC can become a more highly skilled organisation, maximising revenue, increasing compliance and further reducing the tax gap. Its Croydon regional centre is already open, impressing those who visit it with a new understanding of what it means to work for the civil service and providing a valuable prototype for the remaining offices.

Securing the locations of these 13 offices is an important step in the wider Government plans to create hubs across the country, and to move civil servants out of London and the south-east. The regional centres are not just offices for HMRC, but form part of Government hubs and sites for cross-Government work. NHS Digital will be taking space in the Leeds regional centre, for example, and the Department for Work and Pensions will be taking space in Birmingham.

The Cabinet Office is responsible for the wider Government hubs programme and it plans to align Government policy so that it is efficiently used and maximises opportunities for, and productivity of, civil servants. HMRC’s 13 regional centres are the first phase of delivering this vision. I am proud that the public sector is stepping up to the forefront of industry, thinking about what an effective, flexible and inclusive working environment looks and feels like. Far from lagging behind the private sector, HMRC is delivering offices that are suited to the 21st century, maximising current technology and planning ahead for what further change might be in the pipeline. Not only will this enable HMRC to provide its customers with good service while cracking down on the dishonest minority, it is also excellent value for money, saving over £300 million in the 10 years of the programme up until 2025 and then saving a further £90 million a year from 2028.

The route to this transformation is balanced by the recognition that, to protect HMRC from business disruption, current staff and their expertise should be retained wherever possible. HMRC believes that about 90% of the staff that it had at the start of this transformational journey will move to a new regional centre or finish their careers in their current offices. To further manage potential disruption, the Department is keeping eight transitional sites that will be open for longer to help to maintain continuity.

As HMRC gears up to manage the workload resulting from exiting the European Union, it is also providing additional space in regional centre cities for additional staff and retaining some space for longer so that the planning can benefit from the knowledge and experience of existing personnel.

To transform the services that HMRC delivers for the United Kingdom, we are modernising almost every aspect of what we do. I am proud that HMRC is at the forefront of this change within the civil service, and I commend this statement to the House.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I was given advance notice of the contents of this statement while I was in the Chamber for Treasury questions, and therefore time has been limited to prepare for it. I am surprised that we are now discussing this matter given that I and many of my colleagues have repeatedly raised problems with the Building our Future programme and generally been met with one-sentence answers from the Government.

The Minister maintains that this announcement has come today because of the successful securing of sites for 13 regional centres, so I hope that he will indicate to this House which centre was secured yesterday to justify this statement being presented today. When will he publish the list of precise locations of each of these centres, given that he maintains that we have today secured those new places? That would be enormously helpful for us, because without that information we will be forced to conclude that this statement has been made today for reasons other than its newsworthiness.

In July 2014, HMRC published the Building our Future proposals on reforming tax collection services for the next five years. In November 2015, HMRC announced plans to cut the number of offices from 170 to the 13 that are, apparently, having their locations announced today. In January 2017, the National Audit Office published its report on that process. It indicated that that original plan was unrealistic. It stated that the estimate of estate costs over the next 10 years had risen by nearly £600 million—almost a fifth—with more than half of that being due to higher than anticipated running costs for the new buildings. The National Audit Office also forecast a further 5,000 job losses and said that the costs of redundancy and travel had tripled from £17 million to £54 million due to this programme.

So what exactly is happening now among the HMRC workforce as a result of Building our Future? Some 73% of HMRC staff surveyed said that the Building our Future plans will undermine their ability to provide tax collection services. Half of them said that it would actually undermine their ability to clamp down on tax evasion and avoidance. I have to say that that was my assessment as well when I visited a number of current and former HMRC offices right across the country— 10 of them—over the past few months.

The Government say in this statement that

“90% of the staff that”

HMRC

“had at the start of this transformational journey”—

a piece of jargon if ever I heard one—

“will move to a new regional centre or finish their careers in their current offices.”

During the visits that I conducted, I did hear about staff finishing their careers—they were finishing their careers early because they could not travel to the new regional centres that the Minister is trumpeting today. People from Wrexham were being expected to travel every single day to Cardiff or to Liverpool. People from Exeter were being expected to travel to Bristol. These journeys are simply not feasible for people with caring responsibilities and simply not feasible on public transport.

I note that the Minister said that having city centre locations leads to a situation where it will be possible to recruit local graduates, but of course what his Department has forgotten, and what the NAO reminded him of a couple of years ago, is that in many of these city centre locations the labour market is far tighter, so we often find that there is actually an enormous recruitment problem rather than the bonanza that might be suggested to people who read his statement uncritically.

At the end of the statement, the Government accept, it seems, the need to learn from expertise. I will quote the sentence, although it pains me a little to do so given its construction:

“As HMRC gears up to manage the workload resulting from exiting the European Union, it is also providing additional space in regional centre cities”,

which I assume means offices,

“for additional staff and retaining some space for longer so that the planning”—

of what, we do not know—

“can benefit from the knowledge and experience of existing personnel.”

Well, that raises almost as many questions as it answers. The situation is still unclear about where 5,000 extra customs staff will go—a point I will return to later.

None the less, that sentence, as garbled as it is, suggests that HMRC wants to build on existing experience, but that principle is just not being followed in the Building our Future programme. We had within HMRC centres of excellence across a whole range of different specialisms, whether income tax fraud or the different kinds of multifarious problems that taxpayers can have in filling out their self-assessment forms. Many of the staff who were employed in those specialisms have either already left or are thinking of leaving. A great example of this is what we have seen happening in Swindon, which was previously a centre for income tax fraud. There is now a centre of excellence being built up on that in Liverpool, but with none of the same staff and with none of that expertise. It is being built up from scratch, creating huge inefficiency.

The Government have dogmatically refused to reassess the Building our Future programme apart from when they have been forced to do so—as they acknowledge very, very briefly in this statement—and that is exacerbating problems in HMRC. The attrition rate is greater than the hire rate. We saw in 2014 an absolute reduction in staff of over 3,000 and in 2015 an absolute reduction in staff of over 4,000. In 2017, the UK had the second highest attrition rate out of the 55 countries that share data on their tax services. There has also been incredible mismanagement, with the release of 5,600 customer services staff and then, in 2015, the hiring of 2,400 new customer services staff. It is no surprise that morale is at rock bottom in HMRC.

I therefore want to ask some very quick questions of the Minister. Which new regional centre was secured yesterday? When will we have the list of locations of regional centres? If 90% of positions are retained or vacated due to people finishing their careers, does that mean that 10% of people in HMRC are going to be made redundant? Have there been any reviews of these plans in the context of Brexit? Has the Minister thought about the impact of this on the local economies that are so dependent on these jobs, as raised by many of my colleagues?

[Mel Stride]

I thank the hon. Lady for her response. I will pick up on some of the points that she has raised.

The hon. Lady asked why this statement is being delivered today. I think that she partly, at least, supplied the reason for that herself, in that she has shown a very keen interest in these matters, as have many other Members across the House, quite rightly. It is right, as we have always said, that we will be transparent in the roll-out of this transformation programme, and today is part of that process.

Towards the end of the hon. Lady’s remarks, she called for a review of our arrangements in the context of Brexit and the customs arrangements that our country may face. That is the second reason why it is important that we consider these matters. The debate this afternoon will rightly focus on preparedness, among other matters, and HMRC and its transformation programme lies at the heart of the issues that will be debated.

The hon. Lady asked for the locations of these sites. I believe they are all in the public domain, but I am happy to provide her with a list. She also made several observations about the NAO report and value for money. We are still confident that we will meet our roll-out end date of around 2025. In terms of value for money, there will be savings of some £300 million across the 10 years. I remind the hon. Lady that we will be getting out of a substantial number of private finance initiative contracts that the existing offices are engaged with—PFI contracts that were brought in under her party’s Government in 2001. One driver of additional value for money is that we will be able to unpick the unfavourable arrangements that her party’s Government got us into in the first place.

The hon. Lady asked about the cost of redundancy. I said in my opening remarks that some 90% of those who will be impacted by these moves will either conclude their career in their existing offices or relocate to the new regional hub. The overall thrust of these changes is to ensure that we are better equipped at getting in more tax. It is very much a Labour philosophy that every solution has to involve more money and more people, whereas our approach is adjusting with the times and getting offices in place that are fit for the 21st century, often using complicated data-based interrogation techniques, for which large regional hubs are the way forward.

Some of the 170 legacy offices that the hon. Lady seems so intent upon protecting had under 10 staff in them. Most of the processes carried out by those staff were manual in nature rather than technology-driven, so they were far less efficient. For example, over 80% of self-assessment returns are now done in a digital format, which is why it is important that we move to this model.

I turn to the hon. Lady’s remarks about the staff themselves, who have been at the heart of our considerations as we have rolled out this process. All staff are given at least one year’s notice of any proposed change. They are quite rightly given face-to-face meetings with their managers to discuss the changes and assistance that they may require. In determining the locations of the regional hubs, HMRC mapped out the journey to work of the staff who would be impacted, to ensure that that was one of the principles taken into account when assessing where the locations should be. Those who have extended travel arrangements as a consequence of any move may be given assistance with additional travel costs for between three and five years. Transitional offices, which the hon. Lady raised, will provide additional opportunities for continuity of HMRC’s work and the opportunity of employment for those within these arrangements.

There is a purpose to this. It is not just about saving money, closing offices, suggesting that we are ready for the 21st century or making change for the sake of change. The purpose of these changes is to ensure that we continue the excellent work that HMRC is carrying out in clamping down on avoidance, evasion and non-compliance. The proof of the cake is in the eating: some £200 billion has been brought in or protected since 2010, and we have one of the lowest tax gaps in the world at 5.7%. That does not happen by magic; it happens by having an HMRC that is lean, efficient and up to the job. I commend this statement to the House.

[James Duddridge (Rochford and Southend East) (Con)]

More than 1,000 people work for HMRC in Southend. I understand that Southend will not be a regional centre, but what does this mean for the people who work in HMRC in Southend? Do the words “eight transitional sites” offer them any short-term hope? Will the Financial Secretary work with me to ensure that the figure is 90%-plus in Southend?

[Mel Stride]

I thank my hon. Friend for his question. As he will be aware, we have announced that we will retain the Southend office until the end of 2022, but I am happy to meet him to discuss that matter.

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the Financial Secretary for giving this statement and for advance sight of it. It is clear that he has drawn the short straw today—perhaps it is penance for his “no food, no channel tunnel” gaffe. Somebody needed to give a statement so that we had less time for the Brexit debate, and at least 10 fewer Members will get to speak in it as a result of this statement.

This is an important statement, but the timing is bizarre, given that on 8 January HMRC produced on its website a list of addresses and details of the transitional sites. How come it has taken 21 days for the Financial Secretary to come to Parliament to allow us to ask questions on this statement? How come it happens to be on the day when we are discussing Brexit?

As the hon. Member for Oxford East (Anneliese Dodds) said, the entire programme of transformation and the way that this has been gone about is completely bonkers. Dedicated, experienced staff are being forced out of HMRC as a result of these closures. Communities such as Cumbernauld and Livingston are losing thousands of jobs as a result of these changes. Why on earth does the Financial Secretary think it is good value to close a large out-of-town office and move it to a city centre location where rents are hugely in excess of those in out-of-town locations, where staff will have massively increased travel costs to get to work and where business rates are likely to be far higher? Why does he think that this is a good idea?

The Financial Secretary said that 90% of staff who were at HMRC at the beginning of this process will still be there at the end. What about the 10% of staff who will not be there at the end? Will those staff be made redundant? How many of those 10% of staff are in Scotland?

People worked in HMRC offices in Inverness, Wick and Aberdeen, but the only regional offices in Scotland will be in Edinburgh and Glasgow. Does the Financial Secretary realise how long it takes to get from Aberdeen to Edinburgh, from Inverness to Glasgow or from Wick to Glasgow? It takes the best part of a day to get there from Wick. There is no way that people can commute that distance.

In terms of the customs checking functions that HMRC will need to perform, does the Financial Secretary believe that there will be adequate geographical coverage of customs staff once Brexit happens? More checks by customs officers will be required at those ports, and if it takes them a day to get to the port, there will be even more of a hold-up than is being suggested in a no-deal scenario.

I understand that HMRC is taking on an extra 5,300 staff to deal with Brexit planning. Could the Financial Secretary confirm how many of those 5,300 staff who are being taken on or have been taken on are in Scotland? How many of the 3,000 additional customer service staff who have been taken on are in Scotland? How many jobs will HMRC have in Scotland at the end of this process compared with the beginning? Lastly, I want to know why the Financial Secretary has taken 21 days to come to the House to tell us what was published on HMRC’s website on 8 January.

[Mel Stride]

The hon. Lady raised a number of questions, one of which was about the issue of staff.

[Neil Gray (Airdrie and Shotts) (SNP)]

Answer the question.

[Mel Stride]

If the hon. Gentleman gives me a moment, I will do precisely that, as I always do.

The answers to the hon. Lady’s questions relating to staff and the way in which we will be handling the staff are as I have set out. All staff will have at least one year’s notice of any impending move. The mapping process that HMRC undertook, as it went into the detail of where to locate the regional hubs, was very thorough. It took into account a number of principles, which I will come on to in a moment to answer another of the hon. Lady’s questions. Among those principles is the issue of the travel-to-work time, and every single employee’s home location was mapped against the possible new alternatives under consideration at the time those decisions were being made. I have also raised the issue of the transition offices, which are of course there, among other reasons, to provide employment opportunities for the staff.

The location principles—this comes to the questions the hon. Lady asked about why we have chosen one particular location rather than another, or indeed the existing location of the legacy offices—come down to eight key principles. They include transport connections, which are of course excellent in both Edinburgh and Glasgow, and the talent pool there, such as in universities—for example, Edinburgh and Glasgow have world-class universities—as well as the housing that is available, the quality of the schools and all the matters that will sustain the recruitment of the teams we will be bringing together in these 21st-century and much more sophisticated hubs for dealing with our tax purposes.

The hon. Lady raised the issue, which I know she has raised on previous occasions, of the location of these hubs in relation to our ports and points of entry into the United Kingdom. I think I can reassure her that, quite outside this whole process of the transitional arrangements, we will of course ensure that Border Force, HMRC and the Department for Environment, Food and Rural Affairs have the personnel available at those locations to make sure that they are able to run imports and exports efficiently. There is a general premise, however, in the suggestion that the offices somehow need to be close to people all the time. In fact, since 2014, it has been the case—[Interruption.]

[Mr Speaker]

Order. I think there is a sense in the Chamber that there is an inadvertent abuse going on. This is not a debate; it is a statement. The Financial Secretary has twice said that he commended the statement to the House: he said it in response to the first set of questions, and he had already said it when he delivered the statement. A brief and pithy encapsulation of the argument is what is required. A long dilation is not only not required, but notably irritating to the House.

[Mel Stride]

I can only apologise, Mr Speaker, and I obviously accept your guidance on this matter. I believe I was asked about 20-plus questions between the two Front Benchers, but I take your point.

I will deal with one last point. The hon. Member for Aberdeen North (Kirsty Blackman) specifically asked me how many of the 5,000-plus personnel that HMRC is recruiting in the context of our Brexit planning will be based in Scotland. We are up to about 3,500 currently, and I will write to the hon. Lady to make sure that we provide her with the information she has sought.

[John Howell (Henley) (Con)]

When I was an inspector of taxes, the office network was totally incapable of being developed for a digital situation. How will this new programme make such development a possibility?

--- Later in debate ---

[Mel Stride]

As a former tax inspector, my hon. Friend is probably about as popular as I am as a tax Minister, which is never the most popular job in the world. The answer to his question—in a short and pithy response, Mr Speaker—is that we have to move to the more digital-based, data-based and inspection-based system that is facilitated by the very hubs I have been describing.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

This has already cost more; the projected savings have gone down; there are no break clauses in most of the 20 to 25-year leases; and there is little buy-in from other Departments. The Minister has said that the DWP and NHS Digital—interestingly, he picked only two small examples—are buying into a couple of the hubs. Will he list the other Departments that are buying in by locating in these regional hubs?

[Mel Stride]

There has been a series of discussions right across Whitehall, led by the Cabinet Office, in the area in which the hon. Lady has framed her question. The hon. Lady levelled the charge of cost, but she then very quickly went on to talk about savings, and there will of course be net savings from this approach of some £300 million by 2025.

[Martin Vickers (Cleethorpes) (Con)]

Representing a coastal community, as I do, regional centres tend to be very many miles away. This is clearly a problem for staff, but also for constituents in their dealings with HMRC. Will the Minister give an assurance that, even in this digital age, face-to-face meetings between staff and constituents, where necessary, will be available locally?

[Mel Stride]

All requests for face-to-face meetings are of course treated on their merits, and they are certainly not discarded out of hand. I reiterate my point that, since 2014, tax offices have generally not been open for members of the public to walk in and ask to speak to a tax inspector. Indeed, some 80% of self-assessments are now done digitally online.

[Eleanor Smith (Wolverhampton South West) (Lab)]

I have a tax office in Wolverhampton South West that is going to close, and my constituents are not happy. For a start, Carillion has gone and now the tax office is going, and it does not make sense. The Minister has talked about face-to-face meetings, but there are actually a lot of face-to-face meetings in that tax office. The staff there are not happy about having to travel, and the Government are going to lose a lot of staff with experience. How can he explain that with regard to the regional hubs, because they are supposed to go to Birmingham?

[Mel Stride]

The hon. Lady raises the issue of the tax office in her particular area of Wolverhampton. I am very happy at any point—this is of course an invitation to any Member—to speak to her specifically about the circumstances of the HMRC office in her location. Equally, Birmingham is not a huge distance from Wolverhampton for many of those people to commute to, but if the hon. Lady would like to take up any aspects of that with me, I will be delighted to speak to her.

[Mr Marcus Fysh (Yeovil) (Con)]

I welcome HMRC’s work on the transformation of its estate and on gearing up for customs readiness for any eventuality. In particular, it is great news that the CHIEF—customs handling of import and export freight—system will be fully ready on 30 March to handle declarations for customs and that simplifications of customs procedure are being made available to business. That will enable imports of goods into the UK to flow without hold-ups using inland clearance techniques. Will my right hon. Friend confirm that we will indeed be ready and that fear is unjustified? Will he say what he is doing to ensure that a campaign is now activated to inform small and medium-sized enterprises about what they have to do to make use of the simplifications?

[Mel Stride]

On the IT systems element of my hon. Friend’s question, he is absolutely right. CHIEF has been upgraded, and it is now capable of processing about 90 messages per second, which will be enough to handle the import and export declarations that may be required.

On the issue of informing the marketplace or traders about the new circumstances that may pertain after 29 March, we have written to 145,000 exporters that export only to the European Union and are not therefore familiar with customs arrangements. We have issued three iterations of our partnership pack and there is a huge amount of information on gov.uk, where businesses can also sign up to email alerts to make sure that they are aware of the very latest relevant information.

[Mr Jim Cunningham (Coventry South) (Lab)]

On behalf of myself and my hon. Friend the Member for Wolverhampton South West (Eleanor Smith), I have written to the Minister to ask for a meeting, with one or two reps from the trade unions, to discuss the situation in Wolverhampton and Coventry. People in Coventry will have to travel 16 miles to premises that are inadequate, while those who are left are not guaranteed jobs. I will not rehearse all the arguments now, but I would like to meet the Minister, with some reps and my hon. Friend, to discuss this further. Will he agree to do so?

[Mel Stride]

I would be very happy to meet the hon. Gentleman to discuss the matters he has raised.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

Improving public services is about more than just spending more money; it is about delivering better services more efficiently, on which the Treasury is well placed to lead. Will my right hon. Friend confirm that these changes will improve the services available to my constituents and how much money will he save to spend on the other public services they receive?

[Mel Stride]

I can confirm that services will be improved. All the evidence suggests that is the case as we have upgraded and brought HMRC into the 21st century, and I have already stated that the savings will be of the order of £300 million in the run-up to 2025.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

As the hon. Member for Aberdeen North (Kirsty Blackman) pointed out, the nearest centre will be a huge distance from my constituency. If we end up out of the customs union, ports such as Scrabster and Wick in my constituency will be the UK’s border. How exactly will the Minister get HMRC to support those ports? If he is going to put personnel in them, why do we not simply reopen the Wick tax office?

--- Later in debate ---

[Mel Stride]

I cannot comment on the specific tax office that the hon. Gentleman mentions, although I am of course very happy to discuss that element of his question outside this statement. As I have already set out, having effective manpower at our ports and borders is a matter of making sure that we have adequate HMRC, Border Force and Department for Environment, Food and Rural Affairs staff available for that, and it will not impact on the fact that we are rearranging our HMRC tax offices.

[Bob Blackman (Harrow East) (Con)]

Property prices tend to fluctuate, so how long are the leases on the new centres, and what break clauses are included in them?

[Mel Stride]

I will write to my hon. Friend with the answer to that question, on the basis that these are all individual arrangements that have been entered into. As for lease arrangements, the first stage of the process is to enter into a commitment with the developer to take possession of the building; the lease is signed in due course. I will, of course, write to him with a more specific answer.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Given that a no-deal Brexit is likely to increase massively the number of customs declarations made at ports such as Hull by those transporting goods through them, and given that that is combined with the Department for Transport’s general lack of preparedness when it comes to our ports, how can the Minister justify taking these decisions at this point?

[Mel Stride]

These are two relatively unrelated matters. Reconfiguring our tax offices is important for the reasons I set out in the statement. As to the hon. Lady’s point about preparedness for the very large increase that there may be in customs declarations, depending on where we land with the deal, I pointed out in answer to my hon. Friend the Member for Yeovil (Mr Fysh) that CHIEF has been upgraded substantially; it will be able to handle the kind of volumes that it may be necessary to handle.

[Mark Pritchard (The Wrekin) (Con)]

The Minister may have heard of Trump Plaza in Atlantic City, which is now closed, but is he aware of Telford Plaza in the borough of Telford and Wrekin, which is very much open, and is the largest letting in Telford and Wrekin in the last decade? It is 112,000 square feet over 13 floors, and many HMRC staff are employed there. Would he care to visit that centre of excellence, when he can find the time in his diary?

[Mel Stride]

I thank my hon. Friend for shamelessly promoting, quite rightly, the properties in his constituency. I would be very happy to meet him to discuss the area.

[Chris Bryant (Rhondda) (Lab)]

Mr Speaker,

“‘Beauty is truth, truth beauty’—that is all

Ye know on earth, and all ye need to know.”

The Minister keeps referring to bringing together hubs, but the danger is that that will mean everything moving to big cities, and all the smaller towns in a constituency, such as all those towns in the valleys in south Wales, losing out. There are loyal HMRC workers, and cheaper properties, in many of these towns. Will he not look at those smaller towns?

[Mel Stride]

The hon. Gentleman is suggesting that we set all current arrangements in aspic. Going back some decades, there would have been not 170 offices across the country, but several hundred. No doubt if we went back in time, the hon. Gentleman would have been on his feet telling us that we should keep 700 offices, rather than shrinking the number down to 170. The reality is that the way that the tax authority conducts its affairs is effective—I have given the figures—and there is a model that makes that happen. That lends itself to 21st-century hubs that have the right resourcing to do the job.

[Philip Davies (Shipley) (Con)]

Given that cheaper premises were available just up the road in Bradford, it is absolutely ridiculous that the Yorkshire hub will be in Leeds. As HMRC made no economic impact assessment of the effect on the places that it is moving out of, will the Minister look at what financial support the Treasury can give from its savings to Shipley, to make sure that its local economy is not damaged by the closure of its tax office? There is already great congestion for commuters trying to get to Leeds on the train; what investment will he make to ensure that people can get from my constituency to Leeds on the train, which they cannot do at the moment?

[Mel Stride]

The decision to have a Leeds office as opposed to a Bradford office has been rigorously looked at. It hinged on eight principles, some of which I set out in my response to the hon. Member for Aberdeen North (Kirsty Blackman), who spoke for the Scottish National party. On my hon. Friend’s more general point about the economic impact, the House should celebrate the economic success that we have had; we have the highest level of employment and lowest unemployment since the mid-1970s, and it is this Government’s policies that are providing that.

[Dr Paul Williams (Stockton South) (Lab)]

Four hundred people work for HMRC in George Stephenson House in Stockton South. Many of them have built their lives as carers and parents around their work. Why does the Minister think that it is okay to ask them to travel for an hour and a half each way just to keep their jobs, when 97% of them say that that is unacceptable?

[Mel Stride]

I do not think that we are requiring all the employees at that location to travel in excess of an hour to fit in with the new arrangements. In my statement, I set out at length the various measures—I will not repeat them now—that we have taken to make sure that HMRC does the right thing.

[Nigel Huddleston (Mid Worcestershire) (Con)]

How can we ensure that niche skills and the expertise of key HMRC staff are retained in this move to regional hubs?

[Mel Stride]

My hon. Friend asks a very good question that goes right to the heart of why we are making these changes. If we are to build teams of highly skilled individuals, we need the right locations in which to house them; that will lend itself to the hubs that we are rolling out, which are in locations with good housing, good education, good access to a talent pool, good transport facilities and so on.

[Robert Halfon (Harlow) (Con)]

The Minister spoke of graduates being part of this transformation scheme. Will he confirm that HMRC will offer opportunities to apprentices, and will support apprenticeships across the board?

[Mel Stride]

I can certainly assure my hon. Friend that HMRC engages with apprenticeship programmes and is supportive of apprentices, as are the rest of the Government.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

East Kilbride’s Centre 1 is so named because it was deemed No. 1 for taxation skills and experience, but the Public and Commercial Services Union reports that these plans lose the UK 17,000 years of tax experience. Everyone in EK knows someone who has worked in Centre 1 and utterly condemns this Government’s plans. Given that the Minister’s Department has been working constructively with me on the all-party parliamentary group on new towns to regenerate them, why is he devastating East Kilbride and new towns by closing our largest employer?

[Mel Stride]

The hon. Lady is absolutely right to be as passionate as she is about protecting the existing workforce and making sure that we do not lose the workforce’s vital skills. That is why we have taken this approach. We are ensuring that the new locations are viable for those from the old. For example, we are assisting those who need to travel by meeting some of their travel costs over three to five years. We very much want to keep the high level of skills in the organisation.

[Toby Perkins (Chesterfield) (Lab)]

Businesses in Chesterfield that I have spoken to that have had cause to query HMRC judgments have found the organisation monolithic and unresponsive to their queries. Does the Minister have any assessment of how many successful businesses go bankrupt or have a huge financial deficit as a result of a lack of experience in HMRC, and what will he do about that?

[Mel Stride]

If we look at all the metrics, we can see that HMRC is doing extremely well on customer service at the moment, including time taken to answer telephone calls. There is always more to do, and we will continue to work at this, but it has a good record to date.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

HMRC’s New Waverley development in Edinburgh is being used for photo opportunities by Back-Bench Tory MPs even before it opens. We know that the office of the Secretary of State for Scotland and of the Advocate General for Scotland, the Office for Statistics Regulation, the Information Commissioner’s Office, the Government Actuary’s Department and Her Majesty’s Treasury are also moving in. Will the Minister tell us exactly how much this enormous white elephant is costing us, and to which other Departments HMRC will sub-let?

[Mel Stride]

The main thrust of the hon. Lady’s question seems to be to decry the fact that we are decanting more and more services into one location. There are many logical economic and business reasons why one would do exactly that. As for her charge that Conservative Back Benchers are going up to that location, I would suggest that that says they are very interested in these particular matters.

[Mary Glindon (North Tyneside) (Lab)]

Unlike the CEO of HMRC, will the Minister show some common sense and heed the PCS union, which says he should halt his programme and instead concentrate on keeping the expertise, amounting to thousands of years, of staff at offices under threat?

[Mel Stride]

Rather like the question from the hon. Member for Rhondda (Chris Bryant), the suggestion is that we just do nothing and stay exactly as we are. That would not be to the benefit of the taxpayer. Frankly, that would not be to the benefit of the staff, either, who will have increased opportunities as a result of the changes we are bringing in.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Phoenix House in Oldham is due to close to relocate to Manchester city centre. The cruelty is that, when we asked whether a different site in Oldham could be considered, there was a categorical refusal to even shortlist a site, despite rents in Oldham being half the price of those in Manchester city centre. Does the Minister understand the anger felt in many of our towns, which are being cast aside in favour of our city centres by a Government who just do not care?

[Mel Stride]

HMRC has stuck to very clear, very fair and balanced guidelines on how to make the assessments—the eight location principles we have been discussing this afternoon—and I have absolutely no doubt that it was rigorous in adhering to that process. The individuals impacted by this decision are central to the approach HMRC is taking, in the way I have described.

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

Will the Minister publish an economic impact assessment for each HMRC office closure—in many towns, the largest employer is leaving? Will he publish an equality impact assessment, so we can see the impact on staff, particularly those with disabilities, who are being asked to travel over 100 miles to their new workplace?

[Mel Stride]

There has already been an equality impact assessment. It is in the public domain, but I would be very happy to share it with the hon. Member.

[Stephen Morgan (Portsmouth South) (Lab)]

Seventy-nine per cent. of staff surveyed said that the plans undermine their ability to provide tax collection. Are HMRC staff wrong?

[Mel Stride]

What is wrong is the suggestion that we are not good at collecting tax. We are world class at collecting tax. We have a tax gap of just 5.7%. If we had the same tax gap that we had under the Labour party, the missing revenue would be enough to employ every policeman and woman in England and Wales. The Conservative way works; the Labour way squanders resources.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Given the staff and estate upheaval at HMRC, and the fact that the Government will not take no deal Brexit off the table, can the Minister explain to my concerned constituents why HMRC is sticking with the date of 1 April 2019 for making tax digital for all businesses—a day on which many businesses may have something else to consider?

[Mel Stride]

When I first became Financial Secretary, one of the early decisions I took was to limit the roll-out of Making Tax Digital to just VAT and those businesses over the VAT threshold. The roll-out was delayed. I am confident that we are now in a position where businesses will be ready for that important change. That will be of benefit to HMRC by way of tax collection and important for the efficient running of those companies.

[Chris Ruane (Vale of Clwyd) (Lab)]

The Minister is closing down the valuation office in Rhyl, with the loss of 40 jobs. His Government have already closed the Army careers office in Rhyl, the Crown post office and the county court. By contrast, the Welsh Labour Government are investing £50 million in new schools, £50 million in flood defences, £28 million in housing and possibly £42 million in the refurbishment of a new hospital. Why are the Conservative Government disinvesting in struggling seaside towns and reinvesting in already overheated city centres?

[Mel Stride]

The simple fact is that the Government are adopting an efficient approach to the use of our resources, including across HMRC. We do that for a distinct purpose: it allows us to spend more money on the things that our country expects us to spend money on, such as vital public services, including the national health service, where we will be spending £84 billion more over the next few years than under the previous Labour Government. I make no apologies for doing things that drive efficiency and allow us to support health and public services.

[Hannah Bardell (Livingston) (SNP)]

On value for money, the Minister is either sadly mistaken or badly briefed, because the reality for the 1,000 staff in my constituency is that they are going to one of the most expensive retail units in all of Scotland when they move to Edinburgh. Does he think it acceptable that, as I understand it from the PCS union, staff will be expected to sit in armchairs about which occupational therapists have huge concerns and that staff who have disabilities or who are in wheelchairs have been told that if they cannot reach the screen or the plug sockets on their desks someone else can do it for them?

[Mel Stride]

Clearly, I am not in a position to comment on very specific remarks about armchairs, but if the hon. Lady would like to raise the matter with me outside of this statement, I would be very happy to discuss it with her.

[Chris Law (Dundee West) (SNP)]

There is deep and clear concern from the 479 hard-working HMRC staff at Sidlaw House in Dundee that their jobs may come to an end this year, rather than as planned in 2021, which was promised by the Treasury. Can the Financial Secretary give me an absolute guarantee today that their jobs are safe until the end of 2021?

[Mel Stride]

I would be happy to meet the hon. Gentleman to discuss the details of that specific office location.

Bill Presented

European Union (Revocation of Notice of Withdrawal) (No.2) Bill

Presentation and First Reading (Standing Order No. 57)

Angus Brendan MacNeil, supported by Pete Wishart, presented a Bill to require the Prime Minister to revoke the notification, under Article 50(2) of the Treaty on European Union, of the United Kingdom’s intention to withdraw from the European Union, subject to the legislative consent of the Scottish Parliament and the National Assembly for Wales; and for connected purposes.

Bill read for the First time; to be read a Second time on 8 February, and to be printed (Bill 326).