HMRC Tax Office: Cumbernauld

Patricia Gibson Excerpts

Tuesday 14th January 2020 Commons Chamber

[Stuart C. McDonald]

I agree with my hon. Friend. As I have said before and will say again, this is detrimental not only to the workforce and the town of Cumbernauld, but to the work that we require these people to do in collecting the tax that we need to fund our public services.

It is also fair to say that “Building our future” has been the subject of huge controversy since its launch. The National Audit Office and the Public Accounts Committee, among others, have made very critical comments. In Parliament, my party has devoted Opposition day time to opposing tax office closures. There have been Backbench Business debates, one of which I was able to secure and one that was secured by my hon. Friend the Member for Glasgow South West (Chris Stephens), who chairs the PCS parliamentary group. Numerous other Members on both sides of the House have tabled questions or secured Adjournment debates on specific site closures.

I make absolutely no apology for bringing this issue to the House once again, because the “Building our future” programme was flawed from the start. It remains flawed and, given the seismic changes that have happened between its initial design and now, there are strong reasons to pause, to look at what has happened so far and to consider whether it is really still worth pursuing these plans. Serious issues have been thrown up even where regional hubs have already opened. For example, in Norwich, despite emphasis being placed on proximity to universities for recruitment purposes, recruitment has apparently proved incredibly difficult. Not only are many existing staff choosing not to make the switch to the new hub, but the hoped-for recruitment of new graduates has not materialised, quite simply because they have better options in the private sector. For all these reasons, the Scottish National party manifesto again made the case for, and committed to, reconsidering these closure proposals.

My first call on the Government is simply for them to take responsibility for what is going on. That in itself is long overdue. In contrast to my colleagues, the Government have been rather less keen on bringing this issue to the House for scrutiny and debate. Even when the original list of sites to be closed was decided, no announcement was made to the House. That basically sums up how Ministers appear to see their role. Ministers hide behind HMRC’s status. Too often in these debates and question sessions, the issue is simply palmed off as one for HMRC to get on with. I recognise that Ministers cannot interfere in the day-to-day operation of tax collection, but that is not what this is about. These strategic decisions will have an impact for decades to come.

I recently joined Jamie Hepburn MSP, PCS union reps and the leader of North Lanarkshire Council, Councillor Jim Logue, in writing to the Financial Secretary to the Treasury and the chief executive of HMRC to make the case for retaining the site in Cumbernauld. We ask them to come to Cumbernauld and to meet us and the staff. We got a typically bland response from HMRC, but at least it was a response, because all we got from the Treasury was nothing at all. That sums up the total lack of interest that the Treasury has taken in the whole issue of reform of HMRC’s estate and workforce.

Let us remember that these are not trifling changes. We are talking about turning 190 offices into 13. Along the way, thousands of jobs are being cut, and huge sums of money are being thrown at new buildings, refurbishments, relocation costs and all sorts of other expenses. Morale and job satisfaction among the HMRC workforce remains among the lowest in the civil service. Both the Public Accounts Committee and the National Audit Office have raised serious concerns with the programme, so it is no longer sufficient for Ministers to wash her hands of the issue and just leave HMRC to carry on regardless.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

My hon. Friend is setting out clearly the effect on his own constituency, and it is right and proper that he should. Does he agree that, at a time when the tax gap in the UK—the gap between the amount of tax that ought to be collected and the amount that is collected—is £35 billion, it would be appropriate for the Government to weigh up the cost of the savings to HMRC in axing these jobs with the amount of tax that is increasingly going to go uncollected?

[Stuart C. McDonald]

I agree wholeheartedly with my hon. Friend. At the end of the day, this programme may well end up being absolutely self-defeating for HMRC, and it is the Government’s cost-cutting agenda that has been the driver behind it. They need to take ownership of what is going on.

First and foremost, the Government need to take ownership of the implications of these plans for the dedicated workforce who have built up considerable expertise over many years in Cumbernauld. The stark truth is that jobs will be lost. Written parliamentary answers confirm that the total capacity of the new Glasgow financial district site is considerably smaller than the number of staff at the sites that have been closed to make way for it. In fact, we are talking about a maximum capacity of 3,000 at the new site compared with a full-time equivalent workforce of 4,700 at the sites that are earmarked for closure.

It seems that HMRC is relying on the fact that many workers will be unable to make the transition because of personal circumstances. Remarkably, it has managed to pick a site in a part of Glasgow city centre that is unusually difficult for people in Cumbernauld to get to within HMRC’s one-hour reasonable daily travel limit if they are using public transport. Those workers who do make the move will be out of pocket. It is true that some reasonable daily travel costs will be met initially, but that will not last for ever. It also refers to the cheapest option, which I know from speaking to staff will be totally impossible for some of them. We have to remember that 57% of staff earn less than £20,000 a year. If, as has been estimated, staff will have to spend, on average, an additional £17 each week on travel to work, that will represent 5% of their take-home pay. It is a similar story with childcare costs, because 55% of staff have childcare or other caring responsibilities. Additional travel time will see care costs rise by an average of £40 a week, which is 12% of an employee’s take-home pay. After decades of service, those workers deserve better.

--- Later in debate ---

[Jesse Norman]

The hon. Lady is right to say that the Government take the needs of towns seriously. That is why we have a towns fund, which, in turn, works with a much wider spread of support that we are giving to cities. Of course towns have their uses and functions, and cities have theirs. HMRC is seeking to use the benefits of the city: the capacity to agglomerate services and bring people together, and give them proper communications and technology support. Those are things from which both HMRC and those staff will benefit.

I have taken a lot of interventions and I now have a limited amount of time, so I will make progress. HMRC has already opened three new regional centres in Croydon, Bristol and Belfast, with staff planned to move to the Edinburgh regional centre later this year. Construction is under way at all the remaining new locations, including Cardiff, Leeds, Liverpool, Manchester, Nottingham, Birmingham and Stratford.

In addition to the 13 regional centres, HMRC will keep eight transitional sites open across the UK for several years to help retain key skills during the transition period, as well as five specialist sites for work that cannot be done elsewhere. For example, HMRC will retain Telford as a site for some of its specialist digital teams. Through this phased approach, HMRC will seek to minimise disruption to business operations.

The overall programme will deliver savings to the taxpayer of around £300 million up to 2025 and then rising cash savings, estimated to be more than £90 million by 2028. It also avoids additional costs of £75 million a year from 2021, when the current PFI contract with Mapeley, agreed by the last Labour Government, comes to an end.

[Patricia Gibson]

I am grateful to the Minister for giving way as I know he has points that he wants to go on to make. Can he explain to me, and to the House, how the savings he has talked about and the reduction in staff can help mitigate and tackle the £35 billion tax gap that will inevitably grow with fewer staff?

[Jesse Norman]

The hon. Lady rightly raises the tax gap. When expressed as an absolute number, £35 billion is a large amount of money. Some £7 billion or £8 billion of that sum is caused by people not filling the forms out correctly, and there are many other components to it. As she will know, at 5.6% the tax gap is not only near to its historic low in this country but low against international comparators. It is key to see it as a percentage in the context of the overall amount of money the Revenue collects. HMRC remains an extremely efficient tax collection agency.

It is important to stress that the strategy that HMRC has adopted is not just about cost savings or bricks and mortar. The new office in Glasgow, as well as the other sites, will allow people to develop more fulfilling careers. There will be a wider variety of jobs and, therefore, of career paths to senior roles, as a wider range of work will be based in single sites. The judgment has been that the current office in Cumbernauld does not provide the kind of space that HMRC wants for its staff; nor does HMRC judge it to be fit, over time, for a tax authority operating in the digital age. Modern buildings such as the Glasgow regional centre will deliver a better working environment and experience for HMRC’s workforce. Such buildings will increase HMRC’s attractiveness as an employer, enabling it to recruit and retain the next generation of skilled professionals.