HM Revenue and Customs

George Mudie Excerpts

Tuesday 5th February 2013 Westminster Hall

[Mr George Mudie (Leeds East) (Lab)]

Does my hon. Friend agree that closing offices is a false and unfair economy, because it limits the opportunity for face-to-face discussion in settling complex tax matters, which now have to be decided by either calling a call centre, going online or writing?

[John McDonnell]

That is both frustrating for the person who is trying to identify what they should properly pay and counter-productive given the lost revenue to the HMRC.

--- Later in debate ---

[Mr George Mudie (Leeds East) (Lab)]

I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing this important debate. I want to start by asking why it is necessary to deal with some of the problems. In an age of austerity, particularly, every pound matters and every pound not collected means front-line cuts in operating Departments, such as the Department for Education, the Home Office and so on. It is important to get all the money in. In this country, people respect taxpayers and the need to pay tax, but they demand that the system is fair and efficient.

The system is failing in two ways. I do not think, as my hon. Friend the Member for Glasgow North West (John Robertson) said, that it is a question of management. People from HMRC have appeared before the Treasury Committee, and they are largely hard-working and trying to do their best, but that is difficult because of cuts imposed on the department by the last Government and the present one. There is total disregard for the fact that, when money is cut, 10 times the revenue is cut. The problem is to face up to money.

On efficiency, the withdrawal of finance affects HMRC’s efficiency and ordinary people’s perception of how it treats them. The effect of staff cuts is self-evident and disastrous on a scale that is totally unacceptable. On paper, it may seem that office cuts involve just a bit of money and a bit of real estate, but that is not so. For many people—the elderly, those with complicated problems, or those who just have trouble filling in forms—in many towns and regions, offices provide their only chance to meet face to face, and that is the point. Because of those savings and staff cuts, the department is taking the decision for ordinary people that they either go online, telephone, or write, and they never get a face-to-face explanation of complicated tax matters. Call centres are fine, but people do not know who they are talking to. Once people think about what has been said and want to go back, they are starting the conversation afresh.

It is a criticism of the department and the chief executive that when she went to the Public Accounts Committee last week, she said that an HMRC review showed that customers believed a five-minute wait was acceptable. I do not know of any politician in this Chamber who would hang on a phone for five minutes to get an answer, especially when it is an automated answer that goes through information and costs money, and when people do get through, they are asked the same questions. That is about efficiency, and it is putting people off. Some money would put that right.

Many Members have referred to the unfairness in tax avoidance and tax evasion—and tax evasion by rich people and large multinational and British companies. In the minute I have left, I would like to put two questions to the Minister. The first is straightforward. The Chancellor of the Exchequer put in £174 million for an army of investigators to deal with such companies. Is that fresh money, or is it part of the £900 million that was included in the spending review?

The second question relates to unfairness. Two and a half years ago, Christine Lagarde, the head of the International Monetary Fund, gave the British Government the names and addresses of 2,000 people who had Swiss bank accounts. A number of them—I think 500—were being looked at for serious fraud. To date, two years later, only one has been charged. Is that the end of it? With the Swiss tax deal, is that issue now being dropped, as those people are being treated under the terms of the tax deal? If so, it would be totally unacceptable.