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HMRC (Office Closures)

Well, there is a clear and consistent explanation behind all this, because it all started with the then Chancellor's announcement of the Gershon review in 2004. At the time, he was involved in a Dutch auction with the Tories, who had the James review, and both sides were working to more or less the same formula: there would be job losses in the public sector, a reduction in the estate, shared services, increased use of IT, outsourcing and smart procurement. When the issue was debated in 2004, my hon. Friend the Member for Twickenham (Dr. Cable), in his usual prophetic way, pointed out the sheer irresponsibility of announcing figures for job cuts without saying how they would be made or whose jobs they would be. It was all broad-brush, big-canvas stuff about the direction of travel—there were no detailed plans. The result is here with us today: it is that decisions made at the top have had to be implemented somehow, on the ground, by third or fourth-tier civil servants. And so it is in the Treasury. I do not think that any serious calculation has been made of how many officers are needed, or how many people need to be involved in the process of tax collection. There is a general suggestion that the Treasury can be rationalised; its estate can be rationalised, its staff reduced and its processes simplified on Henry Ford-style principles, through the breaking down of the complex business of tax assessment. I remember when tax inspector jobs were advertised by saying that it was a job appealing to reason. That can no longer be put in the advert, because what we are talking about now is reducing complex tasks to simple tasks done through the lean process, in what one might call tax factories. The process of change from workshop to factory has, to the credit of HMRC, been carried out as sensitively as it knows how, which may not be that sensitively in the end. HMRC promised—the same has been promised in this Chamber—detailed personnel analysis before any move was made, and guarantees to be given to the union. It said that it hoped for heavy reliance on natural wastage rather than redundancy. However, there are strong arguments to be made about the process in principle. The lean process in taxation is relatively new, and it has hidden costs. Most of the larger institutions have poor recruitment, high staff absence rates, an increased carbon footprint for the people who work there—which is also a concern for the Treasury—and reduced public satisfaction with the handling of complex and non-standard cases. The standard cases go through as they do at DVLA and similar places, but the more complex and troublesome ones take longer. The evidence for the lean process is not overwhelming. It can be argued that fraud detection will be better with a local presence; it can also quite reasonably be argued that the protection of vulnerable customers, such as the digitally excluded, the elderly and migrant workers, cannot exclusively be dealt with through a process of central data matching. It is good, useful and worth having, but it is not enough to get the tax job done efficiently. In an IT-enabled, carbon-aware, family-friendly world, warehousing workers is neither necessary nor particularly smart. The one argument that counts, and counts now, is whether the costs of change outweigh the assumed benefits. The guarantees given to staff about such things as deployment, disability, family responsibility and travel, which were all given with some degree of sincerity, have in some cases been pushed through. Some rearrangements have been made in a brutalist fashion, but by and large a process has been conducted—a fallible process that lacks credibility in certain respects. However, even where only lip- service has been paid to the procedures and closures, it has become apparent that some were very hard to carry out. In the short term, if relocation and other costs such as voluntary redundancy are added in, they are very expensive. If to that is added the fact that it will not be easy to pull out of property that the Treasury no longer owns, but holds under the public-private finance initiative, particularly given the collapse of the commercial property market and the present financial difficulties of the owner—it is a tax-dodging hedge fund but it still has severe financial problems of its own—the true cost of all the rearrangement is simply not known. It is obviously shrouded in confidentiality. One thing is emerging—and it is certain that it is emerging, because of the extent to which the pace has slowed down in some places: some closures make no savings in the short term, but just bring added costs. Some closures—I suggest that Southport is a quite good example—bring no savings in the medium term. Despite all this, third-tier officers may press on blindly following orders and implementing what they assume to be the master plan from above; but with an election nigh, I should be surprised if, higher up, some people were not having second thoughts.