The Taxman isn’t listening

When the UK government announced plans to close all but 17 of HM Revenue and Customs’ 170 UK offices, it was a variation on a now all too familiar theme: cut public sector jobs, cut services, roll back the state. While the ideology fits, it’s impossible to reconcile on any impartial level the wholly illogical and counterproductive thinking. At a time when ‘balancing the books’ is the new political Holy Grail – providing the justification for austerity – it ought to be common sense to invest in the department collecting the taxes that fund our other public services.

Since 2010, hundreds of tax offices and 10,000 jobs have been cut from HMRC. Meanwhile, we estimate the amount of tax lost through evasion, avoidance and non-collection is more than £120bn – almost 10 times the annual budget of the NHS in Scotland. Yet instead of investment, HMRC blunders on with cuts, patching up delays and errors with ineffectual but expensive sticking plasters.

So as MPs and government auditors line up to criticise HMRC performance – from its ‘woefully inadequate’ efforts to tackle tax fraud to its ‘staggeringly bad’ customer service – HMRC is spending £45m recruiting extra people just months after 1,000 permanent and fixed term staff were made redundant. If this was an episode of the Apprentice, someone would be leaving the boardroom.

It should not need pointing out that to collect taxes, you need to employ staff. After staff costs, the average HMRC tax professional brings in £945,000 a year in revenue. During our campaign against the closure of the Wick tax office, we showed the office collected £14.3m pa, costing less than £0.5m on staff and rent.

Not only do the cuts hit HMRC’s ability to do its job, centralisation within 13 large regional centres and four specialist sites runs counter to the policies of previous administrations. From the early 1990s, there has been a strong push to move public sector jobs out of the main cities and into communities. Many Whitehall jobs have moved out of London, including HMRC policy jobs going to Salford.

In Scotland, successive administrations have overseen moves from Edinburgh, including crofting grants administration to Tiree, central enquiry unit to Kinlochbervie, the Scottish Public Pensions Agency to Galashiels and SNH to Inverness. Other agencies include the Office of the Scottish Charity Regulator in Dundee and the Accountant in Bankruptcy in Kilwinning.

While we have had reservations about decentralising posts where it has led to job cuts or worse terms and conditions, we recognise there are advantages, with cheaper office costs and local communities gaining from employment.

It is questionable, however, what the intent of the UK government is in centralising HMRC work in Edinburgh and Glasgow. In East Kilbride alone up to 2,500 jobs will go from a community that cannot afford to lose one of its major employers. Those who relocate will face higher commuting costs and put greater pressure on transport infrastructure.

As well as damaging local economies, we believe HMRC will become more remote from the individuals and businesses which have to pay their taxes. When HMRC consulted on closing the 281 face-to-face offices two years ago, it admitted a ‘high proportion of respondents’ opposed closure. The main beneficiaries of those offices – as well as just regular personal and business taxpayers wanting help – were pensioners, tax credit claimants and migrant workers, with the latter making up almost 25% of all users.

The threat to revenue collection, our communities and the public is severe. It’s hard to understand the motivation behind the plans. It can’t simply be outright hostility to maintaining a functioning and effective public sector – though it is difficult to read it any other way.

HMRC has refused to hold a proper public consultation and did not want its proposals to be subject to full parliamentary scrutiny. That is one of the reasons why we are supporting John McDonnell’s review of HMRC’s role and resources in order to analyse its needs and expose its shortcomings.

We are committed to opposing the closures, as we are all cuts across our civil and public services. This campaign goes to the heart of the fight against austerity, on our side of the border and across the UK.

Joy Dunn is a former President of the STUC and now the parliamentary and campaigns officer for PCS Scotland.