HC Deb 15 July 1971 vol 821 cc882-92

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

10.50 p.m.

Mr. Norman Atkinson (Tottenham)

I am grateful to you, Mr. Speaker, for allowing me the opportunity of raising on the Adjournment this important question of free telephone access by taxpayers to the centres which deal with their tax affairs.

May I start by expressing the appreciation of hon. Members of the work done by tax officials. We are not critical of the officials. I understand that the amount of work with which they have to cope and the small number of officials available to do it result in massive problems for them.

Nor do we criticise the Financial Secretary to the Treasury. I understand that the hon. Gentleman writes to hon. Members at the rate of about 7,000 letters a year. The Chancellor of the Exchequer may be adding to that total. So that is quite a prodigious output.

Tax centres collectively deal with about 3 tons of mail per week, and as many of the letters represent complaints, we in no way minimise the job that the tax officials are doing, but that is not the issue that I want to raise tonight. The issue that I want to raise is the complaint by taxpayers that they feel frustrated when they try to get their problems resolved.

Our whole tax system is in the process of being computerised, and this must, of necessity, mean the concentration of tax offices into about seven or eight centres where computers will be used and the relevant files stored. I understand that a centre like the one at East Kilbride will deal with the affairs of about 3 million taxpayers. One can appreciate, therefore, that many problems are likely to arise, and my remarks tonight are directed at an attempt to find a solution to some of the difficulties that may be encountered. I have discussed the East Kilbride centre with my colleagues from Scotland, and they have expressed their appreciation of the service that they get from it.

I understand that on 7th December the Minister referred to bus loads of taxpayers travelling the 12 miles from Glasgow to East Kilbride and being met by an army of officials, merely because they were not able to find an easy way of communicating with the tax centre, either by telephone, or through the local inquiry office that had been set up in Glasgow.

One can readily understand from that the problems which exist all over the country. For every taxpayer who would have to travel 12 miles, there are many others who would have to travel a much greater distance in order to speak to someone who has the relevant papers and can discuss problems with individual tax payers. I understand, for example, that the centres dealing with P.A.Y.E. for the whole of the South-East, including London, are scattered anywhere between Southampton and Edinburgh.

From those facts, one can appreciate that communications are very important. If we are to avoid the recurring frustration which is expressed by many infuriated taxpayers, a scheme must be devised which gives them access to their tax officials either by means of a free telephone service or by some other method which is cheap, effective and efficient, so that they may get simple answers to what are very often simple problems.

My attention has been drawn to the difficulties involved by trade unionists who complained to their trade union branches that they found it increasingly difficult to get answers to coding problems. That is the main area in which I am concerned, and I am advocating some sort of free telephone access to the computer centres with a view to finding a solution to these simple coding problems.

A worker may change his job, or there may be some adjustment necessary in his claim for allowances. Often he ends up being given an emergency code number. For a short time, or what is supposed to be a short time, he is paying excessive tax which frequently he can ill afford. It imposes a great strain on his family. The process of writing letters to a far-distant tax centre often involves the taxpayer in a wait of many weeks before he gets a reply. Even then it may not give him the code number to which he is entitled.

We know of the demands from many taxpayers for a better system. As Members of Parliament, we are concerned to ensure that the advantages of computerising the tax system are not dissipated by the creation of some far-off bureaucracy which denies taxpayers the right of access to those who are dealing with their affairs. We have discussed many of these difficulties in previous debates. To cut a long story short, perhaps I might quote from some documents recording the discussions which have been held.

The first of them is the Report of the 1968–69 Estimates Committee. Paragraph 62 recommends : The Chief Inspector of Taxes stated in relation to the P.A.Y.E. centres that 'employers are provided with free telephone access direct to the computer centre. We shall try to encourage the taxpayer to write wherever possible'. Your Committee recommend that facilities for free telephone access to the P.A.Y.E. centres should be made available to all taxpayers, with a view to saving time and improving understanding. That was a clear recommendation. It was put before various Treasury Ministers in the last Government. It was also submitted to the working party which had been set up and which has been trying since to come to some conclusion as to how best to overcome all these problems.

Going back a little further, I refer to a book which was published in 1965 by Sir Alexander Johnston, the head of the Inland Revenue. At that time, he was under the impression that special telephone facilities had been provided to enable employers and employees to get in touch with the "London provincial" offices. In the same book he went on to outline the possibility of providing similar facilities for all taxpayers throughout the country. Indeed, from a reading of that book one would gain the impression that Sir Alexander Johnston was convinced—as I was as a result of my own inquiries—that these facilities existed for everyone.

On 7th December, 1970, the Minister seemed to confirm that impression. I do not wish to misrepresent what he said, so I shall quote his words : But we always recognised that remoteness was a major disadvantage of computerisation, and the Inland Revenue has now for some time had a working party looking into the whole question of P.A.Y.E. inquiry facilities, the adequacy of existing arrangements, whether proper publicity is being given to them and whether improvements are necessary. In response to some pressure from my hon. Friend the Member for West Lothian (Mr. Dalyell), the hon. Gentleman added : He"— that is, my hon. Friend— will know that when the first tax districts, dealing with taxpayers in London, moved out of London to the provinces the Inland Revenue initially made use of the free phone facility. The difficulty with this facility was that it proved to be very expensive even when available only to employers. The hon. Gentleman asked also about abuse of the facility. Although the abuse was not great, and I would not seek to put much weight on it, there were employees who learned the number and were thus able to make free telephone calls themselves to which they were not entitled, although they were entitled to make calls for the cost of a local call. That has been the story, repeated by Ministers at various times, and certainly confirmed by the hon. Gentleman's predecessor to me when I made inquiries. I understood that all taxpayers in the country had a right to telephone their tax centre for the cost of a local call, whether they lived in London and the South-East and they were ringing Edin- burgh, Manchester, Newcastle, or wherever it might be.

In the same speech on 7th December the hon. Gentleman said : As we see this concentration develop, the cost of a free phone service could become very considerable, and I will only say now that the working party will give very close consideration to what the Select Committee recommended. We are anxious that taxpayers should have all reasonable facilities for making contact with the computer centre, but this must have some regard to the cost."—[OFFICIAL REPORT, 7th December, 1970 ; Vol. 808, c. 128.] Basically, that is the case which I am making. What progress has been made in looking into this question? Are we any further towards providing the kind of facilities which were recommended?

Judging from conversations which I have had with colleagues in the House, I should say that the majority opinion of hon. Members is that these free telephone facilities should be given to all taxpayers. I am certain that a simple scheme could be devised. I have spoken to telephone engineers, and they see no difficulty which cannot be overcome, except, perhaps, the problem of cost. They see no difficulty which would prevent an arrangement whereby a local telephone number was made known so that taxpayers anywhere in the country could ring that number and be put through on a direct link to the computer centre dealing with their affairs. That does not seem an insuperable problem in our modern age. There are other methods for doing it.

Why are the Government so complacent about this problem? What have they done in the meantime? Have they tried to accelerate the work of the working party to make some recommendations so that taxpayers can have this facility? What has happened since the working party started to consider the problem? What conclusions has it reached? Can the hon. Gentleman offer taxpayers a way to solve their problems by giving them easy access to those dealing with their tax troubles?

11.5 p.m.

The Financial Secretary to the Treasury (Mr. Patrick Jenkin)

May I begin by expressing my thanks to the hon. Member for Tottenham (Mr. Atkinson) for the tribute he paid to the officials of the Inland Revenue who run our tax system. It was very well deserved, because, as I said in the debate on 7th December last year, the House has imposed major burdens on the Inland Revenue, and its staff grapple with them manfully.

This debate has been well-timed. I am grateful to the hon. Gentleman for raising the matter tonight, for our short debate gives me the opportunity to tell the House of the results of the Inland Revenue working party to which he referred and which I spoke about briefly in the debate on 7th December. It has been looking into the whole question of P.A.Y.E. inquiry facilities, the adequacy of existing arrangements and the publicity about them, and whether improvements are necessary.

There is no doubt, as the hon. Gentleman rightly recognised, of the problems caused by the decentralisation of tax offices out of London and one or two other major cities, part of the Government's dispersal policy which started in 1959 in relation to tax offices and what was intended as the concentration into new P.A.Y.E. computer centres—the programme has been suspended for the time being pending the inquiry into the future of the whole P.A.Y.E. system. Both these developments greatly increased the problems of communication between taxpayers and the offices responsible for their affairs. The hon. Member for West Lothian (Mr. Dalyell) will know that we dealt with this at considerable length on 7th December in connection with East Kilbride. Although in that debate I referred briefly to the history of the dispersal and to the arrangements made to ensure that taxpayers continue to receive a satisfactory local service, it may be helpful if I briefly touch on the main facts again.

When the P.A.Y.E. work was first moved out of London to the new London provincial tax offices—the first phase was 1959–62—it was felt right to offer what would perhaps now be regarded as a fully gold-plated service. It was thought right to provide employers with entirely free telephone access to the provincial districts and to allow their employees to telephone those offices for the cost of a local call. The provision of free telephone calls for employers was thus extended to cover successively London provincial dis- tricts 1–11. But, unhappily, those facilities turned out to be far more expensive than had been estimated, and it was decided that for subsequent London provincial districts no special telephone facilities could be provided and that the right answer was to establish local inquiry offices in London to which taxpayers and their employers could refer their inquiries.

For employees the out-of-area local code call facilities, as the service was called, also proved very costly and was curtailed. It remains today—and this is where some confusion has arisen—only for two of the London provincial districts, London provincial 2 at Manchester, and London provincial 3 at Bradford. In the case of all other London provincial districts there are no facilities for calls at local call charges.

The Inland Revenue decided instead that a satisfactory service at a substantially reduced cost could be provided for taxpayers if special inquiry offices were set up in the London area. There are principal inquiry offices in London which are linked by Telex to the majority of the London provincial districts. Those offices are in Finsbury Square and Baker Street. They can obtain a reply very quickly to pass on to the taxpayer if he telephones that inquiry office in London or calls to make a personal visit. In addition, there are some 12 or 13 London tax districts which serve as district inquiry offices for their locality.

In regard to Scotland where the first and, so far, the only operating computing centre is working, at East Kilbride, similar arrangements were made. Principal inquiry offices have been set up in Glasgow and Edinburgh, which are linked to Centre 1 by Telex. In addition, a further 28 other inquiry offices have been set up in existing tax offices all over Scotland. At these offices advice and general explanations about codings and assessment notices can be given and forms for claiming allowances obtained. That is the present position.

Mr. Tam Dalyell (West Lothian)

In the light of the Scottish experiment, would the hon. Gentleman recommend the extension of this system to other parts of the country and does he consider it reasonably satisfactory?

Mr. Jenkin

I am coming to that. I turn now to the result of the working party to which I referred briefly before the hon. Member for West Lothian came into the Chamber. The hon. Member for Tottenham suggested that taxpayers could telephone their local inquiry offices and be put through direct to the London provincial district or to the centre which deals with their affairs. This is not the case. It is only in the case of two particular London provincial districts that the original cheap telephone facility introduced in the early years still obtains. We are still studying whether that facility should continue.

For many taxpayers by far the most satisfactory way of dealing with their tax complaints is by a face-to-face inquiry. Increasingly it has been found that the most satisfactory method, if the taxpayer's file is needed, is for him to give a local inquiry office a few days' notice, the office acquires the file from the relevant tax office, and an official from the local inquiry office can discuss the person's affairs with the papers before them. There is some evidence to suggest that a telephone call for an ordinary taxpayer—and many people find an understanding of the tax system difficult—when the official and the taxpayer may not have before them the same document often increases problems rather than diminishes them.

At present there are no means by which the inquiry office can transfer a call from a taxpayer to another office, as the hon. Gentleman suggested.

The hon. Gentleman referred to the recommendation of the Fifth Report of the Select Comittee on Estimates that free telephone access should be available to all taxpayers. This was dealt with in the observations of the then Chancellor the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins).

For the reasons I have explained, in view of the extensive and growing provision of local access by means of inquiry offices, it was considered that further provision of free telephone facilities was not necessary and that the cost could not be justified. However, as I told the House on 7th December, this was reviewed by an Inland Revenue working party which looked at the whole question of the adequacy of P.A.Y.E. inquiry facilities.

It made a comprehensive review of the arrangements and looked again at the case for reintroducing free or subsidised telephone access to the London provincial districts and the computer centres. There was a clear recognition in the report that further improvements were needed, but it found that the cost of a free or subsidised telephone service would be very heavy indeed, probably running into several million pounds.

Mr. Atkinson

Would the hon Gentleman repeat that figure?

Mr. Jenkin

Several million pounds. I pressed the officials of the Inland Revenue on this and they assured me that their studies showed that if these facilities were available and were to be regarded as the principal or substantial avenue of contact between the taxpayer and the district offices out of London, the cost would run into several million pounds.

It also found from a survey of callers at a number of offices that nearly 80 per cent. of all inquiries could be dealt with satisfactorily without recourse to the taxpayer's file. All he wants is a form on which to report a child being born, or that he has got married and that he is claiming marriage allowance, or that he has changed his job. His file is not needed for that and the inquiry office can give him the form and he can send it to the tax office. Furthermore, many of the taxpayers who need the greatest help understand tax affairs better if they had a face-to-face contact rather than trying to do it by telephone. Therefore, whether or not one has a free phone arrangement, local inquiry offices would still be necessary to deal with that kind of case.

The working party also had regard to the need for security, and the hon. Gentleman will see the significance of this in view of recent revelations about the ease with which the telephone may be used to get details of an individual taxpayer's affairs. Internally the Revenue now has what it hopes are nearly watertight procedures, but if there were to be large numbers, tens of thousands and perhaps hundreds of thousands of calls a year, the dangers to security would be obviously considerable. Therefore, what the working party recommended as the right course was to develop and improve the system of local inquiry offices and not to introduce free telephone access.

Hon. Members will be glad to learn that we have accepted the recommendation to improve and extend the whole system of P.A.Y.E. inquiry offices where the work is removed to a remote office either as the result of dispersal, or because of the computer programme. The number of specialised principal inquiry offices is to be increased, and staff will be specially trained. They will come under direct head office control. We shall concentrate first on the London area, where two extra principal inquiry offices are already being set up in Victoria and Soho, and on Scotland. We are also considering extending Telex to other inquiry offices. Our aim is to encourage both staff and taxpayers to regard the P.A.Y.E. inquiry offices as places where the great majority of their inquiries may be dealt with speedily and satisfactorily

I know that there will be some disappointment where people have been led to expect and hope that there would be a free telephone service but I have little doubt that as a result of our further study a full service will be secured when we have established these further local inquiry offices not only in London but eventually in other parts of the country where the tax office dealing with a taxpayer's affairs is remote from the area where he lives or works. This will encourage people to meet their tax officer face to face with papers in front of them, and when explanation and understanding are necessary, experience shows that this is the most satisfactory way to get them.

I am grateful to the hon. Member for having raised this subject and giving me the opportunity to give this explanation, and I hope that it will be an encouragement to those taxpayers now finding it difficult sometimes to achieve the right sort of contact with their tax officer, and give them hope that help is on the way.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Eleven o'clock.