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Chamber and committees

Meeting date: Wednesday, September 20, 2017

Meeting of the Parliament 20 September 2017

Agenda: Portfolio Question Time, Finance (Income Tax), Business Motions, Parliamentary Bureau Motion, Decision Time, Tax Collection (Jobs)


Contents


Tax Collection (Jobs)

The final item is a members’ business debate on motion S5M-06672, in the name of Linda Fabiani, on fighting for tax jobs, fighting for tax justice. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the Public and Commercial Services Union report, Fighting for Tax Jobs, Fighting for Tax Justice, which it believes is a comprehensive and considered response to what it believes is the UK Government’s rash and poorly consulted proposals, Building Our Future, and notes the view that these plans will seriously damage Scotland’s economy by undermining its capacity to collect taxes effectively, decimating and destroying a skilled and experienced workforce, overestimating the benefits and underestimating the costs of digitisation, failing to take account of the challenges posed by Brexit, neglecting the support needs of the most vulnerable in society, including poor, disabled and older people, and affecting disproportionately communities such as East Kilbride, which it believes will bear the heaviest job losses and knock-on effects for the local economy.

17:08  

My motion begins with the standard “Parliament welcomes” for the Public and Commercial Services Union report, “Fighting for Tax Jobs, Fighting for Tax Justice: A Worker’s Alternative”. I welcome the information and clarity that the report brings in relation to the United Kingdom Government’s rash and poorly consulted-on proposals, I welcome the opportunity to air again this Parliament’s disquiet and serious concern, and I welcome the cross-party commitment to questioning the UK Government proposals.

However, I do not welcome the fact that a debate is necessary about the slashing of taxation expertise and the effects that that will have on our country, and especially on some of our communities, including East Kilbride, which is the town that I am privileged to represent.

The PCS report was published following the UK Government putting forward its business case—a modernisation plan that is intended to move the service to new online services, data analytics, new techniques, new skills and new ways of working. Of course, the main plan is to save money by closing local offices and replacing them with regional centres. Here in Scotland, the current HMRC sites will be reduced to three, and East Kilbride is being dumped.

There has been an HMRC presence in EK since 1969. It is commonly known as Centre 1 and the workforce has expertise that has been built up over those many years. I am sure that other members will say the same of the HMRC offices in their communities.

It is all very well for HMRC centrally to make assumptions about staff relocating to its regional centres—for example, East Kilbride workers relocating to Glasgow—but as the PCS makes clear, there has been no consultation of staff. PCS has held extensive workshops across Scotland and has proposed collective solutions to the crisis in HMRC and tax delivery. However, there has been no real attempt by HMRC or the UK Government to question the logistics of the moves that they are talking about. There is no recognition that expertise will be lost, or of the dearth of experience that will result.

That is all happening at a time when uncertainty and change through Brexit are facing Scotland and the rest of the UK. In the past week, the head of the UK tax authority has warned that border and tax checks post-Brexit could require an extra 5,000 staff, and that it could take between five and seven years to put in place a new streamlined system to deal properly with imports and exports.

In January, the National Audit Office concluded that costs for the original plans had risen by more than £0.5 billion—more than half of which is the expense of funding new buildings. That is all against a backdrop of UK Government pledges to tackle tax avoidance and evasion, a Tory manifesto pledge to keep jobs in local communities and recognition across the board that the aspirations for digitisation are unrealistic and potentially damaging to many people. Recent research by a number of universities predicts that for a number of reasons up to 35 per cent of people will not be able to use digital services.

As far as East Kilbride is concerned, there has been no Government impact assessment. It is not just that jobs will be removed from the town; there will be the further impact on the local economy, which has already suffered from losing major employers Motorola and Rolls-Royce. One in 10 jobs in East Kilbride is based in the tax office and research indicates that one in four jobs in the town will be affected if the plans go ahead.

As Scott Clark, who is the PCS branch organiser in East Kilbride said, 2700 people no longer contributing to the East Kilbride economy is

“a big hit to local businesses”.

As East Kilbride task force representative, former Councillor Chris Thompson, made clear, East Kilbride stands to lose between £16.3 million and £30.7 million from its economy.

It is not just local representatives who have made the case that the HMRC business case for relocation is fundamentally flawed. A House of Commons Public Accounts Committee report from earlier this year is very critical about the lack of robust business planning, and goes as far as calling for a complete rethink of the business case. It has no faith in the savings that have been projected by HMRC, it is sceptical about basing regional hubs in “expensive cities”, and it is concerned that HMRC’s plan carries a high risk of disruption to its core business of collecting tax and serving customers.

East Kilbride is a vibrant community that includes established tax expertise, but it is clear from the correspondence that I have received via the UK Government that to “Stay in EK” has not even been considered as an option.

The plans are wrong-headed, and they are disrespectful to our town, its workers and their families. Surely it would make sense for HMRC—as was noted by the House of Commons Public Accounts Committee—to reconsider whether moving to major city centres is the optimal way to deliver its objectives and achieve value for money. HMRC should compare the costs and benefits of its chosen approach and for the selected locations with those of alternative sites. I know that that has been done for other locations in the United Kingdom: the same respect should be shown to Scotland and to East Kilbride.

I end by noting that the “Stay in EK” campaign was launched last week by our local paper, the East Kilbride News, and I have no doubt that the campaign will be supported by everyone in our town. A petition is under way.

I ask the Scottish Government to continue to press the UK Government to consider the excellent report by the PCS union and HMRC local staff, and to listen to the many voices that genuinely believe that the HMRC plans are wrong-headed. I ask the Scottish Government to urge the UK Government not to carry on regardless, and not to shorten the closure timescales—as is rumoured. I ask the Scottish Government to support our call. Stay in EK.

17:16  

I congratulate Linda Fabiani on lodging an important motion for debate.

Under reorganisation plans that were announced back in November 2015, 17 HMRC tax offices in Scotland will be closed by 2026, including Plaza tower and Centre 1 in East Kilbride. The intention is to replace those 17 offices with just two centres, in Glasgow and Edinburgh, which will mean staff numbers falling from just under 8,000 to somewhere between 5,700 and 6,300. Therefore, under the proposals, something in the region of 2,000 jobs will be lost, including hundreds of jobs in East Kilbride.

That will affect a significant number of people throughout my constituency of Rutherglen who are employed there. Apart from the effect on the people who would lose their jobs and the working lives of those who are retained—who will be working in a pressured environment, with a quarter fewer staff—the closures will have a significant effect on both tax collection capability and service to the public.

Tax collection and administration of the tax system are core responsibilities of government, and generate the income that is required to provide the public services that we rely on, including the health service, education, infrastructure and economic stimulation, as well as the responsibilities that are currently reserved to the UK Government.

The current understaffing of HMRC is a major contributing factor to tax evasion and avoidance. The ability of large corporations and some individuals to play the complex tax system in order to avoid paying the level of taxation that they are expected to pay is deplorable. Although tax avoidance is legal, it is morally indefensible. According to the House of Commons library’s recent analysis, it cost at least £12.8 billion between 2010 and 2015.

Tax evasion is another area in which billions of pounds are lost to the UK Government each year. Evasion is, of course, illegal, and one of the core responsibilities of HMRC is to investigate and recover those missing moneys for the public purse.

Between aggressive tax avoidance, evasion and other reasons why tax may go uncollected, it is estimated that the public purse loses out by approximately £34 billion every year. At a time when the UK Government is focused on continuing austerity, which has meant a decline in living standards and rising levels of poverty, that is a stark statistic. Those missing billions, if they were collected, would solve many of the problems that are currently facing our society, including health inequality and having a fair and dignified social security system throughout the UK, as well as providing justice for the WASPI women—women against state pension inequality—who have been unfairly robbed of their rightful pensions.

That is exactly why we need to retain trained and skilled tax collectors, who have the specialist knowledge to investigate fraud and who help to increase the tax take. Although enhanced computer and online systems have their place in making the service more efficient, we also need people to exercise judgment.

As the PCS union has pointed out in its report “Fighting for Tax Jobs, Fighting for Tax Justice”, the HMRC’s plans have been drawn up with little or no consultation of the Scottish Government. That is unacceptable—especially given the transfer of some income tax powers to this Parliament. The PCS has also highlighted the risks that the plans might present for collection of the Scottish income tax and the potential consequences for the Scottish Government’s tax take.

The centralisation to two new Scottish megacentres in Glasgow and Edinburgh will disadvantage communities and taxpayers in other areas of Scotland; it will make the service more remote and inaccessible for many customers and, at the same time, deprive tax collectors of vital local knowledge.

Prior to the independence referendum three years ago, the security of HMRC jobs was held up as a reason for Scots to vote against independence. Like so many other vows that were made by the better together campaign, that promise lies in tatters.

The proposals have been decried by the Scottish Government, unions and the National Audit Office, which has said that the HMRC plans are “unrealistic” and show no understanding of the impact on services. The plans will have a disproportionate impact on many communities and will have no tangible benefit. They will deprive Scotland of a vast wealth of skills and experience of tax administration, and will pile additional pressure on staff, leading to a potentially disastrous decline in customer service.

On all those counts and more, the HMRC should be sent home to think again.

17:21  

I thank Linda Fabiani for bringing the debate to the Parliament. Linda and I have quite different political views, but we are evidence that it is possible—quite regularly, actually—for people in different parties to work together.

Linda is the constituency MSP for East Kilbride and I live there.

Can you please use the full name of the member?

I did.

No, you are saying “Linda”. You are not using the full name. It is one of the protocols—it is for the official report.

Linda Fabiani is the constituency MSP for East Kilbride and I live there. I was a councillor there for 10 years and was instrumental in setting up the East Kilbride task force that was formed when Rolls-Royce announced that it was pulling out of the town.

East Kilbride, Scotland’s first new town, which was built 70 years ago, has, like many other places, suffered its share of job losses, but I still believe that it is a vibrant town with a great future. HMRC has announced that it wants to close down its huge operation there although it is part of the fabric of East Kilbride. Right from the start, I said that I would back any campaign to keep those jobs in East Kilbride. However, I also made it plain that, if there were to be banner-waving protests, I would be an observer only.

I have had private discussions with a Government minister before the general election and with HMRC officials, and I will revive that contact. My view is that HMRC, like any organisation, is perfectly entitled to review its operations from time to time and to conclude that it needs to change the way in which it works. That is normal in private businesses and it need be no different in the public sector. However, I think that its solution—closing its East Kilbride operation by 2025, as well as its Cumbernauld site, to move jobs to Glasgow city centre—is misguided.

In April, MPs on the Public Accounts Committee produced a pretty damning report. Its summary reads:

“HMRC ... is one year into a 10 year plan to transform the way it collects tax. As part of this it plans to reduce its 170 offices nationwide to 13 large regional hubs in city centres. We do not believe that it will save as much money as HMRC has predicted and we are concerned that it has not thought through all the negative costs to the wider economy of its approach and the impact on local employment.”

Its first conclusion is highly relevant. It states:

“HM Revenue & Customs has yet to demonstrate that it has a realistic and affordable plan to deliver such a radical change to its estate, and we do not believe that it needs to be based in expensive cities across the UK.”

I agree with that. Glasgow city centre is expensive. The report also states:

“The Government Property Unit should set out the rationale for having regional hubs and mini-hubs and for determining their locations. It should also explain how it is taking into account the impacts on local economies when deciding how the government estate should be configured.”

Will the member take an intervention?

I am sorry, but I am out of time.

It is the local impact that most concerns me and, so far, I have not seen any evidence that it will be mitigated. However, Jon Thompson, HMRC chief executive, makes clear in his 16 June letter to the committee that HMRC is intent on proceeding.

In December 2016, Mr Thompson told me:

“Whilst East Kilbride might offer very competitive rent costs, it would not be right for HMRC to simply opt for the location that offers the cheapest property if an alternative site, with slightly higher property costs, offers a better overall net return for the Exchequer.”

I find that staggering. Mr Thompson also said:

“as the local higher education facilities offer training in the skills HMRC needs”,

Glasgow would provide

“better access to a pipeline of talent that HMRC can attract and retain in future.”

That will be news to South Lanarkshire College and the University of the West of Scotland.

I will continue to do all that I can to assist the “Stay in EK” campaign, and I will work with all parties in doing so.

17:26  

I, too, thank Linda Fabiani for bringing the motion before Parliament today. Presiding Officer, with your indulgence, I will leave shortly after I have made my speech for another appointment.

I declare an interest as chair of the PCS parliamentary group and highlight that PCS represents HMRC staff. I thank PCS for all its good work in so many areas, with the “Fighting for Tax Jobs, Fighting for Tax Justice: A Worker’s Alternative” report evidence of that.

The UK policy to close tax offices impacts on communities from Wick to Brighton. Many communities will be—or have been—affected by the ill-thought-out and damaging proposals that are set out in HRMC’s “Building our future: Transforming the way HMRC serves the UK” document, which includes closing 160 tax offices across the UK and leaving 13 regional hubs. We cannot build the future by destroying a vital public service that collects the taxes that pay for schools, hospitals, police and fire services and all the rest of the services that civilise our communities.

In my region, the planned office closures are Barbara Ritchie house in Livingston, the office at the Pyramids business park in Bathgate, and Elgin house, Grayfield house and Meldrum house in Edinburgh. Well over 1,000 jobs—the figure is probably nearer to 2,000—from West Lothian alone will be centralised to a new-build office in the most expensive part of central Edinburgh. How on earth does that make any financial or operational sense?

The consequences for West Lothian will be grim. Each of those workers contributes £1,000 a year by spending locally in shops, bars, petrol stations and other places. All that money will be gone. In addition, each morning, more workers and more traffic will be directed on to the already brutal journey into central Edinburgh along the M8. Of course, the displaced staff can take the train at £9.30 a day for a return ticket, or £46.50 a week.

The proposals take no account of people’s caring duties, the environmental impact or a series of other knock-on effects.

I commend PCS branches up and down the country, which have been working with councils, businesses and communities, for fighting this madness.

Public sector jobs are being decimated across the board—tens of thousands of jobs have gone in local government because of the Tories’ austerity policies, which are compounded by the Scottish Government’s policies. The fire service, the police and our colleges and councils have seen jobs shed across the board, but no SNP back benchers have called for a debate to defend those jobs.

I have worked across the parties, including with Fiona Hyslop, Angela Constance and the Green Party—I will work with any politician—since HMRC made its announcement. I will continue to do that. However, we do not see any SNP members attending PCS parliamentary group meetings or getting involved in our campaigns. Quite rightly, they put the boot into the Tories on issues such as the one that we are debating, when the responsibility lies with the UK Government, and I am more than happy to join them in doing so, but when it is their party’s Government that is responsible for holding down Scottish civil servants’ pay or imposing cuts on pensions or cuts in posts, they are nowhere to be seen.

Will the member take an intervention?

Excuse me. I appreciate some of the points that you are making, Mr Findlay, but you are drifting more and more off the topic of the debate.

I am not.

Yes, you are, Mr Findlay. This is not a debate between you and me.

Okay—no problem.

I hope that the situation that I described changes.

PCS is quite right to demand that a full equalities and economic impact assessment be carried out of these appalling and damaging proposals. Jobs in the public sector should be located in areas in such a way that they spread the economic benefit and support jobs and services; they should not be centralised with the result that they further erode the stability of local economies that have served our country’s tax system well over the years.

I thank Linda Fabiani for supporting PCS members in their campaign, and I hope that she will do so again when the employer is her own Government.

17:30  

I, too, thank Linda Fabiani for bringing this debate to the chamber and allowing us once again to raise our concerns about the HMRC proposals—to close tax offices and centralise the jobs—that are set out in the optimistically titled “Building our Future: Transforming the way HMRC serves the UK”. Hmm. I think that “Dismantling our Future” might be more appropriate.

Linda Fabiani eloquently expressed the devastating impact that the proposals will have on communities across Scotland. Given the importance of tax collection and its administration to society as a whole, the lack of consultation is, quite frankly, breathtaking. The lack of appropriate public and parliamentary scrutiny is deeply worrying. What about the health and wellbeing of the staff who have been placed in this precarious position? It has been entirely disregarded.

The proposals are determined that efficiency lies in replacing people with technology, yet the international evidence suggests that digital technology has aided tax collection when it has been accompanied by increases rather than decreases in staff numbers. That point is forcefully made in the excellent PCS report. More cannot be done with less money and fewer people. How can we possibly close the tax gap that is created by our failure to collect tax if we lose expertise that has been accumulated over decades of work and which raises much-needed revenue in this country? “Fighting for Tax Jobs, Fighting for Tax Justice”, the comprehensive and well-researched report that we are debating this evening, rightly states that digitalisation is no alternative to human oversight and knowledge gained over decades, and it never will be.

We have previously debated—in a members’ business debate that Neil Findlay secured—the proposal to close HMRC offices in West Lothian and move the jobs to Edinburgh, and the points that I and other members made in that debate are worth repeating, not least because those who are responsible for the decision do not appear to be listening. I should say that I will willingly join colleagues from other parties in carrying a banner if we need to protest further against the decision, because it cannot go unnoticed.

Jobs should be shared across the country rather than being centralised further in the central belt. I represent Lothian, from West Lothian to Musselburgh in the east. We need jobs across Lothian, so why suck more into the centre? I simply cannot see how the centralisation that will take place just five minutes from here at New Waverley makes sense. The notion that offices off the Royal Mile that are minutes from Princes Street and Edinburgh castle are a cost saving and less expensive than the current offices in Bathgate and Livingston is ridiculous. We really need to see the numbers, because taxpayers are paying for this.

The keep work in West Lothian campaign has done much to defend those workers who are based in Bathgate and Livingston and has made the case many times that increased travel times and childcare requirements will mean workers taking a pay cut of 8 per cent, or an average of £1,300 out of a salary of £21,000. Concerns have been raised with me that those who are eligible for cash for excess fares might subsequently lose out on tax credits.

The people of West Lothian have the education, the skill and the expertise; that is proven, as is their commitment to the work. Moreover, the costs to the local economy will be damaging, with many small local businesses losing out. After all, folk pop into shops to buy a sandwich or petrol, or they pop into local pubs at the end of the day.

As for the impact of increased travel on our roads, Glasgow Road is one of the most congested in the United Kingdom. Indeed, it is second, I believe, outside London, and I would like David Mundell to try commuting on it any day this week. It takes an incredibly long time and, as Neil Findlay has pointed out, the train is an expensive option.

The term “regional hub” is a misnomer and a strange description of city centre centralisation. The case for this package of cuts has not been made—far from it. Let us stop it and have a rigorous and independent review now.

17:35  

I thank Linda Fabiani for bringing this important issue to the chamber this evening. Her motion highlights the devastating impact of these job losses on communities such as East Kilbride, and I hope that all of us in the chamber can express support for PCS, wish it all the best in its negotiations with HMRC and thank it for its excellent “Fighting for Tax Jobs, Fighting for Tax Justice” report.

Unfortunately, for folks in the Highlands, it is too late to save their jobs. Every member of staff in the Inverness HMRC office has accepted redundancy; some have already left and the office will close in the next few months. Over 60 highly skilled jobs have gone. I hope that members will indulge me as I focus on my constituents’ experience in this Tory Government centralisation scheme.

To prepare for the debate, I spoke to a PCS union rep about the closure of the Inverness office. I heard about people facing real uncertainty in their lives, their situation seemingly worsened by the way in which things have been handled. Since 2015, the staff of the Inverness HMRC office have been facing the reality of being made redundant as a result of the building our future programme. The nearest regional centres will be located in Edinburgh, Glasgow and Belfast, and most Inverness staff are unable to take up posts there.

Staff were promised support from HMRC; in reality, however, the level of support that has been provided has fallen far short of what employees have needed and wanted. Some employees in Inverness have accepted that their futures do not lie with HMRC and, since late 2016, they have sought to upskill themselves with little or no support from HMRC. Although employees were advised at the time that they would be leaving HMRC in the spring of 2017, they have only just received their voluntary redundancy offers. Having come to terms with the changes lying ahead, many had started to move forward and had even started to submit CVs and apply for jobs, but because of the changes to the timeline that employees were given and HMRC changing when their employment would end, lots of them have had to turn down offers of future employment.

For over two years, the staff have faced uncertainty about their jobs, their financial security and the impact on them and their families. This is how years of excellent public service end: people not being informed and not being supported and HMRC moving the goalposts. It is making employees feel undervalued and stressed. The process of redundancy is inevitably stressful, but when the process is not run properly, it can have a serious impact on employees’ mental as well as financial wellbeing.

One of the most baffling aspects of the whole episode is the way in which the events of the past few years have unfolded—I have mentioned that in the chamber before. I know of folk who were promised that, if they voted no in the independence referendum that was held three years ago this week, their jobs would be safe. They have not forgotten those promises and it is yet another aspect of this whole episode that they find tough to take.

I finish by again thanking Linda Fabiani and PCS for their tireless work on this issue. I hope that the folk of East Kilbride can be spared the human cost of this centralisation. If so, it will prove some comfort to their colleagues in the north.

17:39  

I, too, thank Linda Fabiani for bringing forward the debate. I represent North East Scotland and I am all too familiar with the effect of job losses on communities. The last thing that my constituents want is further job losses. Aberdeen and Dundee are amazing cities in which to live and do business, and both have had more than their fair share of job losses.

Although the announcement of the location of the new social security office in Dundee is most welcome, recent months have not been good for Dundee, where HMRC employs more than 500 people, because of a number of recent job losses. More than 250 jobs have been lost from Lloyds and, just a few weeks ago, almost 100 jobs were lost from the Scottish Electric Group. Unfortunately, HMRC plans to close one office in Dundee, and jobs from another office are to be transferred to the Department for Work and Pensions, although—thankfully—it seems that most of those jobs will be kept.

I recognise that HMRC must adapt to changing circumstances and that it is perfectly reasonable for it, like any other organisation, to examine how it operates in order to improve. That is fair enough.

Bill Bowman echoed his colleague Graham Simpson in saying that it is perfectly reasonable for HMRC to review its business model but, having heard what he has heard from me, Linda Fabiani and Maree Todd about how HMRC has treated its staff and the trade union involved, does Bill Bowman still accept that it is acting in a perfectly reasonable manner?

It is equally fair to examine the process and raise questions about areas that we have concerns about—for example, how the effects of closures on local employment and economies will be properly addressed. There are also questions about the potential loss of specialised local knowledge and the impact that that might have on excise and tax avoidance work. Local impacts will be felt most keenly, and we must engage with one another if we are to find solutions for the communities that are affected.

Sadly, neither the motion nor the report that it is based on lends itself to inspiring an environment of co-operation in the chamber. The language is extreme and the tone is hostile, and the motivation of the organisation that is behind the report is political. The report is not a considered response; it is a cynical response. Management is seen only as being bad, and it is implied that Edinburgh is undeserving of new jobs because of the relatively high average disposable income in the city.

Does Bill Bowman acknowledge that there has been a woeful lack of consultation and that such a lack of consultation and such disregard of the views of those who work in the service are bound to be met with a degree of frustration? I do not share his interpretation of the report.

The language that Alison Johnstone just used is quite extreme. If we are trying to find a way to move forward, we need to use language that we can all adopt. I have read the report, which I hope that Alison Johnstone has read, too. As I said, it says that Edinburgh is undeserving of new jobs because of the relatively high average disposable income in the city. Does that mean that everyone in Edinburgh is rich? The report writers also threw in a bizarre reference to private schools for good measure. None of that helps to raise support for the jobs that Linda Fabiani is concerned about, and the people who will be affected deserve better.

Do I have extra time, Presiding Officer?

Yes—you have taken two interventions.

Thank you.

The fundamental principle to consider should be how best to protect local jobs, address valid concerns in the workforce and support our communities. Those things will not be achieved by pushing party politics on the issue, suggesting that some are less deserving of jobs than others are or promoting a trade union’s radical political objectives; they will be accomplished by co-operation, by consensus, by reasoned and rational debate and by standing up for the people who matter most—our constituents.

As my colleague Graham Simpson is ready to do in East Kilbride, I stand ready to work alongside other parties to keep jobs in the north-east and other communities, and I hope that others do, too.

17:44  

I join other members in thanking Linda Fabiani for bringing the debate to the chamber. I do not particularly welcome the fact that the debate is necessary—she said at the outset that she does not welcome that fact, either—and I very much regret that we are having it, but it is necessary and right that we should have the chance to discuss the issue.

I welcome almost universally the contributions that have been made—I will come to Mr Bowman’s contribution in a few moments. The tenor of the debate has reflected the debate that Parliament held in October 2016, when there was cross-party consensus and concern about the impact of the changes.

I will pick up on the language that was deployed by Mr Bowman and Mr Simpson, with the caveat that I welcome the general thrust of Mr Simpson’s contribution, which I will return to. They both said that it was appropriate for HMRC to review its business model, and in some senses I do not disagree with that general point. However, to take on board the points that Alison Johnstone made, at a time when—rightly—we see very public concerns that too many taxes go uncollected because of significant tax avoidance, surely we must question the sense of a business model that will mean further reductions in the number of HMRC employees, as will be the case under the current programme.

Through the creation of what are euphemistically referred to as two regional centres—Clare Haughey deployed the terminology “megacentres”, which is rather more apt, and Alison Johnstone was right to say that the term “regional hub” is somewhat strange—HMRC anticipates accommodating between 5,700 and 6,300 staff. We know that more than 8,000 HMRC staff are employed in Scotland, so there will be a headcount reduction that continues the trajectory of a reduced number of employees in HMRC over a number of years. I concede that that was not begun by the current UK governing Administration; it was begun by the previous Labour Administration.

Will the minister accept that I said that it is perfectly right for any organisations, including Governments, to review how they operate, but that I also said that I disagree with the review’s conclusions, which I am entitled to do as a locally elected politician? I think that the review’s conclusions are wrong.

I concede that and, with all due respect to Mr Bowman, that is why I drew a distinction between Graham Simpson’s contribution and that of his esteemed colleague Mr Bowman.

On reviewing business models, we have heard a clear and compelling case that should cause the UK Government to pause for thought. I am responding to the debate on the Scottish Government’s behalf with a clear ministerial interest, given my responsibility for employability. The changes will have a direct impact on employment across Scotland. I also speak as a constituency representative, because the second-largest single HMRC site that will be affected—after Centre 1, which is in Ms Fabiani’s constituency—is located in my constituency. That is causing considerable concern to the workforce.

I thank PCS for its work on the report that it has laid before us and submitted for the consideration of the UK Government and of the Scottish Government, as well—I will come to that. That is where Bill Bowman’s contribution was extraordinary and rather peculiar. For him to suggest that what PCS has laid out is extreme with a radical political agenda is—to be frank—one of the most extraordinary things that I have heard set out by any member in my time in the chamber. The Public and Commercial Services Union is representing the interests of its members. It is acting in the fashion in which we would expect a trade union to act. That is not a radical political agenda; it is representing its members, and we should put that on the record.

I see PCS representatives in the public gallery, who may well write to Mr Bowman. I thought that it was strange for him to say that PCS had set out that Edinburgh is undeserving of additional jobs.

Have you read the report?

I have. I stand to be corrected if I have got this wrong—I read the report quickly—but nowhere in the report do I see the word “undeserving”. The report reflects the concern about some existing communities—Bathgate and Livingston are the primary examples—that benefit by having HMRC jobs located there, and it asks why they should have to suffer the disbenefit of those jobs being relocated to a location that might not be as economically disadvantaged as those communities are. I pay tribute to my colleagues—including Fiona Hyslop, who is sitting next to me—for the campaigning that they have undertaken for their communities in West Lothian.

I concede that the report calls on the Scottish Government to undertake certain actions, including interacting with the UK Government and asking it to halt the current process. We have done that; the First Minister spoke personally to the permanent secretary of HM Revenue and Customs, and the Cabinet Secretary for Economy, Jobs and Fair Work wrote to the Financial Secretary to the Treasury to seek a meeting to discuss the matters in some detail. I have to say that the response was rather negative. However, it was interesting to hear that Mr Simpson has been able to secure a meeting to discuss the matter in private with the relevant UK Government minister. I look forward to Mr Simpson’s assistance in ensuring that the Scottish Government, too, can set out its position to the UK Government.

The report considers whether HMRC in Scotland should continue to be under the UK Parliament’s control or whether its powers should be transferred to Holyrood. The Scottish Government supports the aim of transferring those powers here. I am clear that powers to collect and manage all taxation that is raised in Scotland should become the preserve of the Scottish Government and the legislative responsibility of the Scottish Parliament. The report also calls for the abandonment of costly private finance initiative programmes for office buildings, which the Scottish Government also supports and which is a policy that we have put in place through our programme of construction.

I very much welcome the PCS report, but it is unfortunate that PCS had to produce it. I very much regret the approach that the UK Government has taken on the matter. Linda Fabiani has called on the Scottish Government to continue to press the UK Government on the matter, and I reassure her that we will continue to do that.

Meeting closed at 17:52.