Before Margaret Hodge returned to being simply the Labour candidate for Barking, she spoke to Matt Foster about HMRC, claims of grandstanding and her high-profile time as chair of the Public Accounts Committee. Photos by Paul Heartfield
Our interview hasn’t even kicked off, and already Margaret Hodge is outraged on the taxpayers’ behalf. It’s chilly in her House of Commons office, and the chair of the Public Accounts Committee greets CSW with one hand clutching a piping hot drink. “There’s a cold stream that comes through the air conditioning there, so I have to have the heating on,” Hodge explains. She pauses for a moment, before delivering the official PAC verdict: “It’s absolutely appalling. A waste of public money!”
For anyone unfamiliar with her time at the helm of parliament’s most influential cross-party committee – the one which holds government to account on spending – that’s pretty much how you’d expect Margaret Hodge to describe a slight draught. In her five years as chair, the 70-year-old Labour MP – the first woman to occupy the post – has gained a reputation as a merciless interrogator of officials and corporate giants alike. Headline-grabbing PAC sessions during this parliament have seen her brand Google “evil” over its tax record, dismiss the head of the BBC Trust as either “incredibly naive or totally incompetent”, and inform representatives of Her Majesty’s Revenue and Customs that she’d like to “put a bomb under” them.
But as we sit down for what could be her final interview as PAC chair – by tradition, the post always goes to an opposition MP, and our interview takes place days before parliament dissolves for the election campaign – Hodge is in good spirits, in spite of the cold. PAC’s efforts to force tax avoidance onto the political agenda are, she acknowledges, the area in which her committee has made the most public impact. But she’s also keen to highlight the work that hasn’t made the front pages.
“It was pressure from us that changed government use of premium-rate numbers,” she says. “It was a report we did which made NHS England think again about how people with learning disabilities were housed long-term. We got changes in whistleblowing practices. There are a lot of little things we do which are really important, not just the big headlines.”
Under Hodge’s chairmanship, PAC has also expanded the range of sources from which it takes evidence. Curbing a traditional reliance on the testimony of permanent secretaries, the committee in this parliament has been as keen to grill representatives from the private firms running outsourced public services as it has to go after the departments themselves. “I’ve always thought you want the person who delivers the service to come and account to you for what went wrong and what went right,” she says. “So I think it’s completely ridiculous to think we’d go to the accounting officer when you know that we need to look at Serco, G4S, Atos or whoever. That seemed to me a no-brainer.”
When CSW spoke to Hodge in 2010, at the start of her time as PAC chair, she vowed to make the committee more independent. It would not, she promised, become a “creature” of that other spending watchdog, the National Audit Office, whose work PAC has conventionally devoted much of its time to following up.
Five years on, does Hodge think she’s succeeded in giving PAC a voice of its own? “Yes,” she says. “All of our tax avoidance work has come, really, from our initiative. The NAO has been hugely helpful in giving us information, analysis and data that we can then use to frame questions. But it’s been our work.”
She stresses that PAC has proactively pursued tip-offs from whistleblowers, the public, MPs, and investigative journalists (“I think I’m the only MP who likes journalists!” she laughs), rather than waiting for problems to land on her desk. And, she says, it has operated with a strong, “bi-partisan culture of team-working” in the face of limited resources.
Yet Hodge’s chairing of the committee has not been without its critics. Last year, the NAO published an upbeat assessment of the progress made by HMRC in improving its collection of tax. The report found that the UK’s tax authority had already put into action two-thirds of the recommendations made by PAC during the Parliament, and praised it for its strong “managerial competence” and “robustness” in handling risk.
Less than a week after the NAO published its findings, however, Hodge was publicly berating officials from HMRC once again in a stormy televised session. This time, the source of her anger was the way the department had reacted to a fresh scandal at one of Britain’s major banks. HSBC’s Swiss arm was accused of helping wealthy customers to evade tax, and the revelation that UK tax authorities had been handed a leaked list of the bank’s clients as early as 2010 raised questions about its own response. Hardly mincing her words, Hodge told the department’s perm sec Lin Homer that she believed HMRC’s efforts had been “pathetic”.
Some in Whitehall felt Hodge’s strident criticism of HMRC at that session stood in stark contrast with the NAO’s findings. So does she feel she’s given the Revenue a proper chance to improve? “Yep. 100%,” she says, tapping her glasses on the desk for emphasis. While Hodge is quick to acknowledge that there are a “lot of hard-working people” in HMRC and that the department has been good at responding to PAC’s recommendations, she claims it still has an “an awful long way to go” to regain her confidence.
“I don’t trust their numbers,” she says. “I haven’t got massive confidence when they say ‘we’ve collected X more from tax avoiders’. I take those with a bit of a pinch of salt… All I can say is, isn’t it odd that every time there’s yet another leak, there seems to be absolutely no activity until we get our teeth into it?”
Another high profile public figure who found herself caught up in the HSBC scandal was BBC Trust chair Rona Fairhead, called before the committee to answer questions on her time as the head of the bank’s audit and risk committee during some of the period covered by the Swiss tax files. Fairhead’s performance angered Hodge so much that the PAC chair ended up calling for her head. “I really do think that you should consider your position and you should think about resigning and if not, I think the government should sack you.”
For some, this intervention was a step too far. Hodge’s PAC colleague, the Tory MP Stephen Hammond, immediately distanced himself from her comments, while the former Conservative minister Alan Duncan promptly fired off a letter to the PAC chair arguing that her “insulting and offensive” performance had been just the latest example of “inappropriate grandstanding”. “You were rude, abusive and bullying in a manner which brings your committee and the proceedings of the House into disrepute,” he added.
What does Hodge make of Duncan’s claim? “It wasn’t a letter to me,” she says. “It was a letter to the Press Association which he deigned to send a copy of to me the next day, or at the end of the day… That wasn’t a letter. That was a press release.” While she acknowledges that she may have overreacted to Fairhead in the heat of the moment – “I was getting more and more irritated, so I did lose my cool with her” – Hodge remains highly critical of the BBC Trust chair’s evidence. “I thought it was really poor. She talked constantly about systems and policies. And you know, you can have systems, but you’ve got to show a bit of common sense. There was a total lack of common sense.”
Indeed, Hodge argues that her sometimes theatrical approach with difficult witnesses plays a vital part in ensuring that politicians and the wider public sit up and take notice of her committee’s work.
“Do I grandstand? I do, occasionally,” she concedes. “But my answer to it is that I don’t have any powers. My only power is to shine a light on a particular issue, draw attention to it, stimulate a public debate. And sometimes you have to do that with a little bit of exaggeration. So if I were doing that simply for a headline to promote M Hodge it would be outrageous and appalling. But I’m doing it to get attention drawn to a particular issue. And it has succeeded, dare I say it, every now and then.”
And what about her treatment of civil servants? In 2010, Hodge told CSW that she wanted to try to change the way PAC treated officials, warning that, while an all-guns-blazing attitude “may make for good telly”, it was unlikely to result in “meaningful accountability”. How does she feel about that statement five years on?
“It’s really, really difficult. And, probably, in that [regard] I haven’t achieved what I set out to achieve in the first instance,” she says. “Sometimes PAC does. Sometimes, if you look at our hearings, when officials are open, robust, on top of their subject, willing to enter an honest conversation, you’ll find a good session, which is not confrontational but which can be about really difficult issues. I don’t want to pick names. But you can see that sometimes we’ll be dealing with something that’s gone horribly wrong, but there will be a really interesting and good conversation about how to move forward, or what we do to learn from the mistakes we’ve made.
“Other times you get evasiveness. You get long-winded responses. You get a total lack of engagement. And that just forces you to shift into a different gear. So I take partial responsibility for being more confrontational than I had hoped I would be. But I also have to say that the quality of the engagement in the committee often dictates the tone of what happens.”
Witnesses, Hodge believes, have to meet PAC halfway. As a former minister, she says she is quick to spot when officials appearing before her committee seem to have been given a pre-prepared “line to take”, and advises civil servants worried about a tough PAC session to be “honest, direct, and to-the-point”. Hodge also stresses the importance of swotting up on the subject beforehand, claiming that a lack of preparation can even extend as far as Whitehall’s top tier.
“I put time into preparing so that I know a little bit of what I’m talking about,” she says. “And sometimes, even with the little bit I put in, I’m more on top of it than the perm secs. Scary, isn’t it?”
There has been much speculation around Hodge’s plans for the next parliament. She’s already ruled herself out of running for London mayor when Boris Johnson steps aside in 2016, arguing that the time has come for the city to be represented by someone from a black or minority ethnic background. Nor will she be formally endorsing another Labour candidate “at this point”.
However tempting a shot at City Hall may have been, Hodge says the combination of a rejuvenated party in her Barking constituency and the prospect of an uncertain general election result have tempted her to stick around in parliament.
“None of us know what’s going to happen in 2015 really, if we’re honest,” she says. “So I think it’s going to be an interesting time to be part of politics here at Westminster.”
Is there one more big job left in her? “I hope so. Goodness knows.”
A Cabinet job? “Oh, I don’t know. We’ll wait and see… I think these five years have been really, really exciting, really interesting. I’ve learned so much. I’ve learned a heck of a lot about things I never knew anything about.
“I never knew about energy infrastructure, transport infrastructure, defence procurement. I never knew about these things. Tax! I knew nothing about tax. All of these things I’ve learnt about. Not only has it been interesting and quite exciting but I think I’ve got quite a lot to say about public services and how they should be delivered, and the relationship between civil service, ministers and parliament, all these sorts of issues.”
Hodge says some of those lessons will surface in a book she’s planning to write on her time as PAC chair, although she admits she’s yet to put pen to paper. “I’m thinking of it, in my head,” Hodge says, before gesturing to a hefty stack of box-files on a shelf in the corner of her office, which she says she intends to wade through with her researcher at some point soon.
Hodge is also getting ready to take part in her first piano concert – once the election is out of the way, of course. Is she better than fellow Labour virtuoso Ed Balls? “I think so,” she laughs. “I mean he’s only about grade two or grade three, isn’t he? Yeah, I am.” (The shadow chancellor is actually a grade four, CSW learns later). Perhaps sensing a ‘Labour at war over piano claim’ headline, Hodge quickly adds: “He’s probably better at something else! He’s in a rock band and I do classical music. So it’s slightly different.”
Whatever happens in May, the Googles and Amazons of the world probably shouldn’t break out the champagne just yet. The same goes for the civil service. Whether Margaret Hodge is back in the PAC chair or – as she seems to hope – running a department of her own, we haven’t seen the last of parliament’s attack dog. Whitehall, you have been warned.
HODGE ON...
Barriers facing women in politics:
“My feminism has been an important part of my politics. And right through my career there have been points at which it’s hit you… I was a feminist in the very, very early days. And I’ve always worked on women’s issues. That’s always been at the heart of my politics… Have I had to work harder? I have faced barriers. Actually, ironically, because you know I’m the first woman elected to this job, when I was going around [seeking support for election as PAC chair]… and met a woman MP, I said ‘Vote for me, I’m a woman, they’ve never had a woman before’. So in a way it worked to my advantage. I mean, goodness knows, I also said ‘And I’m brilliantly qualified’ – but I did use that as a unique selling point about why I should do the role.”
Her proudest political achievement:
“The fight against the BNP [at the 2010 election] was for me probably the most important thing I’ve done. If on my gravestone it says ‘...and she smashed Nick Griffin’ – that’s really the one."
Not standing for London mayor:
“I did lead Labour in London for 10 years, when I was the leader of Islington. When I went back and I started talking to people I’d have to do business with if I went for that job, it didn’t seem like progress forward. It felt a little bit like I’d been there before. And I always want new, different, much more interesting challenges. So goodness knows what will happen, but I want a new challenge and I’m not giving up yet!”