54. The O'Donnell review noted that the creation
of the new revenue department presents an opportunity to modernise
the accountability arrangements, and to improve clarity about
who is responsible to whom, for what. The review recommended that:
- "the new department should,
like its predecessors, be a non-ministerial department, as an
underpinning of customer confidentiality;
- each year the Chancellor should
issue a Remit to the Executive Chairman outlining the new department's
main new and ongoing tasks. This should be focussed on what should
be achieved, and why, rather than how, which should be a matter
for the new department;
- a Framework Document setting
out who is accountable to whom, for what, in the new department,
should be published. The Framework will be an opportunity for
Ministers to set out long-term principles to govern the work of
the department; and
- structures should be established
to ensure that the Treasury and the new department have a close
dialogue, developing a shared view of key issues, and agreeing
advice to the Chancellor on the form of the annual Remit."
55. On 4 October it was announced that the Paymaster
General would be the departmental minister for HM Revenue and
to an updated list of ministerial responsibilities on the Treasury
website, the Paymaster General's responsibilities also include
"strategic oversight of the UK tax system as a whole including
direct, indirect and corporate taxation, capital gains tax, inheritance
tax and VAT."
The Economic Secretary's responsibilities include "environmental
issues including transport taxation and lorry-road user-charge"
and "excise duties and gambling."
Mr Varney told us that he was accountable to three Ministers as,
in addition to the Paymaster General and the Economic Secretary,
he reported on some issues to the Financial Secretary.
56. We welcome steps to modernise the accountability
arrangements that will apply to the new department. We support
the introduction of a Framework Document setting out who is accountable
to whom, for what, in the new department, and the proposal that
the Chancellor issue an annual Remit to the Executive Chairman
outlining the department's main new and ongoing tasks.
57. However, we note that the Executive Chairman
will be reporting to three Treasury Ministers on various aspects
of the new department's work, an arrangement which, at least in
theory, appears cumbersome. We recommend that this aspect of the
new arrangements be reviewed in the light of practice after the
new department has been created.