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John Healey: I hope that I can reassure the House that the amendments are just what they seem. They cover matters that were debated and scrutinised fully in principle during earlier stages of the Bill's passage, or represent only minor technical changes.
Amendments Nos. 19 to 32 relate to clauses 17, 25 and 27. The clauses provide for how Her Majesty's inspectors of constabulary for England and Wales will scrutinise how Her Majesty's Revenue and Customs complies with the laws, rules and procedures of the criminal justice system. Amendments that were made in Committee allowed the remit of HMIC to be extended to cover HMRC activity in Scotland and to allow joint inspections between HMIC for England and Wales and HMIC for Scotland. Amendments Nos. 19 to 32 will allow the remit of HMIC to be extended to cover HMRC activity in Northern Ireland. In other words, the arrangements are identical to those that we debated in Committee for England and Wales.
Mr. Tyrie: In giving way, the Minister will spare me having to make a more substantive reply. Will he explain why it is that these clauses were not ready earlier? Why is it that Northern Ireland has been left until last and we have been dumped with a dozen or so amendments on Northern Ireland without an opportunity to scrutinise them properly?
The current arrangements in Northern Ireland for external scrutiny of police functions are more complex than in Scotland or in England and Wales. We therefore wanted time to get things right. The greater complexity in Northern Ireland, which I am sure
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that the hon. Gentleman will appreciate, meant that it was important that we had fully discussed the proposals with those bodies in Northern Ireland before we framed the regulation. I do not accept that in tabling these amendments the House has not been allowed properly to scrutinise the arrangements, having previously had a substantial debate on the arrangements in principle.
Amendments Nos. 33 and 34 will allow the Independent Police Complaints Commission and the Parliamentary Commissioner for Administration to co-operate effectively in carrying out investigations into complaints about HMRC. I hope that they clarify aspects of the arrangements that the hon. Member for Torridge and West Devon (Mr. Burnett) raised in Committee. Amendments Nos. 12 and 13 are technical amendments to clause 31. They combine the different subsections dealing with police powers of arrest in Scotland and Northern Ireland. There is no impact on the powers conferred by the clause upon the police either in Scotland or in Northern Ireland.
Mr. Burnett: I shall make a few important points on this group of amendments that set out arrangements for inspection, complaints of misconduct and confidentiality. They also set out the duties, or embellish the duties, of HM Inspectorate of Constabulary and the Independent Police Complaints Commission.
Earlier this week the draft Revenue and Customs (Complaints and Misconduct) Regulations 2005 were published, setting out the powers to be given to the IPPC. The Inland Revenue's serious complaints against staff were handled by an organisation that I believe was known as the board's investigation office. The similar function at Customs and Excise was carried out by its internal investigation division. I understand that the two organisations will merge. I believe that the merged organisation will be called HM Revenue and Customs internal investigation division.
In Committee, I expressed my concerns about possible confusion and duplication, or even triplication, in the functions of the IPPC, the ombudsman and the Revenue adjudicator. Will the Economic Secretary explain the extent of the separate functions of the new internal investigation division and the IPPC? Will the new IID deal with just trivial misconduct, leaving all the more serious cases of misconduct to be dealt with by the IPCC?
It is important that we avoid confusion. There should be clear-cut rules that set out which organisation is to investigate what. I hope that the Minister will be able to spell out for the House the functions of each organisation. When he has explained those separate functions, will he set out the Inland Revenue and the Customs and Excise referral obligations? For example, who should refer if a junior member of HMRC notices corrupt behaviour by a fellow official or officials? Does that employee have a statutory duty and a means directly to refer the matter to the IPCC without breaching the terms of his or her contract of employment? What are the statutory obligations on members of the merged organisation and the internal investigation division to refer misconduct to the IPCC? Will voluntary referral and disclosure of non-specified offences be permitted, as happens in the arrangement between the police and the IPCC?
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It being two hours after the commencement of proceedings on the programme motion, Madam Deputy Speaker proceeded to put forthwith the Question already proposed from the Chair pursuant to Order [this day].
This Bill is the start of a major change in the way that taxes and revenues are administered in this country. The O'Donnell review envisaged significant changes to the way in which the new department of Her Majesty's Revenue and Customs will conduct business, resulting from an ability to look across the affairs of all taxpayers. The integration of Inland Revenue and Customs and Excise is a huge job, and it will take time to complete. The Bill does not deliver a fully integrated department from day one, but it is a first, important step in the process of integration, as it enables new working practices from which integration can develop. Where that integration requires substantive policy or legislative change, it will be subject to consultation in the usual way.
Clear benefits will be realised from the merger. Her Majesty's Revenue and Customs will, over time, be able to provide a truly integrated service to taxpayers, which will result in a more consistent and coherent approach to their affairs. It will be able to improve the quality of taxpayer contact with the organisation by taking a look right across their tax affairs and tailoring its response accordingly. Such developments will also help to realise efficiency benefits by improving the effectiveness of revenue administration and helping to reduce the tax gap. The ability to look across a taxpayer's affairs will allow the department to target its resources more effectively on areas of risk.
The integration of two of the oldest departments in Whitehall is an historic occasion. The Inland Revenue can trace its history back more than 300 years, while a nationally organised customs system dates from the 13th century. The legislation will complete the process of amalgamating the major revenue-collecting arms of the state, which began as long ago as 1834 with the amalgamation of the Boards of Stamps and of Taxes. The staff in both Customs and Excise and the Inland Revenue have consistently delivered the highest level of service, and their professionalism is beyond question. The formation of Her Majesty's Revenue and Customs will build on the proven track record of staff in both departments to deliver a world-class organisation that is truly fit for the 21st century. My right hon. Friend the Chancellor, the Economic Secretary and I have the greatest confidence in the work of the Inland Revenue and Customs and Excise, and the Economic Secretary and I are proud to have served as departmental Ministers. We look forward to the creation of Her Majesty's Revenue and Customs, and I commend the Bill to the House.
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Mr. Tyrie: I agree with quite a bit of what the Paymaster General has said, but not all of it. When we first had a meeting about the Bill in December in the Treasury, she said that she intended to introduce a minimalist Bill and she saw it mainly as a consolidating measure. In the main, she has stuck to her promise to us that day. However, there have been 120 Government amendments and five new clauses. Even on Report, 29 amendments were tabled. Given that the measure has been thought about for so long, and considered over the past four years, first with a view to not having it and then with a view to having it, there seems to have been a lack of discipline on the drafting side.
None the less, we had a constructive debate on the Bill in Committee. I gave the Minister advance warning of every aspect I wanted to examine and told her which clauses I intended to consider, and she responded positively, on the whole by trying to answer the points that I made, rather than retreating to the kind of fob-offs that Ministers often give spokesmen in Committee. I thank her for that, and for the warm spirit with which she approached a number of the amendments that we tabled, particularly on the oath, which she has now broadly accepted.
The Economic Secretary also accepted an amendment that I tabled, or at least the spirit of it, on performance targets and statistics for the Revenue and Customs Prosecutions Office.The Paymaster General agreed in Committee to re-examine the powers of the new department and to look at the way in which the Keith committee went about its work as a possible template for the way in which that might be accomplished. That was widely welcomed outside and is a great step forward, so we have made significant progress. We have a better Bill now than at the start of the process, and one cannot always say that about legislation.
We did not get satisfactory answers on a number of points, but I will not go through them all. One of them has been mentioned by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), who is not now in his placelimits on the powers to transfer functions to other Departments. It is a major concern and we have still not received satisfactory assurances. Neither have we received from the Government assurances on the removal of Treasury scrutiny of payments to informers under clause 22. Payments to informants by the Revenue and by Customs used to be subject to consultation with the Treasury, but that is no longer the case. It used to be written into legislation that that was required, but it is not there now. Again, that is a cause for some concern. There are a number of other loose ends, which those who follow these matters will have noted from the Committee stage.
We are left with one big issue, to which we alluded on new clause 1. I shall not rehearse the arguments. Anybody who has followed the debate and the course of the Bill through all its stages will be left with the nagging suspicion that the Government may not have thought the Bill through carefully enough. Nothing that has been published shows that the Government have thought it through. Even though we were not opposing her on it, the Minister never gave a satisfactory explanation for her complete U-turn from the position that she held in 2000, when she opposed a merger, on the grounds that the benefits could be obtained without
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one. No explanation has been given for the wholly inadequate regulatory impact assessment or the perfunctory cost-benefit analysis presented to us.
I hope very much that the Bill turns into an Act that will work well for the Revenue and Customs. I share the thoughts with which the Paymaster General ended, about the dedication and loyalty of so many of the staff in those Departments. Indeed, that was the very first remark that I made in my Second Reading speech. I am, however, left with this lingering doubt: the Paymaster General has mentioned several times this evening that the merger will help to reduce the tax gap, but she has not indicated the extent to which she hopes it will be shrunk, nor even if an estimate has not been made, explained exactly how that might be accomplished.
The private sector is littered with stories of mergers that have gone ahead in the hope that huge synergies would be available, but which resulted in the disappointing discovery a few years later that most or all of those synergies did not exist. I worry that we may experience something similar with this Bill. We will watch carefully to see how the measure developsin a few months' time, perhaps I will be watching from the Government Benches, in which case the Bill would be of particular concern to me.
I regret that new clause 1 was not added to the Bill, because it would have given us a clear yardstick by which to judge whether the merger is sensible, but we will just have to wait and see. I hope that the Government are right, but I fear that there might be a mess.
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