Clause 2
Officers of Revenue and Customs
Dawn Primarolo: I beg to move amendment No. 5, in clause 2, page 2, line 4, at end insert—
'( ) Anything (including anything in relation to legal proceedings) begun by or in relation to one officer of Revenue and Customs may be continued by or in relation to another.'.
The amendment gives me an opportunity to demonstrate the type of technical amendment that is before the Committee. The amendment will clarify the legal position, not change it.
As the amendment is technical, it might help if I briefly explain the clause. It establishes a single work force for Her Majesty's Revenue and Customs. It provides for the commissioners of Revenue and Customs to appoint staff, who will be known as officers of Revenue and Customs. Officers will work under the direction of the commissioners, whether they are
Column Number: 7
exercising a commissioner's function under clause 12 or one of the officer's initial functions under clause 5. Like the commissioners, officers will be civil servants.
The description of officers of Revenue and Customs replaces the previous descriptions of staff of the predecessor departments—for example, inspectors, collectors and receivers. Thus, I think that Committee members will welcome the amendment; what it does is fully in line with the modern approach to the designation of Inland Revenue staff, such as that taken by the tax law rewrite project—which I know Committee members are very familiar with. The amendment to clause 2 makes it clear that there is continuity for actions, including proceedings, that are begun by one officer of Revenue and Customs and continued by another. This minor and technical amendment applies provisions in existing legislation: section 1(3) of the Taxes Management Act 1970 and section 145(2) and (4) of the Customs and Excise Management Act 1979. It applies those requirements across Her Majesty's Revenue and Customs activities.
For example, if an officer in the process of routinely examining a taxpayer's records considered that there was a possibility that a criminal offence had been committed by that taxpayer, it would be highly unlikely that the initial officer would have the skills and experience to investigate such a case. Therefore, although the initial officer may well raise an assessment of tax due, they would refer the case to specially trained officers, who would conduct the investigation, relying on the work that had already been undertaken by the case officer, and who would have the authority to use the powers appropriate to such cases. Although the two Acts that I mentioned provide for that, for the sake of clarity the provision should be included in the Bill as well, so that it is absolutely clear that those sections move across. That is what the amendment provides for.
I hope that, with that explanation, the Committee will agree that this is a reasonable amendment. It is intended to ensure that when people read the Bill they will clearly understand the continuity that is laid out in other legislation. They will not have to go to the other two pieces of legislation to understand that point.
Amendment agreed to.
Clause 2, as amended, ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.
Clause 4
Commissioners' initial functions
Question proposed, That the clause stand part of the Bill.
Mr. Tyrie: I resisted the temptation to ask the Minister to read out clause 1(2) or clause 3(2) to the Committee—I certainly could not have managed to do so myself.
Column Number: 8
Clauses 4 to 9 are the first clear example of what is largely consolidation and what is intended to be the minimalist transfer of functions. I have one general question in relation to the clause. I think that I can make all the other points that I want to on the basis of the amendment that I have tabled to clause 5. Apart from a few words about clause 8, I do not have any plans to say much more on this area.
The one general point that I want to make at the beginning of this group of clauses is that because this is, to a large degree, a consolidating Bill—I am talking not only of this group of clauses, but more widely—or a tax law rewrite, it would be immensely helpful if we could have a derivations table for the legislation. We have had a clear briefing that the legislation is minimalist, that there is nothing of substance, that there is no fundamental change in powers and that it is purely mechanistic. The Minister has reiterated that today.
There was a meeting on 6 December between officials and interested parties—30 or 40 people who follow these things closely. The Government have listened to a number of their concerns in the Bill. That is important. However, at that meeting, officials were asked to relay to Ministers a request for a derivations table. As far as I am aware, we have not yet received that table. Is the Minister prepared to commit to producing one? I think that interested parties and those following the Bill carefully would find that table extremely valuable. It is the best test of the extent to which the Bill is minimalist.
9.45 am
Mr. Laws: Clause 4(1) clearly sets out the areas in which the commissioners will have responsibility. It is divided into paragraphs (a), (b) and (c), which relate to existing areas of Inland Revenue responsibility, Customs and Excise responsibility and the management of tax credits. We accept that the Bill is minimalist and, to some extent, we welcome both that and the fact that there will be an opportunity to put together the two departments without dealing at this stage with some of the bigger issues about powers.
However, when we are setting out what the powers of the commissioners should be, there is a real issue about whether tax credits should be included in the new department. This is an opportunity to consider whether they should be included. I want to probe whether the area of tax credits, which many people feel is, in reality, more of a social security benefit, belongs in the new, merged department, which will have considerable responsibilities and a large number of staff and, as I understand it, will focus for its primary responsibility on closing the tax gap. That is different from much of the work that is involved in the administration of tax credits.
Without going beyond the bounds of the Bill, I think that there is a great deal of feeling in and beyond Parliament that tax credits may be in the wrong area. They should not be controlled by the Treasury, but are naturally part of the Department for Work and Pensions. Perhaps this moment, when we are thinking about what the new, merged department should
Column Number: 9
consist of, is a good opportunity for us to think about whether we want clause 4(1)(c), which would give commissioners the responsibility for tax credits as well.
The Paymaster General may well say that it is premature to consider the organisation of the new, merged department. However, Sir John, you will no doubt have seen some of the speculation in the last couple of weeks about Government plans to restructure the Treasury after the general election—the so-called Birt plans, as referred to in a recent article. The article said that there are plans to strip down the Treasury after the election, take away its powers of public expenditure and transfer Treasury Ministers and others to the Cabinet Office under the existing Chancellor of the Duchy of Lancaster. So there is a real issue about whether the Government have plans for the future structure of the Treasury and whether those might, as the recent article in The Sunday Telegraph suggested—
The Chairman: Order. I am perfectly happy for the hon. Gentleman to refer to this issue briefly but I hope that we will not be drawn into a debate on speculation about the future of the Treasury.
Mr. Laws: I certainly would not want to get drawn into that debate and I am grateful for your guidance, Sir John. Obviously you appreciate that the issue is extremely relevant because if the Government plan to restructure the Treasury, possibly in a few months, while we are passing new legislation that would cut across those longer-term plans of the Government, and that would be damaging in terms of Government organisation. It would also be a waste of Parliament's time. I hope that the Paymaster General will be able to comment on that issue and shed some light on the stories about the longer-term intentions of the Government for the powers of the Treasury and the merged department.
Dawn Primarolo: Two issues were raised. First, the hon. Member for Chichester asked about the derivations table. It is not appropriate for it to be part of the Bill. [Interruption.] I did not think that the hon. Gentleman meant that. I am glad to see him agreeing with that because it is not a matter for consideration. However, I can see no reason why we should not produce that table. We can produce it for the Committee. It could be part of the explanatory notes. That has been done before. Tax law rewrites established that process. I think that during the proceedings dealing with one Finance Bill I agreed that we would produce a table in the explanatory notes as an explanation for some clauses. I shall try and get that completed as quickly as possible so that Committee members have it for their reference, as will those outside the House, but it will not be part of the Bill. I do not think that the hon. Gentleman was actually asking for that.
Mr. Tyrie: I thank the Paymaster General for her co-operation on that point. I know that there are many people outside this Room who will be delighted to see that document.
Column Number: 10
Dawn Primarolo: I am glad to hear that. I am sorry that I did not provide it before so that the hon. Gentleman did not have to ask.
On the question raised by the hon. Member for Yeovil, I want to make it clear that the O'Donnell review considered the issue of tax credits and their importance within the Revenue department, and thus the new merged department as an integral part of the tax system. It is a matter of Government policy that tax credits are dealt with by the Revenue department.
The hon. Gentleman has expressed his agreement with the idea that the Government should use a minimalist Bill to begin the merger. In considering the new department, it was clear that tax credits should be clearly included in its responsibilities. If at some later stage, in decades to come, another Government decide that they do not want tax credits to be dealt with by the new merged department, primary legislation will be required to move it, which is right and proper, as I have stressed on Second Reading and at the beginning of today's proceedings.
We have taken the two departments and brought them together in a machinery of Government Bill to ensure that they can continue their functions and that we can begin the process of considering the duplications and ensuring efficiency. I say to the hon. Gentleman that if changing that is the policy of his party, primary legislation would be required. That is absolutely crucial in order to give security and clarity to our staff and the commissioners concerning what the new department is expected to do.
| 
