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The Paymaster General (Dawn Primarolo): Welcome to the Chair, Mr. Hurst. We are rehearsing most of the discussion we had this morning on a very important issue. As I was listening to the contribution of the hon. Member for Chichester, I reflected that there was something I should recommend as reading for the Committee: Jim Cousins's excellent book—he is also an hon. Gentleman—
The Chairman: Order. Hon. Members should be referred to by their official titles.
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Dawn Primarolo: Thank you, Mr. Hurst. I apologise. Many hon. Members, including Opposition Members, have commented on the relationship between Ministers and Departments. That would have put into a helpful context what is a complex relationship. The idea that our excellent civil servants would allow a Minister from any Department to direct matters in something that was inappropriate, in breach of a Minister's code of conduct or an accounting officer's duty or value for money is truly repugnant.
Mr. Tyrie rose—
Dawn Primarolo: Do not get up now, please. I listened carefully to the hon. Gentleman and I now wish to elaborate on my argument. I understand clearly the idea that Ministers do not cherish and uphold the high principles of the civil service and its relationship to elected Ministers and the House. The debate is revolving around the general direction as it has always been used in relation to the Revenue department, the Revenue and Customs and Excise, the Ministers and the Treasury.
We must bear in mind the word ''direction''. I want to ensure that there is no question that a Minister would have the power to intervene in a way that would contravene taxpayers' confidentiality. Direction does not imply an instruction or order that overrides the
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rules or views of the commissioner. To say that that would be exceptional is an understatement.
I shall refer to why we settled on a general direction. The hon. Member for Chichester wanted to explore the definition of policy as opposed to operation. On the one hand, he argued for a clear separation but on the other he realised that the two aspects merge with each other and that there needs to be a clear understanding about that. The phrase ''general direction'' provides that Ministers can exercise control over the activities of the department in a sensible and fairly broad way as, indeed, the Secretary of State can in any Government Department. As I have made clear, during the course of exercising that control Ministers would expect to be engaged in discussions with departments in several ways. They would communicate their intentions and seek advice.
In the process of developing policy, a Minister is working closely and directly with departments to inform them whether the policy is do-able, reasonable, value for money, whether it would require more resources or whether there should be a diversion of resources, to which the hon. Member for Chichester referred. That would leave the Minister accountable to Parliament and have an effect on the public service agreement target. The Minister would have to explain his action to the Treasury Committee, as I did. I said that I took a priority view because I knew that Parliament wanted such matters to be delivered and, as a consequence, I was informed that I was responsible. I did not point a finger at my civil servants; they told me what would happen and that it was reasonable value for money, but that I would be accountable for such action and not to blame my civil servants. Of course, that is absolutely what we are not going to do.
Ministers can set the strategic, high-level protection for the department on policy and issues around it in dialogue and engagement with the department, and the clause seeks to ensure that that does not extend to taxpayers' information. The words ''general direction'' were carefully chosen to ensure that the day-to-day business of the Government continues through HMRC as it is created—[Interruption.] I wonder whether the hon. Member for Yeovil (Mr. Laws) will allow me to elaborate, because this is a complex argument. I am trying to explain how the relationship between a Minister and a department works and why ''general direction'' is not a problem.
This morning and this afternoon the hon. Members for Sevenoaks and for Chichester raised specific issues regarding some rare and unusual circumstances, if they were ever to occur—I have been a Treasury Minister since 1997 and in my experience such things have never occurred, and I have checked with my officials for all other Ministers—where a Minister might direct the department, although the department had given advice against that decision, perhaps because it contravened value for money. In fact, I think I would refer to that as a special direction. In such circumstances the accounting officer would have to issue an accounting officer letter, because if value for money were
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breached, or if there were issues around the poor use of resources or a breach of another area, that would be notifiable immediately to the Comptroller and Auditor General, who would then notify the Public Accounts Committee.
The hon. Member for Chichester is trying to focus on whether the department can be instructed against all its knowledge, experience, expertise and understanding to do something that contravenes everything else that it has tried to do as a Government department under the rules of accounting, PSA targets or what is right and proper.
The commissioners do not have to decide what is ''general'', or what that means. They have to decide whether a decision is appropriate and whether what the Minister has asked, requested, ordered, directed, or otherwise given as a ministerial decision, is inappropriate within organisation rules. If it is inappropriate, the Minister will receive an accounting letter that will be in the public domain and will be known, which is what the hon. Member for Sevenoaks wanted to know this morning.
The hon. Member for Chichester asked about a specific matter, so I will deal with his example. If the Minister directed the department to collect every single penny of money that was due, regardless of circumstances or anything else, would that be a ''general direction''? That is an interesting example, because it raises all the issues. The first half of the answer is that that is a general direction, because it is an instruction to collect the money and not specifically about a taxpayer. However, it would immediately bring into play all the other requirements on the commissioners in deciding whether they would proceed with the ministerial request. For example, would it be value for money, or fair and equitable given the complex circumstances when we do not sometimes collect all the money back? Even though it is of a general nature, the decision would be subject immediately to the accounting officer arrangements, before we have got anywhere near the taxpayer's confidentiality—which we cannot do.
That example is hypothetical and the hon. Gentleman acknowledged that. If it were to occur, the working relationship between the Minister and the department would have broken down to such an extent that I find it impossible to think how the department might function. All sorts of other issues would arise. I understand that the hon. Gentlemen see ''general'' and ''direction'' as an instruction on the way down and therefore that a direction is an order from a Minister. What does ''general'' mean? Perhaps in reality it is the other way round. ''General'' means that it cannot be specific. For example, a Minister cannot instruct the department or ask for information on taxpayers, or seek to design a tax policy with a particular taxpayer in mind to give an advantage. All that would be prevented, even though it is in the general policy area.
The interesting thing about the two groups of amendments—
Mr. Fallon: Will the Minister give way?
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Dawn Primarolo: I will, but I will just return to the amendments that we considered this morning and the amendment before us.
Amendment No. 2 sought to remove all the—
The Chairman: Order. Unless the Paymaster General is doing this by way of analogy, we cannot return to those amendments.
Dawn Primarolo: I am indeed, Mr. Hurst. For this morning's debate and this debate I shall run either side of the same principle; should the Treasury Ministers have ultimately specific control or should they have no control? This morning's amendments sought to make specific controls and amendment No. 79 goes in the opposite direction—to the opposite extreme.
I take it that the amendments were tabled in order to have a decent debate about what was meant by ''general direction''. However, the amendment seeks to provide the commissioners with an independence across the whole function that they exercise. That would mean that the Minister would have a remaining function to express an interest and to give possible guidance on how they should perform, but would be completely unable to be accountable, because the Minister would have no control.
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Mr. Tyrie: Will the Minister give way on that point?
Dawn Primarolo: I will, but let me finish the point. The question is where we set the balance. First, we must protect taxpayer confidentiality at all costs, which is why ''general'' is used. The provision cannot be specific; there cannot be direct intervention. Why was ''direction'' used? I was looking for consistency and such things have always been called that. They are called that in all Departments and it did not cross my mind that the two words together would create some loss of control or a way of asserting a Minister's control.
The Government's intentions are clear. The provision is not just about what is meant by general direction, which means not specific and not affecting taxpayers' confidentiality. It is one of the requirements on Ministers, civil servants and accounting officers that combine in a complex model to protect taxpayer confidentiality on the one hand and appropriate behaviour by Ministers on the other. It will ensure sensible advice from the departments both on operation and policy delivery, and a clear line of accountability to Parliament. Finally, it will develop the policy ability to give greater co-ordination and understanding in order to improve the tax system and make it fairer, more direct and accessible, in a sensible way, for taxpayers; and, dare I say it, to make it occasionally simple.
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