Commissioners for Revenue and Customs Bill

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Clause 16

Use of Information

Amendments made:

No. 6, in clause 16, page 7, line 12, after 'international', insert 'or other'.

No. 7, in clause 16, page 7, line 12, after 'Kingdom', insert 'or her Majesty's Government'.

No. 82, in clause 16, page 7, line 26, at end insert

    '(4A) In subsection (2) the reference to an enactment does not include—

    (a) an Act of the Scottish Parliament or an instrument made under such an Act, or

    (b) an Act of the Northern Ireland Assembly or an instrument made under such an Act.'.

No. 83, in clause 17, page 8, line 22, at end insert


    (e) a reference to an enactment does not include—

    (i) an Act of the Scottish Parliament or an instrument made under such an Act, or

    (ii) an Act of the Northern Ireland Assembly or an instrument made under such an Act.'.

No. 85, in clause 36, page 18, line 5, at end insert

    '(10) In subsection (2) the reference to an enactment does not include—

    (a) an Act of the Scottish Parliament or an instrument made under such an Act, or

    (b) an Act of the Northern Ireland Assembly or an instrument made under such an Act.'.

No. 86, in clause 46, page 22, line 25, at beginning insert

    'except where otherwise expressly provided,'.—[Dawn Primarolo.]

Clause 16, as amended, ordered to stand part of the Bill.

Clause 17


Amendment proposed: No. 8, in clause 17, page 7, line 31, at end insert
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    'in connection with a function of the Revenue and Customs'.—[Dawn Primarolo.]

The Chairman: With this it will be convenient to take the following:

Amendment No. 4, in clause 17, page 7, line 31, at end insert

    'and at the time of their appointment shall make a declaration in the form set out in new Schedule [Form of declaration] before another official.'.

Government amendments Nos. 90, 91 and 92.

Amendment No. 80, in clause 17, page 8, line 9, at end insert—

    '(4) A disclosure made under subsection (2) may only be made under terms which will preserve the confidentiality of the information involved in the disclosure.'.

Government new clause 3—Disclosure to prosecuting authority.

Government new clause 4—Data protection &c. Government new clause 5—Disclosure of information to director of revenue and customs prosecutions.

New schedule 1—Form of declaration.

Mr. Fallon Thank you, Mr. Hurst. You are working hard today. To give you some relief, I shall speak to amendment No. 4, tabled in my name and that of my right hon. Friend the Member for Wells, although it is largely self-explanatory.

The issue of confidentiality has been demonstrated throughout our debates to be extremely important. It was important to the O'Donnell review; when Mr. O'Donnell gave evidence to the Sub-Committee, he said that maintaining taxpayer confidentiality is vital. I hope that you will bear with me if I quote in full paragraph 53 of our report:

    ''The transfer of responsibility for tax policy development to the Treasury and the move of some Customs and Excise and Revenue staff to the Treasury building have raised concerns about confidentiality. We welcome the commitment given to maintaining taxpayer confidentiality and the assurance that there will be no access by Treasury officials or Treasury Ministers or special advisers to individual tax records and recommend that this principle be carried forward into the bill.''

The issue is whether that principle has been properly carried forward into the Bill by clause 17. It is often thought that taxpayer confidentiality is something so secret that it can never be breached. At the risk of upsetting the Committee, I have to remind it that the confidentiality of one taxpayer, Mr. Norman Scott, was breached back in 1976, when the then Labour Prime Minister, Harold Wilson, instructed that Mr. Scott's DHSS file be researched by the Secretary of State. I quote simply one sentence from a book that will be familiar to you, Mr. Hurst, ''The Castle Diaries 1974–76'':

    ''Thursday 12 February I hurried into Cabinet early to give Harold the résumé Jack has done of the Scott file.''

The Jack there is Mrs. Castle's former special adviser, the current Foreign Secretary. So, we know that there have been breaches of confidentiality, but some time ago. Let us take at face value the assurances that we have been given that this Government accept that we should do everything possible to maintain taxpayer confidentiality. If we are to maintain it, it is
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essential that the oath of confidentiality that every member of both the Revenue service and the Customs service takes on his or her appointment be continued. However, it has emerged since the Bill was published that the Government intend to scrap the oath. That is something that we need to resist.

The Paymaster General, when she was pressed on those matters on Second Reading, implied that the oath, or the statutory declaration that the oath has become, will be part of a more general employment contract that will presumably list all sorts of other terms and conditions, including bank holidays, holiday entitlement and sick pay and all the rest of it, in a long document that the new official entry department will sign: an all-embracing terms and conditions document with one signature appended to it. I do not think that that is satisfactory and it does not maintain the kind of confidentiality that I want to see enshrined.

The oath currently takes the form of a statutory declaration made in front of another official in the same service at the time of appointment. The wording for that is cobbled from existing legislation and is, as hon. Members will see immediately, a solemn act that is not bound up with other terms and conditions that are undersigned. The oath is a solemn act that carries some weight and I think that it makes the declarer think for a moment about what he or she is declaring and acknowledge the formal importance of the confidentiality. Instead of that, however, I understand that the Paymaster General is now offering us the duty of confidentiality only—not an oath or statutory declaration—which will be tucked away in an employment contract with the other terms and conditions. That divests the declaration of confidentiality of the weight and singular importance that should attach to it. As I said this morning, that is all the more worrying because we have a vast, new merged department with all the officials and records together that is being placed in the same building as the Ministers and special advisers who transgressed before and may do so again.

I repeat that the Treasury Committee recommended that taxpayer confidentiality should be maintained, welcomed an assurance that there would be no access to individual tax records and recommended that that principle be carried forward into the Bill. Clause 17 is not adequate for that purpose and there is no good reason to dispense with the existing statutory declaration.

Mr. Burnett: I support amendment No. 4. I am a lawyer like you, Mr. Hurst, although I do not practice and I do not know if you do—that is none of our business. I declared on Second Reading that in 25 years as a tax practitioner I had no cause to complain about the conduct of the Inland Revenue and its employees. I had many disagreements, but those were resolved professionally. Having said that, there are of course bad apples that can get through the system one way or another and have to be brought to account.

The Inland Revenue culture is admired worldwide, and part of that culture is the professionalism of its
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members, who know that they have similar responsibilities to those that lawyers have for their clients and doctors have for their patients. That is brought home to them at an early stage by, among other things, high training standards, high-calibre recruits and the statutory declaration that they make, which illustrates that being a member of the Inland Revenue is not like any other Government job. It is not like most other employment. It carries very special responsibilities. We all know that any breakdown or erosion in taxpayer confidentiality will have the most appalling effects on the collection of tax.

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We should be taxed by law, and we are taxed in major part by consent, albeit reluctantly. I believe that anyone with confidential taxpayer information should make a special statutory declaration to bring home those special responsibilities to her and to him.

The principle of confidentiality is simply not clear to individuals when a 22-page employment contract is put in front of them that contains this and that provision, information about holidays and pay and all the other matters that are included in an employment agreement. It must be brought home to employees at the Inland Revenue in a special and compelling way. This oath would do exactly that. We support the amendment. It is important, and anyone, including the Treasury officials, who has taxpayer-sensitive information should make a statutory declaration. That includes members of the supervisory bodies, including the Independent Police Complaints Commission, which we will debate. They should make the declaration if they are going to have taxpayer-sensitive information.

The Inland Revenue has a fine record, and I do not believe that any Opposition Member will demur from what I have said. When I have debated other matters in other Committees with the hon. Member for Chichester, he has been only too willing to confirm exactly what I have said about the high standards of our Revenue. We want to keep it that way. There is no reason for change. A statutory declaration in the form suggested by the amendment would, like nothing else, hit home to bodies such as the Inland Revenue and Customs that they have a special duty of care and confidentiality. Many of us said on Second Reading that it is important that the Inland Revenue culture prevails in this matter. Many aspects of the Inland Revenue culture came in for praise on Second Reading. I want this oath to be retained for all the combined agencies.

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Prepared 11 January 2005