Commissioners for Revenue and Customs Bill

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Dawn Primarolo: I am grateful for the way in which the hon. Member for Chichester raised questions on this subject. I agree with his starting point, which was the danger of a community of interest and of reinforcing behaviours. As he rightly said, that can be a problem for the police, because this is a very delicate area. I also agree that these subjects would make any Minister nervous. The right hon. Member for Wells (Mr. Heathcoat-Amory) will know that the Gestalt cases, for instance, are investigations into cases that started back in the 1990s.

I will try to answer the points raised by all hon. Gentlemen where I can. I say ''where I can'' because, as the hon. Member for Chichester rightly flagged up, this moves into sensitive areas of identification of taxpayers. I need to be extremely cautious in what I say here, and some of the information is not information that a Minister would be privy to.

Let us be quite clear; Ministers are not told whether or not there are informants, whether or not they are running and whether or not anything has been paid by way of a reward. That is quite rightly at the discretion of the commissioners with regard to cases. I shall try and answer this by giving the context, and information, within which these decisions are taken and where the checks and balances are. I think that is what the hon. Member for Chichester particularly wants to get to. I can give him some of the information he asks for. I am not sure I can give him all of it on his questions of how much and when, but I will make as much progress as I can.

First, the clause does not confer any new powers, but does consolidate the existing powers to pay rewards. There are no set amounts as to what has been paid in the past or may be paid in the future. This depends on the quality of the information, and the
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criteria for that remain unchanged. The Bill uses the Customs wording of ''rewards for meritorious service''. Treasury consent is not required for HMRC, because the legislation has gone closer to Customs than to the Inland Revenue process, because Customs has oversight by the National Audit Office, and these matters are scrutinised regularly. In fact, the Customs and Excise rewards system was subjected to a National Audit Office inspection in 2002–2003. During this inspection, no adverse comments were made about the management, or the rationale used in relation to the calculation of the rewards examined.

The hon. Gentleman quite rightly goes on to say, ''What about manuals, or criteria and guidelines?'' The Inland Revenue manuals are published as part of open government, but some sections are kept back because they would assist the wrongdoer; the point that the hon. Members for Chichester and for Torridge and West Devon and the right hon. Member for Wells made.

The new department will inherit ring-fenced codes, one for the former Inland Revenue matters and one for the former Customs matters. Those are available. Full new guidance would only be needed if the powers were aligned. We had a debate about powers, after which the hon. Member for Chichester issued a press release. This is a matter, I think he would agree, for the review of powers and considering these issues as sensitively as possible.

10 am

Mr. Tyrie: I am glad the Minister reads my press releases.

Dawn Primarolo: I read the article. The information is out there, the codes are out where they can be, published as part of open government and ring-fenced by the arrangements here. That will continue.

The hon. Gentleman also asked whether details had been drawn up for operating the system of rewards, and whether they could be published.

The hon. Gentleman also asked whether details had been drawn up for operating the system of rewards, and whether they could be published. There is a slight problem with that, which he touched on. I cannot publish the details because to do so would enable the recipients of rewards to work out how much tax had been collected, which would breach taxpayer confidentiality. Such tensions are constant in this matter. Those rules could also be used to manufacture information so that a higher payment is made when that is not warranted. The use of informants will be subject to external scrutiny. The National Audit Office will scrutinise the payments, and it will have something to say.

Mr. Burnett: For the whole department?

Dawn Primarolo: Indeed. The next question is about the procedures. That external scrutiny is addressed in clause 23. Its aim is to ensure that procedures are in line with the very best practices for law enforcement, which the hon. Member for Torridge and West Devon rightly referred to. Despite the difficulty and greyness
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of this area, we seek to maintain the checks and balances and to reach for the best standard, as we also seek to do with regard to the prosecution service, which we will discuss later.

I can give the amounts that are involved. In the two-year period of 2003–04, Customs paid nearly £1 million.

Mr. Tyrie: Two years, or one?

Dawn Primarolo: Two. Inland Revenue paid less than £20,000 per annum. I apologise; I may have misled the hon. Gentleman. I am talking about one year only; the sums of £1 million and £20,000 apply to the single financial year of 2003–04.

The reason for that difference in amounts is the different nature of the fraud criminal offence being pursued; the right hon. Member for Wells touched on that. There is a difference between drug smuggling, where Customs and Excise would be involved, and what is called tax cheating, on which the Inland Revenue would work.

I do not have the figures to hand to answer the question about the amounts over three years. However, I am prepared to take advice on whether I can give the amounts for more than one year without allowing people to start drawing comparisons. I am not referring to Members of Parliament of course, as they are fully entitled to do that. I will get the relevant figures, and write to the hon. Gentleman with that information.

On the question of how many were paid in full and how many paid per case and range, will the hon. Gentleman forgive me if I say that I would like to take advice on whether I can put that information into the public domain? I will get back to him on that. I understand why he would like that information, but I need to be clear that I will not be giving out information to people who will be able to make comparisons.

Mr. Tyrie: The Paymaster General says that she will take advice on whether she can give that information. Is she referring to some legal bar or administrative obstacle, or to a purely practical problem? Bearing in mind that she now has the ability to do so, because the numbers are collected in the Treasury, will she consider whether such information should still be available once the Act comes into force? I ask because the Treasury will then no longer have the automatic statutory right to see the amounts and to approve cases. Even though the amounts have not come before Ministers, they are clearly somewhere, because that is what the Bill requires.

Dawn Primarolo: I was coming to that point. I am trying to be as helpful to the Committee as I can without inadvertently stepping into a delicate area. I am keen to ensure that I give all the information possible to the Committee. By ''advice'', I meant that I would like to speak to my officials about the boundaries.

My next point is about whether the amounts could be reported. Clearly, we would not do that on an individual basis. That cannot be done, and is not done now. There are global anonymised reports, but those
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are not released, either, at the moment. However, the total budget is reported to the National Audit Office. It is in the department's votes.

I am neutral on this matter; I would like to take it back with me and see what can be done about it. I think that the point is important and, as regards access to information, I would like to be as helpful as possible to the hon. Gentleman on this matter and others. I am prepared to reflect on the benefits of some sort of globalised, anonymised figure, although I did not have any plans to do so, as long as I do not step into that sensitive and highly delicate area. By ''globalised'' I do not mean the world, of course; I mean the aggregate figures for the department.

The hon. Member for Torridge and West Devon raised a point about Butterfield and the investigations. Butterfield considered the question of rewards and made no recommendations. That takes us back to the NAO point, because of course there is no greater check on Government and how its departments spend taxpayers' money than the National Audit Office and the Comptroller and Auditor General, which are powerful and important. It is scrutinised carefully for exactly the reasons that hon. Members have touched on today.

The hon. Member for Torridge and West Devon went on to ask about criteria and the level of authority. I think that that is covered in what is already published, but I will check, and I am certainly prepared to write to members of the Committee so that they are quite clear about the level of authority and how it operates.

The right hon. Member for Wells made a number of important points, reinforcing the issues raised by the hon. Members for Torridge and West Devon and for Chichester. The right hon. Gentleman made it clear that this is an issue on which Parliament should be properly informed where appropriate, but that the departments need to be able to engage in this activity at their discretion.

None the less, there must be strong checks and balances. I hope that I have demonstrated that. First, there is the NAO. The Customs practice of reporting and being scrutinised by the NAO is in the Bill. Secondly, clause 23 deals with the external scrutiny of the actual handling. The payment of rewards is dealt with in clause 22, and external scrutiny of the handling—via, I think, the Revenue and Customs Prosecutions Office, but I will come back to the Committee on that—is in clause 23. The criteria and handling of that are as laid out in the codes. [Interruption.] I am sorry, it is Her Majesty's inspectorate of constabulary, not RCPO, that supervises. That ties back into the point that the hon. Member for Chichester was making about police standards and high standards.

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