Commissioners for Revenue and Customs Bill

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The Economic Secretary to the Treasury (John Healey) indicated assent.

Mr. Burnett: I beg his pardon. I look forward to hearing from him a general outline of how the inspections will happen and a response to the other matters that I have raised about the clause.

John Healey: I should say to the hon. Gentleman that clause 23 deals with the arrangements for Her Majesty's inspectors of constabulary; clause 24 deals with those for the IPCC. I can reassure the hon. Gentleman that there will not be a duplication of the areas and activities. The remits in relation to the police are clear and separate, and they will also be so for Her Majesty's inspectors of constabulary. I hope he will take confidence from the discussion of these two clauses.

10.30 am

Clause 23 will allow the remit of Her Majesty's inspectorate of constabulary, the HMIC, to be extended to cover Her Majesty's Revenue and Customs. So the HMIC will scrutinise how the HMRC complies with laws, rules and procedures of the criminal justice system. It therefore establishes the HMRC with a higher level of independent external scrutiny than its predecessor departments. To this extent, it more than satisfies the recommendation of the Butterfield report, to which the hon. Gentleman referred as an excellent report earlier today, that Customs looks at ways to introduce greater external scrutiny into its criminal investigations work.

This will ensure a high level of assurance to Ministers and the public that the HMRC is using its powers properly and professionally. These external scrutiny arrangements will mirror those in place for other enforcement agencies, and those planned for the Serious and Organised Crime Agency, ensuring that all of Customs' former law enforcement work will be covered in the same way.
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The clause allows for regulations to establish arrangements between the HMRC and the HMIC that are similar to arrangements between the HMIC and the police. A draft of these regulations was produced earlier this week, as the hon. Gentleman said, which I hope will help the Committee in its deliberations. It includes the ability for Ministers to require an inspection, as members of the Committee will see, and provides for reports to be made and published.

Mr. Burnett: Does the Minister envisage an annual inspection? Or does he envisage an inspection every few years or so?

John Healey: I do not anticipate how the HMIC will decide, in discussion with HMRC, to conduct its activities. If the hon. Gentleman looks at the draft regulations, he will see the range of potential matters that the HMIC may consider. I expect that the HMIC, where it looks at any HMRC activities, will make reference to those in its annual report.

The HMIC will not cover the full range of HMRC activities. It will be focused on those areas involved in law enforcement, where its expertise in the field of policing is most relevant. The HMIC is therefore specifically excluded by our proposals from duplicating the work of the National Audit Office. That does not preclude the HMIC and the NAO from working together where necessary and sensible, but it ensures that there will be no duplication of effort—the general concern that the hon. Gentleman was raising.

I hope all sides of the Committee will see this as a significant and valuable strengthening of the external scrutiny arrangements for the new HMRC.

Question put and agreed to.

Clause 23, as amended, ordered to stand part of the Bill.

Clause 24

Complaints and misconduct: England and Wales

Question proposed, That the clause stand part of the Bill.

Mr. Burnett: We have a policy document on clause 24 and it is a little thin. My first question to the Economic Secretary is when will we get the draft regulations? I hope that we get them in good time to debate them on Wednesday week.

I draw the attention of the Committee and the Minister to the problem of duplication and triplication. Here, we are dealing with power for the Independent Police Complaints Commission, but there is also an adjudicator and an ombudsman. It is not clear where the demarcation lines are drawn in respect of who does what in the three organisations, two of which are already functioning, and the IPCC that will rightly be drawn into the area. I welcomed the Bill on Second Reading. I said that it would go a long way towards answering the impossible question of who guards the guardians themselves. Although I did not get back to the Minister on the previous clause, I might want to say something about it on Report.
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I should be grateful if the Minister could give us some information about the last point in the policy document ''Her Majesty's Revenue and Customs—Policy for Arrangements with the Independent Police Complaints Commission'', paragraph 33 of which, headed ''Transfer of Resources'', states:

    ''There may be a need for HMRC resources to be seconded to the IPCC to assist with investigations. There will also need to be a mechanism for payments/transfer of resources from HMRC to IPCC.''

Obviously, there will be more work for the IPCC and I welcome hearing from the Economic Secretary about the level of resources that the Treasury intends to commit to the matter. I appreciate that the IPCC is an independent body and that it would be for it to decide how to manage the new role but, as I said on Second Reading, do the Government envisage a separate department within the IPCC to deal with such an important function that is rightly being given to it under the clause? I look forward to hearing from the Economic Secretary about the issues that I have raised.

John Healey: I shall certainly pick up on the issues that the hon. Gentleman has raised. Before referring to the specifics, it may help the Committee if I explain that the clause will allow the remit of the Independent Police Complaints Commission to be extended to cover the HMRC. The IPCC will examine the HMRC complaint handling procedures and will undertake or supervise investigations into allegations of criminal conduct or gross misconduct. The clause will allow the IPCC to investigate incidents of death or serious injury. It will fully justify the Butterfield report's recommendations that HM Customs looks at ways in which to introduce greater external scrutiny to its criminal investigation work. It will establish the HMRC with a higher level of independent external scrutiny than its predecessor departments.

I hope that members of the Committee will agree that such a provision will give a high level of assurance to Ministers and the public that the new department will be using its powers properly and professionally. The external scrutiny arrangements mirror those that are in place for other law enforcement agencies and those that are planned for the new Serious and Organised Crime Agency. They will ensure that all Customs former law enforcement work will be covered in the same way.

Clause 24 allows regulations to establish arrangements between the HMRC and the IPCC that are similar to the arrangements that the IPCC has in place with the police. It includes the provision for IPCC investigators to be given powers of an officer of Revenue and Customs in order to investigate assigned matters should that be necessary. It also allows the HMRC to transfer resources to the IPCC to cover the cost of inspections. I envisage that the bulk of the resources required for this part of the new IPCC role will be transferred from Customs—and, in future, from the HMRC. The large part of the work that the IPCC will do is not new, because it is already carried out internally by the HMRC.
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Mr. Burnett: Will the hon. Gentleman give way?

John Healey: Let me just finish. The detailed procedures for transferring those resources are still to be finalised, but I do not anticipate at this point that significant sums will be involved.

Mr. Burnett: Actually, I should have waited before asking to intervene, as I think that I have now got the gist of the matter I was going to raise. Has the level of resources been agreed with the IPCC?

John Healey: The hon. Gentleman is right: I covered the point in anticipation of his intervention. The detailed arrangements are being hammered out; the final settlement has not yet been agreed, but it is being worked on.

I now turn to the hon. Gentleman's specific questions about the regulations and about concerns to do with demarcation and duplication. I do not accept that the policy document that we published at the beginning of this week is thin; it is seven pages long and is intended to be helpful to the Committee. We were not in a position to publish the relevant draft regulations for the debate on clause 24, but we wanted to give as clear an indication of their breadth as possible. We anticipate that the Bill will reach the Report stage on 26 January, and the Paymaster General and I will ensure that the draft regulations are published before then so that Committee members have time to examine them.

The detail of these arrangements is still being discussed. Their proposed scope is set out in the policy document and covered by paragraphs 4 to 8. I hope that I can give the hon. Gentleman the reassurance he is looking for on demarcation and duplication by explaining the key points of those paragraphs. The IPCC will focus on areas where the HMRC exercises coercive, police-like powers. It will focus on the most serious allegations or incidents, such as deaths in custody, serious corruption or serious sexual offences. It will be able to investigate all HMRC officers, but it will not deal with matters relating to the direction or control of the HMRC, and it will not look at matters relating to the maladministration of taxpayers' affairs. That will continue to be done by the parliamentary ombudsman and the adjudicator's office.

I hope that that has reassured the hon. Gentleman and that, as with clause 23, all Committee members will support this clause. It provides a significant and valuable strengthening of the external scrutiny arrangements for the new department.

Question put and agreed to.

Clause 24 ordered to stand part of the Bill.

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Prepared 13 January 2005