Commissioners for Revenue and Customs Bill

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Dawn Primarolo: The right hon. Gentleman was a Treasury Minister, and I presume he knows the rules with regard to accounting officers. Because the legislation went through this House, he would be familiar with the obligations on Government accounting.

I would absolutely acknowledge—I do not think that there is any individual within Government or business that would not acknowledge—that vast computer systems take a great deal of management and understanding. There are times when those systems do not operate as they should. That was true under the previous Government, with the NIRS contract, which was signed just before the general election in 1997. The right hon. Gentleman referred to some points made about self-assessment, which was entirely commissioned under the previous Government. Then he referred to several computer systems that are not in the new department, and to the tax credit, which is.

I feel duty-bound to say that clearly, because the right hon. Gentleman was excessively harsh on the officials who work in those departments. I would like to put on record how much I and my hon. Friend the Economic Secretary value the staff in the two
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departments, and their hard work in delivering for Parliament the demanding and stretching requirements placed on them for the discharge of their duty.

The scale of the IT contracts is important. The idea that those people are cavalier in their attitude to best value for the taxpayer and do not discharge to the best of their ability the requirements dictated by Parliament needs to be rebutted strongly. Regardless of what the right hon. Gentleman may assert in this Committee about the contracts for the department, the best-value reports done during the commissioning of those projects has demonstrated that that is the case.

Now there is an immense task, as the right hon. Gentleman rightly points out, in bringing together the 250 legacy systems in the two departments. There is not one system in one department and one in the other. There are systems that overlap, that do not overlap and that have been merged into the department; for instance, the Contributions Agency and the NIRS2 contract, which was specified under the previous Government. Some of the contracts will stay as they are and others will be able to be integrated. We need to look very carefully at how the department will proceed.

Because people like to quote things that have not gone well, let us first congratulate the department, for instance, on the ASPIRE contract; the change of the IT supplier, after open, fair competition and a well run contract, from EDS to the new Cap Gemini Ernst & Young and its associated partners. The contract involved not only the management of the competition, but the proper transfer of those substantial systems from EDS, the previous contractor, to Cap Gemini Ernst. The transition is complete and has gone well. I would like to put on record what I have said in private as a Minister and what I hope this Committee will endorse; our thanks. Congratulations should be given when something has gone exactly as it should.

In looking at how the ASPIRE contract and the contract of Customs with Fujitsu, the consideration had to be as it was with the property contract. Whether or not the departments merged, modern contracts must have flexibility. The lessons that we learnt from the NIRS2 system, for example, which was commissioned under the previous Government, was that, if we do not have flexibility in the contracts to manage change, we will have increased difficulties in moving those systems forward and getting them to respond to our needs.

Let us consider the general principles that will take us forward. It is clear in the Bill, and has been explained, that a system of benchmarking will be used. It was used in ASPIRE and it is now being used in Fujitsu. What do we mean by that? I shall cite the example of ASPIRE to demonstrate the principles that will take us forward. The benchmarking process will be carried out for the first time two years into the contract. It will be based on comparing prices and services against levels in the industry standards, which external companies will undertake. That mechanism
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was carried out also in the beginning to ensure a good contract price. The same process will be undertaken with regard to the Customs systems. The first benchmarking process of the infrastructure services agreement for Customs is being carried out now and, as one would expect, that has an element of market testing.

In all the negotiations on ASPIRE and on the expansion of Customs contracts when needed, the principles are about continuity of service provided to the taxpayer. The negotiations had to be conducted in the knowledge of the O'Donnell review that was underway at the time and that flexibility had to be provided. Both contracts will be transferred to HMRC, subject, of course, to parliamentary approval of the Bill. We are reviewing the best commercial models for the new department to take that forward.

The matter of the IT systems is extremely complex. Parliament, for all sorts of reasons—not only for historical reasons—will want to continue to consider such matters closely. They will be subject to the Treasury Committee, the PAC and the requirements in respect of annual accounting. As I said when discussing new clause 1, all the mechanisms are in place. The new department will have a change management mechanism with a new chief information officer who has been appointed. Interfering with computer systems when that has not been taken into consideration could have dire effects on the revenues collected by the two departments. We do not have to be geniuses to work out that.

While considering integration, part of what the department must do is to make sure that it maintains business as usual and it should not lose its focus on delivering that. The new department will have a change management mechanism with a new chief information officer who has been appointed. Those involved will have to work closely to ensure that the public service agreement targets are met and that a strategic overview of both risk and risk mitigation is maintained. That means understanding the possible risks and managing them to achieve integration.

The department will have in place mechanisms for dealing with such matters, mechanisms that are checked by parliamentary rules and those rules that govern accounting officers. When the right hon. Gentleman spoke to new clause 1, he said that it was proposing the same mechanism, one on property and one on IT. My response to him about IT is the same as my response on property; the mechanisms are in place. The department has a great deal to do. There is no point in duplication and bureaucratic mechanisms in order to copy what has already been done elsewhere. On that basis, if the right hon. Gentleman wishes to press new clause 2 to a Division, I will ask my hon. Friends to oppose it.

11.15 am

Mr. Heathcoat-Amory: I think that we have gone as far as we can on this issue. We have had some rather familiar reassurances from the Treasury about how it is all going to be different and well managed in future
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and how things are in place to ensure that, but we have not had a plan. The Treasury Committee criticised the fact that we have an aim, aspirations and a destination, but there are no milestones on the road to ensure that we get there in good order with a saving to the public and improved facilities for the tax-paying public.

I am a little bit more optimistic about IT. I do not think that the revenue departments were stitched up in their contract as they were with the Mapeley contract. That is the last time I shall mention that, Sir John. I have the assurance that the chairman-designate and his staff and the Treasury are fully engaged with the importance of IT. We shall be watching carefully in future to ensure that the savings and contract variations are possible and deliver what they promise. However, in the light of what the Paymaster General has said, and with one eye on the clock, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Dawn Primarolo: I am dreadfully sorry, Sir John, but we have moved so speedily today that I had not appreciated that we had reached the end of the Committee proceedings. Before we finally conclude, I should like to put on record my thanks, and that of the Economic Secretary, to you for the expert way in which you have seen us through this complex Bill, which is, none the less, part of the important machinery of Government.

I thank the Clerks, as ever, for their expert advice and for ensuring that all Committee members were not only in order, but able to discuss at the relevant point what was most important to us. I thank the Hansard writers and the office holders, and the police for ensuring that we were able to hold our discussions uninterrupted. I also thank my hon. Friends, who have hung on my every word—and those of the Economic Secretary—and I am grateful for their undying support and encouragement.

I thank the hon. Members for Chichester and for Yeovil (Mr. Laws) for the business-like way in which their colleagues approached the Bill, which showed Parliament at its best in wanting to improve the Bill and understand the objectives.

I am pleased that we will move on to the next stage and, as I have said, I am eternally grateful to you, Sir John, and to Mr. Hurst for chairing these proceedings. I cannot quite bring myself to say that I look forward to seeing you soon on the Finance Bill; not because I do not want to see you in the Chair, but because it is coming faster than I would like. Once again, I thank you and all Committee members.

Mr. Tyrie: I thought for a moment, Sir John, that we were going to get a date for the Finance Bill.

I echo the remarks of the Paymaster General. I agree with everything she said so I shall not reiterate it or go through the list of people to whom she referred. I particularly thank you, Sir John, for the cordial way in
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which you have handled things, and I should be grateful if you passed my thanks on to your colleague, Mr. Hurst.

I also thank the Clerk, who has put up with a number of questions from me behind the scenes, in order to explain things that I did not fully understand. He also gave me great assistance in drafting the odd amendment and new clause, which would not have been remotely in such good shape were it not for him.

In addition to thanking my colleagues—although only one is here at the moment—and the hon. Member for Yeovil, with whom I have had one or two interesting discussions, I wish to say that, on the whole, I have had some intelligent conversation with Ministers. I am pleased to say that they moved on a couple of points, not least on the oath of allegiance, which we may keep and which will contribute to good quality governance in the Revenue.

We have made some progress, and I look forward to Report. Much more proximately, I look forward to this afternoon, when I shall be debating the Child Benefit Bill, yet another Bill that the Government have decided to impose on us just before, I expect, a general election. Thank you, Sir John, for chairing the Committee so well.

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