Mr.
Gauke: My hon. Friend is correct: this is not new. What we
have is a charter that is new. The charter should set out what the
taxpayer can expect. In our earlier debate, the Exchequer Secretary
raised the point that it might be difficult to be comprehensive and
create an exhaustive document setting out every right and remedy
available to a taxpayer. However, there is an opportunity to assert
what is, as my hon. Friend says, a fundamental aspect of our taxation
system.
What is not
included in the new charter is a blunt statement that taxpayers can
expect to receive a professional service from HMRC. That is not at any
point explicitly stated. The charter refers to various
commitments—we will do what we can to keep the costs down, we
will help to support you to get the payments and claims
right—which partly addresses the point made by my hon. Friend
the Member for Wellingborough, but there is nothing particularly
explicit.
11.15
am I
have, of course, picked out various points that could have been
addressed but have not been. I do not want to obscure the fact that we
believe that an HMRC charter setting out the rights and
responsibilities of taxpayers is right. It is an important safeguard,
as Ministers have said, but we still have one or two concerns about the
drafting, about whether the document lacks focus on what the taxpayer
can expect and on their rights and about the danger that this is a
missed opportunity. It needs to be looked at in the context of a period
that has seen HMRC accrue significant new powers. The safeguards are
right, so we raise those concerns, but welcome clause 91 none the less.
It is an important aspect of the Bill.
John
Howell: When I first looked at the draft charter that goes
with the clause, I had a sense of dÃ(c)jà vu; it struck me
as very retro. It took me back to the 1980s and 1990s and those
companies that had mission statements emblazoned across their doors. It
was axiomatic that the only companies that needed mission statements
emblazoned in such a way were those that had difficulty believing in
them and translating the words into change in the first place. It is a
shame that this charter has that feel because I agree with the comments
made by the Chartered Institute of Taxation—there is real value
in
having a simple, accessible statement of basic rights, particularly as
the relationship between HMRC and the taxpayer is becoming ever more
complex each year. We have also commented on that.
The charter
does the minimum. It is not easy to hold HMRC to account and the
charter is subjective in what it currently sets out. It will not, for
example, be difficult to sue against the charter if you wish. It ought
to have been backed up with hard targets. My hon. Friend the Member for
South-West Hertfordshire commented on professional service. Part of
that professional service is about having targets that can be seen,
measured and used to hold the organisation to account. The charter
comes over as neither one thing nor another: part mission statement, as
has been said, and part an attempt to get some substance into the
relationship between the taxpayer and
HMRC. There
is confusion in the charter over who the audience is. Without wishing
to make the document significantly longer, there is logic in specifying
some of the differences between the different sorts of customers or
clients—however you wish to describe them—that HMRC deals
with. It would be useful in the
charter. Reading
and comparing the proposed draft charter with the OECD model charter,
which, from the structure and the wording, HMRC must have based it on,
I was struck that paying tax that is legally due is firmly in
the OECD charter. So, too, are some very specific recommendations, such
as, “We will finalise assessments in X days, we will deliver
refunds in X days, we will reply to queries in X days, and, even, we
will send the minutes of investigations in X days to those who have
been investigated.” The OECD charter also deals with the right
of appeal in a more robust way than the one-line reference in section 1
of the draft, which just mentions the awareness of rights, including
the right to
appeal.
Linking to
other legislation is important. My hon. Friend the Member for
South-West Hertfordshire mentioned that in connection with the Freedom
of Information Act 2000, but it also applies to the Equality
Bill—the Committee on which is going on in another room down the
corridor. I am sure that there are elements of the Equality Bill that
will need to be taken into account.
What will the
board report against? We come back to the question about needing
specific details. Even with the information that is there, it is very
difficult to see what the HMRC board will say about how the sorts of
objective in the charter will be achieved and measured. That is because
the charter is far too wishy-washy. It could have set out standards and
played an important role in providing safeguards for the taxpayer. Of
course, the weakness in the charter compares very unfavourably to the
enormously greater powers that HMRC is seeking in subsequent
clauses.
My final
point is one of great surprise, Mr. Atkinson. I notice that
the letter to you and Mr. Hood from the Treasury team
regarding this clause, states that the redraft is a better version than
there original. If that is the case, I would hate to have seen the
original.
Mr.
Mark Field (Cities of London and Westminster) (Con): I
rise to speak very briefly, following the contributions of my hon.
Friends the Members for South-West Hertfordshire and for Henley. As the
latter rightly said
toward the end of his comments, there is a stark contrast between the
mushy generalisations of the charter and some of the very specific,
quite draconian and unique new powers in the next few clauses. There is
a fundamental risk that such a document written in such general terms
will look like a very mushy mission statement. It needs specifics. As
my hon. Friend rightly said, the OECD’s proposals talk about
commitments that can be expected by the customers, as it were, of the
HMRC in relation to time
deadlines.
Mr.
Bone: My hon. Friend goes to the nub of the issue. When I
was in practice, one of the problems was that one would get a demand
from the Revenue to reply within two weeks, or else, but the
Revenue’s reply would then take up to six months to arrive,
which left the taxpayer in limbo. It all seems to be one way, and I do
not see the charter addressing that problem at
all.
Mr.
Field: Similar problems may be found in a range of central
Government Departments, but my hon. Friend is absolutely right. There
is a sense of imbalance in the relationship, which is not terribly
helpful.
The charter
is written in such general terms that it justifies HMRC’s
existence in areas where many would doubt its competencies. As my hon.
Friend the Member for South-West Hertfordshire rightly pointed out, the
very notion that HMRC exists to look at international trade and to
protect the economy is utter nonsense, and if that provision gives the
various bodies who should have those responsibilities an alibi, it
makes it all the worse.
I was a
business man before I entered Parliament and have had dealings for many
years with HMRC and the two predecessor bodies. I had perfectly good
relations with the VAT-related bodies and Customs and Excise. There was
a very strict rule that, if one was running one’s own business,
in no circumstances should one mess with Customs and Excise. In almost
20 years as a business man, I ensured that I kept to the letter of that
rule. Fundamentally, my concern with any sort of charter, and certainly
a charter couched in such terms, is that it undermines what I consider
to be a very important principle, which is that businesses and
individuals should be able to get on with their lives without undue
hindrance from the state. We do not want businesses or individuals to
neglect to pay their taxes, and they have certain obligations in that
regard. However, setting those out in a strict rule of a charter must
be the wrong approach. Let businesses and individuals have as much
freedom as possible. I fear that the charter is a step in the wrong
direction. Mr.
Brian Jenkins (Tamworth) (Lab): As usual, it is a pleasure
to serve under your chairmanship and to be guided by your wisdom,
Mr. Atkinson.
I welcome the
charter. It is a good move. One of the difficulties that we have always
had—I think that we have now cracked it—relates to the
rights and responsibilities of taxpayers. Once the charter is passed, I
will await the day when taxpayers line up to give an assurance that
they will always speak the truth, never lie, never take cash and never
join dodgy tax avoidance schemes, but I will not hold my breath while
waiting. I am more concerned about the mechanics of how the provision
will be implemented.
The commissioners must report at
least once a year, but to whom? The Chamber of the House of Commons? Do
not expect me to go through their report line by line and hold them to
account; I have neither the time nor the resources to do so, and
neither do most of our Committees. The only Committee with such
resources is the Public Accounts Committee, which can call upon the
National Audit Office’s 800 members of staff, who have the time
and resources to go through such a
report. The
commissioners’ report is not the only one in which I am
interested. I am most interested in the Public Accounts
Committee’s report, to which the Government have to reply. I am
also interested in what follows that. When the commissioners return
within the next year, as well as having an undertaking to utter, yet
again, the warm words, “We accept that our behaviour was not up
to standard”—I am more interested in behaviour than
values, because behaviour will lead to the targets that the
commissioners aspire to achieve—will they also have a duty to
report to the Public Accounts Committee the percentage of their
promises that have actually been
achieved?. The
Chamber debates Public Accounts Committee reports at least once a year.
Will that Committee have a duty every year to ensure that it reports
not only on the commissioners’ report, but on the
commissioners’ assessment of how many standards of behaviour
they have achieved or failed to achieve, as well as why they failed to
achieve them? Putting the simple mechanics in place is as much as a
Government can do; we cannot change individuals’ behaviour and
we should not legislate to try to do so. I would therefore like an
assurance from the Minister that the mechanics are right for the
situation, and that we have got a firm grip on the
matter.
Sarah
McCarthy-Fry: We have had an interesting debate with
contributions from several hon. Members. On the last point made, the
commissioners must report annually on how well HMRC is doing in meeting
the charter’s standards and, as I have said, that report will be
included in HMRC’s departmental report, which opens the matter
up to scrutiny by both the Public Accounts Committee and the Treasury
Committee. That gives a degree of comfort that the
commissioners’ report will not only be a piece if paper, but
will also be
scrutinised. On
formal service standards, since April 2008, HMRC has been reflected in
the three departmental strategic objectives, all of which are supported
by high-level targets, and HMRC success against those targets is
included in the departmental report. HMRC plans to start publishing
information on its performance against those objectives in the autumn.
The information will focus on what customers tell us is most important
to them, how easy it is for them to access the services support that
they need and the quality of that support, including whether they were
handled courteously, whether information was treated confidentially and
whether they were given the right
answer. I
will not relate the history of the charter, because members of the
Committee probably already know it, but the first consultation document
was warmly welcomed as making a positive contribution to the
relationship
between HMRC and those with whom it deals. The hon. Member for
South-West Hertfordshire has said that he does not agree with the
concept of the
charter. Mr.
Gauke indicated
dissent.
Sarah
McCarthy-Fry: No? I am sorry: he agrees with the concept
of the charter, but his hon. Friend the Member for Cities of London and
Westminster disagrees with it, which is a shame, because I think that
most people agree with the concept. Most respondents argued that a
legal foundation would be the best way to ensure that the charter would
be an effective and enduring document. That is why the clause giving
the charter explicit legislative backing is included in the
Bill. 11.30
am
Mr.
Gauke: For the charter to be effective it needs to impose
or encourage a culture within HMRC to comply with it. Will the
Minister—either immediately or subsequently in her
remarks—outline to the Committee what steps will be taken to
disseminate the contents of the finalised charter among HMRC staff? I
appreciate that we do not have the final version here, although we
anticipate that what we have is very close to
it.
Sarah
McCarthy-Fry: I may come back in detail on that. It is
important that the charter does not just sit here because we have
agreed to it, but that it goes to HMRC staff not just in Whitehall but
across the country, because those are the people with whom the majority
of taxpayers interact. Most people interact with HMRC not in Whitehall,
but in its local branches. The hon. Gentleman said the draft is not set
in stone, and I will come back to that point.
The hon.
Gentleman and the hon. Member for Cities of London and Westminster
asked why the overarching statement at the beginning of the charter
mentions international trade. HMRC has responsibility for European
Union obligations on international trade duties. The
charter addresses all of HMRC’s stakeholders,
so the overarching statement has been written to reflect the
customs policy as well as the tax-collecting duties of the
Department’s role. The Committee has seen a draft of the charter
and I want to assure Members that work continues on the final version
and the remarks we have heard today will feed into it.
The point was
raised that there was nothing in the charter about being professional,
but point 4
says, “Whenever
you deal with us we will take responsibility for our actions and behave
in a professional way. We will: act with
integrity”. We
will continue to work with stakeholders on the specific text of the
charter and to take comments on board, as we have done so far. We aim
to have a complete charter published in the autumn. The second
consultation, which closed in May and led to the revised draft, took a
wide range of views on board. The CIOT congratulated us on listening to
its suggestions and taking them into account.
On the point
made by the hon. Member for South-West Hertfordshire about accounting
bodies, we shared information on a confidential basis with the ICAEW.
In its briefing last week it said:
“We
support the current version of the charter which we believe is a well
balanced document which sets out the rights and obligations of the
taxpayer.” The
clause is straightforward and self-explanatory. The detail is in the
charter, which is still being refined and
revised. Question
put and agreed
to. Clause
91 accordingly ordered to stand part of the
Bill.
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