Examination of Witnesses (Questions 80-99)
HM REVENUE AND
CUSTOMS AND
UK BORDER AGENCY
9 MARCH 2009
Q80 Dr Pugh: But you can tell us
who made the errors.
Ms Dawes: I cannot tell you who made
the errors no, I am afraid not.
Q81 Dr Pugh: The companies that benefited
from the errors then?
Ms Dawes: No, I am afraid I cannot give
you any individual names of companies, no. We are not able to
do that.
Q82 Dr Pugh: They obviously had a
huge significance.
Ms Dawes: It is the sort of thing that
happens with large business work all the time. We do get large
amounts of money. From the nature of these companies they are
accounting for very large amounts of trade and large amounts of
duty and so when we have an individual issue with one company
it can have a big impact on the figures. I was really just trying
to explain that if you take those impacts out there is a fall
in the yield from the large business side.
Dr Pugh: It must be a very big company.
Q83 Chairman: Why do you say you
cannot give the names of the companies? Perhaps you cannot give
them in public session but you can send us a note.
Ms Dawes: We are not able to release
those figures in the public domain. I think this is a debate that
we have probably had with you before.
Q84 Chairman: We would not release
them. You cannot just announce to the Committee that you are not
prepared to give a parliamentary committee the names of companies
in confidence. You do not have that right.
Ms Strathie: I think you know we are
bound by taxpayer confidentiality and you did point out earlier
that if we give you something in confidence you then decide whether
it stays in confidence.
Q85 Chairman: I am not asking you
to reveal the individual's tax affairs, we are talking about companies.
We often get given details about companies, for instance from
the Ministry of Defence. Are you refusing point blank to give
us this information?
Ms Strathie: That is our position because
of taxpayer confidentiality. I know that you often receive information
about companies and indeed very often when something is in the
public domain, perhaps as a result of prosecution or something
else, then those matters become public. However, regarding the
tax affairs of individual companies that is not something that
we can reveal.
Chairman: We may have to think about
that; I may have to take this up with the cabinet secretary I
think. Mrs Browning?
Q86 Angela Browning: I wonder if
I could bring Mr Clark back to sea ports. I do think it is extremely
concerning that the NAO Report tells us, "We were not able
to determine the number of examinations at ferry ports as detection
officers do not record the country of origin of arriving vehicles."
That seems to be rather important that they are able to say exactly
the number of vehicles they examine. Surely that cannot be right
even in the turmoil of what you have all inherited.
Mr Clark: I think the Report reflects
that there has been recording but it has been inconsistent and
patchy right across the estate and the ports. We have taken up
some measures to get the end of shift report—as I think
it is referred to in the document—much more consistently
done and in a way and format that can more ably help the statistics
and the understanding of what is actually going on. We are looking
at other ways of getting that information rather than relying
on the end of shift report. We are looking at more effective ways
of doing that and ways that are more technology based and then
getting a report at the end of shift.
Q87 Angela Browning: How do you know
whether people are actually doing their job or just sitting down
having endless cups of coffee if there is no record of what they
have actually been doing, never mind what they might have missed
in the meantime?
Mr Tweddle: The problem that we had was
whether it was an intra-community—something moving within
the community—or was it from a third country? The officers
were recording what they had done and what success or otherwise
they have achieved, but they were not always putting down whether
the consignment was from within the community or from outside
it.
Q88 Angela Browning: Have you corrected
that now?
Mr Tweddle: Yes.
Q89 Angela Browning: Is that all
part of what we read on page seven, paragraph 23 as the establishment
of the Customs Strategy Delivery Group? Is that anything to do
with solving some of these problems that are outlined in paragraph
23 which gives quite a poor description of the way these matters
are managed? What does this Customs Strategy Delivery Group aim
to do?
Mr Tweddle: I chaired that group and
what it seeks to do is to bring together all the elements which
were involved in the customs process and so you are absolutely
right, we are looking at a performance framework, we are identifying
each of the elements where we want to improve performance, including
the examinations carried out by the Border Agency so that can
help to improve the targeting and the resource deployment.
Q90 Angela Browning: Was that set
up before you saw even the first outline draft of the NAO Report?
Mr Tweddle: Yes, it was.
Q91 Angela Browning: It was something
that you had already identified needed to be addressed.
Mr Tweddle: Yes.
Ms Strathie: Implemented following HMRC's
capability review.
Q92 Angela Browning: Can I just ask
each of you a question? It seems to me that this is really quite
an appalling catalogue of mismanagement and a laissez-faire approach.
From each of your individual responsibilities what is the weakest
link in your organisation?
Ms Strathie: Can I phone a friend?
Q93 Angela Browning: You have all
told us you are getting your act together in the light of this
Report, but what is the weakest link?
Mr Tweddle: The weakest link is the lack
of an in-depth understanding of the risks that we are facing.
As Ms Strathie has said, what we are trying to do is facilitate
legitimate trade but to identify that very small proportion which,
for one reason or another, is illegitimate. We want to do that
better so that we are not affecting the legitimate traffic and
we are being effective in stopping the illegitimate. We recognise
that our risk frameworks have not been as robust and as extensive
as they need to be and that work is in hand so that we will be
better in the future.
Q94 Angela Browning: Mr Clark, the
ports?
Mr Clark: I would put it a different
way and say that in the development of pulling together the UK
BA the two big areas that we just have to get finished and right
are firstly around the powers that staff have at the ports to
carry out their duties as Border Force officers giving them access
to current customs powers and also to immigration powers, and
secondly to make sure that the intelligence, the risk assessment
and the targeting is working as effectively as we can get it.
Q95 Angela Browning: Can I ask you
about ports where there is no permanent staffing but you said
if they received intelligence information they would be deployed
there? In another debate in this place in relation to illegal
immigration as opposed to goods coming in I can think of an example
which I personally witnessed in a small port but one which had
links coming in from Europe. I will not do it because I think
it would be very irresponsible to do it, but I can think of at
least three or four ports of the same kind along our south coast
that would actually give me concern. Are you not concerned about
this plethora of small ports that are not manned and are not checked,
from your perspective not from the illegal immigration perspective?
Mr Clark: In terms of the deployment,
as I said earlier we have more mobile capability now, particularly
in the south, to deploy to places where there is no permanent
presence. The bringing together of borders and immigration allows
us to have much greater flexibility in using people in the broadest
range of duties at those smaller ports. We get a much better bang
for our bucks and are much more able to deploy than ever before
with the new arrangements. That is why I think actually for me
much of the concern to get right is the intelligence and the targeting
of that resource and making sure we get that right to the highest
risk areas and in a speedy way. So we have the resource; that
is emerging out of the new UK Border Force. We are actually visiting
more small ports now than we have done for many, many years. That
is being reflected by the ports themselves who are seeing us there
and we want to build up better relationships so that the feedback
loop from small ports is more effective in inter-intelligence
arrangements.
Q96 Angela Browning: Are there any
more weakest links?
Ms Dawes: One of the difficulties is
that we do not always have the management information systems
that we would ideally like to be able to draw together this information,
to analyse it properly and that can be very difficult. I think
the end of shift report is a really good example because that
was a local management initiative where local managers wanted
to have some kind of way or recording the work they were doing,
checking the outputs and looking at their efforts and the impact
of those efforts over a period of time. We extended that system
across the whole detection service which was a good thing to do,
but in the end it is something that is relying on manual data,
on individual staff that are entering results into a system that
has not actually been properly put together on a stable IT platform.
Q97 Angela Browning: Why is that?
Are you held back by lack of resources or is it technology on
the IT front?
Ms Dawes: I think we always have to prioritise
and this is an area where UKBA have already made some improvements
and are looking at where they might be able to build a more strategic
solution across the whole range of activities at the border.
Q98 Angela Browning: Ms Strathie,
I see you are not going to confess anything.
Ms Strathie: I think management information
and risk would be the areas that I would look at because we are
an island, it is quite different from a country with lots of land
mass around. That means that we will be constantly having to review
risk and constantly redeploying resources and using all the intelligence
we have. Having good systems, skilled personnel and being able
to move quickly to tackle risk I think will be a challenge for
us like any organisation and continues to be a challenge for UKBA.
Mr Clark: I think we have made moves
in very positive ways in that direction and I am not sure that
I would like to reflect that as a weakest link but it is a very,
very important area of development for the future.
Q99 Angela Browning: I notice on
page 24 when it talks about correcting over payments, traders
have to apply for interest due at a rate of 5%. Is there any question
that you are going to change that 5% rate?
Ms Strathie: It changed in January.
Mr Tweddle: When I was re-reading the
Report I realised that in these days the rates of 8.5% and 5%
might seem to be not appropriate. They did actually change in
January. The rate which HMRC charges on overdue money has been
dropped to 3.5%; the rate that we pay on money that we need to
repay has dropped to zero.
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