Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Hollis of Heigham: I do not think we should treat the noble Lord's amendment in quite such a perfunctory way. If it were passed, it would fundamentally undermine the Bill's purpose of transferring the Contributions Agency's functions to the Inland Revenue. Let me explain why.

Other provisions of the Bill, particularly Clause 1 and Schedules 1 and 2, allow the integration of the Contributions Agency into the Inland Revenue by transferring its functions from the Department of Social Security to the Inland Revenue. This amendment, as I am sure the noble Lord is aware, would mean that the

14 Jan 1999 : Column 304

Inland Revenue's responsibilities--that is, what it is entitled to do as a statutory board--were not explicitly extended to cover national insurance contributions.

If NICs were a tax, subsection (1) on its own would be sufficient to complete the transfer of functions to the Inland Revenue that is effected by the Bill. But NICs are not a tax, which is precisely why subsection (2) is needed. It adds NICs to the statutory provisions covering the exercise by the Inland Revenue of its tax functions. Without it, some other means would be needed to fulfil a key purpose of the Bill, to enable the Inland Revenue further to integrate the arrangements for the collection of NICs into those for the collection of tax.

I can assure the Committee that subsection (2) does not merge tax and NICs but merely brings their administration together in one body. In deleting subsection (2), this amendment would omit a key step in the transfer of functions to the Inland Revenue that is to be effected by this Bill, and, incidentally, could put at risk the collection of some £2 billion of NICs money, which I am sure the noble Lord would not wish to be a party to. In those circumstances, I hope that the noble Lord will withdraw his amendment.

Lord Higgins: Indeed, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Higgins moved Amendment No. 19.

Page 2, line 29, leave out (", whether made before or") and insert ("made").

The noble Lord said: This amendment refers to a substantive point. I find the wording of this part of the clause rather doubtful. For example, in subsection (5) it says:

    "In any declaration for the purposes of section 6 of the Taxes Management Act 1970 (declarations on taking office), whether made before or after the commencement of this section, the reference to an offence relating to inland revenue shall be taken to include a reference to",
various offences, and so on. Can the Minister say whether I am wrong in thinking that this provision will in fact make it retrospective? In other words, does the fact that the subsection refers to a declaration being made before or after the commencement of the section mean that it will be possible for someone to be found guilty of an offence, which would not otherwise be the case? Of course, the Government's policy generally does, to some extent, change some offences which are criminal into those which are civil. However, on the face of it, I am not quite sure to which of those categories this particular section of the Bill refers. Can the Minister say whether it would indeed create a situation where someone might be found retrospectively, in the absence of this particular section, to have committed an offence and thereby be guilty of either a criminal or a civil offence? I beg to move.

Lord Renton: My noble friend has raised a fundamental question of principle. I say that because in criminal cases we never convict anyone under a law which has not yet come into force. We expect the law to be clear before the alleged offence is committed and,

14 Jan 1999 : Column 305

indeed, we expect it to be brought into force before the commission of that offence. It is rather strange that this provision could lead to a different result.

Baroness Hollis of Heigham: I very much hope that I can allay the noble Lord's fears. It seems to me that his amendment would have much more dire consequences than he has foreseen. This part of Clause 3 is intended to ensure that the undertaking given by civil servants and tax appeal commissioners to keep taxpayers' affairs confidential is adapted to include the Inland Revenue's new responsibilities for NICs, statutory sick pay, statutory maternity pay and contracting-out matters. Staff and tax appeal commissioners need to be able to disclose otherwise confidential information for the purposes of prosecutions. The wording of Clause 3(5) enables contributions offences to be handled in the same way as tax ones are now.

The amendment proposed would mean that this extension would apply only to Inland Revenue civil servants and tax appeal commissioners appointed after Clause 3 comes into force, which I believe was the concern of the noble Lord, Lord Renton. Staff and commissioners appointed before the passage of the Bill--obviously the very great majority--would not be able to disclose information for the purposes of prosecution about NICs, and so on. The effect would be to place varying confidentiality requirements on staff and appeal commissioners depending on when they were appointed. As all Inland Revenue staff and tax appeal commissioners will potentially deal with both tax and contributions, this would produce an odd and undesirable result. Indeed, it would hardly be helpful to this Government's drive against fraud of all kinds.

I hope that the noble Lord, Lord Renton, will be reassured to know that the provision in Clause 3(5) follows the precedent used in the past, especially by the previous government, when it has been necessary to extend the scope of the declaration of secrecy to cover new matters. For example, when corporation tax was introduced, the existing declaration was extended to cover the new tax. It is a sensible measure, which I do not believe raises serious constitutional issues. It is a well established precedent for the smooth and effective transfer of contribution matters to the Inland Revenue. Therefore, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Higgins: I should like to consider, as no doubt my noble friend and others will, exactly what the Minister said in her response. I was reasonably happy with her reply until she referred to the question of the Government's drive against fraud. Of course, we are all in favour of that drive. However, in the light of what the Minister said, we are not clear as to whether it would be possible for someone to be convicted of fraud in the circumstances outlined by my noble friend Lord Renton. As Members of the Committee know, I am not a lawyer. Therefore, I should like to consider, with others, exactly what the Minister said. Subject to that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

14 Jan 1999 : Column 306

5.15 p.m.

On Question, Whether Clause 3 shall stand part of the Bill?

Lord Skelmersdale: I am not sure whether my noble friend intends to speak in this respect, but if he does I am afraid that I am pre-emoting him because my question relates to subsection (3) and relates specifically to paragraph (e). Subsection (2) says:

    "Subject to subsection (3) below, for the purposes of the Inland Revenue Regulation Act 1890 ("the 1890 Act") the definition of "inland revenue" in section 39 of that Act shall be taken to include contributions".
That is fair enough, but miscellaneous exceptions are then set out in subsection (3) one of which, surprisingly, is the "expenses of prosecutions". I rather wonder why that is. Can the Minister enlighten me?

Baroness Hollis of Heigham: Given the fact that the noble Lord is opposing the Question that Clause 3 should stand part of the Bill, it is perhaps worth emphasising--

Lord Skelmersdale: With the greatest respect to the Minister, I am not doing so. I am using the debate to raise a question on the clause, which is a rather different matter.

Baroness Hollis of Heigham: I am advised that several sections of the Inland Revenue Regulation Act 1890, as set out in Clause 3(3), do not need to apply to contributions. In some cases comparable legislation already exists in relation to contributions, while in other cases the section no longer applies to income tax and would not be suitable in relation to contributions. Hence the inclusion of the list of exceptions.

Lord Skelmersdale: I thank the Minister for that explanation.

Clause 3 agreed to.

Clause 4 [Powers relating to enforcement]:

On Question, Whether Clause 4 shall stand part of the Bill?

Lord Higgins: This clause relates to the issue of enforcement. Again, it was raised on Second Reading and is a matter upon which the noble Baroness has written at some length, as far as concerns the actual hours involved. Schedule 4 is in fact related to the clause and I believe that we have tabled some specific amendments in that respect. Therefore, it may be more appropriate to raise these matters while dealing with the schedule rather than the clause. As Members of the Committee will see, Clause 4 merely consists of three lines so it would be easier to discuss such matters when dealing with the related schedule. In the circumstances, I do not wish to oppose the clause at this point.

Clause 4 agreed to.

Schedule 4 [Enforcement]:

Lord Higgins moved Amendment No. 20.

Next Section Back to Table of Contents Lords Hansard Home Page