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The noble Baroness said: In moving Amendment No. 1, I shall speak also to the 13 other amendments in the group which are in similar form. They would replace the words "Revenue and Customs" in the title of the organisation to be created by the Bill with the words "Customs and Revenue". The amendments apply to Clauses 1 to 4 of the Bill.
At first sight this set of amendments might seem superficial as we do not customarily involve ourselves with the names of bodies or the names of Bills. But I believe that we should carefully consider the title of the new body and not simply accept without question that it would be called the Commissioners of Revenue and Customs.
Within the name we shall be encompassing a whole raft of important ideas which lie behind the two current organisations and which will be fighting for a place in the new organisation. I apologise in advance for the length of what I shall have to say on these amendments. The name of the new organisation goes to the heart of what the new organisation will be about and it is important that the Committee considers the matter in some detail.
Mergers are generally the coming together of two significant bodies to create one more significant whole. The new body should be much more than the sum of
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the parts. I am sure that this is what the noble and learned Lord the Attorney General meant when he said at Second Reading that:
The noble and learned Lord I think was trying to make some new distinction for mergers, but, as I believe I said at Second Reading, that is what has generally been encompassed within the concept of merger in the private sector. So, for me, there is nothing new and magic in the term "integration" because it describes what businessmen have customarily sought when making business mergers. It is a matter of much evidence that they have often not achieved in practice what they have sought. But that is another matter, and we shall return to what is achieved from this merger or integration in due course.
Mergers are not takeovers where one party is dominant over the other. Takeovers normally entail the loss of identity in whole or in part of one of the bodies being taken over. I am sure that the Government do not intend a coming together of the Inland Revenue and the Customs and Excise to be a takeover by either party. It is intended to be a merger or an integration.
In the private sector, the issue of what a merged body is called is always a matter of considerable interest. A takeover generally results in the loss of the name of the minor party, with, at best, the name of the minor party being reserved for brand purposes. So people look to the name of the merged organisation to give some clue as to where the balance of power lies. Very often, wholly synthetic names emerge in order deliberately to obfuscate where the power indeed liesfor example, when British Steel merged with a Dutch steel organisation, it ended up with the name Corus plc, which had nothing whatever to do with any of the organisations, deliberately so as not to lay bare the organisational issues that lay beneath that.
From my own world, which is accountancy, there are currently four major playersthe big four, PriceWaterhouseCoopers, Deloitte & Touche, KPMG and Ernst & Young. Each of them has been formed by one or more mergers and countless takeovers. Each of the names reflects the most delicate positioning, both inside the organisation for partners and staff and externally for customers and markets. That is why the name of the new organisation is so important and why I am taking the time of the Committee today.
It is important that people know whether there is a dominant party in the integration and what that means for those people who have to deal with it. If there is not a dominant organisation, we need to see how that is best communicated. At Second Reading, there was some discussion about the different cultures of the Inland Revenue and the Customs and Excise and the matter was examined at some length by the Treasury Select Committee in another place. Surprisingly, the issue of contrasting cultures received only the most glancing of references in the report by Gus O'Donnell that led to the proposals to create the integrated organisation.
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"The Inland Revenue is more prepared to negotiate and has a more human face. By contrast, mention Customs investigators to accountants and businesspeople and exasperation sets in. Once the Revenue has made a ruling, it generally sticks to it. VAT offices change their minds more oftenpartly because they tend not to commit themselves in writing. The historical background to Customs is that it was not set up as a tax collecting agency, chasing payments from people who are essentially honest. It was set up to chase smugglers".
The issue of what sort of merged or integrated department is being created is fundamental for the taxpayer. The placing of "Revenue" ahead of "Customs" in the title could indicate to the outside world that the more business-friendly Inland Revenue is to be the winner in the new organisation. That would be popular in the business world. Can the Minister say whether that is what the Government are wishing to convey in their choice of name? I hope that the Minister will say something about the way in which the name has been chosen.
It may be that the Government wish no inference to be drawn about the kind of organisation that the new body will be. In that case, the Government should try to find either a new name unrelated to the two existing namesrather like Corus in the steel caseor they should take a more strictly logical approach. I suggest that the strictly logical approach to naming the new organisation would be either to follow an alphabetical approach or an historical approach.
An alphabetical approach would lead to the conclusion that "Customs and Revenue" would be the correct name because "Customs" and "Excise" come before both "Inland" and "Revenue". But an historical approach is more serious because the Customs and Excise is, by a very long way, the more senior of the two organisations. A nationally organised customs service can be traced back over 800 years, to the time of King John. Indeed, the roots of the customs service are said to be in Saxon times. In 1671, Charles II put the service in the hands of commissioners, as it is today. By contrast, the Board of Inland Revenue is a mere stripling, having been formed in 1849, and deriving from the introduction of income tax seven years earlier.
As well as it being logical to put "Customs" before "Revenue", it would show some reverence for the institutions and history of our land. On the other hand, putting "Revenue" before "Customs" in the title of the new organisation is something of an historical affront to the more senior organisation. I suggest that it shows the lack of care for the history and culture of our institutions that the Government have shown in a number of ways over the past eight years.
It is for reasons of historical accuracy and verbal neutrality that my amendments replace the title "Revenue and Customs" with "Customs and Revenue". If the Government wish to keep the title as shown in the Bill, I invite the Minister to lay out clearly and
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unambiguously what the rationale for the judgment was, and what that means for the culture of the merged organisation.
If these amendments are accepted by the Government, which I earnestly desire, a number of other amendments will be required, including the title. I have drafted the amendments in terms of Clauses 1 to 4 merely to facilitate today's debate in Grand Committee. I have not even attempted to amend Clause 1(2) or Clause 4(2) for the simple reason that I find the Welsh language almost impossible to understand and certainly impossible to pronounce. An early experience taught me never to tangle with the Welsh language, and so I hope that for today the Committee will accept the spirit of my amendments as encompassing Clause 1(2) and Clause 4(2). I beg to move.
Lord Campbell of Alloway: I support the amendment. Customs and Excise is the dominant partner in this merger; it is the senior partner. It has coercive investigatory powers that are more draconian than the Revenue has ever had to use. In my Amendment No. 21, I deal with the fact that the cultures and patterns of working of these two departments are wholly disparate.
Lord Newby: This is a fascinating discussion. If the title of the new merged department is to reflect its brand value, as it were, and if by having "Revenue" before "Customs" the intention is that the department should treat taxpayers in a somewhat more flexible way than the average excise man on a bad night, I will be all in favour of it. Therefore, I am sorry that I cannot support the amendment proposed by the noble Baroness.
On a matter of historical accuracy, the noble Baroness said that Customs was set up to chase smugglersI do not believe that was the case. Customs was set up simply to collect the King's revenue when he had personal control of that revenue and Parliament had nothing to do with it. Smuggling was a relatively late development on a grand scale, which of course reached its height in the 18th century when Walpole, as Chancellor of the Exchequer, employed his own smuggler. In the early days of the history of the department, it had a less flamboyant role.
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