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Baroness Noakes: I was quoting from the Association of Chartered Certified Accountants. I am glad to report that that is not a body of which I am a member. I will make sure that the association is told of its error.

Lord Brooke of Alverthorpe: I am against the amendment. This is a business merger; and of the two parties coming together there is no question that the Inland Revenue is the bigger of the two. If we are following the business model found outside, the bigger of the businesses normally comes first in the title. I do not for one moment believe that Customs and Excise will be taken over by the Inland Revenue; indeed, I
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hear fears from within the Inland Revenue that the new partner is a pretty strong one. Indeed, when it took over the National Insurance Contribution Agency, the Revenue discovered that it was a strong partner too. We do not need to worry on that score. The impression that is given to the public at large must reflect reality, and the Revenue side is the big business piece. That is what people need to know.

Looking some 15, 20, or 30 years down the line, it is the Customs side, if anything, that may not be quite what it has been in the past, or even what it is at the moment. I struggle to see the Revenue side declining. We should stick with something that will hold with time. I hope that we will oppose the amendment.

Lord Brooke of Sutton Mandeville: I am delighted to follow my namesake and—as all Brookes believe themselves ultimately to be related—my noble kinsman as well. I have a very slight declaration of interest to make, in that I was the Minister responsible for Customs and Excise between 1985 and 1987. I apologise to the Committee for not being present at Second Reading. With the amount of business that the Government are loading on us in what I understand to be the last two months before an election, I find that there are manifold diary conflicts, and I am afraid that I had such a conflict on that day. If I offend by making any remark that sounds like a Second Reading remark, I ask to be forgiven.

I have an emotional involvement in the subject. It was said at Second Reading that an enormous attraction of service in Customs and Excise was the enthusiasm that people had for belonging to it. Even the noble Lord, Lord Newby, said that. Having been its Minister, I absolutely concur with the enthusiasm expressed at Second Reading.

I have one or two minor factual observations to make. Although it is perfectly correct that Customs started in the 13th century—the noble Lord, Lord Newby, may well be right in his observations about its purpose—I think that I am right to say that the true origins of Customs and Excise activity occurred in the City of London in about the 7th century AD. In a remarkable reverse of normal procedure, it was at that stage a privatised service. Until at least about 1500, the City of London was the business centre of the kingdom, with Westminster very much for the public sector and the task of government.

When the king and court left Westminster at the end of the 13th century or the beginning of the 14th century to fight the wars in north Wales and against Scotland, the whole centre of gravity of government moved to the north. Tourism takings in Westminster fell off to the extent that, during that period, 30 times as much money was given to St Thomas a Becket's tomb in Canterbury as was given to Edward the Confessor's in Westminster Abbey. When the king brought the court back in the middle of the 14th century, to try to build up the economics of Westminster he established a wool tax, which was to be secured and exacted at Westminster rather than in the City. All exports were to go out through Westminster. Market forces allowed that to continue for only about 10 years, and it then
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moved back to the City. Involvement in that—including that, obviously, of Chaucer—was very much City-based during the ensuing years, before the Revenue began.

Although my noble friend Lady Noakes fell back on some of the language about 1842, I noticed that, at col. 1171 of the report of Second Reading on 8 December, the Paymaster General actually took the Revenue back 300 years. It is not as Johnny-come-lately as we might have thought. Nevertheless, the origins of Customs go back much further than those of the Revenue.

It is obvious that the title as set out is not alphabetical, so it is a deliberate move to place the Revenue as its first item. In moving the amendment, my noble friend is absolutely right to come back to the difference in cultures, which is significant. I shall make one observation about the Second Reading debate. In my experience as a Customs and Excise Minister, the essential difference was that Customs would strike what I will call a business bargain with the sectoral interests with which it had to deal, so that a simple interpretation would be reached in negotiation between the industry and the Excise that would make the tax easier to collect. As a taxpayer, however, I have found a greater preoccupation on the part of the Inland Revenue with the detailed letter of the law. That is a massive cultural difference. I was a little surprised, admirable though I think the O'Donnell review is, that there was not more reference to those differences, which will be a significant problem in terms of negotiations. When I negotiated with the noble Lord, Lord Brooke of Alverthorpe, my namesake and distant kinsman, I believe that, at that stage, he was responsible for the Inland Revenue and not for Customs and Excise. Therefore, my negotiations with him were entirely on an Inland Revenue basis, but I was certainly conscious of that distinction.

The cultural side is important. My noble friend is entirely justified in putting down this amendment and since I have not previously seen any explanation of why the title was written in the way it was, I am much looking forward to hearing the Attorney-General's reply.

The Attorney-General (Lord Goldsmith): I am rather sorry to have to get up, because I have been enjoying this debate enormously and feel that, having already produced a rift politically on matters of historical accuracy, some achievement has been made. However, I do not want that remark to detract in any way from the fact that I entirely accept that the integration of two of the oldest departments in Whitehall is an historic event and that the name of the new department is a serious issue. I will do my best to answer the question asked by the noble Baroness, Lady Noakes, and most recently by the noble Lord, Lord Brooke of Sutton Mandeville, about why this name has been chosen.

The title needs to say clearly and recognisably what the new department does. In that respect, some of the devices that have been taken in the private sector—the noble Baroness, Lady Noakes, referred to one name that said nothing about its predecessors and possibly nothing
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about the business that the new company carried on—are not at all appropriate for a government department. The name also needs to stand the test of time.

Of course, the intended name incorporates first of all the long history of both predecessor departments. It includes key words from each. It places Revenue before Customs but it adopts a similar form to that of the current department of Her Majesty's Customs and Excise. If we had gone further towards the precedent of Customs and Excise and called the department, as the noble Baroness would wish, Customs and Revenue, that would probably do very little to help create a new and separate identity for the new department and it could well lead to confusion and the continued inadvertent use of the expression Customs and Excise. Customs and Revenue, Customs and Excise: one could see how that confusion would arise. Revenue and Customs means a quite distinct and deliberate change of identity.

The new title does invoke the history of the two current departments and I will say a little more about the historical issue in a moment. But it also looks to the future. The title does not reflect the relative importance that people may decide the Government are placing on the two departments and may differ in this respect from what I know happens in the private sector. There is quite a battle sometimes about whose name will be most prominent in the name of the new company, because that indicates that the management of the new company has won the battle and demonstrated that it is the stronger. That is not what this merger or integration is about. The Government hold both departments in equally high regard.

The name reflects better what the new department will actually be doing. Her Majesty's Revenue and Customs will primarily be a revenue raising department and that will be reflected in his name. That does not mean that the Government are not committed to the department's other non-revenue raising functions. Customs' role in securing the frontier is vital to the new department and we firmly believe that the benefits from creating a single department will apply to international trade just as it will to other areas. But primarily revenue raising—and revenue, of course—would include within it duties.

The name of the department will encompass what the department will be doing while maintaining its links with history. So it was that on Thursday 13 May it was announced that my right honourable friend the Chancellor of the Exchequer had chosen this name and that this had been approved by Her Majesty the Queen. It has to be noted, though I do not put it at the forefront of my opposition to the amendment, that any change now in the name would require a further approval by the Queen.

Let me say something about the other ideas that the noble Baroness, Lady Noakes, has expressed about how to put the names together. I hope that I have said enough about the rationale behind why the name was chosen. First, I am not persuaded by the alphabetical argument when there are considerations on the other side—the scale of the two activities and the need clearly to
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distinguish customs from excise. I do not believe that the noble Baroness really put that reason at the forefront of her argument.

As for the historical argument, we have heard already from the erudite and interesting observations made so far that the question of precisely who has the right to claim seniority is not so straightforward. Under their current names, the Inland Revenue has existed since 1849 and HM Customs and Excise since only 1909. On the other hand, the Inland Revenue is a direct descendent of a national government institution which does, as the noble Lord, Lord Brooke of Sutton Mandeville, said, go back to 1694 and the Board of Stamps; whereas Customs can, as the noble Baroness said, trace its lineage further back to the reign of King John.

But again, if one gets even more antiquarian than that, one can find shadowy ancestors of both departments in Anglo-Saxon times. The Income Tax Appeal Commission can trace its descent and in some cases its precise boundaries to the hundreds and wapentakes through which Saxon taxation was administered. A charter of King Athelbald of Mercia has a reference from the 8th century to customs duties. Members of the Committee have made further references. It is very important to the history of both departments but not, I would suggest, ultimately in any sense a clincher as to how the new department should be named.

One point of agreement is that it is wrong to say that the origins of the body to which reference was made, and of which the noble Baroness was ready to show that she was not a member, were related to chasing smugglers. Even in 1203, the non-revenue functions were ancillary to the revenue raising. I am told that the revenue raised in 1203 was £5,000—and huge riches they no doubt were at that time.

A number of noble Lords have referred to the cultural point. As I said on Second Reading, both departments have long and proud histories and we shall not want to lose the best of each culture. There is already a cultural overlap: values centred on integrity, honesty and a focus on helping people to pay the right tax and receive the correct benefits at the right time. There is also a clear determination from both bodies to take robust action against those who seek to avoid their obligations. So there is already a strong shared culture, and we would expect that through time, the incremental approach, having strong leadership, unified communications and the involvement of staff, there will be still greater convergence in the cultures of the two constituent parts of the new department.

The noble Lord, Lord Campbell of Alloway, referred to the practice of negotiation of agreements by way of example, as did other Members of the Committee. It is right to say that both departments currently use a mixture of negotiated agreements and formal proceedings. They have the powers to do so and those powers will be inherited by the new department.

It may well be said that in the past the Inland Revenue has been more ready to negotiate than Customs has been, although the contrary has been
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expressed in the course of this debate. But whatever the historical practice, the new department will need to develop its own policy on this question. I hope that Members of the Committee will agree that ultimately what really matters is how this new department will carry out its functions.

While I am grateful to the noble Baroness for the opportunity to debate this question and to answer the question put to me, I am also grateful for the opportunity to debate the rich heritage of both departments. I hope that she is now satisfied that there is a good, rational basis for the choice of name and that it will provide a sensible banner for the important work the new department will undertake. I hope therefore that she will feel able to withdraw her amendment.

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