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Baroness Noakes: I thank the noble and learned Lord for that response. He argues that on the grounds of flexibility the amendment should not be in the Bill. I look forward to using his arguments against his fellow Ministers when these provisions appear again—as they will—in other Bills. I did not make the language up; I stole it from Bills produced by his colleagues.

I am reassured that the intention is to have an audit committee and that it will be comprised solely of non-executives. Perhaps noble Lords would care to consider that for their own audit committee, which certainly does not have even a majority of non-executives. However, I leave that issue to one side.

I have one question for the noble and learned Lord. If the Commissioners for Revenue and Customs choose not to set up an audit committee—I understand
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that is the direction of travel at the moment—and there is no requirement in the Bill, what would be the Government's position?

Lord Goldsmith: We have been discussing the general power of directions and the Government would plainly need to consider whether that was an appropriate and proper way to proceed. Because we are talking about a government department, arrangements which the Government consider ought to apply to government departments—either generally or for the category in which this department would fit—may make it clear that the Government's view is that it is or is not appropriate to have that kind of committee.

The noble Baroness asked whether the Government would have a view on that. I believe, without any direction from behind me to say that I am wrong, that the Government would have a view on it, which we would discuss and no doubt put forward.

Baroness Noakes: I was hoping that the noble and learned Lord would say they would direct the Commissioners for Revenue and Customs to set up an audit committee, but he did not go quite that far. That is a great pity, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Clause 13 agreed to.

Clause 14 [Delegation]:

The Deputy Chairman of Committees (Baroness Ramsay of Cartvale): I should inform your Lordships that if Amendment No. 28 is agreed to, I cannot call Amendment No. 29.

Baroness Noakes moved Amendment No. 28:

The noble Baroness said: In moving Amendment No. 28 I shall speak also to Amendments Nos. 29 and 30, all of which are probing amendments in relation to Clause 14.

Clause 14 allows the commissioners to delegate their functions. We believe that it is important to understand the limits of that delegation. Clause 14 allows the commissioners to delegate to a committee. As drafted, that can include people,

Amendment No. 29 is really a technical query. By virtue of Clause 2, the staff of commissioners are known as officers of Revenue and Customs. I am therefore at a loss to see why subsection (1)(b) of Clause 14 refers both to "staff of the Commissioners" and to "officers of Revenue and Customs". Surely they are the same people. If they are not, how do staff who are not officers fit into the Bill? Is it, for example, possible that there are staff of the commissioners who are not officers and who are not therefore required to make the declaration of confidentiality required by Clause 3? That is a narrow and technical point.
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Amendment No. 28 strikes out all of the words in parenthesis in subsection (1)(b), so that you can only have committees comprised of commissioners and no others. As I say, it is a probing amendment to ascertain the use to which the provision will be put. The Explanatory Notes refer to an audit committee. While I am not trying to reopen the question of the audit committee, I would like the Minister to outline what else the provision will be used to legitimate. It is easy to point to an audit committee but rather difficult to see what else it might be used for.

It is important that we understand what is intended because the range of functions that could be delegated is very extensive. There are some excepted functions in subsection (2) covering orders and warrants, but that leaves a whole range of functions relating to the assessment and collection of taxes including VAT, the payment of tax credits, administering child trust funds, valuing property, enforcing customs laws and so on. Those functions include dealing with specific taxpayers. That is why understanding the limits on delegation are important.

If the involvement of those who are neither commissioners nor officers in paragraph (b) causes problems, the ability in paragraph (c) to delegate to "any other person" is potentially even more troublesome. Amendment No. 30 deletes paragraph (c) on a probing basis. While the potential effect of that is partly mitigated by the requirement for commissioner oversight in subsection (4), I am concerned about what the commissioners might seek to delegate and the capacity of individual commissioners to oversee the work of people to whom they have delegated. The commissioners will be busy and cannot be expected personally to supervise a lot of other people.

As I assume the word "person" includes companies and other bodies corporate—so the commissioners could, in theory, delegate to a company which in turn employed hundreds or thousands of employees—I struggle to see how the commissioners could monitor the exercise of functions that they have then delegated.

I have a question on the declaration of confidentiality in Clause 3, which applies to commissioners and officers of HM Revenue and Customs. A number of outsiders can come within the delegation framework, either being appointed to a committee or having a delegation under subsection (1)(c). As there is no restriction on the delegation of functions in relation to individual taxpayers, is it proper that those persons should not be bound by a confidentiality declaration, an important feature that we debated on our first Committee day?

These are probing amendments, but they are not mere technicalities because they raise issues of quite great significance. I beg to move.

Lord Campbell of Alloway: If you added to paragraph (c) the words "to any other person competent to discharge the delegated function", you would limit that and, to some degree, cope with what has been said.
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Lord Goldsmith: The key point of Clause 14 is to provide for the delegation by commissioners of the exercise of commissioners' functions other than those reserved to them by subsection (2). It is important, perhaps particularly given the observation just made by the noble Lord, Lord Campbell of Alloway, that decisions to delegate be taken in accordance with the arrangements determined under Clause 12. Under those arrangements the commissioners could also collectively decide not to delegate so as to keep to themselves other functions in addition to those reserved to them under the Bill.

Subsection (1)(b) provides the ability to delegate the exercise of functions to one of the commissioners' committees, whose members may include persons who are neither commissioners nor officers. Amendment No. 28 would still allow the commissioners to delegate functions to one of their committees but it would leave the position of members of such committees, be they officers or non-executives, less than clear.

We absolutely take the view that non-executives can make an independent, authoritative, highly valuable contribution to such top-level committees. I am sure that we would not want by any amendment to seek to prevent non-executives from playing that part. I would be concerned that the amendment would result in a loss of clarity about this important area of delegation. I want also to emphasis again, noting the point made by the noble Lord, Lord Campbell, that the overall accountability remains with the commissioners, even where there has been a delegation. The commissioners will need to ensure that their committees are effective and support them in the discharge of their responsibilities.

On Amendment No. 29, the noble Baroness makes a not unfair point about the distinction between "staff" and "officers". As she points out, given what is said in Clause 2, "officers" and "staff" may, broadly speaking, be seen as interchangeable. Even though the reference may be belt and braces, it serves this purpose. Let me explain why. It is intended that there should be no restriction on the commissioners' power to establish committees that are fit for purpose and to delegate functions as appropriate to them. Therefore, we do not want the potential membership of those committees to be restricted. The wording ensures that by covering all of these categories.

There will, for example, be members of the commissioners' staff, perhaps support staff, who will be officers of Revenue and Customs, but will not, as any part of their work, confer any of the functions that are by statute conferred on officers of Revenue and Customs. That expression makes it clear that people who are not otherwise connected with HMRC in any capacity can be considered for appointment to a committee.

I accept that there may be an element of belt and braces in the Bill by making it clear that the people on the committee may be neither commissioners, nor staff nor officers. But we would rather have that stated in that way, so that there can be no doubt that the potential category is as wide as we intend it to be,
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rather than risk some debate that someone does not fall within one of those categories and, therefore, cannot be included.

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