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Lord Thomas of Gresford: My Lords, I am not making any allegations: I am seeking information.
Lord Goldsmith: My Lords, the noble Lord is a very experienced advocate who has a way of seeking information that tends to cast aspersions, but it often works. However, I am glad that on this occasion I was wrong to deduce anything of the kind from what the noble Lord said.
I return to the fundamental point. This legislation is subject—and the department will be subject—to the full rigours both of the Data Protection Act and of the Human Rights Act. It will not be possible to make disclosures and to use confidential information unless that complies with Article 8 of the European Convention. I understand that is absolute common ground between everyone. Administrative safeguards are in place; statutory prohibitions exist to reinforce the confidentiality obligations. Like the noble Lord, Lord Newby, I take the view that this amendment, if passed, would greatly damage the work of the departments. It would put the clock back a long way. I hesitate to say that it would make us go backwards, not forwards, but it would certainly not allow us even to stay where we are.
Lord Campbell of Alloway: My Lords, I shall answer the question that was put to me by the noble Lord, Lord Brooke. If the noble Lord reads paragraph (b) of my amendment carefully, he will see that what he suggested was not and is not the case. Paragraph (b) relates only to information given for one purpose which,
It acts as a bar on those very rare occasions. It is of such importance that it attracted the attention of the Joint Committee on Human Rights, but it is strictly limited in the way I have described.
On the general trend of the speech of the noble and learned Lord the Attorney-General, I am afraid that we are not in an unusual position; we have to differ. This has happened on many occasions. However, the beginning of Report is not the occasion on which it is proper for me to seek to argue back line by line, point by point, and I do not propose to weary your Lordships in doing so. In
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view of some helpful concerns raised by the noble Lord, Lord Newby, and some of the points made by the noble and learned Lord the Attorney-General, I should like to have an opportunity to consider the substance of the argument against me and if necessary reform the form of the amendment. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Power to transfer functions]:
Baroness Noakes moved Amendment No. 3:
"( ) After section 5(1) of the Ministers of the Crown Act 1975 insert—
"(1A) No Order in Council which—
(a) provides for the transfer to any Minister of the Crown of any functions previously exercisable by the Commissioner's for Her Majesty's Revenue and Customs or by the officers of Revenue and Customs, or
(b) directs that functions of the Commissioner's for Her Majesty's Revenue and Customs or of the officers of Revenue and Customs shall be exercisable concurrently with another Minister of the Crown, or shall cease to be so exercisable,
shall be made under this Act unless, after copies of the draft thereof have been laid before Parliament, each House presents an Address to Her Majesty praying that the Order be made.""
The noble Baroness said: My Lords, I rise to move Amendment No. 3 which would amend Clause 8 so that any transfer of functions from HMRC has to be approved by each House of Parliament. The effect of Clause 8 as it stands is to invoke only the negative procedure if any functions of HMRC are to be transferred.
We debated this issue in Grand Committee and since then the noble and learned Lord has written to me with a helpful list of the current functions of both the Inland Revenue and Customs and Excise which would be subject to transfer under Clause 8. I thank him for that. We acknowledge, of course, that Clause 8 does not permit the core collection and management functions to be transferred under Clause 8, but that leaves, on my counting, 29 current activities as set out in the noble and learned Lord's letter, which could be transferred.
The concern is that functions which involve confidential taxpayer information could be transferred by only the most minimal of parliamentary procedures. For example, child trust funds, which involve a means-tested element, are covered. So, too, is the enforcement of the national minimum wage.
There are also other important functions. For example, Customs and Excise has some interesting investigation functions, including in relation to weapons of mass destruction. These, too, could be transferred at will by the Government.
These activities have been placed under the care and control of the Inland Revenue or Customs and Excise by primary legislation. It has been suggested by some—
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notably the Public and Commercial Services Union—that the removal of the functions should similarly be done by primary legislation, but we do not go that far; we are simply asking for the affirmative procedure.
When we debated this in Committee, I said that my amendment did not take account of Scotland and Wales, and therefore I would return on Report with an amended amendment. I discovered that in fact that is not necessary, as I am advised that the effect of subsections (2) to (6) of Clause 8 is that the affirmative procedure would be required if functions were to be transferred under either the Scotland Act or the Government of Wales Act. I hope that the noble and learned Lord the Attorney-General will be able to explain why the affirmative procedure is good enough for Scotland and Wales but not for England.
In Committee, the noble and learned Lord cited as a disadvantage of my amendment that parliamentary time would be taken even if the transfers were not controversial. That misses the point; we are concerned that functions might be transferred where there is controversy. It is important that Parliament should be fully involved, as set out in my amendment. I beg to move.
Lord Goldsmith: My Lords, as at the earlier stage, and for the same reasons, I resist the amendment. I will summarise where we are. As I understand it, there are no concerns about the ability to transfer functions into HMRC by order in council under the Ministers of the Crown Act. I see the noble Baroness shaking her head, which I understand to mean that she agrees. I will comment therefore simply on the issue of transferring functions out, which is what I understand the amendment to be about. I emphasise, as I have done before, that there is no present intention or plan to transfer any particular function out. We are talking at the moment about the power to do so, rather than signalling any changes.
Secondly, I want to reiterate the point that I made at the earlier stages. There is an important restriction in Clause 8, which prevents the transfer out from HMRC under Clause 8 any of the tax, duty, national insurance contributions or tax credit functions inherited by HMRC from the predecessor departments. Those are all the functions which, put broadly, are the reason why HMRC is being created as a non-ministerial department rather than as a ministerial department—in order to maintain that arm's length approach that we discussed at earlier stages. But for that, but for the desire to keep those functions at arm's length, this could be perfectly easily an ordinary ministerial department, in which case the provisions of the Ministers of the Crown Act would simply apply. In those circumstances, the procedures for machinery of government changes would apply as they do between any other departments. As it is a non-ministerial department it has been necessary to make specific provision for the Ministers of the Crown Act to apply because otherwise it simply would not do on its terms.
All that Clause 8 does is take those other functions, not those functions that it is necessary to keep at arm's length, and to reverse the effect of making this a
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non-ministerial department. In other words, in relation to those other functions they should be capable, in principle, of being transferred out in just the same way and subject to just the same procedures as if they were in an ordinary ministerial department, which they could easily have been.
5.15 p.m.
I will give a couple of examples. The valuation of property for council tax purposes will be conducted by HMRC. The Office of the Deputy Prime Minister has policy responsibility for council tax, and local authorities administer council tax. If the tax can be administered by a local authority, and if the policy can be set by a ministerial department, could it really be that the question of who performs the valuation of that property is so sensitive that it cannot be transferred out of HMRC into another department without some special procedure?
Statutory payments, such as maternity and sick pay, will be administered by HMRC on behalf of the Department of Trade and Industry and the Department for Work and Pensions. Those departments are responsible for the payments. Could it really be right to suggest that there is something so special and sensitive about the payment of those sums that the transfer of the function of making the payment has to be subject to some special procedure over and above the procedures that we already have in place, and which have worked extremely well for machinery of government changes?
The noble Baroness has been good enough to refer to the letter that I sent, in which I set out in an annex the functions that we could be talking about. One has functions such as the payment of student loans, the issue of bank notes, the investigation of dealing in tainted cultural objects, and the payment of rates to local authorities in lieu of rates on diplomatic premises. Those are all important, and one could perfectly easily envisage that it might be appropriate at some stage to transfer them to some other government department. Why should the procedure for transferring that sort of function to another department be any different from what it would have been had they been in an ordinary ministerial department in the first place? They easily could have been, given that it is only because of the special Revenue functions, which are exempted from the procedure altogether, that this is being created as a non-ministerial department. As a matter of principle, I do not see why it is necessary to have that special procedure.
The noble Baroness asked me about the position in relation to Scotland and Wales. The procedure for orders involving HMRC mirrors that for all other departments. In the case of the Ministers of the Crown Act, that is a negative resolution, but both the equivalent Scottish and Welsh procedures are affirmative. That simply reflects the rather more complex issues that accompany the devolution settlement. The Bill simply brings HMRC on to the same footing as other departments in so far as concerns those non-protected functions, which is the reason why it is a non-ministerial department.
I conclude by emphasising this point. As with all other regulation-making powers, Clause 8 was scrutinised by the Delegated Powers and Regulatory
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Reform Committee, which reported on 21 February. Noble Lords will know, because it arises so frequently, that the views of that committee are rightly treated with great respect by this House, so much so that when that committee takes the view that the Government ought to have included some procedure over and above what they have, or if the committee has a problem with a power, that is always carefully considered by the Government and more often than not—that may be an understatement—accepted by the Government. On this occasion, having considered the question of the ring fence and the statutory model for transferring functions, the committee concluded that,
I invite noble Lords to accept that judgment. The committee did not regard the procedure under the Bill as in any way deficient. It did not regard it as in any way lacking in parliamentary scrutiny. It was satisfied that the procedure was entirely suitable for those non-ring-fenced powers. Under those circumstances, I respectfully invite the noble Baroness not to press her amendment and not to seek to impose an unnecessary limitation, which would not have arisen if we had done this simply by leaving the powers in a ministerial department.
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