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Lord Thomas of Gresford: My Lords, perhaps I may speak briefly for the legal profession. This amendment is entirely anathema to the ethical position of the lawyer, who is bound by legal professional privilege up until the point where it is disclosed to him that his client has committed a criminal offence. For him to receive money to disclose matters to the Revenue or to Customs and Excise in those circumstances, or even to another lawyer to whom the case has been passed, would be contrary to the code of practice. I would resist the amendment.
Lord Goldsmith: My Lords, in one sense this is the most animated debate that we have had so far today. I am very pleased that the noble Lord, Lord Barnett, has managed to return to the aspect of the Bill that has caused him a great deal of interest, perhaps the most, since we started the debate. Now we have the punch-line of the interest.
I can be very brief. I agree absolutely with the remarks of my noble friends Lord Barnett and Lord Sheldon on the importance of professionals acting in such a way that illegality and tax evasion are brought to the attention of the authorities. My understanding of the profession's own ethical standards demonstrates that there is an understanding of the need for that disclosure. The Institute of Chartered Accountants in England and Wales states that:
"In certain circumstances information which would otherwise be confidential, will cease to be so if the information is such that disclosure is justified in the 'public interest', for example, where the employer has committed or proposes to commit a crime, fraud or misdeed".
I trust that lawyers and tax professionals, practising and retired, will always act with the highest regard for the public interest. Whether they need the inducement of rewards to do so is an entirely different matter. As it happens, the Bill would permit such payments to be made. The merit of my not agreeing to the amendment is that that would not limit the possibility of rewards to those who are still practising. With the assurance that I
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would not want to discourage the commissioners from paying rewards where they thought it appropriate, even to practising or non-practising tax or legal advisers, I invite the noble Lord to withdraw the amendment.
Lord Barnett: My Lords, I am grateful to my noble and learned friend. I make it quite clear that when I talked about "retired" professional people like the noble Lord, I meant people who have only recently retired, not someone who has retired as long ago as the noble Lord. I appreciate the strength of the debate we have had.
Lord Shutt of Greetland: My Lords, I have never thought of myself as retired at all. It has not ever come into my thinking. I did, however, lay down my practising certificate.
Lord Barnett: My Lords, I am not sure what the noble Lord was saying.
The Opposition, particularly those on the Liberal Democrat Benches, seem to want to vote. I do not wish to deprive them of that opportunity. However, on this occasion, I will. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (The Countess of Mar): My Lords, before I call Amendment No. 15, I should point out that in subsection (3)(a) of the amendment, the word "merger" should read "integration".
Baroness Noakes moved Amendment No. 15:
"REPORT ON HER MAJESTY'S COMMISSIONERS OF REVENUE AND CUSTOMS
(1) On or before the second anniversary of the coming into force of this Act, in accordance with section 53(1) the Chancellor of the Exchequer shall appoint a person or persons to report on the operation of Her Majesty's Revenue and Customs.
(2) A report under subsection (1) shall include an assessment of—
(a) the overall success or otherwise of Her Majesty's Revenue and Customs since its establishment including, but not limited to, a cost-benefit analysis;
(b) the direct costs of effecting the integration;
(c) the direct cost savings achieved by the integration;
(d) whether efficiency gains have been achieved as a result of the establishment of Her Majesty's Revenue and Customs including, but not limited to, the effects of the integration on the tax yield and the incidence of fraud;
(e) the overall compliance burden, including the impact on day-to-day customer service and the experience of taxpayers in dealing with Her Majesty's Revenue and Customs;
(f) the performance of Her Majesty's Revenue and Customs in the development and application of information technology and data systems;
(g) the working relationship between Her Majesty's Revenue and Customs and the Treasury including, but not limited to, the adequacy of arrangements for accountability;
(h) the performance of the Revenue and Customs Prosecutions Office including, but not limited to, a cost-benefit analysis;
(i) the work undertaken preparatory to the integration; and
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(j) any other area that the person or persons appointed under subsection (1) considers relevant to an understanding of the creation or operation of Her Majesty's Revenue and Customs.
(3) A report under subsection (1) shall not include any assessment of—
(a) the annual performance of the Commissioners for Revenue and Customs in discharging their responsibilities as tax administrators and collectors, except in so far as these have been affected by the merger; or
(b) any matter (whether relating to value for money or otherwise) that has been reported on by the Comptroller and Auditor General.
(4) A report under subsection (1) shall be prepared annually for five years from the date referred to in that subsection and shall be laid before both Houses of Parliament and published.
(5) The first report under subsection (1) shall be completed within 12 months of the date referred to in that subsection.
(6) In this section "the integration" means the creation of Her Majesty's Revenue and Customs from the Commissioners of Inland Revenue and the Commissioners of Customs and Excise."
The noble Baroness said: My Lords, we come to the last of our amendments on Report, although it is not the least of them.
Amendment No. 15 introduces a requirement for a report to be made on the integration of the Inland Revenue and Customs and Excise into HRMC. The noble and learned Lord will note that even the Public Bill Office found it difficult to tell the difference between a merger and an integration.
We debated a similar amendment in Grand Committee, but we make no apology for returning to the issue now. The issue is how proper scrutiny of the integration of these bodies can be achieved. We do not believe that a proper case was made for that integration, in the sense that all the costs and benefits were fully laid out; we do not believe that the risks of implementation were properly explained; and we do not believe that the impact on taxpayers was properly identified.
The noble and learned Lord will, I hope, acknowledge that we have not opposed the Bill, but our support has been on the basis that proper post-examination will be made of the integration, which is what the amendment proposes.
I will not go through the individual items set out in subsection (2) of the new clause. They are there to indicate the many complex issues that we believe need to be scrutinised. In Grand Committee, the noble and learned Lord said that the Comptroller and Auditor General could examine all these things. Indeed he could, and I am sure that he will examine some of them, but the issue is when, and how often. Our amendment proposes a report after the first two years of the integration, and then annually for five years.
The noble and learned Lord also said that the Public Accounts Committee and the Treasury Select Committee in another place could examine the integration. Of course they can, and probably will, but this amendment ensures that there is regular information to allow those committees to determine whether and to what extent they do so.
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Following our Grand Committee debate, I have modified the amendment so that the person selected to produce the reports is not required to be independent. Some, including the noble and learned Lord, and the noble Lord, Lord Barnett, did not like that. I am sure that any Chancellor would appoint an appropriate person, so the amendment does not seek to fetter his choice in any way.
It is often easy for grand schemes to be introduced with a fanfare, and then to degenerate. It is genuinely hard for parliamentary scrutiny to be kept up to date on past events, given the raft of current issues that exist. I shall give the noble and learned Lord just one example of a grand scheme gone wrong: the Dome. The Comptroller and Auditor General produced a damning report after the event, but there was no requirement for regular reports, so the true cost to public funds, now nearly £1 billion, has managed to escape largely unnoticed.
The amendment seeks to ensure only that there will be proper scrutiny of the integration. I sincerely hope that the integration does not go wrong. We have already had more than enough waste of public money over the past eight years. The chances remain high, however, that there will be unforeseen problems, whether of cost, efficiency, of tax yield, of continuity of service or of impact on the taxpayer. Parliament deserves proper oversight of the integration. I beg to move.
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