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There was one point in particular that I had hoped he would address from the Dispatch Box: recognition by the Government that it would be beyond credibility for the Information Commissioner not to seek an early review of the operation of HMRC. The noble and learned Lord gave us that suspicion, which was extraordinarily helpful. I also drew great comfort from what was said about the principle of having a nominated commissioner to deal with compliance with the HRA and the DPA.
Lord Goldsmith: My Lords, I do not want the noble Earl to get a false impression in any way. It will be for the Information Commissioner to decide whether he needs to undertake some particular form of review. I have indicated that the procedures are in place for him to talk to a nominated commissioner, so that he can form that view for himself. I would not like to be taken
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as having offered any assurance that that is what he will do. The Information Commissioner isrightlyhis own man.
The Earl of Northesk: My Lords, I take that point absolutely. The point that I was cack-handedly trying to convey was that it is the expectation of all of us that the Information Commissioner in his independent capacity will do so. It would be beyond credibility for him not to want to take a look at the first year or two of the operation of HMRC. I may have expressed it rather cack-handedly, but I did not infer that in any sense the noble and learned Lord was giving a cast-iron guarantee that he spoke on behalf of the Information Commissioner. I understand that point.
I hope that I am not repeating myself if I say that I was also grateful to hear the noble and learned Lord espouse the principle that there should be a nominated commissioner for HRA and DPA compliance. That is extremely useful and offers me great comfort.
"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 (referred to in this section as "the assessor") to report on the matters set out in subsection (2).
(2) A report under subsection (1) shall deal with the creation of Her Majesty's Revenue and Customs from the Commissioners of Inland Revenue and the Commissioners of Customs and Excise (referred to in this section as "the integration") and shall include any matters considered by the assessor to be relevant to an assessment of the integration in terms of its costs, its benefits and its impact on taxpayers.
(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 integration;
(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 not be required to deal with any matter which the assessor believes has been adequately dealt with in any document which has been issued by Her Majesty's Revenue and Customs and which is publicly available.
(5) 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.
(6) The first report under subsection (1) shall be completed within 12 months of the date referred to in that subsection."
The noble Baroness said: My Lords, I am sure that the House will be glad that we have reached the last amendment at Third Reading. We debated different versions of the amendment in Grand Committee and on Report. On Report, the noble and learned Lord made some important statements in response to the
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issues raised by the amendment, which seeks a report on the integration of HMRC. In particular, we welcomed what the noble and learned Lord said on Report about the reports that would be made by HMRC in the first year or so of its operation.
The amendment before us today is different in two important respects from the one that we debated earlier. First, we have eliminated the reference to the Revenue and Customs Prosecutions Office that upset the noble and learned Lord on Report. I did not wish to upset him, so I removed the reference from this amendment. I am sure that the performance of the RCPO should be kept under review, but I am equally sure that another mechanism should be found.
The second respect in which the amendment differs is that it is drafted now to sweep up those matters that are not dealt with in other public documents. We believe that what the Minister said on Report about the content of the early reports by HMRC will go a long way towards meeting our concerns. But those reports may not adequately deal with all of the issues that are relevant to an assessment of the integration in terms of its costs, its benefits and its impact on taxpayers.
I have been particularly concerned that the reports will run out after about 18 months. Some of the issues that are relevant to how well the integration has worked will not become clear very early. In particular, the impact on tax yield would not be clear for some time, nor, almost certainly, would the impact on taxpayers, given the rather incremental approach to the way in which the operations of HMRC will change.
The noble and learned Lord may say, as he said on Report, that as time goes on the impact of the integration will be mixed up in some ways with other measures. I accept that, but it seems to me that it is a basic principle of good management that procedures should be put in place to differentiate the impact of different policies. If they are all to be muddled together, after a year or so no policy could ever be evaluated on an ex post basis. It is a principle of good government that policies are capable of being evaluated on an ex post basis.
That is particularly the case with the creation of HMRC. We have argued throughout the Bill that the policy was not well justified at the outset. We did not oppose the policy, but we made the point that the costs of integration were not well explained, the risks were not well identified and, in particular, the benefits in terms of increased yield were barely mentioned, let alone quantified.
So our concerns are that proper information is put routinely into the public domain, in particular after the first year, which is where the real test of the impact of integration can be determined. The amendmentbecause it focuses only on information that is not otherwise publicly availablecould result in absolutely no additional information being put in the public domain. That would be splendid because it would mean
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that HMRC was doing a splendid job in being open and transparent about the effect of the integration. But just in case it does not do so, I beg to move.
Lord Newby: My Lords, first, I apologise to the House for being unavoidably detained elsewhere at the start of this debate. I should like to begin by echoing the comments made by my noble friend Lord Thomas of Gresford. We thank the noble and learned Lord and the Bill team for responding in such a positive manner to the amendments that were carried at an earlier stage. As a result, it is a better Bill.
As regards this amendment, we support the attempts made by the noble Baroness to obtain a satisfactory review of the progress of the merger, given its importance and the importance attached to it by the Government and external observers. We support the efforts that the noble Baroness has made to achieve that.
Lord Goldsmith: My Lords, I thank the noble Lord, Lord Newby, for his contribution to the debate. We entirely understand that he was unable to be present earlier; I understand that it was nothing to do with the events of this morning.
I want briefly to respond to the noble Baroness, who I think knows my principal objection to what has been described at one stage as a risk of "reportitis". I want to put on record a further elaboration of what I said on Report about the commitment to cover aspects of the performance of the new department in the annual and spring reports. I am happy to confirm that there will be continuing reports on HMRC's performance on the key areas of yield, on reducing the compliance gap and the impact on taxpayers. These are the very items which are covered in HMRC's public service agreement targets.
In addition, a special chapter in the annual and spring reports will report on specific post-implementation issues. I said previously that this would cover 200506. I can commit to it being carried forward at least into 2007 as well, which is an increase on what was first said. However, I emphasise again the words, "and, where appropriate, subsequently". This will provide for progress made in the medium term as well as more immediate early progress following the creation of the new department.
I remain in a different place from the noble Baroness when it comes to considering at what point it will no longer be productive to try to separate out particular aspects of performance from the overall performance of the department, but we do not need to determine that debate now. It will be for the Commissioners as they go forward, bearing in mind what has been said in this debate, and what will be said no doubt in this House, in another place or in Select Committees as they look at the early reports, to consider the need for continuing reports to be brought forward. The Commissioners will decide how best to organise and set out their annual and spring reports, and I believe that a point will come when the concept of special chapters is no longer relevant. But perhaps we cannot predict precisely when that will be.
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I conclude by congratulating the noble Baroness and the noble Lord, Lord Newby, on the determination with which they have pursued this point, which resulted in a very careful consideration by the department of an appropriate reporting mechanism and the development of ideas for the reports. They will improve on the overall structure for what we have in mind. I think that we can all be satisfied that this now represents a full scheme of reporting to Parliament over the next few years, and perhaps beyond, of this extremely important department on its very important work for the British economy and the British public.
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