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The noble Baroness said: My Lords, I shall speak also to Amendment No. 121. In Committee I moved several amendments concerning the new powers that the Bill gives Her Majestys Revenue and Customs. I was grateful for the fullness of the Ministers answer then and the comprehensive letter that I received late last week, following up the points that she made. The noble Baroness will see that I have retabled amendments on only one of the topics that I raised in Committee, in a form that I hope addresses some of the technical points that she made.
The amendments concern the powers in the Regulation of Investigatory Powers Act 2000 to allow HMRC to obtain an intercept warrant, under Section 5, and to carry out intrusive surveillance, under Section 32. The powers are available to use for preventing or detecting serious crime as defined by that Act. Amendments Nos. 120 and 121 do not disturb the effect of Schedule 11 to the Bill, which is to extend the use of those powers to all HMRC activities.
My amendment would confine the use of the powers to the prevention and detection of serious crime, hence removing the possibility that HMRC might use them in other circumstances by relying on one of the other purposes for which they may be used under the Act. The two other purposes are the interests of national security and safeguarding the economic well-being of the United Kingdom.
In Committee, the Minister said that HMRC, which can currently use the powers for just its former Customs and Excise functions, only ever applied for the use of the powers to prevent or detect serious crime. She said:
HMRC does not apply to use the powers for national security purposes or to protect the economic well-being of the United Kingdom as HMRCs functions do not include those purposes and an application would be inappropriate and no doubt unsuccessful.[Official Report, 27/3/07; col. 1615.]
The functions of HMRC are somewhat illusive. The Commissioners for Revenue and Customs Act 2005 basically says that the functions are to collect and manage taxes and that HMRC has all the functions that the former Inland Revenue and Customs and Excise had. We never managed to get a full list of those functions when we debated that Bill in 2005. HMRCs website does not take one much further. It summarises what HMRC does by saying:
In Committee, I sought to argue that since the collection of taxes is a crucial part of the economics of government it was not difficult to see an argument that pursuing tax assessment and collection could be to protect our economic well-being. When pursuing taxes which are being evaded through serious crime, no issue arises. But I pose the question of the pursuit of tax avoidancea wholly legal activity which involves no crime whatever. However, tax avoidance reduces the tax take, sometimes very significantly, and has the potential to harm the economic well-being of our country.
The Ministers argument was that safeguarding the economic well-being of the UK relates to activity that is similar to the security of the state and was, hence, not available to HMRC. The Minister said that the powers could not therefore be used for tax avoidance. I put it to the Minister that the Act does not place this restriction on the use of the economic well-being powers.
I fully accept that the Minister does not believe that HMRC should use the powers other than in the context of serious crime and should not use them for tax avoidance. But I hope she will see that there is some ambiguity in the statute and that it would be better to remove that ambiguity in order to protect future generations.
In her letter to me of 25 April, the Minister pointed to the provisions of the interception of communications code of practice which makes an explicit link between economic well-being and state security, but that is only a code of practice and not the law. In addition, the code of practice for covert surveillance does not make the same link for Section 32 powers.
The Minister will know that my amendments would in no way affect the RIPA powers for any of the other agencies who might need to use them: we have no desire to do that. My amendments are modest, relate only to HMRC and would simply ensure that what the Government think should happen will in fact do so. I beg to move.
Baroness Scotland of Asthal: My Lords, I am afraid that I must resist these amendments to the Bill, but I hope that in so doing I will be able to persuade the noble Baroness that her concern about the issue is not as well founded as she may fear. The amendments would place restrictions so that HMRC cannot apply to intercept communications, or authorise intrusive surveillance, in the interests of national security or for the purpose of safeguarding the economic well-being of the United Kingdom.
As the noble Baroness knows, under the Regulation of Investigatory Powers Act 2000, intercepting communications and intrusive surveillance are subject to stringent safeguards and controls and are possible only where necessary to prevent or detect serious crime, in the interests of national security or for the purpose of safeguarding the economic well-being of the United Kingdom. I am grateful to her for highlighting her understanding of that and setting out what we debated on the last occasion. However, national security and the economic well-being of the UK are mentioned in the Act as these powers are available to a number of law enforcement and security agencies, some of which may need to use the powers for those purposes. I understand that she is saying I'm not talking about them, I am just looking at HMRC. Her Majesty's Revenue and Customs applies to use these powers only for the purpose of preventing or detecting serious crime, not in the interests of national security or for the purposes of safeguarding the economic well-being of the United Kingdom. I was trying to make a distinction about the different roles that the different bodies would seek to take in applying those powers.
Safeguarding the economic well-being and national security are not part of the statutory functions of that department and noble Lords may know that it is unlawful for an agency to act outside its statutory functions, so an application would be both inappropriate and unsuccessful. In particular, the purpose of protecting the economic well-being of the UK is concerned with matters relating to national security and this was discussed when the Regulation of Investigatory Powers Act 2000 was debated. The link between national security and the economic well-being of the United Kingdom is also recognised and reinforced by the code of practice on the interception of communications. As the noble Baroness has identified, that code of practice states that the Secretary of State will not issue an interception warrant unless a direct link between the economic well-being of the United Kingdom and national security is established.
In addition, the Regulation of Investigatory Powers Act ensures that an authority to intercept communications can be granted as necessary only in the interests of the economic well-being of the United Kingdom where
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Amendment No. 121 may also have drafting errors. It would insert new subsection (3A) into Section 32 of RIPA, but there is already a subsection (3A) that was inserted by the Enterprise Act 2002. If it gives comfort to the noble Baroness, I am always grateful for having officials who will trawl through the minutiae to stop me entering into error and I understand the noble Baroness's acuity in looking at these issues and that she may not necessarily have the number of people to support her in that regard. In addition, the amendment refers to paragraph (m) of subsection (5) of that Section, but that paragraph does not exist so the legislation would become difficult to interpret and operate. The amendment is possibly intended to refer to paragraph (m) of subsection (6) of Section 32 of RIPA.
Amendments Nos. 120 and 121 are unnecessary as Her Majesty's Revenue and Customs can apply to use these powers only for the purpose of preventing or detecting serious crime and not for protecting the economic well-being of the UK or in the interests of national security. I therefore assure the noble Baroness and the House that the situation will not be altered by Schedule 11.
The noble Baroness was in essence asking how we can be sure that HMRC officers will use these powers appropriately and will not misuse them. The training provided to HMRC staff who are investigating serious tax crime, and the stringent safeguards and procedures that come with these powers, will ensure that they are used appropriately. The procedures ensure that any possible use of one of these powers is subject to strict internal scrutiny before an application can even be made for their use. The powers are used only where other methods of investigation have failed or would clearly not succeed in obtaining the evidence or intelligence being sought. Many of the powers require independent external authorisation before they can be used; for example, a warrant must be obtained from the Secretary of State before communications can be intercepted. The use of all these powers is also subject to regular, independent external inspection to ensure that officers use them appropriately. We have spoken in the past about the procedures that we have followed in authorising interceptions. Therefore, I hope that the noble Baroness will see that, although I share her concern about getting this right and I understand her fear of the possibility of one issue bleeding into the other in a way that we would both regard as wrong, we have structured the Bill in a realistic way which prevents that happening. Having given the noble Baroness that assurance, I hope that she will feel able to withdraw her amendments.
Baroness Noakes: My Lords, the Minister will be aware that the three ways of using the power are set out separately in the Act under Section 5 and Section
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There is a code of practice relating to Section 5 which makes that explicit link, but there is also a code of practice covering surveillance. That does not make the link; it makes no mention of it whatever. The natural interpretation would therefore remain. Will the Minister comment on that?
Baroness Scotland of Asthal: My Lords, that is not necessarily so, because one of the difficult aspects of putting this legislation together is that various agencies will be responsible for different areas of activity commensurate with their own limitations. When one reads the legislation, one must look at the purpose which is likely to be addressed by this agencythat is, HMRCwhat its function is and, therefore, how it will be used. One then looks at the codes of practice which apply quite directly to each.
I am happy to look again at whether the code of practice needs to be refined. I do not believe that the codes as they are currently structured need such definition, but I am happy to write to the noble Baroness if, on mature reflection, we reach the view that something may need to be changed. I do not believe that that will be necessary, but I am happy to see whether my assumption is correct.
Baroness Noakes: My Lords, I am grateful to the Minister for saying that she will look again at the codes of practice. That is helpful. In her usual way, she has pointed out the technical deficiencies of one of my two amendments and for that reason, I shall withdraw it today. I shall carefully read her remarks on the way in which HMRCs powers can be used. I do not believe that it is clear beyond peradventure that HMRC could not be said to be protecting the economic well-being of the country by the way in which it prosecutes its activities in collecting and managing the tax system. I shall carefully read what she has said at the Dispatch Box to see whether it constitutes sufficient assurance for those who may come to use these powers in the future and who may look back at what she has said. In the mean time, I beg leave to withdraw the amendment.
(3) An application for permission to introduce intercept evidence or metering evidence, or both, may be made by the prosecution for the purpose of conducting a criminal prosecution to which this paragraph applies, and not otherwise.
(4) Unless and until an application has been made by the prosecution in any such proceedings the provisions of section 17 of RIPA (exclusion of matters from legal proceedings) shall continue to apply in connection with those proceedings.
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