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Standing Committee D
The Committee consisted of the following Members:
Chairmen:
Mr. Roger Gale, †
Mr. Jimmy Hood
†Baird, Vera (Redcar) (Lab)
†Blackman-Woods, Dr. Roberta (City of Durham) (Lab)
†Borrow, Mr. David S. (South Ribble) (Lab)
†Burnham, Andy (Parliamentary Under-Secretary of State for the Home Department)
†Carmichael, Mr. Alistair (Orkney and Shetland) (LD)
†Drew, Mr. David (Stroud) (Lab/Co-op)
†Ellwood, Mr. Tobias (Bournemouth, East) (Con)
†Farron, Tim (Westmorland and Lonsdale) (LD)
†Garnier, Mr. Edward (Harborough) (Con)
†McNulty, Mr. Tony (Minister for Immigration, Citizenship and Nationality)
†Mercer, Patrick (Newark) (Con)
†Mountford, Kali (Colne Valley) (Lab)
†Palmer, Dr. Nick (Broxtowe) (Lab)
†Prisk, Mr. Mark (Hertford and Stortford) (Con)
†Robertson, John (Glasgow, North-West) (Lab)
†Ryan, Joan (Lord Commissioner of Her Majesty’s Treasury)
†Wallace, Mr. Ben (Lancaster and Wyre) (Con)
John Benger, Emily Commander, Committee Clerks
†attended the Committee
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Tuesday 19 July 2005
(Morning)
[Mr. Jimmy Hood in the Chair]
Clause 19
Use for purposes of public authorities etc.
10.30 am
Mr. Alistair Carmichael (Orkney and Shetland) (LD): I beg to move amendment No. 181, in clause 19, page 17, line 32, leave out paragraphs (a) to (f) and insert
‘where it is necessary in the interests of national security or the prevention or detection of serious crime’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 65, in clause 19, page 17, line 33, leave out ‘prevention or’.
No. 66, in clause 19, page 17, line 34, leave out paragraph (c).
No. 67, in clause 19, page 17, line 37, leave out paragraph (d).
No. 68, in clause 19, page 17, line 41, leave out paragraph (e).
No. 69, in clause 19, page 17, line 43, leave out from ‘numbers’ to end of line 44.
Mr. Carmichael: Hon. Members will recall that, prior to the conclusion of our proceedings on Thursday, we dealt with amendments Nos. 178, 179 and 180. The matter before the Committee today under amendment No. 181 is broadly similar the issues raised by those amendments. It relates specifically to the powers given to the Inland Revenue and Her Majesty’s Customs and Excise or whatever the new formulation of that merged body is.
The point that I want principally to draw to the Committee’s attention is the breadth of those powers. I accept that the clause excludes the auditing data under schedule 1, but it gives powers in respect of substantial data and, as drafted, it gives Her Majesty’s Revenue and Customs broader scope for accessing data than is strictly necessary. The form of words in the amendment are those used by the Government for clause 1. It is a probing amendment, and I shall be interested to hear the Minister’s response.
Mr. Edward Garnier (Harborough) (Con): I rise to support amendment No. 181 and to speak to our amendments Nos. 65, 66, 67, 68 and 69, which would achieve by a process of salami slicing the same outcome as amendment No. 181. The further that we get into the Bill, the more horrific is the creeping nature of the powers that the Secretary of State will be accorded. Although the Minister of State has accepted
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that we are discussing a Christmas tree of a Bill, the glaring nature of that description becomes more apparent as we turn its pages.
Clause 19(1) states:
“The Secretary of State may, without the individual’s consent, provide a person with information recorded in an individual’s entry”,
while subsection (4) deals with the provision of that information without consent to Her Majesty’s Revenue and Customs. It states:
“The provision of information not falling within paragraph 9 of Schedule 1 is authorised by this section where the information is provided to the Commissioners for Her Majesty’s Revenue and Customs”—
and to quote paragraph (f) of the subsection, which I wish to highlight—
“for other purposes specified by order made by the Secretary of State.”
That is a classic example of the vague and impenetrable nature of the Bill. The Secretary of State, no doubt with some form of parliamentary scrutiny—but not much, as we know from experience—is enabled to do more or less what he likes, but we do not know his intentions.
Dr. Nick Palmer (Broxtowe) (Lab): In relation to amendment No. 65, which would remove the authority to seek information in connection with the prevention of crime, will the hon. and learned Gentleman give examples of crimes that he considers should not be prevented under the clause?
Mr. Garnier: That question comes under the heading of a very clever but rather stupid intervention, if the hon. Gentleman will forgive me for saying so.
John Robertson (Glasgow, North-West) (Lab): But it was a good one.
Mr. Garnier: If the hon. Gentleman thinks that the intervention was a good one, he has convinced me that my rude remark was justified.
The Minister for Immigration, Citizenship and Nationality (Mr. Tony McNulty): A rude remark can never be justified.
Mr. Garnier: The Minister of State is correct—indeed, this is advice he will wish to take himself—that it is never appropriate to be rude.
Let me return to the purpose of the debate. As the hon. Member for Orkney and Shetland (Mr. Carmichael) made clear on introducing this group of amendments, they are probing amendments that are designed to discover what on earth the Government intend. Of course, we can make witty remarks like the one that the hon. Member for Broxtowe (Dr. Palmer) has just made, which provide us with a degree of amusement and diversion, but the serious point is that the Bill provides the Secretary of State with creeping but unknown powers. That is what the Government and the hon. Gentleman need to address.
Does the hon. Gentleman think that it is right and justified that our constituents should be subjected to legislation that their representatives in Parliament cannot discover the limits of? That is a clumsy way of
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putting it, but I hope that he understands my concern. I urge the Government to give us a rational and candid explanation of what they intend to happen under the relevant subsections.
Patrick Mercer (Newark) (Con): Following on from what the hon. Member for Orkney and Shetland and my hon. and learned Friend the Member for Harborough (Mr. Garnier) said, when amendments Nos. 65 to 69 were written several months ago, my colleagues and I puzzled over this part of clause 19 and could not understand why subsection (4) could not be simplified. If paragraph (a) were left in place, paragraph (b) were changed slightly and paragraphs (c), (d), (e) and (f) were struck out, subsection (4) would be much simpler and easier to understand, and it would not lead—both speakers on the amendment have mentioned this—to any form of mission or identity creep.
I remember that, all those months ago during the first debate on this subject, we received no satisfactory explanation from the then Minister. I underscore the words of my hon. and learned Friend by asking the Government to explain why we need this measure. Is it not clear that if the clause were amended as we suggest—this takes into account the comments of the hon. Member for Broxtowe—it would assist the wording of the Bill? I might add that the explanatory notes on the clause are particularly unhelpful in this regard, and I should be grateful if the Minister could enlighten me.
Dr. Palmer: I feel that the Opposition are getting away a little too easily with the repeated line that nonsensical amendments are all right because they are merely probing amendments. We should do the amendment justice by considering its content and debating it.
As the hon. Member for Newark (Patrick Mercer) says, the combined effect of amendment No. 65 and the other Conservative amendments would be to reduce subsection (4) to the provision of information
“in the interests of national security”
and
“for purposes connected with the . . . detection of crime”.
It would specifically exclude the provision of information for purposes connected with the prevention of crime.
The hon. and learned Member for Harborough asked about our constituents’ views. I think that they would like to see crime not only detected, but prevented. Should he seek to withdraw his amendment, I will be inclined to oppose him, so that we can see whether he is prepared to go on the record as saying that the information should not be gathered.
Mr. Garnier: I desperately want to help the hon. Gentleman, because he needs it. Even if his desire is genuine, I cannot seek to withdraw amendment No. 65, because it is not the lead amendment. If he wishes to stay here until 7, 8 or 9 o’clock on Thursday evening, however, we may vote on it. I am happy to meet him
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in this Room to do that, but procedurally, the only amendment that can be dealt with now is amendment No. 181.
Dr. Palmer: I am aware of the point that the hon. and learned Gentleman makes, but the Liberal Democrat amendment would have the same effects; the Conservatives are merely a little more blunt about them. It is perfectly proper that the Government should seek not only to detect crime, but to prevent it. That is a significant purpose of this Bill. The amendments are entirely wrong-headed.
Mr. Carmichael: The hon. Gentleman says that my amendment would have the same effect, but I refer him to what it says:
“where it is necessary in the interests of national security or the prevention or detection of serious crime”.
It would not have the same effect at all.
Dr. Palmer: I apologise to the hon. Gentleman. He is correct that the Conservative amendment is even more extreme than the Liberal Democrat one. Nevertheless, both amendments are fundamentally against the Bill’s purpose and they are not in line with what our constituents wish to achieve.
The Parliamentary Under-Secretary of State for the Home Department (Andy Burnham): I welcome you to the Chair, Mr. Hood. I also welcome back to the Committee the hon. Member for Westmorland and Lonsdale (Tim Farron). I am just sorry that his stay in Cheadle was so successful.
We are considering amendments Nos. 181 and 65 to 69. As Members have pointed out, they relate to the provision of information without consent to Her Majesty’s Revenue and Customs. The clause has to be read in conjunction with the rules for the provision of information, which are set out in clause 23. As a preface to responding in detail to the amendments, I must say that we are not talking about wholesale access to the database. People need to balance things. Perhaps the hon. and learned Member for Harborough will be so wise as to balance his somewhat overstated remarks and say that this is not about wholesale access for Her Majesty’s Revenue and Customs, but about proportionate access to the basic identity details that are held on the register.
As Members will know, it is not as if the customs are operating in a vacuum at the moment. They have access to information relating to who might be currently under investigation. It is not as if we are talking about extending the arms or tentacles of government into entirely new areas and interfering into people’s private lives. The provision simply allows the benefits that the register provides to be extended to Her Majesty’s Revenue and Customs in the carrying out of its work. It is not horrific, as the hon. and learned Member for Harborough suggested. That was just one example of his overstatement.
Mr. Garnier: Perhaps the Under-Secretary could help me. What does subsection (4)(f) mean? It states:
“for other purposes specified by order made by the Secretary of State.”
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What “other purposes” do the Government have in mind?
Andy Burnham: I shall come on to that. In responding to the amendments so far, I have sought to get some balance back into the argument. The hon. and learned Gentleman asked whether it was right and justified for our constituents to be subject to far-reaching legislation such as this. I take it that his constituents are taxpayers, like mine are. They all have an interest in Her Majesty’s Revenue and Customs doing its work effectively and in ensuring that it can bear down on cases of fraud and tax evasion. If he has a problem with that, he needs to say so. If his objection is to the efficient running of Government agencies, that is not acceptable as a criticism of the Bill.
Mr. Garnier: I do not want to keep jumping up and down, because listening to me correcting the Under-Secretary all the time would be tedious for everyone, but I should make the following point. We all have a general desire to prevent and detect crime, be it crime against the Revenue or the Treasury, or against the general criminal law. We do not have a joined-up approach across this Committee Room about how to give powers to the Secretary of State to run the identity register and the identity card system. That is what we are discussing. The Government would be advancing a false argument in suggesting that the Opposition do not approve of the detection and prevention of crime—of course we do. However, we are concerned about how the Government are giving themselves powers to do things that we cannot yet define.
10.45 am
Andy Burnham: I shall come on to address the amendments in detail. I was simply pointing out that from the tenor of some of the hon. and learned Gentleman’s remarks, it seems that he has little trust in any arm of the Government. We heard last week about rogue elements in the security services. I say to him that the powers that we are discussing are balanced. Her Majesty’s Revenue and Customs is already carrying out investigations; the provisions would simply extend the benefits of the register to its work.
The hon. Member for Orkney and Shetland was right to say that the amendments are not entirely the same. His amendment would restrict the provision of information to
“where it is necessary in the interests of national security or the prevention or detection of serious crime”.
Amendments Nos. 65 to 69 would restrict such provision further—to when it was necessary in the interests of national security or the detection of crime.
Her Majesty’s Revenue and Customs is the new department responsible for the business of the former Inland Revenue and Customs and Excise. Its law enforcement responsibilities are often undertaken jointly with the police, but it is also directly involved in the prevention and detection of crime. The customs side of the organisation is responsible for the
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investigation and prosecution of crime, including major cases of drug trafficking, and the Revenue side also has an important role in law enforcement.
The hon. Member for Newark made a fair point in asking why the issue was not simplified and why the focus on those roles was not absolutely clear. Clause 19(4) is necessarily detailed so as to ensure that all the relevant Revenue and Customs functions are covered and that information from the national identity register can be provided to the organisation. Such information could, for example, concern the identity of a suspect and assist with the law enforcement functions of the Revenue and Customs.
The hon. Gentleman will know that the Revenue also deals with compliance, but the amendments would make it very difficult for it to use the national identity register to any real effect. Information from the register will increase the Revenue’s ability to direct its compliance work effectively. Without the possibility of making identity checks against the register, it would risk making payments to individuals who had made fraudulent claims. I do not believe that he would want that, and neither would we.
Recently, there have been cases of people claiming tax credits fraudulently, and that is an example of how identity fraud is becoming more and more common. Members on both sides of the House have an interest in ensuring that people who receive payments are entitled to them and are who they say they are. If the Revenue is to be able to do that, it is obviously important that it should have access to the register.
Mr. Carmichael: The distinction that the Under-Secretary draws between the compliance functions—as he sees it, these would be impaired by the amendments—and the other functions is not real. The fraudulent claiming of tax credits and everything else would surely be covered by the
“prevention or detection of serious crime”.
Andy Burnham: The functions of the merged agency apply widely. It provides payments to individuals through the tax credit system. The argument will be about whether that would extend to serious crime. I do not believe that it would in some cases. The organisation has wide-ranging responsibilities for enforcement—the collection of tax—and for providing benefits through the tax credit system. That is why the clause is drawn so widely.
Furthermore, the boundary between the civil and criminal work of the Revenue and Customs is necessarily complex. The disruption of Revenue fraud to prevent significant tax loss is a key element of the strategy for combating commercial fraud, such as that involving VAT and duty on tobacco, oils and alcohol. Although it may be possible to arrest and prosecute the perpetrators, part of the response in tackling serious tax fraud may be the use of civil procedures to frustrate the criminals and thereby prevent loss of revenue. For example, in missing trader VAT fraud, fraudulent VAT repayment claims can, in some cases, amount to millions of pounds. In such cases, Revenue and Customs may use civil procedures to recover the loss of tax.
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Those civil procedures, which can be more effective than criminal proceedings in recovering funds, may include restraint orders where a debt has been established, the appointment of an insolvency practitioner and civil conspiracy proceedings. What links those civil disruption activities to criminal investigations is that both require timely and accurate intelligence for effective action to be taken. For those reasons, we want to be in a position to provide Revenue and Customs with access to information held on the national identity register that could help its investigations, whether or not it leads to a criminal prosecution.
For those reasons, paragraphs (a) to (e) of subsection (4) reflect the wide range of responsibilities held and work done by Her Majesty’s Revenue and Customs. The order-making provision in paragraph (f), which would be removed by the amendment tabled by hon. Member for Orkney and Shetland, as well as by the amendments tabled by the hon. and learned Member for Harborough, allows the circumstances referred to in subsection (4) to be extended in line with any additional work that might be allocated in the future to what is still a new department. We do not believe that it would right to have to do that through primary legislation.
Amendment No. 65 would allow the information to be provided only for purposes connected with the detection of crime. Under amendment No. 181, the provision of information is limited to purposes connected with serious crime. We think that those amendments would seriously constrain the legitimate use of the national identity register and the ID cards scheme. Her Majesty’s Revenue and Customs is working in an increasingly intelligence-led arena, in partnership with some of the other agencies that we discussed in relation to the earlier provisions in the clause. It is right that its role in relation to crime is not just reactive, as my hon. Friend the Member for Broxtowe said. The phrase “prevention or detection of crime” is commonplace in legislation. It is not right to suggest that Revenue and Customs must wait until a crime has been committed before it can be provided with information from the register to help to identify a suspect.
There are also good reasons why we should not limit the provision of the information to cases involving serious crime. As I have said to the hon. Member for Orkney and Shetland, Revenue and Customs deals with child benefit and tax credit fraud. An individual instance of those types of fraud may not appear to be serious crime, but it could be part of a serious organised fraud and, cumulatively, cases in which false identities are used could lead to a major loss of funds.
As I reassured the Committee at the outset, we are not talking about wholesale access to the register. Under existing law, Revenue and Customs can already access information held on individuals in the course of its investigations. We are talking about providing basic identity details. I do not believe that that is horrific or that my constituents would object to Revenue and Customs being given proportionate access to the national identity register. Coupled with
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that, rules will be laid down in clause 23 about how requests will be handled. The Information Commissioner will provide further oversight. A further safeguard is that the provision of information must be necessary in the public interest, as defined in clause 1(4).
In the light of those assurances, the amendments are not necessary or desirable. They would restrict and limit the work of Her Majesty’s Revenue and Customs. I urge the hon. Member for Orkney and Shetland to seek leave to withdraw his amendment.
Mr. Carmichael: This has been an interesting teasing out of the issues. I shall take the Under-Secretary’s comments away with me when the House rises at the end of the week and consider them further. It seems that there are a number of internal contradictions in his argument. It also seems that, over the years, the Government, who seek to allow Revenue and Customs to operate in this way and to rely on civil penalties rather criminal prosecutions, allowed a certain laziness to creep into the way in which Customs and Excise, as it previously was, performed its duties. That became apparent to me in the course of a Select Committee investigation in relation to the imposition of strip stamps on spirits, of which I was a part. Nothing that the Under-Secretary said has persuaded me that that situation will change. By insisting on the wide definition in the clause, the Government somewhat undermine the purposes on which they themselves have placed so much stress. I do not know how one can reasonably construe clause 19 in a way that is consistent with the basic provisions that are clearly outlined in clause 1.
Andy Burnham: Clause 1(4)(e) states that one of the purposes is
“securing the efficient and effective provision of public services.”
I hope that the hon. Gentleman would accept that Revenue and Customs is engaged in precisely that activity.
Mr. Carmichael: I do not necessarily accept that. The range of issues for which Revenue and Customs would require access—what the Under-Secretary would call compliance issues—would be adequately covered by the first two paragraphs of clause 1(4):
“(a) in the interests of national security;
(b) for the purposes of the prevention or detection of crime”,
which is what we are dealing with. I do not believe that the
“efficient and effective provision of public services”
is part of the work of an enforcement agency, which is, in essence, what Revenue and Customs is, as distinct from a service provision agency such as the health service or the Department for Work and Pensions.
Andy Burnham: I fully accept that Revenue and Customs may not be a popular organisation and that people may not want it to be able to do its work with ease and convenience, but the fact is that we all depend on the tax take for the health service and other organisations to work. Revenue and Customs carries out a crucial public service, and it should be aided and assisted in doing so.
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Mr. Carmichael: The Under-Secretary does not do himself or the Committee any service by trying to misrepresent what we are discussing. Nobody is saying that Revenue and Customs should not be allowed to carry out its functions properly—that is certainly not what my amendment is about. My amendment seeks to achieve consistency in how access is allowed. Is he saying that Revenue and Customs should be allowed access to any information that it wants in any circumstances? That seems to be what he is saying now, although it contradicts what he said two or three minutes ago about proportionate access. I shall not misrepresent his position, and he should not try to misrepresent mine.
I do not intend to press the amendment to a Division. We are exploring for Revenue and Customs the same issue that we explored for other agencies in the debate on the previous string of amendments. I do not intend to detain the Committee further, but perhaps the issue would benefit from further scrutiny at a later stage. Accordingly, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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