Examination of Witnesses (Questions 80-99)|
MONTAGU KCB, MR
MONDAY 18 MARCH 2002
80. What is the figure? You have given a figure
of £3, as I understand it, at the moment but I am not quite
sure, what is the figure you would envisage later on down the
(Sir Nicholas Montagu) For the reasons that I gave
earlier on, what we are talking about here is a long term investment.
The difficulty is that we have obviously to keep all sorts of
channels of communication for doing business open at the moment.
We are putting in the infrastructure for doing business with us
electronically at the same time as we are carrying on looking
after the good citizens of Pollok by letting them call into our
enquiry centre, letting them file by paper, or whatever. Does
that answer it, or not really?
81. Not really, actually.
(Sir Nicholas Montagu) What about the 1,300 figure
Sir John gives, does that help?
82. That is quite helpful. You think there would
be a saving of 1,300 per head in costs?
(Sir Nicholas Montagu) That is not Sir John's figure.
That is the figure we gave as the staff savings in very plain
terms for the number of people carrying out clerical and processing
tasks on a 50 per cent across the board take-up.
83. £1,300 per what?
(Sir Nicholas Montagu) No, 1,300 people.
84. Sorry, I misheard you. That would work out
as being how much of a saving per person who was lodging in that
way? Rather than pursuing this now, would it be possible to get
a note on that?
(Sir Nicholas Montagu) I do not think I could be much
more helpful in a note than I am trying to be now. Look, try it
this way: if 50 per cent of our transactions were carried out
electronically we would immediately save 1,300 people, which represents
£30 million a year. Over and above that there would be savings,
which I cannot quantify at the moment, on things like postage
and stationery. Over time if take-up increased and we saved more,
then correspondingly you would save on things like telephone calls
and ultimately you might save on accommodation. Because it is
long term investment I cannot really give you more precise figures
85. Okay, I understand that. Can I make one
point on advertising, you may or may not be aware that you won
an award, apparently, from Marketing Magazine for your
Mrs Doyle advert?
(Sir Nicholas Montagu) That it was the most irritating.
I was absolutely thrilled. People remember annoying advertisments.
86. Is that necessarily the image that the Inland
Revenue want to have?
(Sir Nicholas Montagu) You have to put this in context,
Mr Davidson, Mrs Doyle is not the successor to that odious little
Hector. The Committee know from my previous appearances that I
could bore on forever about Hector, which is why I compulsorily
retired him. There is a very serious point here. Hector was brilliant
at what he was brought in to do, which was to raise self assessment
awareness. He became associated with the Revenue, and a white,
middle-aged, male stereotypical taxman is not the image for the
21st Century Revenue. Mrs Doyle was a one-off to remind people
87. Thank God for that!
(Sir Nicholas Montagu) She did awfully well. We actually
reversed a downward trend in filing by the due date. She served
a dual purpose, reminding people of deadlinesI will not
attempt the accentand encouraging them to, "go on-line,
go on-line, go on-line".
88. I will not pursue that.
(Sir Nicholas Montagu) Sorry to disappoint you, you
might have tempted me at one time.
89. Can I turn to the question of specialist
staff? There is a point made in 3.19 and onwards about staff skills
and difficulties. It indicates in one of them that EDS, 3.21,
had some difficulties in finding staff. Can you clarify for me
whether or not any penalties descended upon EDS? Was there any
difficulty caused to the whole process because EDS could not find
appropriate staff and if so where were the penalties and what
(Sir Nicholas Montagu) Our contract provides for penalties
when EDS fail to deliver contracted levels of service, and that
did not happen in this case. What happened was in 1999 there was
a peak of activity among the dot-coms. I took this up with Dick
Brown, who is the Chairman and Chief Executive of EDS, as being
an issue that we needed to resolve. They resolved it in a way
that I think is extremely interesting, which is by teaming up
with EzGov, who are small and whizzy and internet-literate, which
complemented the traditional EDS skills very successfully. As
Sir John notes in his Report, we got EzGov to do us a report on
what people did and did not like about self assessment, and acted
90. The final point I want to raise comes back
to the point Mr Bacon touched upon, it is the question of professional
advisers. Given what you have said it would be reasonable, would
it not, for anybody who has a professional adviser to expect a
cut in fees in the near future if they are filing, given that
they have the option to file electronically which is easier and,
(Sir Nicholas Montagu) I think that people would be
entitled to ask their professional adviser if they filed electronically
for them how much time they need to do that compared to doing
it under the old traditional way.
91. If they were not filing electronically it
would be reasonable to ask the adviser why not?
(Sir Nicholas Montagu) That would be up to the individual,
92. What sort of saving do you anticipate would
(Sir Nicholas Montagu) I do not have at clue, Mr Davidson,
I just do not know. A lot would depend on the complexity of the
Chairman: Thank very much, Mr Davidson.
93. Good afternoon, I do not want to be cynical,
you did not want the image of being white, middle-class tax inspectors?
(Sir Nicholas Montagu) Yes.
94. I look across at the three of you and thinkno,
you did not! We are the same.
(Sir Nicholas Montagu) You will also know, Mr Jenkins,
that the Inland Revenue is the leading Department in Whitehall
on diversity and that I am the Permanent Secretary Champion across
the Civil Service for the subject.
95. Excellent. If I can put one or two things
past you. They might seem like repeat questions but I want to
take it from a slightly different angle. When I heard `build and
learn' I thought it was just `suck it and see' but it is not,
it is different, is it not?
(Sir Nicholas Montagu) In our young days, if you will
forgive me for bracketing us together generationally, it might
have been called `trial and error'. There certainly is an element
of suck it and see. The point that I must make is that we would
never, never introduce any release of systems or anything new
unless we were satisfied through pre-release trialling that it
was fit for purpose. One can certainly, particularly with the
internet, do things much more provisionally now because you know
if it is not absolutely spot on you can put it right very quickly
and very easily through this iterative process.
96. That is good because at one time IT to us
just meant `pay up and look happy'. Each project was a major project,
we paid up, they put it together, it fell over, and we did not
know that at the start. With this system of build and learn it
is like a Lego set; you build each component part and each part
is tried so we should not have any major fall overs.
(Sir Nicholas Montagu) That is right. We would always
trial it before release but, equally, after release if we pick
up a blip or if we pick up particularly that our customers using
the service are not happy with something, we can put it right
very quickly indeed. Again, if the Committee will not find me
tedious on this, the e-CT portal that I described is a prime example.
The Committee may find me tedious on it, my own Department find
me tedious, but I boast because it is one of the few things where
I have made fellow tax commissioners green with envy.
97. Can I take you to something which is probably
outside your remit, but it is certainly something you should have
considered. At the present time access to broad band and digital
TV is not going very well, particularly in the private sector.
There is a certain company that has got into a lot of debt and
there is a merger. I have got the awful feeling that this is not
going to go as fast as we thought it would. In fact, some of it
may fall over. You must have done a risk assessment on this proposalwhat
if this does not roll out as fast or if access is not availableso
what conclusions have you come to?
(Sir Nicholas Montagu) I will ask Terry to comment
on the more detailed technical side in a moment, although obviously
we will not be commenting on particular companies. More generally,
if broad band were on the scale that it is, let's say, in Singapore
or in Canberra, the Australian Capital Territory, we would have
a great deal more scope. We would not be starting from where we
are now. What we aim to do is in all things to make our systems
robust. We recognise that there will be developments absolutely
outside our control and that is why in particular we do still
have a whole range of services, including a range of electronic
services. To take the very obvious example, picking up three from
Sir John's Report, we now have electronic data interchange, electronic
lodgement and use of the internet, so we try to make a broad range
of options available and to make sure that what we provide is
robust against any future developments. Terry, do you want to
add anything on Mr Jenkins' specific point?
(Mr Hawes) Only a very brief point. The risk reduction
that we try to run here is that the services which are most dependent
on broad band type access we provide over the electronic data
interchange service, which has much greater capacity and speed.
The self assessment tax return message that is sent to us is very,
very small and therefore broad band access is fairly irrelevant
to that particular service.
98. Okay. I find the service we have got at
present, particularly for my part of the world, slow, difficult
and at times I cannot even access it. If you are happy that that
awful standard is allowed to continue without us getting at least
a digital TV system up or broad band system up and running, I
think we have got difficulties in the private sector.
(Mr Hawes) What I was suggesting was we would love
to see widespread broad band access but on the particular services
that are most vulnerable to lack of carriage capacity we do have
the alternative EDI services which do not suffer that problem.
99. Could I ask you, Sir Nicholas, on self assessment;
do you do your own?
(Sir Nicholas Montagu) No, I do not. I am a represented