HMRC

Part of the debate – in the House of Commons at 12:32 pm on 25 June 2008.

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Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury) 12:32, 25 June 2008

To date, the semantics of incompetence have been reasonably clear. We have had "systemic failure", which is the responsibility of Ministers, and "procedural failure", which is the failure of individual officials. We now have something new called "cultural failure", which is an all-pervasive management mess for which everybody is to blame, but no individual is responsible. Can the Chancellor therefore go back to the question that the Conservative spokesman fairly asked him at the outset: which individuals now carry responsibility, beyond Mr. Gray, who left voluntarily with a golden goodbye?

Is not the Conservative spokesman right that the responsibility indeed lies with the current Prime Minister, albeit for one specific decision that he made? That was the decision to remove 24,000 staff at the Inland Revenue, the consequence of which is that it is now hopelessly ill equipped to handle the growing complexity of the tax system and tax credits. There has been a breakdown in face-to-face relationships, particularly with small businesses, and the institution is hopelessly understaffed to cope with the complexities of tax avoidance and evasion, which are happening on a large scale in the City and among the rich of this country.

Specifically on data security, what lessons have been learned, when we discover from the Information Commissioner that there have been no fewer than 100 breaches of data security since last November? Is there not a growing diversity of data breach, involving not merely CDs, but memory sticks, laptops and paper files, and a growing variety of places where these things are lost, including on trains, in backs of cars and in bars? As has already been said, the issue is the integrity not simply of the ID system, but of any centralised Government database of the kind that has been accumulated, for example, under the NHS scheme.

What lessons have been learned about basic management efficiencies last November, when the Select Committee on Public Accounts published a report only a month ago saying that the Inland Revenue had lost £2.8 billion of revenue as a result of false reporting by taxpayers, which it is unwilling or unable to follow up? What lessons have been learned about the Inland Revenue's IT system, when only a few weeks ago the Economic Secretary to the Treasury had to report a programme failure, such that 100,000 poor people were not receiving their payments under the trust scheme?

My final point is this. There are very few private sector companies that are as managerially inefficient as HMRC, but there are some. One of them is BAA, a private monopoly whose reputation for consumer service is legendary in the worst possible way. Is there not an irony in the fact that the failed chief executive of that appalling company is now being appointed as the chairman of HMRC?