Clause 77
Serious Crime Bill
10:30 am
Vernon Coaker (Parliamentary Under-Secretary, Home Office; Gedling, Labour)
It may help the Committee if I say a few words about the clause. In answer to the hon. Gentleman, my understanding is that those authorised will be senior officers. At present, only five officers within HMRC are authorised to act in that sphere of work, so it is not a widespread responsibility—only a small number of specially trained officers have it.
Another point worth making to the hon. Gentleman is that work in that area is divided into criminal and civil cases. One aspect of the arrangements that concerned people was that the two parts of HMRC’s operations should not be merged, as they are very distinctive and it is a small, specialised body.
Clause 77 and schedule 12 extend the surveillance powers available to HMRC to tackle serious crime. At the moment, they are available only when the crime relates to an ex-Customs and Excise matter. The clause would make them available also for serious crimes that relate to ex-Inland Revenue matters. The change is necessary to address the emerging patterns of criminality targeting ex-Inland Revenue tax systems, such as self-assessment, tax credits and gift aid. That criminality involves not only the evasion of tax on income or commercial profits, but organised attempts fraudulently to extract money from the Exchequer. For example, in June four people were jailed for a total of 19 years for committing a £1 million fraud involving the gift aid scheme. The extension of the powers would allow HMRC more effectively to investigate and bring to justice criminals engaged in serious attacks on ex-Inland Revenue systems. The powers would help to establish the links between those involved in the criminal activity, the financial structure of the activity, and where the proceeds of the crime are located. For example, the serious criminals behind organised tax credit fraud involving identity theft may engage foot soldiers to operate bank accounts for them. The extended powers would make it easier to establish the links between the foot soldiers and the major players, allowing the full extent of the crime to be uncovered.
HMRC consulted on the change from March 2006 to January 2007. The majority of those who responded were in favour of what is proposed, provided that the powers could be used only in criminal investigations into serious tax crime, and that they continued to be subject to the same safeguards and controls that apply to HMRC criminal investigations into ex-Customs and Excise matters. The same concerns were voiced when the clause was considered in another place. I am pleased to assure the Committee on all those matters. The powers can and will be used only by trained specialist officers who work only on criminal investigations. They cannot be used by other HMRC staff engaged in civil compliance work, such as checking the accuracy of tax returns. The powers cannot be used to inquire into major tax avoidance, on the ground of safeguarding the economic well-being of the UK. They can be used only when necessary, and they must be proportionate to the circumstances.
The interception of communication requires a warrant from the Secretary of State. Intrusive surveillance must be approved by a surveillance commissioner, and the most intrusive property interference also requires the approval of a commissioner. All property interference must be reported to the commissioners, who can quash any authorisation. As the hon. Gentleman will know, use of the powers will be overseen by the independent Interception of Communications Commissioner and the Office of Surveillance Commissioners. Complaints can be made to the investigatory powers tribunal, and HMRC is subject to inspection by HM inspectorate of constabulary. None of that will change.
I assure the hon. Gentleman that only senior officers will be able to apply for warrants, and there will be rigorous internal controls on applications. I think that that is the reassurance that the hon. Gentleman sought. It will involve only a small number of people in HMRC, and only senior directors will be able to apply for warrants.