Amendment proposed: No. 8, in clause 17, page 7, line 31, at end insert  

'in connection with a function of the Revenue and Customs'.—[Dawn Primarolo.]

With this it will be convenient to take the following:

Amendment No. 4, in clause 17, page 7, line 31, at end insert

'and at the time of their appointment shall make a declaration in the form set out in new Schedule [Form of declaration] before another official.'.

Government amendments Nos. 90, 91 and 92.

Amendment No. 80, in clause 17, page 8, line 9, at end insert—

'(4) A disclosure made under subsection (2) may only be made under terms which will preserve the confidentiality of the information involved in the disclosure.'.

Government new clause 3—Disclosure to prosecuting authority.

Government new clause 4—Data protection &c. Government new clause 5—Disclosure of information to director of revenue and customs prosecutions.

New schedule 1—Form of declaration.

Mr. Fallon Thank you, Mr. Hurst. You are working hard today. To give you some relief, I shall speak to amendment No. 4, tabled in my name and that of my right hon. Friend the Member for Wells, although it is largely self-explanatory.

The issue of confidentiality has been demonstrated throughout our debates to be extremely important. It was important to the O'Donnell review; when Mr. O'Donnell gave evidence to the Sub-Committee, he said that maintaining taxpayer confidentiality is vital. I hope that you will bear with me if I quote in full paragraph 53 of our report:

''The transfer of responsibility for tax policy development to the Treasury and the move of some Customs and Excise and Revenue staff to the Treasury building have raised concerns about confidentiality. We welcome the commitment given to maintaining taxpayer confidentiality and the assurance that there will be no access by Treasury officials or Treasury Ministers or special advisers to individual tax records and recommend that this principle be carried forward into the bill.''

The issue is whether that principle has been properly carried forward into the Bill by clause 17. It is often thought that taxpayer confidentiality is something so secret that it can never be breached. At the risk of upsetting the Committee, I have to remind it that the confidentiality of one taxpayer, Mr. Norman Scott, was breached back in 1976, when the then Labour Prime Minister, Harold Wilson, instructed that Mr. Scott's DHSS file be researched by the Secretary of State. I quote simply one sentence from a book that will be familiar to you, Mr. Hurst, ''The Castle Diaries 1974–76'':

''Thursday 12 February I hurried into Cabinet early to give Harold the résumé Jack has done of the Scott file.''

The Jack there is Mrs. Castle's former special adviser, the current Foreign Secretary. So, we know that there have been breaches of confidentiality, but some time ago. Let us take at face value the assurances that we have been given that this Government accept that we should do everything possible to maintain taxpayer confidentiality. If we are to maintain it, it is   essential that the oath of confidentiality that every member of both the Revenue service and the Customs service takes on his or her appointment be continued. However, it has emerged since the Bill was published that the Government intend to scrap the oath. That is something that we need to resist.

The Paymaster General, when she was pressed on those matters on Second Reading, implied that the oath, or the statutory declaration that the oath has become, will be part of a more general employment contract that will presumably list all sorts of other terms and conditions, including bank holidays, holiday entitlement and sick pay and all the rest of it, in a long document that the new official entry department will sign: an all-embracing terms and conditions document with one signature appended to it. I do not think that that is satisfactory and it does not maintain the kind of confidentiality that I want to see enshrined.

The oath currently takes the form of a statutory declaration made in front of another official in the same service at the time of appointment. The wording for that is cobbled from existing legislation and is, as hon. Members will see immediately, a solemn act that is not bound up with other terms and conditions that are undersigned. The oath is a solemn act that carries some weight and I think that it makes the declarer think for a moment about what he or she is declaring and acknowledge the formal importance of the confidentiality. Instead of that, however, I understand that the Paymaster General is now offering us the duty of confidentiality only—not an oath or statutory declaration—which will be tucked away in an employment contract with the other terms and conditions. That divests the declaration of confidentiality of the weight and singular importance that should attach to it. As I said this morning, that is all the more worrying because we have a vast, new merged department with all the officials and records together that is being placed in the same building as the Ministers and special advisers who transgressed before and may do so again.

I repeat that the Treasury Committee recommended that taxpayer confidentiality should be maintained, welcomed an assurance that there would be no access to individual tax records and recommended that that principle be carried forward into the Bill. Clause 17 is not adequate for that purpose and there is no good reason to dispense with the existing statutory declaration.

I support amendment No. 4. I am a lawyer like you, Mr. Hurst, although I do not practice and I do not know if you do—that is none of our business. I declared on Second Reading that in 25 years as a tax practitioner I had no cause to complain about the conduct of the Inland Revenue and its employees. I had many disagreements, but those were resolved professionally. Having said that, there are of course bad apples that can get through the system one way or another and have to be brought to account.

The Inland Revenue culture is admired worldwide, and part of that culture is the professionalism of its   members, who know that they have similar responsibilities to those that lawyers have for their clients and doctors have for their patients. That is brought home to them at an early stage by, among other things, high training standards, high-calibre recruits and the statutory declaration that they make, which illustrates that being a member of the Inland Revenue is not like any other Government job. It is not like most other employment. It carries very special responsibilities. We all know that any breakdown or erosion in taxpayer confidentiality will have the most appalling effects on the collection of tax.

We should be taxed by law, and we are taxed in major part by consent, albeit reluctantly. I believe that anyone with confidential taxpayer information should make a special statutory declaration to bring home those special responsibilities to her and to him.

The principle of confidentiality is simply not clear to individuals when a 22-page employment contract is put in front of them that contains this and that provision, information about holidays and pay and all the other matters that are included in an employment agreement. It must be brought home to employees at the Inland Revenue in a special and compelling way. This oath would do exactly that. We support the amendment. It is important, and anyone, including the Treasury officials, who has taxpayer-sensitive information should make a statutory declaration. That includes members of the supervisory bodies, including the Independent Police Complaints Commission, which we will debate. They should make the declaration if they are going to have taxpayer-sensitive information.

The Inland Revenue has a fine record, and I do not believe that any Opposition Member will demur from what I have said. When I have debated other matters in other Committees with the hon. Member for Chichester, he has been only too willing to confirm exactly what I have said about the high standards of our Revenue. We want to keep it that way. There is no reason for change. A statutory declaration in the form suggested by the amendment would, like nothing else, hit home to bodies such as the Inland Revenue and Customs that they have a special duty of care and confidentiality. Many of us said on Second Reading that it is important that the Inland Revenue culture prevails in this matter. Many aspects of the Inland Revenue culture came in for praise on Second Reading. I want this oath to be retained for all the combined agencies.

I very much support the remarks made by my hon. Friend the Member for Sevenoaks. As a member of the Treasury Committee, I, too, support the recommendation that there should be no dilution in the defences against unauthorised disclosure. We should not simply take taxpayer confidentiality for granted. It is important, and it is very much in the interests of the Revenue departments, because people will co-operate freely with the Revenue authorities only if they can be sure that the information given is protected. I do not know if it is still the case, but I was told some years ago that all tax returns in Greece are published. A book is published   every year of the tax returns of all the taxpayers in that country, which is immediately filed in the fiction department of all public libraries. It is often said that openness and transparency has a beneficial effect on the client.

In a similar vein, I understood that the same prevails in Italy. When Fiat took over Ferrari, people looked to see what contributions the Ferrari family would make in the tax year in question, but I do not know whether they managed to do so and to locate where they were in the order of merit, as it were.

The hon. Gentleman is right. It is a Latin habit to publish everything of that nature, but it does not help compliance—quite the reverse; it is when people feel that their private affairs are to be respected that they co-operate most freely and give the necessary information.

It is vital that that culture and the safeguards are reformed in the way proposed in amendment No. 4 and in the new schedule. The financial temptations for Revenue officers are considerable. The tabloid press would love to get detailed tax returns of prominent people, and companies would like to see the tax returns of their competitors. That reinforces the point that our every defence, including the statutory declaration, should be carried forward.

Government amendment No. 92 allows disclosure for certain purposes. It mentions

''the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom) relating to matter in respect of which the Revenue and Customs have functions''.

The amendment is a late addition. The Bill is littered with Government amendments, which is regrettable; the Government have had months to prepare the legislation, yet many amendments are being brought forward. Will the Minister explain precisely why the amendment is to be made? The Bill already provides for disclosure for the purposes of civil or criminal proceedings, so why are we adding criminal investigations, whether or not within the United Kingdom?

I can easily envisage a situation in which foreign Governments and authorities would wish to receive information about British taxpayers, companies or partnerships, in pursuit of real or imaginary crime, or acts that may not be crimes under our own law. The amendment authorises the Revenue to disclose information to people in other countries for unspecified purposes, because ''a criminal investigation'' is very wide.

The notes on the amendment simply say that the amendment provides for disclosure to the prosecution authorities. I do not know whether that means foreign Governments, Revenue departments, governmental and quasi-governmental agencies elsewhere, the United Nations or agencies of it, and countries within or outside Europe. The amendment is very wide. I would like the Minister to tell us what she envisages under it, particularly as there has been a change as to whether it should relate to Revenue or Customs functions. Under the Bill as originally published, disclosure for criminal proceedings has to relate to a function of Revenue and Customs. That has   now become much more contorted. It has only to relate to a

''matter in respect of which the Revenue and Customs have functions''.

We are getting further away from the function of the Revenue and Customs. I am unclear as to why that should be. It seems to me that it will simply widen the possibility of allowing the departments to pass on information to pretty well anyone, in any part of the world, who purports to be an authority that may be undertaking a criminal investigation. Perhaps the Minister could give advice on those specific points about the Government amendment in addition to taking on board my strong support for the amendment that we have tabled.

I rise to support amendment No. 4. I agree with just about everything that I have heard so far. It seems to me that this clause raises two questions, one of which was put to me by a number of accountancy bodies.

The first is whether clause 17(2)(a)(i), which states that disclosure can be

''made for the purposes of a function of the Revenue and Customs'', could mean that a decision could be made by officials to trigger the disclosure of information to bring about a demonstration effect in order to secure a better practice by an industry. If the Minister and the Revenue department conclude that the behaviour of a section of an industry or a tax loophole is unacceptable, could the clause be used to expose what that company is doing, as a demonstration in order to achieve a particular outcome?

I raise that point not for hypothetical reasons, but because I have in my hand an extract from Accountancy Age, which states:

''Vodafone, one of the world's biggest mobile phone companies, has denied dodging hundreds of millions of pounds worth of VAT, following a confidential meeting with Customs and Excise.''

It goes on:

''Details of the meeting were leaked to the Financial Times just hours after the meeting took place.''

I do not think that Vodafone had much interest in leaking that information. It is possible that it was somebody at Vodafone, such as one of the advisers, but it is also possible that it was leaked by someone in government, who should not have done so. The main beneficiaries of the leak were the Government, because it is widely held in the industry that the demonstration effect has shocked parts of that sector into wondering whether the way in which they were hoping to achieve tax liability was appropriate.

I am confident that the Minister will reply that that has nothing to do with the Bill, and I will believe her if she tells me so. I am fairly confident that she will be able to tell me that the intention of the proposal is not that it would be used to trigger such demonstrations. I would like that reassurance, because a number of people who work in the industry have told me that they are worried that it could be used for that purpose.

The second major issue about this clause is the one that has seen most debate so far. Will the fact that the Government intend to remove oaths of confidentiality   result in a change in the culture of confidentiality? I worry that it might. I support David Varney's appointment. He seems to be a good man, from everything that I have read about him. I have met him only once. He has been heard saying at a number of functions, talking to the tax industry, that his experience of Sweden has shaped his thinking about the way to collect tax.

I heard my right hon. Friend the Member for Wells say that it is a Latin trait for countries to want to make information public, but in Sweden one can apparently look up any citizen's tax returns for a token fee. David Varney goes around telling everybody this, and then points out that this is one possible route that countries might want to pursue in the long run. Doubtless this is his policy, and I hope—referring back to clause 10—that it will remain an election priority.

It is not only not our policy; it is not our culture. We do not have a culture of such disclosure in this country. Nor is it our culture to disclose information about people in public life; in the United States there are very clear limitations on the duty of confidentiality laid down in order to produce a higher level of accountability for politicians, for example.

In the UK, we start with the principle of confidentiality and we stick with it. We do not want the Swedish model, and we do not want the American model. I think political culture is crucial to the whole matter. I once had a meeting with the then Finance Minister of Malta, and we ended up discussing champagne socialism. He certainly was not a socialist. He said, ''I do not know why you are so squeamish about exposing champagne socialists, Andrew. Just get hold of their tax returns and publish them! What are you doing?''. He continued, ''You are far too soft. You should realise that, in Malta, at various times, if you are on the wrong side of the political fence you can soon find yourself pushing up the tulips.'' He described to me a political culture that was, with respect to tax collection, completely alien to the one I was trying to describe to him.

It sounds Sicilian.

Of course, Malta was ruled from Sicily for a while.

That is a very interesting story. Perhaps the hon. Gentleman could tell us in what capacity he was meeting a Minister of another country. Was he an adviser? Was he employed in the Treasury? Or was he there as a shadow Minister?

I cannot—

Order. We should return to the subject under discussion.

I will certainly tell the Paymaster General in some detail after the sitting.

The oath is important to us. I am sorry that the Government seem to think that we should get rid of it. We accept oaths as part of our culture in many ways. We accept that they bring an extra degree of solemnity   and a sense of importance to what people say in courtrooms. We accept that it is important to take oaths before we take our seats in the House of Commons. A good number of my colleagues think that it should be appropriate for people giving evidence before Select Committees to take an oath to reinforce their duties.

I cannot see any harm at all in keeping the oath. I cannot see any downside whatsoever in the status quo. Even if some who take the oath consider it a bit old fashioned, it cannot do any harm. Even if only a minority of those who take the oath find they are the few that it means something to, it must surely be worth keeping. I feel that there is a spurious cult of modernity about with respect to the oath. I do not think that that will do anybody any good.

Will the hon. Gentleman give way?

I am just winding up. I support my hon. Friend's amendment. We need to send a clear signal that we should keep things as they are.

This is has been an interesting and important debate. We want to ensure beyond any shadow of doubt that those who have access to taxpayer-confidential information for the purposes of their employment should be under a duty not to disclose it. There should be a sanction for any civil servant foolish enough to do so. The issue is how we do that, rather than whether it should exist.

The hon. Member for Torridge and West Devon (Mr. Burnett) talked about Treasury officials and said that if they had access to taxpayer-confidential information they should be covered by the confidentiality provisions. I must make it clear that Treasury officials will not have access to taxpayer-confidential information. If they do not need it to discharge their functions they will not receive information. The new Department of Her Majesty's Revenue and Customs will not disclose to the Treasury officials any confidential information. Members of the Committee are correct to raise that matter. I want that to be clear on the record.

Mr. Burnett rose—

Will the Minister give way?

I will give way, but as I was responding to a point made by the hon. Member for Torridge and West Devon, I will take his intervention first.

I am grateful to the Paymaster General. I know that she regards this issue as one of great importance. I am glad that she has put that point on the record. There will be other organisations, for example, the Independent Police Complaints Commission—

I was coming on to that point.

Fine. I will wait for her to knock that point on the head.

I am grateful to the hon. Gentleman for being patient. I wanted to make it clear that Treasury officials will not have information and that any disclosure to them will be a criminal offence. Secondly, where information is required to   carry out the responsibilities of, for instance, the Revenue and Customs prosecution service, the duty not to disclose it will transfer with the information together with a criminal sanction. Where taxpayer information is disclosed to the Independent Police Complaints Commission or to the Crown Prosecution Service there will be the same requirement to protect it.

Before I deal with the demonstration effect in the case that has been quoted, does the hon. Member for Chichester want to intervene?

I am very grateful to the Paymaster General. A moment ago she said that Treasury officials would not have access to the information, but they will be sitting in offices next door to people who presumably will have access. We all know how offices work. Will the Revenue officials who are in the Treasury building have access to individual files and information on cases? Will the files containing that information be stored in the Treasury building?

Yes, the Revenue officials who require access to that taxpayer information in discharging their duties will have access to information and they will be under a duty not to disclose that information. The hon. Gentleman seems to suggest that, despite that, the location, in a complex of offices, will somehow blur things. There is a requirement to protect information and the duty on an individual official is enforceable by prosecution for a criminal offence. That is extremely important. On protection, the question is not just whether offices happen to be shared, but how information is transmitted in offices.

The hon. Member for Chichester raised two points, one of which was about the demonstration effect. I am happy to reassure him that is not the Government's policy to name and shame, which would in any case require access to confidential information. As a Minister, I do not think that it would be possible to maintain taxpayer confidentiality under such a scheme. Taxpayer confidentiality and the confidence of the taxpayer to comply with the obligations relates exactly to the hon. Gentleman's point about disclosure of information in the knowledge that it will be used appropriately and not inappropriately, which must be continued.

The hon. Gentleman went on—I am mystified by this, quite genuinely—to refer to a individual taxpayer, Vodafone. I am afraid I have no knowledge of that. I could not comment on a taxpayer's information. Sometimes hon. Members laugh when I say that I cannot answer a question because of taxpayer confidentiality. In fact, that happened at the last Treasury questions, when I was asked about a taxpayer. I said that I was afraid I could not answer the question because of taxpayer confidentiality, which prevented me from having access to information on whether the organisation in question paid corporation tax.

I genuinely have no idea about the answer to the question that the hon. Member for Chichester asked. I am not aware of any complaints. No issue has been raised with me. The matter is important and I checked quickly with the Economic Secretary to ensure that the   issue had not been raised with him. I am genuinely mystified and do not know the answer. The clear and important answer is that the demonstration effect is not being applied, will not be applied and is not sensible.

On the issue of whether to have an oath, the current state of play is that the Inland Revenue requires a declaration, but Customs and Excise does not and never has done. Provisions are written into the legislation and even into employment contracts. Staff understand clearly that they are not to breach confidentiality and have not taken the view that they should not protect it. Therefore, we needed to consider how to take forward the powerful arguments that hon. Members have made today, and I absolutely concur about the importance of protecting confidentiality.

Perhaps it would be helpful if I explained how the statutory duty will work, why it is preferable to the oath and why we took this route. The essential issues are standards and confidentiality. Clause 17 sets out a binding statutory duty of confidentiality, which will automatically bind all the staff of the new department on its creation, without the need to wait for any formal agreement on their part. It will also become binding on any new members of staff upon their taking up their job, even before the formalities have been concluded. Therefore, our approach immediately places a binding statutory duty on staff, whether they are in post at HMRC at its inception or join later.

I recognise the point hon. Members have made about culture, but a culture of taxpayer confidentiality requires continuous reinforcement within the organisation. That culture must be constantly reinforced during the working lifetime of an official. I appreciate that hon. Members see a formal statement on joining the department as important, but I think that we need to go further. The letter of appointment to the new department will include a specific section on the duty of confidentiality, and officers will have to sign to acknowledge and accept the terms.

I entirely recognise, as I did on Second Reading, the points that hon. Gentlemen have made about provisions in someone's employment contract not being drawn to their attention and about people not reading all their contract. However, the duty will be drawn to officers' attention and will be emphasised during induction training and in regular messages throughout their career. The uniform way in which the statutory duty will apply to every member of staff will be a valuable tool for building and maintaining the culture of confidentiality that we all want.

The route that the Government have taken is to place the duty in the employment contract and to require all staff to have the contract on moving to the new department. We want to ensure that the requirement of confidentiality is drawn specifically to their attention and that they are constantly reminded of it throughout their career through regular intranet communications. All of that is vital.

I need to correct myself about what I said was the current position. For Inland Revenue staff, it is at the beginning of their career; for Customs and Excise the   matter is in legislation, but I think that I said it is not in long contracts. That is not correct. It is in the employment contacts of Customs and Excise. However, I want to go further.

My hon. Friend the Economic Secretary and I are looking at the matter. First, on appointment, it has to be drawn to the attention of the individual. Secondly, it must be done on induction, so that new members of staff know. Thirdly, it must be constantly reinforced throughout the career, which does not always happen. That underlines my contention, in reply to the hon. Member for Chichester, that being in the same building will not necessarily result in slippage, and that those who have the duty will not somehow forget it or breach it, even inadvertently. It is an enforceable part of their duty, yet we have gone much further.

We take many oaths at the beginning of a process; we do, as Members of Parliament, and so do Ministers. I certainly did as Paymaster General. However, I consider that not to be enough. The fact that taxpayer information is confidential will be constantly reinforced in the department, and it will be underlined in the employment contract. With respect to the strongly held views of the Treasury Select Committee, of which I took a great deal of notice, and with respect to the points that have been made today, I am still of the view that the route that the Government have chosen is stronger and better. I say that with regret because it is something on which we should agree. Should the matter of the oath be put to the Committee on a vote, I would ask my hon. Friends to oppose it.

Other, wider questions were put by the hon. Member for Torridge and West Devon about IPCC, the HMRC and the Crown Prosecution Service. Lawful disclosure of that information is covered in clauses 25 and 26. It is absolutely correct to make that clear.

Lastly, I shall deal with Government amendment No. 92. The amendment changes the wording because, on advice from my officials—I concurred with them—it was thought that the original formulation could be improved. There are proceedings to recover unpaid taxes; for example, it would relate to matters for which HMRC had a function for the collection of tax. However, the function proceedings themselves mean that there must be a drafting change to ensure that the wording is right but without changing the substance of the provision. The proceedings and investigations are limited to those having a connection with a function. It seems sensible to have a parallel power to make foreign disclosures, so that those HMRC and RCPO—Revenue and Customs Prosecutions Office—provisions can continue. However, they should be limited. We already have those arrangements.

The hon. Member for Torridge and West Devon and I frequently discuss double taxation treaties. There is an exchange of information provision to facilitate this type of exchange of information. That is provided for, improved and tightly controlled. It is negotiated within treaties. For the record, we have followed the agreements on the exchange of this information that   are in double taxation treaties that have been negotiated.

Before the Paymaster General finishes, will she answer the question I asked her? It was about the width of the powers. They go way beyond provisions for information exchange and provide for information to be given not just for criminal proceedings but for criminal investigations and to any body holding itself up as a prosecuting authority anywhere in the world. Therefore, the powers appear to go much wider than the example that has been given.

That was the right hon. Gentleman's second point on Government amendment No. 91. His first point was about Government amendment No. 92. I was going to come on to his second point.

Investigations from prosecutions will now be shared between HMRC and RCPO. Disclosures for the purpose of criminal investigation cover matters such as disclosing evidence to the Scottish sheriff to serve a search warrant under common law, and may cover disclosure of civil proceedings to get an injunction to freeze assets as part of criminal investigations.

Disclosure to foreign investigators and prosecutors are necessary when fraud spans national jurisdictions. Parliament has already endorsed that; it did so in the Criminal Justice (International Co-operation) Act 1990. The UK co-operates with our European partners for the mutual recovery of tax duties throughout the European Union. We want to make sure that those arrangements that already take place—they will have taken place when the right hon. Gentleman was a Minister—can continue to do so, but only within specific requirements. The amendments are as clear and precise as necessary; the right hon. Gentleman is right that information should be disclosed only for the intended purposes, and not for any other purposes such as fishing expeditions, or where the safeguards that I have outlined do not exist.

I am grateful, but the Paymaster General has still not answered my point. If the measure is to comply with international obligations, why is that not stated? I can think of examples where other countries—Zimbabwe, for example—might want information about one of their citizens who is now a resident of the UK. They could apply for and receive that information on the basis that it is for what they call a criminal investigation. That would have nothing to do with any international framework, and disclosure of that information would be against the interests of that taxpayer. Can the Paymaster General answer the point that I raised, rather than the one that she wished that I had raised?

With respect, I did answer the question that the right hon. Gentleman asked. The example he gives is totally erroneous. I made it clear that the crime has to span national jurisdictions, and things have to fall within the requirements of the Criminal Justice (International Co-operation) Act.

Where is that stated?  

I am saying it to the right hon. Gentleman now, on the record. If he would like me to write to him chapter and verse on it, I should be happy to do so. These are powers from prior to 1997, and it is not necessary for their machinery to be included in the Bill. It is only necessary that the provisions tie in with the relevant legislation.

I am grateful to the Paymaster General for the seriousness with which she has taken this debate, a seriousness that this issue deserves. She has accepted that we need to reinforce confidentiality. There is common ground among Committee members of all parties. The difference between us is how best to reinforce confidentiality. The Paymaster General says that the duty of confidentiality will be written into contracts; that there will be a section on it in the letter of appointment; that it will be included in induction training; and that the message about confidentiality will be repeated throughout an official's career.

First and foremost, none of those four things is incompatible with having the oath. She says that we would go further than the oath. If that is the position, why dispense with the oath? None of those things would replace the oath. It could stay at the beginning, and those four additional points could be incorporated. I do not see any case for dispensing with the oath.

When we asked Mr. O'Donnell about that point, he replied, as I have said, that

''maintaining taxpayer confidentiality is vital.''

He went on to say:

''The Chancellor made it absolutely clear to me at the start that under no circumstances should anything we do damage that.''

Dispensing with the oath would damage that. I welcome the steps that the Paymaster General offers to reinforce confidentiality, but I still think that there is a very strong case for retaining the statutory declaration. I shall press for a Division on this issue.

None of us demur from what the Paymaster General has said. We all want to ensure confidentiality, and we want Inland Revenue employees to be buttressed in that. Making an oath is not just a symbolic, but a solemn matter. We ask for an oath from executors and those applying for letters of administration. We want to keep a Rolls-Royce system of Inland Revenue confidentiality and we want it grafted on to the combined agency of the Inland Revenue and Customs. The Paymaster General has made admirable points, and the criminal sanction is spelled out clearly in the relevant clauses. However, let us not allow even the perception of watering down to occur; let us keep the oath. I ask the Paymaster General to consider that matter again in the interests of preserving the highest standards at the combined agency of the Inland Revenue and Customs.

I want to respond specifically to the hon. Gentleman's point, but I am not sure how to do that. I am clear in my own mind. The Economic Secretary and I have taken lots of advice. Having an oath requires a wait for formal agreement. However, the requirements for the contract become immediate   and because many staff are already employed, they will transfer as the contract becomes enforceable.

I do not see the oath as comparable to the mechanism that I have put in place in the Bill, the employment contract. I do not want to do anything that will lead any individual to believe that what we propose is less powerful, and I am not prepared to give the hon. Gentleman an undertaking today that I will reconsider the answer—that may not be strong enough for him—but I am prepared to consider the matter again in discussion with the Economic Secretary.

Let me be absolutely clear, as I do not want to mislead the hon. Gentleman; that may result in me not changing my mind. I am trying to be helpful to the hon. Gentleman. I do not want to say that I will go away and look at the matter, raising his expectations so he thinks that that really means that I will go away and add the oath. I am not prepared to give that undertaking. But I am prepared to say that I will consider looking at the Hansard report of exactly what the hon. Member for Sevenoaks said. I will look again at what I am doing and I will come back to the Committee. If that is not a strong enough undertaking, Opposition Members may want to press the amendment to a Division. If so, I ask my hon. Friends to oppose it. However, it would be better if the Committee agreed rather than had a vote on such an important issue.

I would just like to say that I have often debated with the Paymaster General, a person of great integrity who is held in high regard in the House. I shall await the result of her deliberations.

I suspect that that puts the onus back on me. I am grateful to the Paymaster General, who has listened to the debate. I am particularly grateful for her undertaking, which I fully understand comes with certain conditions. However, I do not see why we cannot have the new provision, providing the reinforcement that we are after. If I accept that that itself reinforces the oath, she may accept that there is some solemnity and some exceptional value to the statutory obligation. I hope that on that basis she will undertake to reflect further on the matter. I fully understand if she cannot commit herself to doing so. However, should she come to such a conclusion, of course she will understand that we may want to return to the matter at a later stage.

I thank the Paymaster General for being prepared to read Hansard and for agreeing to come back to us following her deliberations. I am very grateful for that.

Amendment agreed to.

Amendments made: No. 90, in clause 17, page 7, line 38, at end insert

'or [Disclosure to prosecuting authority],'.

No. 91, in clause 17, page 7, line 39, leave out from 'civil' to end of line 40 and insert

'proceedings (whether or not within the United Kingdom) relating to a matter in respect of which the Revenue and Customs have functions,'.—[Dawn Primarolo]

Amendment proposed: No. 92, in clause 17, page 7, line 40, at end insert—  

'(ca) which is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom) relating to matter in respect of which the Revenue and Customs have functions,'.—[Dawn Primarolo.]

Question put, That the amendment be made:—

The Committee divided: Ayes 8, Noes 4.

Question accordingly agreed to

Amendments made: No. 45, in clause 17, page 8, line 1, after 'Constabulary', insert 'or the Scottish inspectors'.  

No. 46, in clause 17, page 8, line 22, at end insert

'and

(d) a reference to the Scottish inspectors has the same meaning as in section 23.'.

No. 83, in clause 17, page 8, line 22, at end insert

'and

(e) a reference to an enactment does not include—

(i) an Act of the Scottish Parliament or an instrument made under such an Act, or

(ii) an Act of the Northern Ireland Assembly or an instrument made under such an Act.'.—[Dawn Primarolo.]

Clause 17, as amended, ordered to stand part of the Bill.

Further consideration adjourned.—[Jim Fitzpatrick.]

Adjourned accordingly at three minutes to Five o'clock till Thursday 13 January at twenty-five minutes past Nine o'clock.