Commissioners for Revenue and Customs Bill – in a Public Bill Committee at 10:45 am on 13th January 2005.
I rise very briefly, because at least one of my hon. Friends will develop the arguments about this part of the Bill in much more detail. As everyone can see, the clause and those that immediately follow it are about the creation of the new prosecution authority, and that is an important aspect of the Bill. Fortunately, it is also, in most respects, not particularly contentious. It arises out of recommendations in the Butterfield review, which concluded that the existing arrangements for prosecution were appalling in some respects. The report was extremely critical. I shall read only one passage; there are so many that I could go on for half an afternoon. It stated:
''The issues I identify include the absence of a strategic approach to excise diversion frauds; poor communications; serious deficiencies in the handling of informants; and failure to comply with disclosure obligations.''
An independent authority is being created; the prosecuting authority will be answerable to the Attorney-General, and we strongly welcome that. Some issues of transparency and accountability arise and I shall raise them in an amendment to schedule 3. I have one or two other remarks to make, either on schedule 3 or, probably, on clause 31, but beyond that I think that I shall leave the matter to one or two of the lawyers in the Room.
As someone who exhorted the Government for many years to bring the prosecution authority of the Inland Revenue and Customs and Excise under the aegis of the Attorney-General I support the clause and the following clauses, with one or two caveats. I should like some further information.
Presumably the Economic Secretary can assure us that the Revenue and Customs Prosecutions Office will be subject to the usual inspection regime under the Crown Prosecution Service inspectorate. Will he say a few words to the Committee also about the hierarchy of authority? The Director of Revenue and Customs Prosecutions will be appointed by—and presumably responsible to—the Attorney-General. What role, if any, will the Director of Public Prosecutions have in relation to the functions of the body? I suspect that it will be entirely independent of the DPP.
Will the Economic Secretary also ensure that the department will be housed in an area entirely separate from the mainstream Revenue and Customs officials? That is a point that I raised on Second Reading. Will he also say a few words about staff seconded from mainstream Revenue and Customs to the prosecutions office? Independence must palpably happen: it must be de facto independence.
Finally, I want to say a word about sufficient resources. I mentioned the Butterfield report earlier, and it contained trenchant criticism of certain practices. That is of course one of the reasons for the formation of a separate prosecutions office, independent under the Attorney-General. It is no good its being separate and independent if it is emasculated by having insufficient personnel and plant and machinery with which to do its work.
I rise briefly to raise a question about the appointment of the director. That would appear to be in the gift of the Attorney-General. Subsection (1) of the clause reads:
''The Attorney General shall appoint an individual as Director of Revenue and Customs Prosecutions.''
That is important. What are the mechanisms or procedures by which the Attorney-General will interview prospective candidates either now or in the future? What is the nature of the transparency of the selection and appointment procedure? That is thrown into relief by an article in this morning's Times. The headline reads, ''Crony taunts return with job for friend of Falconer''. It lists—it is almost a Venn diagram—the legal links, tracing all the friendships of members, relatives or friends of the current Administration.
The new story this morning is that Sir Mark Potter, a former pupil master of Lord Falconer, has been appointed—
Order. That will not do. The hon. Gentleman should restrict himself to the terms of the particular clause.
I do not wish to try your patience, Mr. Hurst, but the question whether the Attorney-General will make appointments in a clear, transparent and accountable way is the issue. The clause tells us that the Attorney-General will make the appointment.
To quote the article, there is ''disbelief'' among judges at the appointment of Sir Mark Potter and:
''Sir Mark also served as pupil master to Lord Goldsmith, the Attorney-General.''
The appointment follows the rampant cronyism of Kenneth Macdonald, QC, a barrister from the—
I think that that is a most unfortunate comment. We had that discussion last summer or the summer before. The appointment of the Director of Public Prosecutions was almost universally welcomed, and I hope that the hon. Gentleman will reconsider those points.
I think that the hon. Gentleman should calm down. The appointment of Sir Mark Potter has been described as having
''caused disbelief among senior judges''.
I will go further, if it will help the hon. Gentleman.
''Lawyers said that it was unprecedented for a''—
Order. I appreciate that the hon. Gentleman is vastly enjoying himself, as is the hon. Member for Torridge and West Devon. If the hon. Gentleman is doing this by way of an analogy, he remains in order. He must make it pertinent to the debate.
I am indeed arguing by analogy. As regards the appointment announced this morning:
''Lawyers said that it was unprecedented for a non-family judge—Lord Justice Potter comes from the Queen's Bench Division—to be promoted to the top post.''
That is a matter of fact. It is causing disbelief, it is unprecedented, and I think that as this article shows, there is a huge question about the nature of legal appointments made by the Government at this time. Those are specific examples.
Is my hon. Friend implying that, with reference to the clause, a judge from the family division could be appointed as the Director of Revenue and Customs Prosecutions not because he was qualified to deal with Revenue and Customs work, but because he happened to be a crony of the Lord Chancellor?
My hon. Friend anticipates me brilliantly. That is the very point at issue. We have a case this morning where there is disbelief, and the hon. Member for Torridge and West Devon might want to try to intervene and ask whether he thinks that that is an improper remark. He is sitting in his place.
The fact remains that my hon. Friend the Member for Sevenoaks makes a pertinent point. If unprecedented and unfathomable appointments can be made—unprecedented is how the legal community are describing the appointment—could it not be the case that equally unfathomable and perverse appointments could be made by the Attorney-General pursuant to subsection (1)—[Interruption.] If the hon. Member for Harwich (Mr. Henderson) wants to chunter away from a sedentary position, he is very welcome to do so, but if he wants to intervene, he should stand up and do so. He is sitting in his place.
Chuntering away is all very well. The hon. Lady can intervene if she wishes to do so.
Order. It is a matter for the Chairman to decide who is chuntering and who is not.
On a point of order, Mr. Hurst. Surely it is preferable to the conduct of the Committee that Members on the Government Benches at least chunter away rather than remain entirely silent, as they have been so far.
That is a point of observation, as the hon. Gentleman knows, not a point of order.
I conclude by asking the Minister a very specific question. What procedures will be put in place so that we can properly understand the basis on which this or any future Attorney-General will make appointments to the post of Director of Revenue and Customs Prosecutions? Will that information be made available, and what steps will the Government take to allay obvious public concern, as well as the concern of the Opposition and of the legal community, which was expressed this morning, about the most recent example of cronyism?
This has been a useful little debate—in some parts—because, as members of the Committee will recognise, this is a significant new arrangement to create the office of the Director of Revenue and Customs Prosecutions. The appointment will be made by the Attorney-General. I shall talk in a moment about the appointment of the current director of the Customs and Excise Prosecutions Office.
The clause provides the Attorney-General, and through him the director, with the power to appoint staff. Most significantly, the department will be separate and completely independent of the HMRC. The functions of the director and his staff, and the lines of accountability for the decisions taken by the RCPO, are set out in the following clauses. The creation of the department follows the report of Mr. Justice Butterfield in July 2003. In December 2003, the Attorney-General and I accepted the recommendation that a new independent prosecuting authority should be created to conduct all the prosecutions for Customs and Excise. Primary legislation was clearly required for such a move, which is what the Bill provides. However, given that there will be only one department, it made no sense to have anything other than a single prosecuting office for the appropriate cases of the new HMRC. The new RCPO will therefore also prosecute cases for the Inland Revenue.
On the point made by the hon. Member for Bury St. Edmunds (Mr. Ruffley)—the only point to which I want to respond—the director of the Customs and Excise Prosecutions Office has been appointed by the Attorney-General. He will be the first director of the RCPO, and is a distinguished lawyer who gives me, my right hon. Friend the Secretary of State and others the greatest confidence that the Customs and Excise prosecutions office and the new RCPO will be in good hands.
Mr. Ruffley rose—
I will finish my point, because it is very important that the hon. Gentleman understands the process for this appointment, which was precisely his question and the territory on which he was making much wider insinuations.
This was an independent appointment made by an independent appointments board, which was set up to appoint David Green. The board interviewed all the suitable candidates for the position, and recommended what it regarded as the most suitable candidate to the Attorney-General, who accepted its recommendation. The RCPO director will be a civil servant. Such an appointments procedure is well established, widely used, and entirely appropriate for such an appointment. I do not believe that the sort of insinuations that the hon. Member for Bury St. Edmunds was making in his contribution are properly founded or well placed.
I was driving at what any future Attorney-General might make as an appointment—the principle—as opposed to the instant case of the designated director, whose background and antecedents are not known to me. I was talking about the principle of how the appointments are made and what appointments might be made in the future.
Let me make it clear to the hon. Gentleman that the approach that we have taken with the appointment of David Green is entirely well established, proper and principled and it will be followed by the Government in relation to such appointments in the future. If there is a change of Government—the hon. Gentleman might have been anticipating such a change—I obviously cannot give any reassurances about such circumstances.
The hon. Member for Torridge and West Devon made some serious and specific points. I am glad that the Government have his support for the clause. I will address his point about resources first. A sum of £1.5 million has been set aside by Customs to cover the transfer of the Customs prosecution function to an independent prosecution authority over two years. A sum of slightly more than £330,000 has been set aside by the Inland Revenue for a similar purpose.
On staffing, the director of the RCPO will appoint all those who will prosecute HMRC cases. When the Bill comes into force, RCPO staff will be identified from among former Customs and former Inland Revenue staff and will be advised that the director has then appointed them to the RCPO. No prosecutors will remain in HMRC. However, for a limited period—probably about two years—those RCPO staff who were Customs or Revenue employees previously will be eligible to apply for posts within HMRC. That will be on the same basis as HMRC staff. The purpose of that is to provide the opportunity for those staff who wished to remain in their previous department to transfer back. That is entirely in line with Cabinet Office guidelines and procedures. There will not be a reciprocal arrangement for HMRC staff moving into the RCPO. After that period, there will be no special arrangements for appointing staff between the RCPO and HMRC. That means that all applications and all appointments will be on the same basis as those between Government Departments generally.
The hon. Gentleman asked about secondments. There may be a limited number of secondments or loans of staff between RCPO and HMRC, perhaps to meet particular individual development needs. Again, that will be on the same basis as secondments or loans between Government Departments generally.
On locations, RCPO staff will be based in two locations: New Kings Beam house in London, and Ralli quays in Manchester. Both of them are large Government offices, and RCPO staff will share the buildings with other Government staff, including those from HMRC. RCPO staff will be housed in specific sections of the buildings, separately from HMRC and from employees of other Departments.
On the hon. Gentleman's other two points, I can confirm that the director of RCPO and the RCPO will be separate and independent from the Director of Public Prosecutions. Clause 37 will give him precisely the answer that he is looking for to his question about the inspectorate.
Question put and agreed to.
Clause 30 ordered to stand part of the Bill.