Public Bodies (Merger of the Director of Public Prosecutions and the Director of Revenue and Customs Prosecutions) Order 2014

Lord Beecham Excerpts

Monday 24th February 2014 Grand Committee

[Lord Hope of Craighead (CB)]

My Lords—

[Lord Beecham (Lab)]

My Lords, try as I might—oh, I am so sorry.

[Lord Hope of Craighead]

My Lords, perhaps I can insert a few words of welcome for the measure. I used to prosecute in the High Court of Justiciary in Scotland as an advocate depute. From time to time, cases arose north of the border where the Revenue wanted to prosecute in the High Court. As the Minister will know, in Scotland all prosecutions are in the hands of the Lord Advocate. I remember having to deal with officials from the then Inland Revenue and, separately, HM Customs, who were somewhat upset that they could not conduct those prosecutions themselves but had to hand the papers over to me or my colleagues so that we could conduct the matters on their behalf.

Of course, the order has nothing to do with the position in Scotland, which is quite unaffected, and it is unnecessary to do anything about it because it is well established that prosecutions will continue to be handled by the Crown Office under the overall supervision of the Lord Advocate. As the noble Lord said a moment ago, my experience was that efficiency was promoted by combining the prosecution element—the exercise in presenting the material in accordance with the best use of the courts—in one body. It seemed to me at the time rather odd that, south of the border, there was this division of functions, which gave rise to uncertainty in my mind as to exactly why it was necessary for there to be a separate prosecution system at all in the hands of the Revenue or HM Customs.

So, from a rather unlikely quarter, I admire what is being done administratively and entirely approve of the Minister’s suggestion that it should now be endorsed in legislation. I am sure that this is a good measure to promote efficiency.

[Lord Beecham]

I must begin by apologising to the noble and learned Lord. I had not noticed that he was here and obviously intended to speak; I apologise for that.

As I said, try as I might—and I certainly tried—I cannot find anything much to object to in the 19 pages of the order or, indeed, the 134 amendments embodied in it. The principle is clearly right and it is sensible to combine the two positions. However, although this does not quite fall within the Minister’s brief, there are still questions to be asked about the operation of the service as a whole, particularly in relation to staffing.

Of course we are only talking about part of HMRC for the purposes of the order, but within HMRC there have been significant staff reductions. To be precise, 1,697 staff left in 2012-13. That forms part of a significant reduction in funding of HMRC amounting to about £2 billion, or 16.5%, by 2015. The Chancellor’s reinvestment, as it were, of £154 million, which was announced with a flourish a couple of years ago, will not make much of an impact on that massive cut.

The question arises, therefore, about the implications for staffing on what had been the HMRC function. Will the staff be protected, or will there be reductions? The record of HMRC in recovering moneys is clearly not very good. The Public Accounts Committee criticised it for collecting more than £1 billion a year less in December 2012 than it would have done, had it had the relevant staff.

Another question in relation to staffing is: will those who will be employed in the completely unified structure be paid comparably to those with whom they will no doubt be locking horns in the private sector? For that matter, is there much of a two-way flow between the department as it is now constituted and the private sector? I am not talking about the prosecution side thus far, as far as I am aware, but concerns have been expressed about people coming to work for the Inland Revenue from the private sector and then going back to the private sector and so on. I am not asking the Minister to answer this today, but it would be helpful if he would let us know the position in relation to movement inward and outward of staffing, particularly on the Inland Revenue side.

One of the concerns raised—I do not think with any great force in the consultation—was about the need to maintain within the prosecution side expertise of Inland Revenue matters. The Government seem to be satisfied on that, and I am not challenging that assertion, but it underlines the need to keep an eye on matters. No doubt the Government will be reviewing the situation as it progresses.

A further point relates to the third arm of prosecutions in this country, which is the Serious Fraud Office, which comes under the aegis of the Attorney-General and is separate from the DPP and HMRC, which we are now discussing. Given the somewhat challenging history of the SFO in recent years, I wonder whether it might be opportune at some time to consider a further merger between that department and the structure that we are formally approving today. I am not suggesting that the Minister can give an immediate response to that, but it is something that his colleagues could look into. In principle, it might seem sensible to have a seamless prosecution service dealing with serious fraud and tax fraud and the other matters that come under the direct surveillance of the DPP.

Having said that, we certainly do not object to this order and wish the fully combined departments well in their endeavours on behalf of the public and the taxpayer.

[Lord Faulks]

My Lords, I am grateful for the remarks of the noble and learned Lord, Lord Hope, for bringing to the debate his experience from Scotland and for endorsing the desirability of this move from that vantage point. As well as making certain economies, we think that it will prevent potential demarcation disputes of the sort to which he referred.

The noble Lord, Lord Beecham, as ever, probes slightly beyond the scope of the statutory instrument, as I am sure he would be the first to accept. On the question of staffing and training, there is perhaps one aspect with which I can help the Committee. The legislation removes the barriers to the staff of the CPS and the staff of the RCPO from working on mixed duties.

The question of training is relevant. The HMRC prosecution work will remain for the immediate future within the CPS central fraud division, which prosecutes cases nationally. Expertise already exists within the division and the new staff are trained internally. Where any HMRC work is to be devolved, this will be managed carefully and appropriate training and support will be provided.

I am given to understand that RCPO is entirely separate from HMRC, and there have been no staff reductions as a direct result of the merger. I anticipate that the noble Lord, Lord Beecham, was talking of staff reductions more generally, but I can confirm that, in so far as the issue of the statutory instrument is concerned, there are no such reductions.

As always, I will take back his remarks and observations generally about the Serious Fraud Office and whether or not further consolidations might be made with profit, as well as his observations generally about staffing and the involvement of the private sector. I am grateful for those contributions.

We submit that the draft order is a modest but worthwhile measure. In effect, it will complete what was unfinished business and should enable improvements and efficiency to take place. I commend it to the Committee.