In 2010 the Treasury Sub-Committee launched an enquiry into the administration and effectiveness of HMRC. Following that enquiry, the senior management structure of HMRC was overhauled and a new chief executive appointed. But if HMRC is still not working to the satisfaction of the PAC, then what happens next?
Over the years, we have followed with interest the work done by the UK Public Accounts Committee in respect of global tax avoidance. The tenor and content of the debate sparked by the PAC suggest an intention to create a climate to change UK tax law, thereby reconciling the UK government’s apparent inconsistency in striving to create a tax system which attracts multinationals to the UK, then reviling those companies which do so.
The PAC’s other main target has been HMRC. With weekly, if not daily, criticism of the taxman by PAC members, where does all this end?
It’s worth remembering that on 27 October 2010 the Treasury Sub-Committee launched an enquiry into the administration and effectiveness of HMRC. Following that enquiry, the senior management structure of HMRC was overhauled and a new chief executive appointed.
The British Constitution has been likened to a three-legged stool. The three legs are the Legislature, the Judiciary and the Executive. If any of these legs breaks, the stool falls over.
The Legislature – Her Majesty the Queen in Parliament – is sovereign. The Executive is subordinate to the Legislature. The Legislature therefore has the authority to impose change on the Executive. It would be disappointing if, so soon after the last review, the PAC felt that further root-and-branch changes were required in HMRC. But more change would be preferable to the perpetual sniping which we see now.
Perhaps what we are seeing is an element of the Legislature trying to impose executive decisions on the Executive, inconsistent with the latter’s own wishes - a recipe for an imbalance.
Is there a recent precedent for that change? Arguably, one can be found in the reorganisation of the UK Border Agency (previously The Border and Immigration Agency). Following what was described as ‘catastrophic leadership failure’ at that agency, the chief executive was replaced. If the PAC believes it necessary, such change could be imposed on HMRC.
This would be accompanied by a dreadful feeling of deja vu: the former chief executive of the UK Border Agency is now chief executive of HMRC…