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Busted! Public bodies at party conferences

Oct 13th, 2011
by Emma Boon.
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Conference season was just as frantic as ever this year, with the usual rotation of speeches, receptions and events in Liverpool, Manchester and Birmingham. Now the dust has settled it’s time to share with you some interesting discoveries we made.

We caught a number of public bodies exhibiting and campaigning at all three of the major party conferences.  We’ve reported on this previously here and here and we estimated the cost of RDAs at party conferences back in 2008; the Conservatives have in the past pledged to end taxpayer-funded lobbying but our photographs below prove that it is very much still alive and well. Just this week The Daily Telegraph exposed how bureaucrats at the Olympic Delivery Authority spent £4515 on the three main political parties for conference tickets last year.

Every part of the public sector needs to do its bit to cut spending. It is fine for a wide variety of groups to set up a stall at a party political conference to have their say, but what’s not okay is when that stall is at taxpayers’ expense.

Conservative Party Conference

Welcome to Yorkshire describes itself as the official Destination Management Organisation for Yorkshire. In 2010 Yorkshire Forward gave them £9,246,000 of taxpayers’ money and Local Authorities topped that up with another £285,600. Welcome to Yorkshire is already known for its high profile advertising, such as its sponsorship of the Paul O’Grady Show.

The University of Northampton, like other higher education institutions is kept afloat in part with taxpayers’ cash. Nothing wrong with that, but what if it wasn’t being spent on research and education at the university but in a conference hall.

Two bored-looking employees put in an appearance on the costly looking Centro stand too. For those of you not from the West Midlands this is the body responsible for promoting and developing public transport across the region.

Labour

Digital UK was at the Labour party conference. They were set up supposedly to assist people by offering impartial advice about the digital switchover, however it’s unclear why that requires them to attend a party political conference.

Royal Mail were also present, despite the dire state of their finances they managed to scrape together enough of our money to pay for a stand.

And the more obscure pteg (the passenger transport executive group) also had a (rather empty looking) display. Centro (remember them from Tory party conference?) are a member of this body that represents six passenger transport bodies, all paid for by you and me.

Royal Mail Group and pteg also popped up at the Liberal Democrats party conference, along with several unions who have cash to spare for things like this thanks to the taxpayer-funding they receive.

It’s not because they love Guinness

Sep 27th, 2011
by Emma Boon.
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Micro-blogging website Twitter is to set up a new HQ in Dublin and I’m willing to bet that it’s not because they love Guinness.

Ireland’s attractive 12.5 per cent corporate tax rate is bound to have been a big sweetener for the firm, which has been valued at upwards of £5 billion.

The news is a blow to the Treasury, who were hoping that a London office opened earlier this year would become Twitter’s European HQ. But catchy names, like Tech City and Silicon Roundabout, and even the irresistible allure of Boris Johnson are not going to be enough to convince the micro-blogging website to bring its money over here when our main rate of corporation tax is 26 per cent.

The list of internet firms who are now benefitting from Ireland’s lower corporation tax reads like the bookmarks menu on most people’s internet browsers: Google, Facebook, Amazon, Yahoo, eBay and Microsoft all have offices there, to name but a few. The presence of businesses like these means more jobs in Dublin. Google alone is one of Dublin’s biggest employers, with 2,200 staff.

With modern technology allowing them to work from almost anywhere in the world, companies like Twitter are not going to choose the UK without a more competitive corporate tax rate as an incentive. Read our briefing on corporation tax from Tax Commissioner Anthony J. Evans for more.

Margaret Moran faces 21 expenses charges

Sep 7th, 2011
by Emma Boon.
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One of the last politicians to be investigated in the expenses scandal, Margaret Moran, will be charged with fiddling her expenses by more than £60,000.

The Crown Prosecution Service (CPS) has announced that the former MP for Luton South will appear before Westminster Magistrates’ Court on the 19thSeptember 2011.

Charges relate to 15 charges of false accounting, contrary to the Theft Act 1968.

Moran claimed for dry rot treatment on a home more than 100 miles from her constituency.

Keir Starmer QC, Director of Public Prosecutions, said:

“Ms Moran also faces six charges of forgery, contrary to the Forgery and Counterfeiting Act 1981, where it is alleged that she submitted forged invoices in support of some of her claims.”

The Metropolitan police originally passed ten files of evidence to the CPS, relating to ten individuals. Seven cases have resulted in charges: David Chaytor, Eric Illsley, Elliot Morley, Jim Devine, Lord Taylor of Warwick and Lord Hanningfield have already been jailed over the scandal.

Margaret Moran is suspended from membership of the Labour Party and is no longer an MP.

Further information and our reaction to the trial and sentence will be posted on this blog once proceedings are complete.

Article about Let them Eat Carbon in City A.M.

Sep 1st, 2011
by Emma Boon.
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This morning there is an article by Matthew Sinclair in City A.M. about Let them eat carbon. He discusses who will really be paying for investment in the energy sector to make it greener and concludes that it will be already heavily burdened households.

He also highlights that:

Benefits for poor and elderly households are the biggest item in the government’s budget. Higher energy bills will make it much harder for them to stomach the long term fiscal adjustment that the country needs.

By and large the public do not realise what is going on in the lucrative world of climate policy. How informed taxpayers are will decide whether or not the current, failing agenda is reversed.

Read the full article here.

Why we should include PFI in the national debt

Aug 19th, 2011
by Emma Boon.
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There is much talk of PFI in this morning’s news; the Treasury Select Committee has warned that many Private Finance Initiative (PFI) deals are poor value for taxpayers and the cost of those that have been badly negotiated has shot up.

A huge amount of taxpayers’ money is spent via controversial PFI schemes and Andrew Tyrie, of the Treasury Select Committee, said on Today that whilst taxpayers are “getting ripped off” by PFI schemes they are often not aware how bad the situation is because PFI is not counted as part of our official national debt. The insidious characteristic of PFI deals is that they allow the Government to spend taxpayers’ money without really fully admitting that it’s spending it, or promising to spend it in the future.

We highlighted the importance of counting PFI as part of the national debt in our research paper, The Real National Debt, written in 2010 and using figures for the financial year 2009-10. For the first time we laid bare the startling growth of the real national debt over the last decade. At the time of that paper it stood at £300,000 for every single household in Britain; for most ordinary families it would represent the whopping second mortgage you never knew you had.

$1,000,000,000

Bringing PFI fully onto the balance sheet and including it in the headline figure of national debt would, at a stroke, add a good few billion to the amount we admit we owe. It sounds terrifying but it’s hugely important that the liabilities for PFI are more transparent; at the moment the true scale of what taxpayers are on the hook for is disguised. Once we’ve faced up to the PFI problem why stop there? Shouldn’t we also look at the huge liabilities we have thanks to unfunded public sector pensions and unfunded state pensions? The debt from bailing out the banks is still very much sitting on our books, add that too and we’re nudging £8 trillion.

Once you get above a few million I think it gets all too easy to throw around billions and trillions discussing these matters. We created this video to try and illustrate the scale of the numbers we were talking about in our report. This useful graphic relates to US dollars but also gives you some serious perspective on what a few trillion looks like.

The Government should be responsible not just for the money that it spends but for the PFI deals that it signs taxpayers up to, because that represents our money or our children’s money.

HMRC: Getting tax wrong since 2005… and earlier

Aug 1st, 2011
by Emma Boon.
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There was further embarrassment for the taxman this weekend after the Commons Treasury Committee criticised HM Revenue & Customs (HMRC) for poor performance and ‘endemic delays’.

HMRC was formed in 2005 when Inland Revenue and Her Majesty’s Customs and Excise were merged. Like the two organisations that were combined to form it, HMRC hasn’t always gotten things right and caused problems for millions of taxpayers in the process. This latest report by MPs was ordered after last year’s PAYE debacle when HMRC had to admit that 6 million people had been paying the wrong income tax in previous years.

Almost 1.5 million people had to pay back an average of £1,500 each, after being told they had been underpaying because of faulty calculations. At the time we were very critical of the tax office, and said that things had to improve. This newest report reveals that the department is in crisis and confirms they still aren’t getting it right – and taxpayers are the ones left to pick up the pieces.

Let’s not forget that isn’t even their biggest mistake, as John O’Connell blogged in February this year when the Public Accounts Committee criticised HMRC for their mismanagement of the tax system and a few years before that the tax office lost 25 million taxpayers’ details that had been copied onto a disc – whoops!

Key complaints raised in this latest report were:

  • The continuing legacy of unresolved tax discrepancies from past years still affecting millions of tax payers
  • Taxpayers had to wait as long as three months just to receive a reply to a letter
  • Excessive reliance on the internet for filing tax returns, or giving information, to the disadvantage of those without good internet connections, such as the elderly
  • “Overly ambitious” IT projects such as plans to make employers submit “real-time” data for the PAYE system
  • Increasingly complex tax laws.
  • Just 48 per cent of telephone calls made to HMRC offices are answered
  • The use of 0845 phone numbers by HMRC for customer queries. The committee suggested that cheaper 0345 numbers are used.

We can't go on like this, with a tax system in total disarray

We cannot go on with the system in total disarray like this, it’s failing millions of taxpayers and we’ve put up with too many mistakes and excuses for too long. Last time it was a new IT system that was blamed, now it is staff shortages. Enough is enough.

At least after this most recent debacle Mike Clasper, chairman of HM Revenue & Customs, came out and apologised. Last year it took Dave Hartnett a full day to put his hands up and say sorry, after initially telling the BBC that he “had nothing to apologise for”. The attitude may have changed, but the problems still remain. It is too hard to make contact with HMRC, and it is often too difficult to understand the information and guidance.

The problem of increasingly complex tax laws, highlighted by the committee, is one that we have been shouting about since our inception. The 2020 Tax Commission (a joint project with the Institute of Directors) will release a report early next year that will look at ways to address this and other problems with our tax system. We released a video featuring the world’s fastest speaker to underline how long the UK tax code now is.

The taxman must get his house in order, taxpayers should not have to tolerate another fiasco.

Jonathan Isaby joins growing TaxPayers’ Alliance campaign team

Jul 27th, 2011
by Emma Boon.
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The TaxPayers’ Alliance (TPA) today announces the appointment of Jonathan Isaby to the role of Political Director. Jonathan has previously worked at the BBC, the Daily Telegraph and most recently was co-editor of ConservativeHome.

One of the objectives of the TPA has always been to represent taxpayers in the corridors of power, so Jonathan will focus on building links with Ministers, MPs and MEPs. His immediate focus will be to communicate the work of the 2020 Tax Commission to policy makers and to develop joint campaigns with other European taxpayers groups in light of the Eurozone crisis.

The TPA has already got a strong track record of influencing policy in Westminster. Many of the Coalition Government’s spending cuts were first discussed in the joint IoD/TPA paper ‘How to cut spending by £50bn‘  (September 2009), which was later published as a book by Biteback (March 2010). Eric Pickles has also cracked down on many of the examples of local government waste first identified by the TPA in the seminal ‘Council Spending Uncovered’ series. Most recently, our 2010 paper on taxpayer funded trade union officials has played in integral role in the debate, which Dominic Raab MP has picked up on in the House of Commons, and Francis Maude MP is looking into at the Cabinet Office.


Jonathan Isaby, new Political Director at the TaxPayers’ Alliance, said:

“Having watched the TaxPayers’ Alliance go from strength to strength in the relatively few years since its founding, I am delighted now to be joining Matthew Elliott and his team. The TPA plays a vital role in reminding those in power of that timeless maxim that there’s no such thing as government money, only taxpayers’ money. Right now it is more important than ever to ensure that politicians and bureaucrats in Brussels, in Westminster and in town halls up and down the country use that money responsibly and transparently. What’s more, they also need to be challenged as to whether hard-pressed taxpayers could be using it more wisely themselves. I’m looking forward to working with the brilliant team at the TPA to ensure that those messages are heard in the corridors of power.”

Robert Oxley
As well as welcoming Jonathan to the team, the TaxPayers’ Alliance also has a new Campaign Manager, Robert Oxley. Robert previously worked as a researcher in the House of Commons and will now work under the TPA’s Campaign Director, Emma Boon, communicating the organisation’s research to the media. He will also be responsible for the TPA’s social media presence on Facebook, Twitter and YouTube.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“We’re delighted to welcome both Jonathan and Robert to the TPA. Jonathan will add a wealth of experience to an already strong team. His knowledge, skills and contacts will be a tremendous asset as our campaign moves forward.

“Robert will be a new face to many in the media, and I’m really excited to welcome him aboard. His experience of Parliament and passion for TPA campaigns will stand him in good stead for his new role.”

Jonathan Isaby will join the TaxPayers’ Alliance from the 15th August 2011. Robert Oxley has joined the team with immediate effect.

FiReControl project money up in smoke

Jul 1st, 2011
by Emma Boon.
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Remember the last government’s grand plans for regional FiReControl centres? If not let me jog your memory, they were the ones with no staff but luxury £6,000 Brasilia coffee machines.

The idea was to replace 46 fire control rooms in England with nine purpose-built regional centres. The Coalition Government scrapped the project at the end of last year to prevent further loss of taxpayers’ money. It had taken seven years and the NAO has today confirmed that £469 million had been wasted on the project.

One problem was that local fire and rescue services didn’t support the plans from day one.  Add the obligatory expensive and badly managed IT contract into the mix along with lashings of oversights then boil vigorously for seven years… and voila, you’ve wasted almost £500 million!

No computer system was ever delivered. The report lays the blame squarely at the Department for Communities and Local Government (DCLG) for rushing in at the start of the project and then mismanaging “the IT contractor’s performance and delivery”. The NAO must be sick and tired of repeating this phrase in their reports. How many times need they say it before politicians and civil servants finally do something about it?

“Poorly managed consultants” also get a mention. Amyas Morse, head of the NAO, said “essential checks and balances in the early stages of the project were ineffective”.

This costly failure has an expensive legacy. Eight of the new control centres remain empty but taxpayers are still forking out for rent bills and security for these ghost-offices. One in the West Midlands is costing £1.4 million a year to sit empty, according to the Birmingham Post, and the Government is tied into paying rent on the centres for years to come. Worse still they’re paying rent at way over the market rates. A property expert tells me the government agreed to lease the London Fire Control centre in Merton (where rents are about £15 per square foot) for the sort of price per square foot that hedge funds pay for their offices in Mayfair.

The NAO says DCLG is now trying to minimise the future cost of the project by subsidising fire and rescue services to use the buildings. However, all that is certain in the future of these buildings is that taxpayers are still bearing the cost.

No more secrecy on civil servants’ pay

Jun 23rd, 2011
by Emma Boon.
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The man in charge of deciding what information should ultimately be made public has ruled that high paid civil servants pay must be made public. The Information Commissioner, Christopher Graham has decided that the names of 24 high-earning public sector workers, who previously tried to avoid being named, must be published.

We have always campaigned for greater transparency in public sector remuneration, enabling public opinion and the media to act as a check on over generous pay rises, bonuses or pensions deals. For several years now, we have published our Town Hall Rich List and Public Sector Rich List, a comprehensive and easy to digest guide to the highest paid public sector workers. For the first time, people all over Britain could see what the senior officers in quangos and at their local council were earning, and they could hold them accountable. Public sector fat cats could no longer keep their pay a secret.

The day after the publication of the 2009 Public Sector Rich List, the then Prime Minister, Gordon Brown, attacked the “culture of excess” in public sector pay and said that any salary above £150,000 would now need formal ministerial approval, this was a good start but still wasn’t full transparency.

Topping the 2007 Town Hall Rich List was Kent County Council’s chief executive, Peter Gilroy. After publication he received complaints from the public that he wasn’t value for money, and KCC subsequently tried to block our FOI request for the 2008 Town Hall Rich List. We fought the decision, defending the idea that it was taxpayers’ money and there is a legitimate public interest in taxpayers knowing how that money is spent. Eventually the Information Commissioner’s Office conceded that the public interest trumped all other considerations and ruled in our favour. New ICO guidance on salary transparency was issued and all public bodies (including local authorities) were recommended to provide salaries of significantly senior staff as a matter of routine, in bands of £5,000.

This latest decision extends similar rules to others in the public sector who have previously tried to avoid being named. The ruling was needed after the Cabinet Office last year published lists showing that 332 civil servants and quango chiefs have salaries of more than £150,000. Of these, 49 were paid over £200,000. David Higgins, the chief executive of the Olympic Delivery Authority had the largest pay cheque at £390,000. The names of 24 people receiving taxpayer-funded salaries of more than £150,000 were withheld from the list after the individuals involved refused permission to reveal their identities. The Information Commissioner, Christopher Graham, has ordered the Cabinet Office to identify them. He said:

“If you are earning over £150,000 working for a body that is funded by the public purse, then there is now a legitimate expectation that your name and salary details will be disclosed.
“Being open and transparent is an integral part of being accountable to the taxpayer and, like it or not, this level of disclosure goes with the territory.”

The Cabinet Office has 35 days to appeal against the decision or reveal the names.

Surrey County Council get the latest toy

Jun 10th, 2011
by Emma Boon.
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It’s great to see councils trying to find ways of working more efficiently. Technology absolutely has a role to play, with laptops and mobile phones (both now can be bought relatively cheaply) meaning staff aren’t tied to their desks and can do more work on the go. But sometimes I get the sneaking suspicion that councils are trying something new out because it’s the latest toy, not because it’s actually going to be more efficient than what they’ve already got.

Surrey County Council has perfectly demonstrated this approach with a video recently posted on their You Tube page. It features a demonstration of an app developed for the new BlackBerry® PlayBook™ tablet. The council’s own website proudly announces that this tablet has yet to even be launched in the UK yet social workers are trialling this new technology for two months.

Not very good, apparently

Surrey County Council Cabinet Member for Adult Social Care and Health, Michael Gosling, hopes that this new app will “help save time and money by reducing the burden of paperwork, allowing social workers to focus on caring for the elderly.”

A noble ambition indeed, but do they really need Blackberry Playbooks and apps to reduce paperwork? Never mind the fact that the tablets have been slated as rubbish with a battery life so short staff will be popping back to the office to charge it up, they are going to cost a small fortune. Councils should embrace new ideas and should looks at ways of improving care for the elderly and providing better services, but they must be wary of the temptation to throw money at the latest gadget as a means to achieving this. We don’t know whether Surrey CC has any Playbooks or plans to buy any, and there is probably no cost for this trial, but taxpayers should consider firing a warning shot across the council’s bow now if they think this trial could be paving the way for extravagant spending.  We’ve said it before on this blog, councils shouldn’t spend taxpayers’ money on frivolous nonsense just to make themselves appear innovative and revolutionary.

All that aside I should mention the reason that this came to my attention is because I encountered their You Tube channel. Aside from the danger that they’re about to splurge (or have already splurged) huge sums of money on tablet devices, someone at Surrey CC took the time to film a video about this ground-breaking (ahem) news and upload it to web. Seriously fellas, you have too much time on your hands.

PETITION: Oppose the EU Bailouts

Jun 2nd, 2011
by Emma Boon.
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Sign the petition here

A couple of weeks ago, at the Rally Against Debt, we launched a petition to oppose EU bailouts. Lots of you signed up on paper and hundreds more have signed up online. If you haven’t added your signature yet, here’s why you should.

EU bailouts are storing up debt for the next generation. British taxpayers’ liability for propping up the collapsing euro has rocketed, largely due to a recent rescue package for Portugal. We thought the bailout for Ireland was a bad idea and we opposed that, the Portuguese case seems even more egregious as they couldn’t pass an austerity plan before stretching out the begging-bowl. Worse still it’s becoming increasingly apparent that Greece will need another handout as its debt woes continue. At a time when we’re making very necessary spending cuts at home, why are we handing over more money to try to save the euro; a mistake we didn’t make?

The Government is disastrously letting down taxpayers by picking up the bill for bailouts to keep the rest of Europe happy. It’s time to say no and oppose the EU bailouts, sign here if you agree.

Bye bye bin police

Apr 11th, 2011
by Emma Boon.
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The Government has sent a shot across the bows of councils that are issuing fines to people for breaking bin rules.  We have always opposed these penalties, viewing them as a mean-spirited stealth tax on households, thinly disguised as a green measure.  We recently flagged up the problem of fines again in our widely reported research paper on the number of bins each council collects.

A letter from Environment Department Minister Lord Henley and Local Government Minister Bob Neill has warned councils that they are not allowed to impose charges for collecting mainstream rubbish, only for things such as garden waste or bulky rubbish.  It also clarified rules on call-out charges, official council rubbish sacks or special receptacles and general policy on ‘backdoor’ bin charging.  Lots of people want to recycle but slapping fines on people for putting bins out on the wrong day or for not separating their rubbish could be putting people off recycling.  It would be nice to see more carrot and less stick to encourage recycling, the use of ‘bin police’ is unnecessary and heavy handed.   Of course part of the problem is the EU Landfill Directive, which sees councils having to pay if they send too much household waste to landfill, and Government driven targets for recycling.  But this is no excuse for dishing out fines and variations across the country show that councils are interpreting the same rules in different ways.

The front page of today’s Daily Mail highlighted a related issue and another common bin gripe, fortnightly collections.  According to the newspaper more than half of households now have to wait two weeks to have their rubbish collected.  Lots of local councils claim they cannot afford to empty bins weekly, clearly they could if they cut wasteful spending elsewhere.  Bin collections are a key service and residents have a right to expect councils to focus spending on this before other priorities. Many councils that only collect fortnightly say that it helps to encourage recycling rates, however the rules could actually be worse for the environment as those who can’t or won’t abide to them could choose to burn rubbish or resort to fly-tipping.  Fortnightly bin collections are also unfair on those who generate more waste through no fault of their own, like large families.

Communities Secretary, Eric Pickles, promised to tackle Britain’s “barmy bin policies” when took office.  He’s made a good start but there is still much more to do to persuade councils to make rubbish collection simple and efficient for everyone.

Chaytor challenges his sentence

Feb 25th, 2011
by Emma Boon.
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It was a shock to hear that disgraced criminal and former MP David Chaytor has launched a challenge to his 18 month jail sentence.

The 61-year-old was found guilty of fiddling his parliamentary expenses and jailed on January 7th.  During his trial a jury heard how he’d forged tenancy documents and invoices to falsely claim more than £22,000 of taxpayers’ money for rent and IT work from the Commons authorities.  This was not a one off slip up, the false accounting took place over a prolonged period, between 2005 and 2008.  In jailing him, the judge had said that it was important that Chaytor received a custodial sentence, as it would help to restore the public’s faith in Parliament.

Like fellow disgraced MP, Eric Illsley, Chaytor initially pleaded not guilty to the charges, stringing out his case for longer than necessary and trying to have it thrown out by citing parliamentary privilege; however, it was in vain and justice was finally done.

Taxpayers cannot be expected to tolerate fraud by those trusted with their money and with making decisions about how to run the country.  Voters who thought justice had been done would be rightly disillusioned with Westminster if Chaytor was seen to get special treatment and let off with a lighter sentence.  MPs are not above the law and it would be a step backwards if an appeal against is successful.
Chaytor’s application will be heard by judges at the Court of Appeal on March 22nd, they will then decide whether or not to let him appeal his sentence.

Councils need to stop complaining and cut their publicity spending

Feb 15th, 2011
by Emma Boon.
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Councils are complaining that new rules designed to stop them spending so much of our money on publicity are ‘draconian’.   The Local Government Association has been whinging that the rules shows that the Government is not truly committed to localism but this is a pathetic attack- and it’s a line they seem to use every time Eric Pickles makes an announcement. Of course local communities should be free to conduct their own business in the way they see fit, but local councils must act within the law and certain other reasonable constraints.  Localism is intended to offer taxpayers a better deal, not to allow council-empires to flourish.

Eric Pickles should not have to ask councils not to spend huge sums of money on publicity.  Councils are supposed to provide services for the taxpayers who pay for them; it should go without saying that this does not include self promotion.  It does not fly in the face of localism for Pickles to mention to councils that they should not hire private sector lobbyists or set up stalls at political party conferences; it should go without saying that their activities should be in the spirit of democracy.

LGA Chairwoman, Baroness Eaton, described the rules as “entirely unnecessary” but sadly she is mistaken. We first looked in detail at council spending on publicity in 2007, but here we are in 2011 and councils are still churning out their own newspapers and splurging on glossy leaflets.  We first spotted local councils at party conferences some years ago, but they continued to spend taxpayers’ money on setting up stalls in 2008 and in 2009.

This is all part of a wider and ongoing attempt by certain councils, and the LGA that represents them, to create bad feeling around the changes happening at Town Hall level.  Many councils are angry that they are getting less money from the Government; they are angry at being asked to do ‘more for less’; they are angry that things are changing.  If this change was one that would interfere with the lives of local taxpayers it would be interfering with localism, but it is not.

See for yourself the common sense suggestions, the draft Code of Recommended Practice on Local Authority Publicity is here.

Taxman in turmoil

Feb 10th, 2011
by Emma Boon.
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There has been a catalogue of errors at the taxman’s office in recent months. Her Majesty’s Revenue and Customs (HMRC) and the country’s top taxman (Dave Hartnett) came in for heavy criticism after it emerged that millions of people had been paying the wrong income tax (via PAYE) for two years.  Exasperation turned to anger as the story evolved into accusations that top brass knew that there was a problem with the system for months before they took action and told those affected.
Millions of pounds of tax debts had to be written off, probably because it would be too time consuming and costly to try to recover any less than about £300 from those who had underpaid income tax in recent years.  Millions more in unpaid taxes were then not collected because of rules preventing HMRC from chasing money that should have been paid more than four years ago.  Just as taxpayers were reeling from this mammoth blunder, the taxman had to admit that further mistakes had been made, this time relating to National Insurance contributions.  Further blushes followed.  In the midst of all this Dave Hartnett initially refused to apologise when interviewed by the BBC, but later back tracked; Dame Leslie Strathie (Chief Executive of HMRC) then admitted the fiasco could continue for years and that her organisation had no idea about the true scale of the problem.

Stories of blunder, mismanagement and inefficiency are nothing new and many successful organisations at some point make mistakes, but the shambolic performance at HMRC calls into question whether or not it is fit for purpose.  The true scale of turmoil at HMRC is only now coming to light as the organisation is quizzed about how and why such cataclysmic errors happened.  When the PAYE scandal was first uncovered many people suddenly realised that they had no idea whether or not they had overpaid or underpaid – taxpayers rely on HMRC to work out their tax for them because it is so complex.  And if the taxman can’t get his sums right then how can we mere mortals possibly be expected to?  Our tax system is in desperate need of a very serious overhaul; we cannot continue with the current myriad of taxes, loopholes, credits and concessions.  It’s not just HMRC that needs to change, it’s the system; it needs to be simpler and more transparent.

Andrew Tyrie MP recently said the very integrity of the tax system is at risk, after MPs were told that HMRC employs badly trained staff who regularly give out the wrong advice or do not know what they are talking about.

The 2020 Tax Commission has important work to do and the Government must listen to those who are proposing radical change.  Unsatisfactory sticking plaster solutions can no longer hold together our tax system, real reform is needed.

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