HAVING been caught up in the students' protest in the City of London(which made me late for the Lexis Nexis Tax Journal conference), it made it all the more fascinating to see permanent secretary for tax Dave Hartnett's speech at said conference interrupted by UK Uncut protestors.
In the cold light of day, the Hartnett protest was good natured, and, similarly, the education protestors have every right to make their voices heard. Having minor disruptions is a small price we pay for the right to protest.
But, for me, I simply cannot agree with the Hartnett protestors and there are a few questions I would like UK Uncut to answer: first, how could it be in Hartnett's interests to allow big business to "get away" with it?
As I have said before, 99% of the population want to see big business paying its fair share. Call me naive, but surely HMRC wants this more than most? That is certainly what big business advisors, many themselves critical of Hartnett, would claim. And Hartnett is judged on his record of bringing money in. To let big business "get away with it" would be against his own interests in so many ways. His explanation that an error was responsible sounds far more convincing. A free lunch is not enough to make a top civil servant jeopardise his position. Hartnett could conceivably have been negligent in the whole affair, but it is highly unlikely he acted improperly.
Second, at a time when public services are being cut, and Home Secretary Theresa May called on the Border Agency boss to quit over the borders scandal, does UK Uncut really feel it is right to attack a public servant? Sure, protest against politicians and policies, but civil servants are bound by confidentiality, their minister's whim and are constantly in danger of being made scapegoats.
Finally, what would happen if he leaves? With the sad news about Dame Leslie Strathie having to leave for health reasons, there is less experience at the top. There have been two more commissioners appointed this week, one with tax experience. But if Hartnett leaves, there will again be one tax commissioner. It seems a terrible time to remove more tax knowledge at the top, and big business could find it even easier to reduce tax bills.
There are two major potential counterpoints to this. First, Hartnett must still be accountable for his performance. But his accountability is to Cabinet secretary Gus O'Donnell. This might not sound particularly satisfying, but it comes back to the fact that Hartnett is a public servant. His role is accountable to his line manager (previously Strathie) like any other job. O'Donnell has said he is happy with Hartnett's performance.
Secondly, and more importantly, HMRC as a department must be more accountable. The issues behind this are complicated. As a non-ministerial department, accountability lines are blurred. It is far more preferable that it remains so - otherwise we end up in the situation where politicians, who would have far more vested interests, are able to use the tax system to help friendly organisations and punish enemies,as Richard Nixon used it for.
But the accountability it currently has is not acceptable. It is up to Parliament to give it more accountability. O'Donnell this week said it would be strengthened, and it will be interesting to see how the government - namely, ministers and the civil service - intend this to happen.
A report in the Times today also suggested that the National Audit Office was considering asking the judiciary to look at the Vodafone and Goldman Sachs deals. If this were the case, then it is a welcome step to provide more accountability and if Hartnett was found to have acted improperly, he should leave. But it should also call into question the role of the NAO. It was only through good journalism that the deals came to light. Surely the NAO should have flagged up the errors more publicly?
UK Uncut's action was effective and, dare I say it, imaginative. But if it is targeted at civil servants, who cannot currently answer back effectively, then it does not sit well.
...Dave Hartnett has made anti-avoidance his route to the top. He has also created what some see as an integrity-free zone at the top of HMRC by promoting acolytes and easing out those who were not prepared to be cheerleaders for his willingness to do deals. He also made a point of taking a very high personal profile - higher than any previous tax official. So perhaps it is fair that he now reap the whirlwind.
Posted by: Neverwas, 11 Nov 2011 | 08:47
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