Overview: shades of Gray

by Nicholas Neveling

08 Mar 2007

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It has been a long wait, but after six months of playing the makeshift bridesmaid, Paul Gray has finally received the support of the Treasury and the prime minister’s office to formally step into the chairmanship of HM Revenue & Customs.

Gray is a popular figure: advisers like his open manner and willingness to solve problems, while civil servants see him as a one of their own and a stable leader.

His widespread popularity, however, is no guarantee of success in a department that has already seen one chairman fall on his sword. The people singing Gray’s praises now, could be the same ones twisting the knife in a few months time if things don’t go according to plan.

What’s happened?

Gray was appointed as acting HMRC chairman in September last year, when then incumbent Sir David Varney quit a year earlier than expected. He was, according to many Whitehall sources, not a popular chairman.

A private sector man, Sir David was disliked for his brittleness in parliamentary committees and, at HMRC, for the private sector structures he attempted to impose in Whitehall.

Sir David is believed not to have got on with paymaster-general Dawn Primarolo, and privately civil servants still mock the off-the-peg ‘McKinsey Matrix’ he brought in an attempt to define roles at HMRC.

The Varney regime has also been criticised for compromising good customer relations at the altar of the tough, no-nonsense approach advisers have complained about.

What’s going to happen?

This is the legacy Gray inherits ­ an organisation still trying to make sense of the 2005 merger and bitter over its previous chairman.

On top of that, it is not clear whether Gray is popular with Primarolo, with rumours circulating about a falling-out dating back to incidents when he was at the Department of Works & Pensions.

Then there are rumours that a restructuring of the Treasury and the Home Office, as well as the imminent appointment of a successor to Gordon Brown, could all add additional pressure to Gray’s position.

Gray has been hailed as the symbol of consistency, the leader with a steady hand who will stabilise the department after two years of gut-wrenching change. In an organisation rife with internal politicking and uncertainty, it will be a heavy burden to bear.

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