On the money

There was, for example, a media frenzy a few weeks ago when a Home Office
official admitted ‘he had not the faintest idea’ how many illegal immigrants
there were in the UK. In other departments, however, examples of incompetence
pass almost without notice.

For example, Britain’s huge surge of exports in the first months of this year
is not a sign of economic competitiveness, but rather of the scale of the VAT
carousel fraud. Adjusted for that, exports were up 7% rather than 17%, but the
fraud itself has not provoked speculation at the level of efficiency of the tax
departments.

That in turn served as a reminder of comments made last year by an
information officer of HM Revenue & Customs. Speaking at a technology summit
– where he perhaps thought he could be frank – he described the chaotic state of
the Revenue’s outdated computer systems and suggested that as much as £50bn was
being lost each year through underpayment.

He also revealed that as many as 30 million letters a year were sent to the
wrong addresses and 48% of self assessment forms were processed incorrectly the
first time.

Talking to the press afterwards, he toned his comments down somewhat by
saying that any figures he had used had been ‘entirely illustrative’ and should
not be taken as ‘official estimates’.

Now any rational person would think that an admission that the tax system is
chaotic and ‘losing £50bn’ would be a much greater cause for concern than a
declaration that the immigration system is chaotic, if only because the former
affects far more people and businesses. But our emotion-driven media takes
little notice.

Anthony Hilton is finance editor of the Evening Standard