HC Deb 26 June 1980 vol 987 cc728-30
9. Mr. Alton

asked the Chancellor of the Exchequer if he intends to proceed with general computerisation of the income tax PAYE system; and if so, when.

Sir Geoffrey Howe

Proposals based on the Inland Revenue's detailed feasibility study of the computerisation of PAYE are under consideration. I hope to make an announcement in the near future.

Mr. Alton

Particularly in view of the evidence given by Sir William Pile to the General Purposes Sub-Committee of the old Expenditure Committee, can the Chancellor say whether the computerisation of the PAYE system will in any way limit Parliament's ability to make changes in the tax structure.

Sir G. Howe

Once it has been completed the computerisation programme is designed to handle the PAYE system without impeding the possibility of introducing new developments of a very wide variety. However, while the process is being implemented—during the period when one is changing from a manual to a computerised system—there are bound to be some constraints on changes to the tax system at that stage.

Mr. Ralph Howell

Will my right hon. and learned Friend delay any computerisation of the tax system until a complete reform of our taxation and welfare system has been carried out so that we no longer take such vast amounts of income tax from the lower paid, thus reducing the incentive to work?

Sir G. Howe

My hon. Friend raises an important and familiar point to which he has given a great deal of attention over the years. However, the fact is that reform on the scale that he has in mind would be a long and complicated process. If we were to wait for that to be completed, before we were to set in hand the process of computerisation, we would not be acting in a sensible way.

Dr. Bray

Can the Chancellor confirm his statement that the computerisation of the Inland Revenue is intended to facilitate changes in the structure, because my understanding is that the Inland Revenue's case is based solely on clerical savings? As this point is most important it ought to be confirmed. Secondly, can he assure the House that a British-made computer will be used by the Inland Revenue?

Sir G. Howe

Computer procurement is a matter for my right hon. Friend the Minister of State, Civil Service Department, and decisions on that project, including the method of procurement, have not yet been taken. The point raised by the hon. Gentleman is one which will certainly be borne in mind. As to the effect of computerisation, it is certainly intended to add to the versatility of the tax system, and that is one of the factors which have been borne in mind throughout the process of design.