HC Deb 12 February 2004 vol 417 cc1563-4
22. Miss Anne McIntosh (Vale of York) (Con)

What activities the Serious Fraud Office is undertaking in relation to Parmalat. [154531]

The Solicitor-General (Ms Harriet Harman)

For operational reasons, the SFO cannot confirm or deny whether this matter has been referred to it.

Miss McIntosh

That response is a little like the answers that I get from the Advocate-General. Will the Solicitor-General answer the more general question about what precautions are in place to ensure that nothing like the Parmalat scandal could happen in this country? It would reassure many businesses, and many people affected by the scandal in Italy, to know that nothing similar could happen in this country.

The Solicitor-General

The focus of a number of Departments would bear on that, such as the Treasury, through the Inland Revenue, and the Department of my right hon. Friend the Secretary of State for Trade and Industry, through the auditing processes. There are a number of mechanisms to combat fraud in this country. We are not complacent; we aim to be robust in ensuring that tax is paid and accounts are audited and that, if corruption starts, with its dreadful effects that can cause loss of businesses, homes and people's livelihoods, it can be nipped in the bud rather than continue to grow.

Mr. John Burnett (Torridge and West Devon) (LD)

International financial scandals, such as Parmalat, invariably involve substantial amounts of tax evasion and tax fraud. Recent evidence of prosecution criminality in Customs and Excise has vindicated the decision to bring Customs and Excise under the aegis of the right hon. and learned Lady's Department. Even though the culture in the Inland Revenue is different, are there are any proposals to bring Inland Revenue prosecutors into her Department, not least to enable them to work more closely with the Serious Fraud Office?

The Solicitor-General

We have acted on the proposals, following the Butterfield review, to create a separate prosecution arm for Customs and Excise, and making it accountable to the Attorney-General. The hon. Gentleman is right to say that big scandals, such as the one we have just been discussing, often involve tax evasion and tax fraud. He asks whether we should undertake the same exercise at the Inland Revenue as with the Customs prosecutors. There is a different culture, but the Attorney-General and I frequently meet the Revenue prosecutors, and hear about their cases. There is a light-touch professional superintendence, although they work effectively in their home department—the Treasury. If there was evidence that that did not provide sufficient independence, and that professional standards were not sufficient, we should obviously have to look at the matter. However, that is not the case in relation to the Revenue.