HC Deb 19 July 1995 vol 263 cc1254-6W
Mr. MacShane

To ask the Chancellor of the Exchequer what safeguards exist to ensure that tax details on people about to begin self-assessment tax returns do not fall into the hands of(a) General Motors, (b) Mr. Ross Perot and (c) American-based employees of the EDS computer company. [33524]

Mr. Jack

The Inland Revenue is responsible for the confidentiality of taxpayer records. Under the terms of its IT services contract with EDS Ltd. that company is required to maintain the Department's security and confidentiality standards while the Inland Revenue will monitor performance against those standards.

  • EDS does not process, handle or store taxpayer information outside the United Kingdom without the Department's consent;
  • EDS's employees and its agents and subcontractors sign the appropriate statutory undertaking not to disclose taxpayer information;
  • EDS reminds its employees, agents and subcontractors every six months of their obligations under the non-disclosure arrangements, and monitors compliance.

The Inland Revenue has the following safeguards built into the contract and will regularly inspect to ensure:

  • EDS reports to Inland Revenue all breaches of undertakings and the disciplinary action taken;
  • EDS maintains the security standards set out in the Inland Revenue's security manual;
  • EDS observes any departmental requirement not to use specified individuals on Revenue business;
  • EDS obtains security clearance for all personnel handling classified information; and
  • EDS ensures that all persons involved in delivering the Department's business are aware of their obligations under the Official Secrets Act 1911.

Legal sanctions—section 182 of Finance Act 1989, on conviction, a fine or imprisonment or both—apply to unauthorised disclosure of personal tax data whether for civil servant or private sector staff.

Mr. Ross Perot does not own EDS Ltd. It is a subsidiary of a US parent company, EDS Corporation, which is owned by General Motors.

Ms Quin

To ask the Chancellor of the Exchequer how many of the job losses envisaged as arising under the system of assessment will be redeployed to the fields of compliance and customer service under the change agreement signed between the Inland Revenue Staff Federation and the department of Inland Revenue; and if he will give the figures(a) in total and (b) by region and district. [36213]

Mr. Jack

When self-assessment is bedded down the Inland Revenue currently expects to employ around 3,000 fewer staff. This will be achieved only after implementation and is net after the expected deployment of staff into customer service and compliance work.

As the Inland Revenue gains a better understanding of the way self-assessment will work in practice, it is constantly reviewing those net savings. At present, the figures are not sufficiently developed to permit an estimate to be provided on the basis requested.

But in accordance with the change agreement, the Inland Revenue has offered to share the detail of that thinking with the main trade union involved—the Inland Revenue Staff Federation. The Inland Revenue remain committed to avoiding compulsory redundancies wherever possible.

Ms Quin

To ask the Chancellor of the Exchequer what additional costs in excess of original estimates have been incurred in connection with the introduction of self-assessment of taxation. [36219]

Mr. Jack

No additional costs have been incurred to date.

Ms Quin

To ask the Chancellor of the Exchequer if his Department expects to have identified every taxpayer to whom self-assessment will apply by the start date for the scheme; and if he will make a statement. [36214]

Mr. Jack

Yes, the Inland Revenue aims to identify all taxpayers to whom self-assessment will apply by the start date of its scheme.

Ms Quin

To ask the Chancellor of the Exchequer if he will make a statement as to how the system of self-assessment will comply with the(a) compliance, (b) cost efficiency, (c) customer services and (d) caring for staff elements of the taxpayer's charter. [36212]

Mr. Jack

Self-assessment will be a clearer, more straightforward system. It has been designed following extensive consultation so that taxpayers will find it straightforward to understand and easier to meet their obligations. This will reduce costs for both taxpayers and the Revenue, provide a better customer service and improve compliance. The new arrangements will enable the Inland Revenue to focus its staff more on skilled customer service and compliance activity and less on routine processing activity, thereby enriching jobs under self-assessment.

Ms Quin

To ask the Chancellor of the Exchequer (1) if he will publish details of the costs and savings involved in the introduction of self-assessment of taxation; [36217]

(2) if he will make a statement on the overall costs involved in the introduction of self-assessment. [36211]

Mr. Jack

I regret that it has not been possible to provide a substantive answer before the summer recess. I shall write to the hon. Member shortly and place a copy of the letter in the Library.

Ms Quin

To ask the Chancellor of the Exchequer what studies his Department has undertaken in the last five years into systems of self-assessment of taxation in other countries. [36211]

Mr. Jack

In preparing for self-assessment the Inland Revenue looked at the experience of the following countries:

  • Austria
  • Canada
  • Denmark
  • France
  • Germany
  • Ireland
  • Italy
  • USA

More recently, visits by officials have been made to both Australia and New Zealand. Lessons from the practical experience in these countries has been built into planning for the implementation of self-assessment in the United Kingdom.

Mr. Mullin

To ask the Chancellor of the Exchequer if he will list the contracts his Department has with the computer company EDS. [33174]

Mrs. Angela Knight

I regret that information prior to 1991 is not held centrally and could be obtained only at disproportionate cost. From 1991 onwards the Treasury has had only one contract with EDS for the supply and installation of a memory board.

Mr. MacShane

To ask the Chancellor of the Exchequer what is the expected payment from public funds to the US-based EDS computer firm for running the self-assessment tax system for each year from 1994 to 2005. [33523]

Mr. Jack

The current estimate of the payment form public funds to EDS for developing and running the self-assessment tax system for each year from 1994 to 2005 is, in constant prices:

  • 1994–95: £1 million
  • 1995–96: £15 million
  • 1996–97: £50 million
  • 1997–98: £45 million
  • 1998–99: onwards: £35 million

Mr. MacShane

To ask the Chancellor of the Exchequer on what basis the contract for providing the computer service to run the new tax self-assessment scheme was awarded to a foreign company. [33527]

Mr. Jack

The contract to provide all IT services to the Inland Revenue, not just for self-assessment, was awarded as a result of an open competition run under the EC and general agreement on tariffs and trade rules and advertised in the ECOfficial Journal. These rules open up to the bidding for Government contracts on a wide basis. The winner was EDS Ltd., a UK subsidiary of a US parent company, EDS Corporation. The EDS bid was evaluated as providing the Department with the best value for money with potential savings of £225 million over 10 years.

More information on the procurement is available in the National Audit Office report "Inland Revenue—Market Testing the Information Technology Office" which was published on 8 March 1995.