Belfast Telegraph

Don’t make civil servants carry the can for politicians

By Hamish McRae

Are you one of the six million and have you got your letter from the tax people yet?

And do they want more money from you, or have they charged you too much in the past?

For most of us the really upsetting thing about this whole sorry saga is the way it highlights the asymmetry in our relationship with the Government.

If they make a mistake and owe you money you eventually, after a lot of hounding, get your money back. But if you make a mistake — for example, paying late — you get charged interest and maybe even have to pay a penalty.

Yet however upset we may feel and however strong the temptation to blame the tax authorities, it is really important to learn the right lessons from this and not the wrong ones.

For the core of the problem is not that we have an incompetent civil service, nor that we have fundamental flaws in our tax system.

Rather it is that an inherently honourable government department has been undermined over a period of years by unreasonable demands from politicians.

It is too early to see the detail of what has gone wrong, but we know the broad outline of the story.

Two departments — the Inland Revenue and Customs & Excise — were merged in 2005 by the then chancellor Gordon Brown.

Merging was always going to be a nightmare. But this error was compounded by two further factors: staff was cut by close to 20% as a result of ‘efficiencies’, and offices were closed.

The fact that revenues repeatedly, year after year, fell short of Treasury estimates put further pressure on the civil servants.

Data was lost. Some staff took early retirement. Some resigned. HM Revenue & Customs reported the lowest levels of employee satisfaction of any Government department.

The good news is that we can learn from this and, if the new Government has any sense, it will do so now.

The most obvious lesson is that we have too complex a tax system. The PAYE mechanism functions well, but the more tortured the rules and exceptions imposed, the more likely it is that errors creep in. The additional complexity of the National Insurance system has made matters even worse.

A more general point follows. If you are cutting staff you must cut functions. So the aim of the Government should be to do less, but do it better.

Finally we need ministers that respect civil servants. You don't scream at them; you don't throw staplers at them. You don't make loyal officials come out of a meeting shaking because you lost your temper when they brought you unwelcome news.

If you treat people dreadfully, they are more liable to make mistakes. And, as we now see, HM Revenue & Customs have made a corker.

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