HMRC loses its grip on reality

Loss of contact with reality is a good way for the mind to cope with daily difficulties, according to a Canadian university professor on Radio Four last week.

Loss of contact with reality is a good way for the mind to cope with daily difficulties, according to a Canadian university professor on Radio Four last week.

Now we understand how ministers cope so blithely with being responsible for HM Revenue and Customs (HMRC).

It explains why the Paymaster General, Dawn Primarolo, was praising the department's handling of tax credits when it was responsible for hundreds of millions of pounds in overpayments. It also explains why another minister gave a bland assurance that all was well when he was asked in the House of Lords about a debacle over the introduction of the ERIC system for validating online employer tax returns.

The loss of contact between ministers and reality may make sound political sense: it's not playing the Parliamentary game for a party in power to tell the whole truth. No government ever does.

So we should not be surprised that HMRC is now apparently trying to discourage its directors from telling the whole truth at speaking engagements. The move comes after Steve Lamey, HMRC's CIO, highlighted a series of administrative failings of the department in the context of showing what needs to be done to put things right.

After Lamey's disclosures ministers had a discussion with David Varney, chairman of HMRC. Later Varney warned board members to be aware of politically sensitive items and topics when speaking in public. That is tantamount to a gag.

This is because nearly everyone in the UK is touched in some way by the taxman, so public disclosure of any significant failing could be branded politically sensitive.

A spokeswoman for HMRC explained that directors have simply been reminded of the need, when speaking in public, to "present what is said in such a way as to minimise the potential for misunderstanding or misinterpretation". In other words, they must not say anything that may be of interest either to MPs or to the press.

Perhaps one day a departmental minister will say in public: "In future we will admit our mistakes and tell everyone what we have learned so errors are not repeated. As we are a monopoly organisation, funded by taxpayers to whom we should be seen to be accountable, this is the least we can do for their benefit."

Then again, if we begin to believe that any minister will ever defy a centuries-old culture of defensiveness and secrecy perhaps we are losing touch with reality.

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