Business warns of daunting task

Alistair Darling has recruited Mike Clasper, a senior industrialist, as the third chairman of the embattled Revenue & Customs since its creation in 2005.

Mr Clasper, who joins from Terra Firma, the private equity business, promised to strive for “a top quality and reliable experience” for all of the department’s users.

But unions and business groups warned he faced a daunting challenge in improving the Revenue’s tarnished reputation. It is under pressure to maximise revenues while struggling to cope with a demoralised workforce, the threat of strikes, a requirement to cut costs by 5 per cent a year in real terms, repeated information technology glitches, large-scale office closures and resistance from business to its aggressive stance against tax avoidance.

Mr Darling said “appointing someone of Mike’s calibre and experience is particularly important at this point in HMRC’s development”.

He follows Paul Gray, a respected civil servant who left after the Revenue’s embarrassing loss of the personal details of 25m child benefit claimants last autumn. Sir David Varney, a former Shell executive, was Mr Gray’s predecessor for two years until August 2006.

Mr Clasper, who will work a three-day week, will be responsible for the strategic direction of the organisation. The operations will be dealt with by the Revenue’s first chief executive, who has yet to be appointed.

Business leaders welcomed the latest attempt to infuse private sector expertise into the department. Richard Baron, of the Institute of Directors, said Mr Clasper’s appointment would give businesses “hope that there will be a new type of business awareness injected at the top”, although he was sceptical that this would solve the Revenue’s problems. He said Mr Clasper might follow the example of Sir Richard Broadbent, a former corporate financier who was chairman of Customs & Excise from 2000 to 2003 and who “made waves” by abolishing numerous committees. He said a priority would be ensuring the workability of the Revenue’s new management structure, which has been designed to improve accountability.

John Cridland, deputy director-general of the CBI employers’ group, welcomed Mr Clasper’s appointment, saying he had “a great track record”. He urged the Revenue to “increase the clarity of the tax system, and improve its relationship with big business by implementing the recommendations of the Varney Review, and extending improved administrative practices to businesses of all sizes where possible”.

Mr Clasper’s tasks include strengthening the department’s corporate governance and engaging with its stakeholders. John Andrews, of the Low Income Tax Reform Group, said a key role for Mr Clasper would be improving the Revenue’s poor record on dealing with vulnerable taxpayers and tax credit recipients. Restoring public trust in the Revenue, while rebuilding staff morale, is set to be a long haul, according to professional bodies and unions.

Frank Haskew, of the Institute of Chartered Accountants in England and Wales, said the programme to cut 24,000 of the 94,000 jobs at the Revenue had left a lot of staff “fearful of the future and pretty demoralised”. “It will be difficult to improve customer satisfaction and services. The priority will be to making sure it does not get worse . . . There is a lot of sympathy on the ground for HMRC being asked to do a lot more with a lot less.”

Brendan Barber, Trades Union Congress general-secretary, said: “This is not an easy time to become chair of HMRC. Ordinary taxpayers increasingly feel the system is skewed toward the super-rich and big companies, while in turn those who can afford to pay the most are mounting a noisy campaign for lower tax, threatening to up sticks and move elsewhere.”

The Public and Commercial Services Union said its members, who are due to negotiate a new pay deal this year, would be balloted on industrial action in the autumn unless the Treasury reconsidered its pay policy.

Terry Cook, president of the Association of Revenue and Customs which represents senior officials, warned that “a failure to deliver on pay in 2008 could have a significant impact on morale and lead to the loss of highly experienced staff to the private sector”.

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