UK Plans To Merge Inland Revenue And Customs With Treasury

The move is doubtless intended to promote a greater level of cooperation between the two agencies and their governmental masters, after the shortcomings of the present system were publicly exposed following the tax credit crisis and the Mapeley Steps affair.

However, critics argue that government will now be uncomfortably close to the tax collection process, leading to potential conflicts of interest and the temptation for ministers to delve into the tax affairs of private citizens and firms. "Better co-operation between the Inland Revenue and Customs seems to me pretty sensible," Howard Flight, shadow chief secretary to the Treasury, commented, adding: "But moving them into the Treasury is not."

"The Government has made the Bank of England independent because it didn't work when there was political interference," Mr Flight told the Telegraph, explaining that: "They are putting that principle into reverse with tax. An individual's tax affairs have long been a private matter and we have the right to expect they will remain that way."

By 2005, some 750 staff from both the Inland Revenue and Customs & Excise, including the agencies' respective chairmen, will have moved into offices in the rear portion of the Treasury building. "It makes sense for us to be there because that is where our ministers are," explained a Customs spokesman.

Meanwhile, a Treasury spokesman insisted that clear divisions between the departments will be put in place, and that tax records will remain confidential. "There will be measures in place. Apart from anything else we don't need access to individual tax records as the Treasury is concerned with setting the broad policy framework," he observed.