VIPs exempt in tax plans: Inland Revenue looks to contract-out letters to 20 million

THE TAX affairs of 'top people' will continue to be handled by a special high-security unit at the Inland Revenue, while the private business of more than 20 million other employees could be contracted out to secretarial agencies.

All communications from tax officers to the Royal Family, celebrities, peers, MPs and other VIPs will be processed by the special unit at Cardiff. Other letters could be typed by private companies.

The Inland Revenue last night refused to define 'VIPs' and 'celebrities', but did not deny that the special categories existed, or that they would continue to enjoy privileges.

Clive Brooke, general secretary of the Inland Revenue Staff Federation, which is protesting over the 'market-testing' of Revenue functions, said all taxpayers deserved the same protection afforded by the present 'in-house' system.

'If the Government argues that the introduction of private agencies will not affect confidentiality, why is it insisting that sensitive information concerning some individuals is only processed by civil servants? Clearly, the Government is trying to ensure that data is not supplied to the press or the public. I'm not sure here how Mr Major's classless society fits in. It seems to be another example of double standards and hypocrisy,' he said. The Government was taking an 'amazing' risk with the confidentiality of taxpayers' returns. The union is to demand an inquiry by the National Audit Office about the potential dangers.

Under the present proposals, the secretarial and typing function is the subject of bids from outside Whitehall, although the first such experiment in the South-west resulted in civil servants retaining the work. Mr Brooke said his members in the South-west had proven that, given the right resources, they could deliver value for money and confidentiality standards that the private sector could not match. An American group, EDS, has won the contract to run the Inland Revenue computer.

Mr Brooke said he had been invited to explain his concerns to some of the country's largest companies, including Marks & Spencer, British Gas and Thorn EMI, which together employ more than 150,000.

A spokeswoman for the Inland Revenue said the same standards of confidentiality would be maintained. 'We treat our taxpayers with the same level of care. We take the same trouble with our ordinary taxpayers as we do for an MP.' The proposals only concerned the processing of letters to taxpayers and did not affect tax assessments, which would continue to be the responsibility of Inland Revenue officials.