Brown announces surprise Customs and Revenue merger

Thursday, 18 March 2004 12:00 AM

Chancellor Gordon Brown announced yesterday that Customs and Excise will merge with the Inland Revenue.

The move, part of the chancellor's annual Budget will create a single tax collection agency.

The merger will mean 10,500 jobs will be lost from the combined body and a further 3,500 will be redeployed.

The government hopes the proposals will result in huge savings on administration and help combat inherent problems in the tax system, such as evasion of duty.

The full details of the new department are not yet known, despite the publication of a 184-page review by Gus O'Donnell, permanent secretary at the Treasury.

The new body, which will employ around 100,000 workers, will inherit a series of complex and diverse computer systems. In the future businesses may be able to provide just one lot of information for both customs and VAT.

Customs and Excise has been under its current name since 1909, although much of its structure dates back 300 years, while the Inland Revenue's main duty remains the collection of income tax, first announced in 1798.

The government announced last month that the investigative arm of Customs and Excise would become part of the new Serious Organised Crime Agency.

The Public and Commercial Services Union had been expecting the merger of the Inland Revenue and Customs and Excise, but the decision to axe thousands of jobs came as a shock.

Mark Serwotka, the union's general secretary, said: "The manner in which these cuts were announced will do nothing to boost the morale of hard-working public servants who provide vital services to people from cradle to the grave. It's a case of a day of the long knives for public servants across the UK and we will are seeking an urgent meeting with ministers."

Civil servants also today have to come to terms with plans to shift 20,000 jobs from London and the South East and the loss of 54,000 existing jobs in the Inland Revenue, Customs and Excise and the Department for Work and Pensions.

The chancellor's ambitious plans, all intended to take place by 2008, include moves out of London for staff from the Revenue and Customs, PAYE, the Office for National Statistics, The Ministry of Defence, the Department for Constitutional Affairs, the Department for Environment, Food and Rural Affairs, the Department of Health, the Passport Office, Child Support Agency, Disability Benefit Directorate, Jobcentre Plus and the Foreign Office.

The Home Office will be merging the Prison Service and the National Probation Directorate headquarters, enabling 1,800 posts to be moved from London to a new headquarters outside the south-east.

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