Q101 Mr Davidson: Is there any problem about giving the NAO access to that?
Mr Morse: I cannot see how I can do it otherwise.
Mr Friedlos: I have already given an assurance here that we are committed to providing more information.
Mr Morse: I am not denying that.
Q102 Mr Davidson: I am just trying to be clear. You mention you need access and I am just asking, in the limited time I have available to ask questions, whether or not that is a difficulty for you.
Mr Friedlos: It is not a difficulty.
Q103 Mr Davidson: Fine. So we should in due course get something back clarifying all that for us.
Mr Morse: We will put something together in cooperation with HMRC.
Q104 Chairman: That must be done promptly before we publish our report.
Mr Friedlos: Yes; agreed.10
Q105 Mr Davidson: May I seek clarification? A question has also been asked about whether you had ever been asked about bringing the properties back to the UK and you said you had never been asked. Can you just clarify that for me? If the property ownership is brought back to the UK, does that then negate the tax advantage or is there a different way of doing it. I did not quite understand the significance of bringing the properties back to the UK. Can you clarify that for me?
Mr Friedlos: Yes. If the properties were brought back to the UK it would negate the £55 million tax advantage which we have just been discussing.
Q106 Mr Davidson: If you did that, you would seek to renegotiate the contract to bump the price up.
Mr Friedlos: We would need some compensation for that benefit being given up.
Q107 Mr Davidson: That is the same thing basically, is it not? That is helpful. To what extent is this company a bit like the Royal Bank of Scotland in that it is too big to fail? If you are negotiating with it and they come to you and say "Look, things are hard, you have to be a bit softer on us because otherwise we will be pushed into bankruptcy and then you will end up with all sorts of costs", is that an accurate representation of the position or do they have a bottomless pit of money and you can just hold them to the terms of the contract?
Ms Strathie: I can only speak about my experience on the work I have done since I have been in HMRC. I am absolutely clear that HMRC is not a soft touch here. I am clear that what we are asking for is no more than the contract entitles us to ask for. Mapeley is accepting that and the challenge. I do know broadly the cost were this to revert to us but I actually believe that there is much value to be extracted and I would not accept under any circumstances Mapeley saying they had real financial difficulty and expecting the taxpayer to help out if I did not have full visibility over finances.
Q108 Mr Davidson: They have refinanced themselves a couple of times, have they not, in one way or another so presumably they could do a bit of moving things around which would put them in a position as some of the building societies and banks did that meant they had to be bailed out.
Ms Strathie: We have not had to cross that bridge, which is good. I think you know from the business payment support service that HMRC put in place at the start of the recession that lots of companies have come to us for support in our time-to-pay arrangements. The law is pretty clear on all of this. We work with people to bring them into compliant regimes provided they are a viable business. We all know the history of the banks.
Q109 Mr Davidson: Yes, but there is a slight difference between bringing them into compliance in terms of being your customers, so to speak, as distinct from you being their customer.
Ms Strathie: Yes, but in the recession we recognised, particularly while we were dealing with the banks, that there are cash flow issues for business and we were doing our best to support. Mapeley is a business too. What I am saying is that I cannot see us being in a position where we would be looking for public money to bail Mapeley out. We would have to take on the costs and manage the risks according to the plans we have.
Q110 Mr Davidson: Mr Friedlos, what security can we feel that you will not come to HMRC in a little while and say that the market is tough and you cannot meet the terms of the contract? In terms of the way in which some of the deal was done at the beginning, we have heard suggestions that you were sharks which took advantage of the gullible to some extent. This was before Ms Strachie was there and no doubt you were dealing with other people from private schools and Oxbridge who were not aware of the ways of the world. How do we know that you are not going to be up to bad things later on?
Mr Friedlos: When we came to the departments at the outset of the contract, we settled some money in respect of errors in the data and additional services which we were being asked to provide and that was settled some years ago. We do not expect to come back to the Government asking for any more money outside what we are entitled to under the contract. We have looked at the Department's vacation plans.
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