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Dáil Éireann debate -
Tuesday, 13 Feb 1968

Vol. 232 No. 6

Finance (Miscellaneous Provisions) Bill, 1967: Committee Stage.


I move amendment No. 1:

To add a new subsection as follows:

"(3) The appeal commissioners shall be appointed by the Government and shall hold office during good behaviour."

The purpose of the amendment is to secure that another of the recommendations of the Commission on Income Taxation shall be carried into effect in this measure. The explanatory memorandum to this Bill states:

The section and section 3 implement recommendations of the Commission on Income Taxation to the effect that the Special Commissioners should be and appellate body only;

It does not, however, go on to implement the remainder of the recommendation relevant to this particular topic. In fact, the proposal in this Bill is in the teeth of the recommendation of the report. At paragraph 775 of the Report of the Commission on Income Taxation, page 243, we read:

The title "Special Commissioners" is not an apt one for an appellate body on income taxation, the adjective "Special" is not appropriate. We recommend that they should be designated "Appeal Commissioners";

To the extent that I have read the recommendation, this Bill carries the recommendation into effect. Not merely does it ignore the subsequent part of the recommendation but the provisions of this Bill are in the teeth of the remainder of the recommendation, which is that these Commissioners should be appointed by the Government, or by the Taoiseach, rather than by the Minister responsible for the Revenue Department.

The Bill provides that the Minister shall appoint persons to be Appeal Commissioners: that is in the teeth of the recommendation. My amendment seeks to secure that the recommendation shall be carried into effect. I directed attention to this omission in my speech on Second Reading: the Minister did not see fit to accept my proposition and said I was rather ungenerous in my approach as he had done what he was asked to do. He has not done what the Commission recommended should be done and what ought to be done in the interests of the general public.

These people who were known as Special Commissioners and, if my amendment is not accepted, who will henceforward be known as Appeal Commissioners, have a very serious duty to fulfil. They are the arbitrators between the taxpayer and the Revenue Commissioners through whom they are responsible to the Minister. They are the body responsible to the Minister for this purpose. As the matter stands, they are civil servants. They are part of the Department of Finance: they are servants of the Minister for Finance. The Minister for Finance now proposes to continue the old and, I think, inappropriate position that he should continue, as Minister for Finance, to appoint these people to perform these very onerous and very serious judicial duties which are imposed upon them by the Income Tax Acts and other laws. Under these Acts, these Appeal Commissioners, as they will now be known, have the duty of standing independently between the Minister for Finance, or the Revenue Commissioners, and the taxpayer.

When the taxpayer is assessed with an amount of duty which he thinks is unauthorised, he has the right of appeal to the Special Commissioners, the Appeal Commissioners as they will now be known. That is a very serious function which these people have to fulfil. It was not merely that the commission thought they should not be called "Special Commissioners" but they were of the view that, so far as possible, they should be kept apart from the Department of Finance for the very reason that they are acting in a judicial capacity—and I use the word "judicial" advisedly: I did not use the expression "quasi-judicial" which is often used in relation to these bodies. They are deciding issues on fact and law between the taxpayer and the Department of Finance. It is utterly wrong (1) that they should be appointed by the Minister for Finance and (2) that they should be under his control. That is the position at the moment and apparently it is intended to continue that position unless my amendment is accepted. They will be civil servants in the Department of Finance. They will be governed by the Civil Service Regulations Acts which deal with matters of this kind. They will be subject to the control of the Establishment Officer of the Department of Finance. They can be demoted, promoted or deprived of their salary or increments in accordance with the decisions of the Minister for Finance, the Establishment Officer, in the ordinary way in the Civil Service. That is utterly wrong. They should not be in that position. The Commission, recognising the very fundamental principle involved in this matter, recommended that they should be appointed by the Government or the Taoiseach rather than by the Minister responsible for the Revenue Department.

The Minister for Finance certainly gave me the impression, not merely in the explanatory memorandum but in the speech he made in this House and which is reported at column 1997, volume 230. No. 12, of the Official Report, that he was carrying out the recommendations of the Commission. He was carrying them out but he was keeping a fundamental control of them which is quite wrong, in principle. It is very important that the taxpayer should know that he has a body to which he can appeal which is independent so far as the law can achieve it. No taxpayer can have the confidence he ought to have in a body of this kind, dealing with these very fundamental rights, if he knows that the person to whom these people, who are hearing his case, are responsible is the very person who is trying to take from his pocket the money he is alleging before the tribunal is not payable. That is wrong in principle. I do not know why, because we got no reason on Second Reading, having accepted one part of this recommendation, the Minister declines to accept the other part and persists in securing, in so far as this Bill stands at present, that these people will be appointed by the Minister in the teeth of this recommendation.

I do not want to indulge in clichés or to repeat the maxim that justice must not alone be done but must be seen to be done. It is of the utmost importance that the taxpayers should have a feeling of confidence in these people. They cannot have that confidence if they know that, in a matter of vital importance to them, in every appeal they make—and every appeal that goes before these people is a matter of vital importance to the person making the appeal—they are appealing to one civil servant against another who is subject to control, as a civil servant, to the person who is trying to exact what the taxpayer thinks is an excess of income tax from him.

I am sorry I am not in a position to accept this amendment. I am quite satisfied that the situation that has prevailed all along—indeed, since the State was established—with regard to these Commissioners has worked well. I cannot find any compelling reason to change it. I think Deputy Costello exaggerates when he talks about these people being under the control of the Minister for Finance. Even when they were Special Commissioners, they were not under the control of the Minister for Finance in any way in the exercise of their functions as Special Commissioners. They are likely to be much less so when they are specifically designated to be appeals commissioners. Apart from the actual wording of the statutes there are traditions and precedents which have great bearing on these matters. It is preposterous to suggest or imagine that these Appeals Commissioners would be in any way influenced by the Minister for Finance in regard to any particular matter coming before them. It is just impossible to contemplate any such thing happening. I could not envisage any Minister for Finance attempting in any way to control these Commissioners in the execution of their duty or succeeding in any way if he did make any such ridiculous attempt. The whole purpose in establishing these Special Commissioners, as they were before, and Appeals Commissioners, as they are now to be, is to provide a relatively inexpensive lay tribunal where the differences between the taxpayer and the Revenue Commissioners can more or less informal atmosphere. That type of machinery has worked very well. I do not see any reason why it will not work even better in the future when the administrative functions which the Special Commissioners had up to now are taken away and the Appeals Commissioners will be a purely appellate body as suggested by the Income Tax Commission. I believe this is the right sort of machinery. Behind the Special Commissioners, even when they make a determination, there are always the courts. The taxpayer has the complete right and freedom to appeal to the courts if he is dissatisfied with the decision of the Special Commissioners, as they have been and the Appeals Commissioners as they will be in future.

The Minister has not given one single answer to any point I made on this matter. He has not given any reason why the recommendation of the Commission should not be accepted. He says tradition has grown up. If it has, let it be continued. Let these people have the further status of being a tribunal not subject to the Civil Service Regulation Acts. I assert that in the last Civil Service Regulation Act the Special Commissioners, as they were then known, are specifically mentioned as being under the control of the Minister for Finance. Why is there to be a continuation of that position? The Minister says there is power to appeal. There is power to appeal to the circuit court judge. There is also power to appeal by way of case stated from these very people.

I am satisfied that a taxpayer who knows that these people are under the control of the Minister for Finance— as they are in law whatever about fact —the person who will be hearing their appeal either by way of case stated or through the circuit court is the Minister for Finance who is making them pay what they think they ought not to pay. What I am saying is that the Minister has not given a single reason why these people should not have this independence over the person who is employing them so that the taxpayer will have confidence in this tribunal. I have appeared at this tribunal myself. I have never appeared before the present Special Commissioners, whoever they are at the moment, and I am not in any way commenting on them. But I was struck by the fact, appearing for the taxpayer at that time—it is some years ago now —that there seemed to be a close connection between the Special Commissioners and the income tax inspector appearing in the case against the taxpayer. They were interchanging notes, passing law books, interchanging precedents between each other in the presence of the taxpayer.

Your very appearance at the proceedings probably had something to do with that.

I hope so. That is why at least sometimes lawyers are better than accountants in matters of this kind. That is what I am objecting to. I cannot get any reason why these people should not get this particular status, this particular species of independence, which will be conferred on them by being—as the Commission recommended—appointed by the Government instead of by the Minister for Finance. There is no reason why they should not do it. There would be an added dignity given to this body, an added confidence from the taxpayer. It would secure the same traditions as the Minister says have been brought to bear on the structure and operation of these bodies—this would still continue—but you would have a better status, more confidence from the public and the matter would be more in accordance with general principle than it is at the moment. The Minister has not answered my questions at all. I hope the public will take some notice.

The adjective "preposterous" seems to be a little unsuitable on the Minister's lips in this context. This Bill ought to be in this House an uncontroversial Bill, a Bill for tidying up old anachronisms and bringing the law up to date in regard to a variety of matters relating to the Inland Revenue. From the Minister's point of view I cannot see there is any practical difference between what Deputy Costello proposes and what the Minister seeks to enact. It is highly likely if the Appeals Commissioners are appointment by the Government that the Government will be advised on their appointment by the Minister for Finance. It is equally true that their appointment by the Government as distinct from the Minister for Finance does give them a certain status and does create in the minds of the taxpayer and his advisers the feeling that this is genuinely an appellate body outside the jurisdiction of the Minister for Finance.

I said more than once in this House that my experience of the Revenue Commissioners and their proceedings, which is not inconsiderable, advising my own constituents or transacting business with them myself, is that I found the Revenue Commissioners, if they are met in a reasonable way, to be the friend rather than the foe of an honest taxpayer. But it is true that there do arise cases where, on the text of the law there can be a genuine difference as to the correct interpretation in a matter of complexity. It is true that it is right and proper in such circumstances there should be available to a taxpayer such an appellate procedure as the Minister himself has described—readily available and quasiinformal—so that expense may be spared. It is poor consolation to say to an individual taxpayer who is not satisfied with the adjudication of the Appeals Commissioners that he has access to the courts. I believe it was attributed to my own grandfather the aphorism or obiter dictum of the bench “The Ritz Hotel is open to everybody”. The Supreme Court is open to all, if they can afford to go there. But we are asking a benighted and unfortunate man to classify financial legislation of this House by testing it not only before the Special Commissioners but the circuit court and the appellate courts thereafter.

It is a matter of some circumstance when Deputy Costello, from the point of view of one who has never been a Minister for Finance but who has been a Taoiseach of an Irish Government and who has been an Attorney General of an Irish Government, and who out of professional experience as well as his experience in government and in this House, endorses the view expressed by the Commission established by the Minister or, indeed, established, I think, by Deputy Sweetman to examine income tax. They made this recommendation to which Deputy Costello attaches profound importance. It does not seem to command from Deputy Sweetman any wild enthusiasm, because I suspect that anybody who has ever been Minister for Finance is in a certain measure——

I am part of the trade union of Minister for Finance.

I know. I have seen many a decent man go into that establishment, and they always come out with chickenpox. They are very fortunate if they are not permanently marked afterwards with Department of Finance smallpox. What on earth difference does it make in practice? This is one of the occasions on which the Minister for Finance might say with perfect propriety: "While as Minister for Finance I think the present method is open to no conceivable abuse, the Commission take the view that this appointment should be made either by the Taoiseach or the Government or somebody other than the Minister for Finance, and this is the view to which Deputy Costello, standing on experience, attaches immense importance. In those circumstances I am glad to accept the amendment". We could, in fact, picture the Minister for Finance looking at the Ceann Comhairle and cynically adding: "Not that I think it will make the slightest difference, but if it pleases Deputy Costello." It is useful to do that from time to time.

I am always doing that.

I suggest the Minister should do it now.

I never get any thanks.

Who wants thanks in politics?

The politician who expects thanks is a fool.

I am beginning to suspect with some alarm that the rhinoceros hide which I have always attributed to the Minister for Finance is getting frayed in patches. He has become very sensitive recently. He has even now reached the stage when he expects us to lay laurel wreaths upon his brow and to bring him our thanks.

For clearing up his Taoiseach's mess.

It is not for the purpose of getting thanks but for the purpose of doing something useful I express the view, as an experienced parliamentarian, as a Member who had the privilege of serving under Deputy Costello in two Governments, that while I think it will not make a ha'porth of difference—because when such appointments are to be made they will be made on the advice of the Minister for Finance—the very fact that they have been appointed by the Taoiseach or the Government as distinct from the Minister does give them a certain status. There is a parallel to that. Is it not the Government that appoints the Attorney General?

No, the Taoiseach.

It is the other way around. It is the Taoiseach's prerogative to appoint the Attorney General and not the Government's.

He is part of the Executive.

I remember, shortly after the present Minister for Finance was born—I think Deputy Costello will remember—there was one hell of a row because the Government wanted to appoint the Attorney General and the Taoiseach stuck his heels in the ground and said it was his right to do so. Eventually the row was sorted out and the Taoiseach got his way.

That is why it is in the Constitution.

There is a distinction attached to the source of that officer's appointment. There is a certain significance in who makes an appointment whether it is the Taoiseach or the Government or one of the Minister's of State, and in accordance with the source of a person's tenure of office his status is, in substance, fixed. I do suggest to the Minister that if it makes no difference who the appellate commissioners are to be, there is a lot to be said for saying: "If Deputy Costello attaches so much importance to that part of the recommendation of the Commission, be it so. I do not give a fiddle-de-dee whether the Government appoint them or the Taoiseach appoints them so long as they are appointed."

Deputy Costello's amendment suggests that the Government shall make the appointment. I think he has offered the alternative that the Taoiseach would make the appointment. May I suggest to the Minister for Finance that he would think again and exercise a choice between the Government and the Taoiseach and accept Deputy Costello's amendment in principle.

I have a feeling we are making, if I may resort to a cliché, a mountain out of a molehill in this whole affair.

Hear, hear. Why make a mountain out of a molehill?

I am, in fact, in this piece of legislation meeting the gist of the desire of the Commission on Income Taxation, because what they were really concerned with was to make these people a fully appellate body and to remove from them any executive function which they would have in relation to the administration of the revenue code. We are doing that and, in doing that, I am quite certain we are meeting the essence of what the Commission wanted. I fully agree with Deputy Dillon that it is completely immaterial whether these people are appointed by the Government or by the Minister for Finance, because in either event, the decision will be taken at the Government table. If the Bill says the Minister for Finance shall make the appointment, the Minister for Finance will go into the Government and say: "I propose to appoint X and Y" and the Government will say "Yes".

No, not if the Minister appoints them.

But he will.

He may, but he need not When the Government appoint them he must——

In this Government we do not make an appointment of this kind without bringing it to the Government table.

I did not say that.

We have collective responsibility.

You would not appoint a ratcatcher without consulting the whole Party, but I did not say it.

We have collective responsibility and any appointment of any significance in this Administration for which a Minister is responsible is brought to the Government table.

Except the Appellate Commissioners.

They will be brought to the Government table.

Why not accept Deputy Costello's amendment?

Because it does not make the slightest difference.

It does, as an act of courtesy.

It is only a statutory obligation on the Minister for Finance to make these appointments. As regards their being members of the Civil Service, I am quite convinced it is a good thing that they should be members of the Civil Service. As I have explained, it is inconceivable—I withdraw the word "preposterous"—that any Minister for Finance in this country at any time would attempt—even attempt—to influence those people in the exercise of their appellate function.

There are other aspects of this matter. A person might perhaps unfortunately become addicted to drink and completely neglect his duties, and some sort of disciplinary action must be available in that situation. I think there is everything to be said for members of the Civil Service being eligible for superannuation and subject to discipline on matters other than the exercise of their appellate functions. As I say, I have no doubt that basically we are meeting the Commission's suggestion in the proposals we have put forward, and Deputy Costello is really straining the thing beyond the bounds of reasonableness in pushing this suggestion in the way in which he is doing.

The answer to the Minister's last remark—it can hardly be dignified as an argument— that I was straining the matter beyond the bounds of reasonableness is contained in the recommendation of the Commission itself. I shall read it again:

We recommend that they should be designated "Appeal Commissioners"; and also that they should be appointed by the Government, or the Taoiseach, rather than by the Minister responsible for the Revenue Department.

The Minister has not yet given one single reason for this. I should like if he would submit to this tribunal his observation that he is carrying out the gist of what they intend. I know the answer he would get.

Surely there is a dilemma in which the Minister must find himself? He has recommendations from the Commission which he has sought to meet generally as representing improvements in the law. This responsible Commission, the findings of which have commended themselves to the Minister as being reasonable, recommended two things. One was that the Special Commissioners should be Appellate Commissioners. I think that is the word they used. They go on to say that they should be appointed by the Government or the Taoiseach but not by the Minister for Finance. The Minister and I have agreed across the floor of the House——

This is irrelevant.

——that in practice that will not make any material difference from the point of view of the Minister for Finance for the time being. In the considered judgment of members of the Commission, there was substance in having a different system of appointment. Heretofore the Special Commissioners were appointed by the Minister for Finance and they say: "Let us mark them out as a genuine appellate body by calling them Appeals Commissioners." The other recommendation was that they should be appointed by someone other than the Minister.

This is irrelevant because if they are civil servants, no matter who appoints them, they can only be removed by the Government.

I take the view that there is no practical difference.

You only want to humour Deputy Costello.

I take that view, but I am not such a fool as to imagine that because I take the view that there is no practical difference, everyone else must share that view. If I were Minister for Finance and if I apprehended no danger in the existing situation, I would say: "If anyone else does, and it does not make any practical difference to change it so as to secure the confidence of all, all right, do it."

The Minister agrees that it does not make any practical difference from the point of view of the Minister for Finance, but he must see for himself that Deputy Costello did not ramble in here to hear himself speaking. He came in here because he attaches some importance to the recommendation. We must proceed on the assumption that the Income Taxation Commission set up by Deputy Sweetman, which sat for five or seven years, did not make a recommendation for fun. That Commission consisted of a pretty wide spectrum of men, most of them very practical people, but not all of them approached this question from the point of view of the Department of Finance. Is it not commonsense to suggest that if this Bill is to be considered in the atmosphere in which it should be considered—in common council trying to improve the machinery—the Minister should say: "Very well, if you attach importance to it and if it will make no practical difference. If it did make any practical difference I might have to resist it, but it does not make any practical difference, and if Deputy Costello thinks it does, that is fine by me."

Deputy Costello, members of the Commission, and a number of other persons who have not the specialised Department of Finance approach to this matter think it a matter of substance. If we are to conduct discussions of this kind in the right atmosphere, I suggest to the Minister that he has an admirable opportunity to do so now.

Two things are involved in the change in the Appeals Commissioners. The first is the removal from the Special Commissioners of any function whatsoever in connection with the administration and collection of revenue. That is being done. Apart from what is being done under this Bill, there has been a very big change in the method by which the Special Commissioners dealt with appeals over the years. Undoubtedly it used to be a fact, as Deputy Costello has related, that the Special Commissioners sat with the inspectors of taxes handling the matter. It used to be the regular practice that they would give the taxpayer the appearance of being complementary to each other in the submission of information, the borrowing of decisions, etc. That has gone for some time in my experience, and that is a very good job. I do not think anyone can make that allegation now. So, the first thing recommended by the Commission is being met by the Minister and I can accept it is being met and met correctly.

I do not think it really makes any difference whether the Minister for Finance or the Government makes the appointments, but I can see that other people could feel it would make an immense difference to them. I would feel very strongly against the appointment of the Appeals Commissioners by the Taoiseach. It should be the Minister for Finance or the Government, and I would not mind in the slightest which. I believe that any Minister for Finance who was going to make an appointment of this sort would discuss the matter with his colleagues.

In relation to what the Minister said about the dismissal of an Appeals Commissioner because he was not doing his work or was misbehaving himself, I do not believe any Minister for Finance, with any intelligence, would take that decision on his own without first bringing the matter before the Government. Indeed, I think Ministers for Finance, although they may have power in relation to more junior civil servants, realise there may be problems involved in asking a civil servant even to retire, much less dismiss him, and it would be entirely unlikely that Ministers for Finance would deal with that problem on their own. I have a sort of suspicion at the back of my mind that it is only the Government who have the right to dismiss a civil servant.

That is correct.

The case, therefore, the Minister made a moment ago would not hold water. The Minister for Finance merely brings the matter to the Government.

I said that.

I misheard the Minister.

The Minister said he has to take the initiative.

Obviously he has to take the initiative, but I would be very strongly opposed to appointments being made by the Taoiseach. In my view, the Commission were wrong in that respect. Appointments should be made by the Government as a whole. The Minister for Finance is part of that Government. If people feel very strongly about this it is better to have appointments made by the Government as a whole, and I do not think it is worth the Minister's while opposing it. Frankly, I do not believe that there is in this respect—I say, in this respect— any secret motive behind the Minister's decision.

It is the "ould disase".

I do not think it matters, but if certain people have such violent views on the subject, then the Minister would be unwise to prevent it appearing there was some queer machination behind the appointment of the Appeals Commissioners by the Minister for Finance of the day. In fact, there is not and it will be just the same whether it is written into the statute that the Government do it.

This seems to me to be an unreal discussion because it has been agreed—Deputy Dillon made it perfectly clear initially—that this is a question of a distinction without a difference.

I do not agree with that.

I think Deputy Dillon brought that out very strongly.

No, I did not. I said in practice it might make no difference from the point of view of the Minister for Finance, but it might make a great difference from the point of view of those who did not approach it from the point of view of the Minister for Finance.

Whose doubts are we worrying about?

The taxpayer's.

He will not appear. It is doubtful if he will appear on his own.

He very often does. The Deputy seems to know nothing about this tribunal.

He will undoubtedly take advice before he appears and anyone who is suspicious with regard to the method of appointment will, I presume, look into the relevant statutes to find out how and by whom these Commissioners are appointed. If he finds the appointment has been made by the Government and if he is of a suspicious disposition he will very quickly come to the conclusion that this business of being appointed by the Government is all eye-wash because the Government are influenced to such an extent by the dark designs of the Minister for Finance of the day. It is, I think, far better to come out into the open and say the man who will make the appointment is the man who will actually take the initiative with the Government and make his recommendations, recommendations which would almost certainly be accepted. We are only fooling ourselves if we say we are going to give any increased standing to these commissioners by saying they are appointed by the Government and not by the Minister for Finance. I agree that justice must not only be done but be seen to be done. That, in itself, is a much better argument for leaving the section as it stands because then it will be plain and above board that there is one man who takes the responsibility for making the appointment. Everyone will then know precisely where he or she stands. The fact the commissioner may have received his appointment from the Minister for Finance can hardly be said to prejudice the commissioner so much in favour of the Minister for Finance that he, the commissioner, will fail in his duties. It would be an extraordinarily unsuitable appointment if a man were appointed who was liable to do that. I am against this amendment. I am looking at it purely as a layman. I much prefer that an appointment like this should be to all intents and purposes the appointment of the Minister for Finance.

I do not think Deputy Booth's remarks call for any comment at all except to the extent that he overlooks, and the Minister likewise overlooks, that part of my amendment which specifies that they shall hold office during good behaviour. The amendment thereby assimilates the position of these appeals commissioners to that of judges who are appointed during good behaviour, and by the Government. Civil servants hold office at the will and pleasure of the Government. I want these appeals commissioners to be appointed in the same way as judges. The Minister has not answered that argument.

I think it is completely inappropriate.

Of course the Minister does. He cannot see anything.

I have appeared before these Special Commissioners very often indeed and the last consideration present to my mind was who appointed them. I am sure any accountant, solicitor or taxpayer who has been before them on appeal would confirm what I say. One regarded them as a completely appellate body, holding the scales equally between the taxpayer and the Revenue. They were Special Commissioners. Under this Bill they will have a new status. Time and again I have got decisions against the Revenue, acting in my professional capacity. On other occasions the Revenue Commissioners sustained their point of view. I am quite certain that this body will be a completely fair tribunal. That tradition has been firmly established and I cannot see that anything will upset it. I think everybody, having heard the discussion, will agree that it is perfectly legitimate to have these Appeals Commissioners appointed by the Minister for Finance. The only exception is Deputy Costello; he has some reservations.

No doubt and no reservation at all. I think it is wholly wrong.

Surely, if democracy is to prevail, the majority here, who think the proposal in the Bill perfectly valid, should have their way.

I have always suggested the hallmark of democratic government is not the brutal ignorance with which it uses its majority to steamroll legitimate representation and the habitual lack of respect in refusing to consider the rational view of any minority effectively expressed.

That is what we have been doing for the last hour—paying respect to a minority view.

There are rights of the majority as well as of the minority.

I understand the Minister's point of view but I do not understand Deputy Booth's point of view, and I want to restrain myself because his interventions excite me to a kind of scurrility which does not become me. Perhaps the Minister for Finance will have time to reflect during the period of the adjournment.

Anything to avoid scurrility.

Progress reported; Committee to sit again.