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Comment: The Finance Bill has its second reading today. Will parliamentary scrutiny be any better than usual?
The Government has made much of its new approach to tax policy. Much of the current Finance Bill was consulted upon as draft legislation in advance of the Budget; although that does not, of course, apply to some of the new anti-avoidance rules. That said, the effect should be that, for the most part, we avoid the need for desperate last minute changes to paper over the cracks in defective legislation or for that matter Government ministers refusing to accept sensible changes simply because Treasury and Revenue officials advising them have not really had an opportunity to consider them fully. We shall have to see whether or not the quality of debate in Standing Committee is improved. Let’s hope so.
One idea which had been sponsored by the Chartered Institute of Taxation to improve parliamentary scrutiny of Finance Bills is that of a Joint Committee for Taxation, along US lines, which would be available to advise MPs on technical aspects of legislation. So far that idea has not been taken up by the Government.
An alternative, perhaps less radical idea, may be to make use of some of the expertise that is already available within Parliament, particularly within the House of Lords. At present, the House of Lords' role is limited for constitutional reasons. However, the House of Lords Economic Affairs Sub-committee does prepare its own reports on some aspects of the Finance Bill after interviewing expert witnesses whether lawyers, accountants or representatives of HMRC and HM Treasury. The report is, however, produced in parallel to the current parliamentary process and so it is not available to MPs in advance of the consideration of the Bill by the House of Commons Treasury Select Committee. Given the changes to the parliamentary timetable, would it not be possible for the House of Lords Economic Affairs Sub-committee to compile a written report during the three month period for consultation on the draft legislation in advance of the Budget, which would then be available to MPs?
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26 April 2011
Author: Tax team
