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Parliament should scrutinise tax measures more rigorously

11 January 2017

In giving his views to the Chartered Institute of Taxation (CIOT), the Institute for Fiscal Studies (IFS) and the Institute for Government (IFG) for their report on 'Better Budgets: Making Tax Policy Better', Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, has written to John Cullinane, Tax Policy Director of CIOT, about strengthening scrutiny of thTree Finance Bill.

Parliament needs more ammunition

Commenting on the correspondence, Mr Tyrie said:

"Parliament can and should do a more rigorous job of scrutinising the tax measures. A start can be made by bolstering the scrutiny of the Finance Bill measures in Committee.

It is astonishing that, alone among Committees formed to look at each piece of legislation, the Finance Bill Committee does not take evidence from those best informed about the subject, before beginning its detailed line-by-line consideration. This should be put right. 

Parliament needs more ammunition. Henceforth, the Finance Bill Committee should begin by holding several oral hearings with tax experts. If well organised, these can help flag up serious shortcomings in the legislation at the start, well before line-by-line scrutiny starts, giving the Government time to remedy defects. And, instead of clutching their heads in despair each time they see the latest Finance Bill, tax experts will acquire a duty to make sure crucial points are made in these sessions. 

Parliament also needs to arm itself in other ways. Among other things, Parliament should accumulate greater expertise among its staff in support of scrutiny of the annual Finance Bills. This is thin on the ground at the moment. In addition, Members of the Committee should have access to professional Parliamentary draftsmen. Dumping poor quality tax legislation on to the statute book on a quiet day in Committee should no longer be an option for the Government.  None of these proposals require changes to House of Commons procedure. All could improve scrutiny. The result should be a better tax system.

I look forward to seeing this timely work from CIOT, the Institute for Fiscal Studies and the Institute for Government."

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