Ministerial statement on economics and the GAAR (extract from column by Adrian Rudd of PricewaterhouseCoopers, Tax Adviser’s representative on the Technical Committee, published in the May 2001 issue of Tax Adviser). Ministerial statements
The Institute asked its Parliamentary adviser, Quentin Davies MP, for help in tracing written replies to queries raised during the proceedings of the Finance Act 2000. It is common practice for Ministers to undertake to deal by letter with issues raised during Finance Bill proceedings, and for the letters to be lodged in the House of Commons library. However in previous years this information has not been published.
Mr Davies commented: ‘It does seem to me absolutely essential that the public should have ready access to any such ministerial answers which may, under Pepper v Hart , have a decisive bearing on the interpretation give to aspects of tax law, and I think it really scandalous that these answers have been in practice entirely inaccessible up until now. I should certainly be delighted to ask the Library to monitor future proceedings of the Finance Bill to make sure that we can identify such occasions in the future.’
The House of Commons library provided four separate items relating to the Finance Act 2000, which are set out below.
Ministerial statements 4: Economics and the GAAR
Lord McIntosh of Haringey wrote to Lord Simon of Glaisdale on 26 October 2000 as follows:
‘It is our policy not to give a running commentary on the United Kingdom’s position within economic cycles. We prefer instead to publish such information at the time of the Budget and the Pre-Budget Reports. The Budget stated that the economy was judged to have been on trend in the first half of 1997 and gave a provisional view of developments since then. Updated information on the Government’s estimate of the current economic cycle will be provided in the forthcoming Pre-Budget Report.
‘As I made clear in the debate, the Government is well aware of the importance of balanced economic growth across all regions of England, Scotland and Wales. With rising prosperity comes the opportunity further to reduce regional economic imbalance and deliver full employment not just in one region, but in every region and city of our country. Since May 1997, the number of people in employment has increased by over 1 million. Whereas the recovery of the late 1980s was largely confined to the South of England, this time every region in Britain has seen sharply falling unemployment and rising levels of vacancies. Sustained economic growth has also made possible increases in public expenditure that will help all regions and the communities within them.
‘The Inland Revenue was asked to look at a General Anti-Avoidance Rule by the Chancellor of the Exchequer. The work was completed by Inland Revenue civil servants in the normal course of their duties and in consultation with ministers, rather than by a formal body. A consultation paper on a General Anti-Avoidance Rule was issued on 5 October 1998, requesting responses by 31 December 1998.
‘The enclosed note seeks to answer your specific queries …
1. Who were the representatives of business?
The Inland Revenue received 106 representations 15 of which were made in confidence … The remaining 91 … were from associations, institutions, companies, professional firms, academics and individuals.
2. Did institutional representatives (CBI, FSB and IoD) make representations.
3. Did any individual or representatives of the institutions give evidence to the IR committee in response to their consultative document?
Yes. In addition to the written representations, the Inland Revenue held meetings with a number of representative bodies while the consultation paper was being prepared. These included the CBI, the Chartered Institute of Taxation, and the Law Society, the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland. These meetings allowed the Revenue to take informal soundings; formal evidence was not taken … ‘
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May 2001 by