Treasury Committee Chairman sets out tax scrutiny ideas

The letter was sent in December as a contribution to the project by CIOT, the Institute for Government and the Institute for Fiscal Studies to improve the tax policy making process, but has been published on the Committee’s website today. This project will culminate in a report - 'Better Budgets: Making Tax Policy Better' – which will be published on Monday 16th January.

In the letter Mr Tyrie proposes:

• The Finance Bill Committee should take oral evidence from relevant tax experts before commencing line-by-line scrutiny
• The Finance Bill Committee have access to an expert parliamentary draftsman and improvements to support from House staff
• Reinstatement of HM Treasury's Tax Consultation Tracker
• More post-legislative scrutiny of tax measures by Parliament, potentially including the House of Lords

The full letter can be read here.

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."

The CIOT warmly welcomes Andrew Tyrie’s contribution in this area. Strengthening parliamentary scrutiny is a key aspect of improving the tax policy making process. As Chairman of the House of Commons Treasury Committee Mr Tyrie is in a uniquely influential position to help bring this about.

Our report and recommendations that we will put forward next week are intended to promote further debate. We look forward to continuing to engage with Mr Tyrie and the Treasury Committee as a whole over the months ahead, as well as with other interested parties, inside and outside Parliament, to move this agenda forward and improve the tax policy making process.

By George Crozier, CIOT Head of External Relations