The House of Lords Select Committee on the Constitution has published a report on preparing legislation. While not tax-specific many of its recommendations relate to tax legislation and it quotes CIOT evidence in a number of places.
The CIOT evidence drew heavily on work done for the Better Budgets report that we issued earlier this year in conjunction with the Institute for Fiscal Studies and the Institute for Government.
One area where the CIOT’s evidence is cited by the Committee is on early stage consultation. The report states:
“We recognise that there will be times when the Government’s path is already set—an obvious example being a policy that has been detailed in a manifesto—but early consultation should leave open the possibility of departments exploring alternative ways to achieve their policy goals. As the Chartered Institute for Taxation told us: “The result of starting consultations at too late a stage, with the central proposal already decided upon, is that other routes to achieve the objective more effectively are excluded, and also that unforeseen consequences can only be raised by outsiders after the government is committed to a course of action … Tax technical people often feel that they are in a damage limitation exercise.””
Another area where CIOT is cited is on the volume and complexity of legislation. The report states:
“Likewise, the Chartered Institute of Taxation noted that “The quality of Tax Information and Impact Notes (TIINs) is felt by our members to have deteriorated.” They also expressed concerns about the legislation itself, drawing our attention to the increasing volume and complexity of tax legislation and adding specifically that: “One factor that makes tax law less clear than it might be is inconsistency of terms and definitions used in legislation. Terms such as ‘dwelling’ and ‘residential property’, for example, are defined differently for different taxes and sometimes even in relation to different sections of law relating to the same tax.””
The report also notes that:
“The Chartered Institute of Taxation suggested publishing departmental instructions provided to the Office of Parliamentary Counsel as a way of clarifying the “intention” behind tax legislation.”
The 32 recommendations in the report are divided into three areas - the policy development process; consultation and legislative scrutiny; and the quality of legislation. Some of the more noteworthy recommendations are set out below.
The policy development process
- Government should routinely publish the evidence base for legislative proposals (CIOT’s submission cited on this)
- Civil servants have a duty to ensure that ministers are aware of any relevant evidence—even when that might be politically inconvenient
- While recognising the value of piloting, the Committee believes it would ensure a more consistent approach if the Government were to set out guidance as to when piloting is appropriate or desirable
Consultation and legislative scrutiny
- Informal discussions with stakeholders are an important element of the policy development process. There should be early and sustained engagement with a wide range of stakeholders to capture a diversity of views (as indicated above, CIOT evidence was cited in relation to this)
- Six weeks should be considered a minimum feasible consultation period, save in exceptional circumstances (CIOT’s submission cited in this area)
- Government departments should normally consult a wide range of stakeholders on the drafting of legislation. Departments must have sufficient resource and expertise to ensure that they are not reliant on a narrow group of external stakeholders who may have a particular objective or interest in mind when contributing to the development of legislation
- Pre-legislative scrutiny (of Bills in draft) should be considered an integral part of the wider legislative process. This applies to technical bills as well as other legislation
- There is a case for greater resources to be made available for committees undertaking pre-legislative scrutiny, in order to facilitate a detailed legal, policy and financial examination of the proposals in a draft Bill and its associated documents, including impact assessments
The quality of legislation
- Concern about large bodies of law (including tax law) which are remarkably inaccessible and difficult for practitioners to comprehend, let alone the average citizen (as indicated above, CIOT evidence was cited in this area)
- Concern about the use of delegated powers. The Committee will return to this in more detail at a later stage of their inquiry
- Consolidation offers the possibility of cost savings and increased efficiency. The legislation.gov.uk website will, in effect, allow the law to be consolidated on a rolling basis in the future
- Parliamentary counsel have a duty to ensure that legislation introduced into Parliament meets their own criteria for ‘good law’, as well as ensuring that legislation is constitutionally appropriate (as indicated above, CIOT evidence was cited in this area)
- The Parliamentary Business and Legislation Cabinet Committee should consider the extent to which the scope of a bill will affect Parliament’s ability properly to scrutinise the legislation
- Creation of a legislative standards committee, either as a Joint Committee or as a Select Committee of the House of Lords, to assess, immediately after introduction and before second reading, the technical and procedural compliance of government bills with standards of best practice in bill preparation
The report, which was published on October 25th, covers the first of four stages in a large-scale inquiry the committee is conducting into the legislative process. Future reports will cover delegated powers, the passage of legislation through Parliament and what happens after Royal Assent.
CIOT Head of External Relations