Andrew Hubbard

Written by: Andrew Hubbard

Andrew Hubbard


Does the Finance Bill get the scrutiny it deserves?

Imagine you are a keen new MP who has just been appointed to the committee scrutinising the Finance Bill. You want to show that you have done your homework so you decide to read the Bill all the way through before the first meeting. Because you are extra keen you also read the explanatory notes which are published alongside it. But how long would that take? 

I’ve been examining Finance Bills for more years than I care to remember but I have never actually timed myself so I sat down one evening this week and started to read. I didn’t rush but neither did I stop to try to understand anything – I simply ploughed on through. After half an hour I had got half way down page 23 and decided that I had suffered enough! 

There are 315 pages of actual text in the bill so at that rate had I lasted the course I would have been reading for just over six hours. I did a similar exercise with the explanatory notes and I estimate that it would have taken another 2 ½ hours.  So in total it would have taken me 8 ½ hours just to read through the material once. 

That’s bad enough, but what if I actually wanted to understand the legislation? That would have taken much longer. If I really wanted an A* grade I would have to get my head round clauses like this 'Until those regulations come into force 259N continues to have effect (other than for the purposes of making those regulations ) as if – (a) the amendment made by subsection (4) had not been made and the Taxation of Regulatory Capital Securities Regulations 2013 (SI 2013/3209) had not been revoked by paragraph 1 of Schedule 19 to this Act'. 

Would I really follow up those references to other acts and regulations? And the explanatory notes might not always help either. I scratched my head several times over 'An election in a return under Schedule 2 may be revoked by providing a new election in a normal tax return, but an election made in a normal tax return is irrevocable'.

Ok, I am having a bit of fun. Nobody would seriously expect MPs to read every word of the Bill. But there is a serious point here. Parliament has spent about 23 hours in total debating this year’s Bill (there is some more debate to come but the bulk of the work has now been done). Given how long it would take just to read through the Bill and its associated material is that really long enough for proper scrutiny? This year’s Bill contains a number of amendments, in such areas as corporate losses and salary sacrifice, to correct errors which were not picked up during the passage of the previous Bill. I would not be surprised if the same thing happens this time round. The merry-go-round never stops.

This is not a criticism of MPs. I am constantly impressed by the way in which members of the Finance Bill committee do try to get to the heart of the matters which they are discussing, but the fact remains that the level of scrutiny which tax legislation goes through is simply not adequate.  We have a much improved framework for consultation on tax policy but that is only of limited use if the legislation itself does not get the same level of scrutiny.

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