Examination of Witness (Questions 560
- 568)
THURSDAY 14 DECEMBER 2000
MR EDWARD
TROUP
560. Which takes us back to the experience and
coherence of the staff in the Treasury?
(Mr Troup) Correct.
Mr Davey
561. Do you not find the Finance Bill process
depressingly ineffective and, if you do, how would you reform
it?
(Mr Troup) I am not sure this is a question about
the Treasury.
562. It is parliamentary scrutiny of the Treasury
system.
(Mr Troup) The parliamentary scrutiny, yes, is very
depressing. I have to say I think the extent to which there has
been the opportunity to consult on the legislation before it was
put into the Finance Bill—
563. Occasionally.
(Mr Troup) Well, quite a lot actually, an awful lot
of the Finance Bill has been put out for consultation. I have
to say as a professional and someone who is involved with representative
bodies, our view is once it is in the Finance Bill you might as
well give up.
564. We are so bad at our jobs.
(Mr Troup) Our maximum input is discussing with Revenue
and Customs at the consultation stage before the Finance Bill,
before hopefully draft legislation is prepared in the first place
but then, once draft legislation is prepared, before it actually
goes in the Finance Bill, the Finance Bill process in Parliament
is such that as a practical matter it is almost impossible for
us to have any effect.
565. Why do you think the Treasury takes no
notice of Parliament? Does it not care what we think?
(Mr Troup) I think to a certain extent it is a reflection
of what I have just said about the political imperatives. Once
you have launched a Budget, it is very difficult politically for
a chancellor of any political persuasion to say "I am sorry
I got it wrong".
566. Most of the things that are in the Finance
Bill are technical tax measures which the general public do not
care about.
(Mr Troup) True.
567. If you look at any Finance Bill, 95 per
cent Joe Soap would not care a monkeys about.
(Mr Troup) I do not think this is an issue for the
Treasury, I think this is a political process issue. It is difficult
for chancellors to admit, even on the detail of the Finance Bill,
they have got it wrong. If you have got the detail wrong you might
have got something rather larger wrong. I would greatly prefer
the parliamentary process was more effective and, as you say,
there was a willingness to say "Look, we are right on the
policy . . ."—
568. How can we do that? How can we make that
happen? Are you saying our politicians' psyches need changing?
(Mr Troup) I think partly it is volume, is it not,
I think it is volume and complexity. The Members of the Standing
Committee on the Finance Bill are politicians who very rarely
come with a detailed knowledge of tax. The Finance Bill is almost
incomprehensible except to a few of us sad enough to actually
work in tax. To expect any political process to allow for real
debate on the content is quite hard to design, which is why I
think, although the position is far from satisfactory, putting
more out to consultation ahead of time is actually the better
result. If the politicians feel that they are being thereby excluded
from the detailed debate, it seems to me it is going to be very
difficult to rectify that unless they are prepared to really get
into the details of tax law. I would have thought it was better
for them to be reassured that process has gone on than necessarily
to try to amend the drafting as it goes through. There are some
other detailed points about the way that Parliamentary Counsel
operates independently from the Inland Revenue, and I have the
greatest respect for them, but they do sit in a different box
and they have their own pride which means that once they have
actually produced draft legislation it is very difficult for the
Inland Revenue to get them to effectively structurally alter it.
Once they have decided they are going to implement their instructions
from the Inland Revenue in a particular way and produce their
first draft, if the Inland Revenue said "actually, we thought
you were going to do it this way", it is bad luck, they very
rarely rewrite something completely because the Revenue thought
they should do it in a different way. There are a number of examples
on the statute book where that has happened. There are all sorts
of things wrong with tax policy making in this country and I am
certainly not laying them all at the door of the Treasury. The
way the Revenue and Parliamentary Counsel work is a separate,
relatively minor topic which ought to be addressed.
Chairman: Thank you very much indeed, Mr Troup,
we are most grateful to you.
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