A travesty of democracy

Published on 11 April 2005

"No taxation without representation" was one of the battlecries from which our democratic structures have evolved. But it has been seriously undermined in 2005.

Parliament has just passed into law the Finance Act 2005. It spent a total of 4 hours scrutinising over 200 pages of legislation. Our political masters thought that they could properly examine the Bill at close to a page a minute. Most of the rest of us would have difficulty in reading the Bill, let alone understanding it, at that speed.

Parliament might just possibly have been excused for so doing if it were the case that our taxation system was flawless, so that the new provisions could have been taken on trust. But week after week the Low Incomes Tax Reform Group comes across, and publicises, anomalies, unfairness and weaknesses. Officials in the two Revenue departments are struggling valiantly, but all too often without success, to keep on top of the further complexities which Parliament loads onto them. This ill-examined further lump of legislation will only add to their difficulties.

Parliament did not have to pass this Finance Bill before the election. The annual taxes had to be reimposed, but that could have been done in 2 pages. The 2 page Finance Act 1979 was passed immediately before the election of that year. It did all that was needed to ensure that the taxation system carried on effectively until the incoming Government could decide what it wanted to do and Parliament could examine a new Finance Bill. A similar procedure could, and should, have been followed this year.

It is no excuse to say that some of the legislation was to attack abusive avoidance and not relevant to the “ordinary citizen”. We have shown with the pre-owned assets avoidance rules, which came into force last week, that such avoidance legislation can catch unintended innocents.

The originators of the legislation, in their ivory towers, do not understand everything that is happening in the real world, so cannot anticipate the pitfalls hidden within the drafting. The debate in Parliament is the key opportunity to demonstrate such unfairness.

Getting changes made to badly drafted legislation, once it is enacted, is notoriously difficult, especially where the changes required do not prevent a leakage of funds to the Exchequer.

Over the years, when debating with the Revenue authorities or speaking with Ministers on the meaning of legislation, much play is made of the “intention of Parliament”.

Never again let that be heard.

(11-04-2005)

Contact Name: John Andrews (Tel: 0844 579 6700, Fax: 0844 579 6701)

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