tiintax

On August 17th Richard Murphy and Jolyon Maugham published this blog entry headed “Labour needs to take tax seriously”.  (Richard is the accountant behind Tax Research UK and Jolyon is a tax QC).  And of course Labour does: all parties do.  But the passage which interested me was this:

We know that the Labour Party in opposition lacks the technical resource at the disposal of a sitting government. This affects profoundly its ability to make the right interventions and develop sound policy. It also has, to our knowledge, no Parliamentarians with a detailed technical knowledge or who communicate confidently in the field. Vitally, it has no retained advisers who are expert in tax.

Clearly all opposition parties lack the technical resource available to the government, because they do not have the resources of HMRC and the Treasury or another Department at their command.  I am not so confident that Richard and Jolyon are correct in the conclusions they seem to draw from this however: civil servants are required to develop and implement the ideas the government asks of them.  So behind the scenes they might advise ministers they are making, in the words of Sir Humphrey in Yes Minister, a “brave decision” and do their best to point out any pitfalls in what is proposed.  Nevertheless anyone who has worked on a Budget will also have worked on making some mad idea work as well as it can work once the advice to think again has been rejected.

Similarly different civil service cadres may have their own shopping list of pet policy ideas which they try to get into the “Budget possibles” list time and again…. but Ministers decide.  In other words, the development of sound policy does not necessarily require the technical resources of government, and more often than you think governments push forward their policy agendas in the teeth of their own technical advice.

The more interesting, to me, comment is the reference to the Labour party lacking “Parliamentarians with a detailed technical knowledge or who communicate confidently in the field.”  Yes; look at any Hansard report of a “debate” on any Finance Bill and you will see the level of discussion is absurdly poor.  I have long wondered why this is the case, particularly as the last few years of my own Revenue career were devoted to producing the documents which would allow parliamentarians to debate the proposals they were being asked to implement on a level playing field with Ministers.

The whole purpose of the “better regulation” agenda is to produce fewer, better regulatory burdens on business by requiring policy makers to consult before their introduction and publish cost/benefit analysis to enable a considered decision to be made of whether a regulation is proportionate and effective.  Tax has never quite fitted into this framework (is a tax also a regulation?  discuss, using both sides of the paper) but the “new approach to tax policy making” comes from a better regulation perspective.  In other words, when MPs debate tax changes, they have available to them background documents which should set out, in plain English, why the change is desirable, what it is designed to achieve, how much it will cost or raise in tax and how much it will cost to administer and collect.  If they cannot achieve a reasoned debate under those circumstances, then perhaps a “detailed technical knowledge” isn’t going to help much either?

To me, the real question is at heart the one I have posed in this blog time and again.  How are we to include the tax muggles in the tax conversation?  It is of little use to say that one side of the debate has more tax wizards than the other.  The analogy is a good one, I think.  If detailed technical knowledge of tax is considered as an arcane magical power (almost as if, like Rowling’s magic, some people are just born with it but they are all trained in the same schools) then the question isn’t whether Dumbledore or Voldemort will prevail.  (You may, of course, see the Dark Arts emanating from whichever party you prefer!)

Imagine for a moment that Rowling’s magic were real.  Would we, the muggle world, sit by and let Dumbledore and Voldemort’s forces duke it out and be grateful we weren’t involved?  Or would we, more likely, look for ways to uncover, understand, and neutralise the lot of them?

Nuke Hogsmeade?

The reaction of tax experts to (for example) tax justice campaigns seems to me to exist on that sort of level, as if the proposal weren’t to put trade unionists and civil society representatives on the Board of HMRC but to nuke the entire tax profession.

I wish Richard and Jolyon well with their suggestion that the Labour Party should take on some retained advisers who are expert in tax.  (I imagine they might want to apply for the posts: I know I would!)  But the real question to me is, how are we to involve the people who don’t understand tax but nevertheless have to pay it, and who depend on its collection to pay for services.  In my view, that’s where the tax conversation needs to go next.