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Rejoice! Only a fifth of government legislation is nonsense! (last year it was a quarter)

August 27, 2014

Great news today from the Regulatory Policy Committee, the independent scrutineers of Impact Assessments.  There has been an improvement in the number of Impact Assessments marked as “fit for purpose”, from 75-77% to 80%.

Yes, that’s right.  Instead of a quarter of the government’s legislation having an evidence base which is not fit for purpose, it’s now only one in five – rejoice!

Let’s take a step back and look at what this means, shall we?  First of all, what is an Impact Assessment?  It’s a document that sets out the reasoning behind the government making a piece of legislation, particularly what the costs and benefits will be, and whether there are any other impacts on, for example, equality, small businesses, carbon emissions and, coming soon (if we are to believe David Cameron)  impacts on families.  They are supposedly a key part of policy development, making sure that the only legislation which sees the light of day is based on robust evidence.  I say “supposedly” because in my experience they are also on occasions produced at the last minute, between the policy being finalised and the announcement seeing the light of day, solely to justify the actions being taken rather than as part of a judicious consideration of alternatives.  At their heart, though, Impact Assessments should show you that there’s a good reason for the government to take the action that it’s taking.

So why would a panel of independent experts find that the ones you were publishing were “not fit for purpose”?  Well, let’s look at a few examples, shall we?  How about the BIS attempt to change the Trades Unions’ register of members regulations, where they managed not to know what they were requiring unions to do, not to give a long enough consultation for the unions to talk to them about it, and not to work out how much it would all cost to implement.  No?

Well then, how about the Cabinet Office trying to consult on the proposal to introduce a register of lobbyists, where they managed to forget to explain why they were proposing the change in the first place, what options were available, whether there were any benefits from what they were proposing, oh, and to base their costs on a register of dental professionals that the RPC thought was “unclear how relevant”!

I’m sorry, but as a former Impact Assessment professional you have to allow me my moment of schadenfreude here.  There is a serious point, however, which is that by the time an Impact Assessment goes to the RPC for its opinion, the responsible Minister will have physically signed the form (Jo Swinson in the case of the TU register) if it’s a final IA, or will have approved the documents for issue if it’s a consultation (Oliver Letwin and Mark Harper for the Lobbyists consultation) so the IA is the place where “the rubber meets the road” – the place where the responsible Minister has to rely on his Civil Service to give him the facts.  You don’t expect him or her personally to investigate whether the numbers should be 42 or 43, but you do expect them to be able to be confident that when they sign a piece of paper saying it’s 42 they’re damned certain there’s an infrastructure in place that gives them assurance they’ve got the right figures in their hands.

It’s embarrassing to the Minister, then, to be found wanting by the RPC.  It’s embarrassing to the government to have its expertise found wanting by a panel it appointed to give it independent scrutiny.

And then sometimes they go ahead and just plain do it anyway.

 a red-rated ‘not-fit-for-purpose’ opinion does not mean the policy is flawed, but that the evidence as presented in the impact assessment is lacking. Decisions on whether to proceed with regulatory proposals following the publication of an RPC opinion are for ministers to take. 

So that’s all right, then.  The impact assessment shows you the rationale and evidence for a piece of regulatory legislation.  Around a fifth of them aren’t fit for purpose.  But then the government can go ahead and do what it likes anyway, regardless of whether there’s any evidence underpinning what it wants to do.

But what of tax changes, I hear you ask?

Hmmm… well, for tax changes the impact assessment is contained in the TIIN, the Tax Information and Impact Note.  How do I know?  Because David Gauke told Parliament it was, so by definition it must be true. But, oddly enough, the New Approach to Tax Policy Making somehow forgot to include external scrutiny of the evidence base for tax changes, so the TIINs don’t go to the RPC.  I’m a lot keener on the idea that they should now that I no longer work on them, of course.  Practical experience tells me it’s enough of a nightmare to get the book of TIINs out of the door in time for the Budget and the autumn statement, let alone having to wrangle them past an external scrutiny panel first.

It would be difficult to do, and inconvenient for the civil servants who have to do it, and expensive for the government (because they’d need shed-loads more people on the RPC and so they’d need to resource them better, not to mention they’d need a big spike in analyst resource to get the TIINs produced in time to get them to the RPC in time to get the Budget out of the door on time so they’d probably have to buy in some resource there, too…)  But those are project management problems, not issues of principle.

It would be difficult in terms of Budget secrecy, too – increase the number of people who know about a package of measures by the number of people needed to give them independent scrutiny and you of course increase the number of opportunities for things to go astray.  Again, though, a practical rather than a principle issue.

Is there a principle behind the lofty insistence that tax is different and special?

No, I don’t have an answer: it’s a genuine question.  Is there?

 

Posted in Bit of politics, Budget, HMRC, HMT, TIINs | Tagged , , | 1 Comment »

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More competitive, simpler, greener and fairer.

March 20, 2014

After the election, the Tories and the LibDems got together and agreed on a programme of what they would actually do together in government.  On taxes, they agreed their priorities were to make taxes simpler, fairer, greener and more competitive.

So how did yesterday’s Budget move them towards those objectives?

More competitive

Can we just kick this one into touch now please?  According to the back of my envelope, the budget is giving away £920 million next year on measures tagged with “investment and growth” (table 2.1) when, by the World Bank and Bloomberg‘s methodology we’re in the top ten places to do business and well placed in KPMG’s tax competitiveness survey.  So let’s say, yes, we’ve DONE this one, and stop throwing money at it?  Please?

Simpler

Is the Budget going to make taxes any simpler?  Well, pensions and savings maybe – insofar as big chunks of them won’t BE taxed.  But in general?  OOTLAR (the inelegantly named “Overview of Tax, Legislation and Rates” document) has only seven instances of use of the words “simple” or “simpler”:

  • In a reference to the revalorisation of the VAT registration limit, commenting that this and the “simpler” income tax cash basis will help SMEs
  • In talking about the processes banks and building societies already have in place for savings, in claiming the abolition of the starting rate for savers won’t have much of an impact on banks’ processes.
  • In the general measure to let governments give tax exemptions for future sporting events without having to go through the rigmarole of passing specific legislation like they did for the Olympics and the Champions League Finals.
  • In a claim that “Chargeable gains roll-over relief: reinvestment in intangible fixed asset”  (sic: what, only one?) “makes the tax system fairer and simpler by clarifying the current legislation.” Uhuh.
  • Twice in “Modernising the taxation of corporate debt and derivative contracts” where it is claimed that the change to de-grouping rules “supports the Government’s objective of establishing a simpler, more certain and more robust tax system”.  Well, I feel much better for that.  You?
  • In the change to the ISA rules, so you don’t have to decide whether it’s better to have a few quid in a cash ISA or a few more in a stocks and shares one.

I mean, I’ll give you the last one, and I appreciate there’s some stuff coming out of the OTS so I think on the whole I’ll mark this one as “some progress; more to be done”.

Greener

Stop laughing at the back!

The “green” elements of the tax system are mostly around fuel duty, and it’s coming up to an election year, so you couldn’t expect the government to carry on with any of “that green crap”, now, could you?  Section 2.27 et seq in the actual Budget document, under the heading for spending on “Energy and Environment” is just embarrassing: 140 million extra on flood defences, granted, and £200 million on potholes but 2.31, 2.32 and 2.33 are laughable.  The government “welcomes announcements”, “has agreed” someone else will “set out plans for how they will help”, and “welcomes announcements by the vast majority of suppliers…”

No.  Green measures are definitely marked “see me” in red ink.

Fairer 

The thing is, if you’ve got a bit of money, then it actually does seem like a fair budget.  You can earn a bit more and save a bit more without faffing about with tax, you can do more with your pension than buying a bog-standard annuity, and you’re not going to have to pay more for petrol and beer.

But what if you haven’t got a bit of money to start with?  What if you haven’t just not got £15,000 a year to save in an ISA but you haven’t even got £15,000 a year AT ALL?  What if you haven’t got a job, or haven’t got enough hours, or you’re on a zero hours contract or you have a disability or are a carer?

Well you’ll be under the cap.  Because while there’s no limit on the amount of money you can accumulate in profits or rents or inherited wealth, and no-one is going to tax you on the money you make just from having stuff that accumulates in value, not even when you die and pass it on in their silver spoons to your children.

But if you haven’t…

… if you haven’t, well, there’s going to be a fixed amount of money.  Fixed like a granite slab over the heads of the ordinary, poor or unlucky; regardless of how many of us there are, or what changes in circumstances might have pushed us under.  And once you’re under, well, the cap fixes the amount we can share out.  Let’s fight it out amongst themselves.   I warn you not to be ordinary.

Sorry George, but beer and bingo aren’t going to distract us from noticing.  Fairness – must try harder.

Posted in Bit of politics, Budget | Tagged , | Leave a Comment »

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Wizengamot

September 11, 2013

So I was at a meeting of the Wizenagemot yesterday…

Ah.  I probably need to step back a bit and explain?  You see, it’s my belief that the debate about tax is divided between two groups.  There are the tax professionals on the one hand – people like HMRC and HMT and accountants, tax specialist solicitors and barristers, tax specialists in large businesses and policy thinktanks and lobby groups.  People who understand that a painting can be “plant” and whether or not a jaffa cake is a biscuit.  Let’s call them the tax wizards.

And then there are the people who don’t understand that “there is no equity about a tax” but think that there ought to be some kind of principle of “fairness” involved.  People whose “idosyncratic and ill-informed” views about tax are “a joke to those who understand the subject”.  The tax prats .  The citizen stakeholders.  People who pay their taxes and don’t understand why everyone else doesn’t seem to have to follow the same rules.  The tax muggles.

Well, if you’re a tax muggle you may not be aware that there’s an active debate in the tax wizarding world about this thing called the Tax Gap, which is the difference between the tax that HMRC collects for us, and the tax that they ought to be able to collect if everyone paid their dues and no-one made any mistakes.  And you don’t have to be a wizard to understand that this gap is never going to be zero because, after all, nobody’s perfect, but everyone is clear that it ought to be as small as we can reasonably make it.

Ah.  And there’s the rub.  Because David Gauke, the Minister for Magic doesn’t think there’s much of a problem with the tax gap at all.  He told the meeting that the UK tax gap was “relatively small by international standards”.  (Does anyone have a source for this, by the way?)

He also told the meeting that he made “no apology” for HMRC’s staff and budget being reduced, which was a bit of a brick considering that the meeting had been called by ARC, the section of the FDA that represents senior officials in HMRC, and that their agenda was to explain that they thought they could make a big hole in the tax gap if they could just have a few more people and some decent treatment for their members.

The meeting was at Portcullis House (and isn’t THAT a fabulous building!  Wow!) and involved tax wizards from HMRC and ARC, the Exchequer Secretary, his Labour Shadow and the Chair of the backbench Lib Dem Treasury Committee, as well as Richard Miller from ActionAid.  It was chaired by Vanessa Houlder from the Financial Times and was extensively tweeted here (although not at the time – no signal inside Portcullis House).

I am not sure there was any great meeting of minds resulting from the event.  The politicians spoke to their briefs, the campaigners argued the tax gap is bigger than HMRC’s calculation, and I sat there wondering (a) what does it matter and (b) when was ARC going to get back to the “give us more resources” point?

What does it matter?  Well, everyone agrees there IS a tax gap.  Everyone agrees that it is a good thing to endeavour to keep the tax gap as small as feasible.  There is some broad agreement on what elements are included in the calculation of the tax gap so we know where to direct attention.  So what does it matter in practical terms whether underpaid corporation tax is around 3-4 billion or 12 billion?  Can we just agree that it’s either “shedloads” or “a fuckton” and that in either case we’d like some of it back, please?

Which takes me back to (b).  I was surprised, frankly, that ARC didn’t drive home their point a little more strongly.  When your Minister says he makes no apology for cutting your staff and resources, surely you exercise right of reply and say, “yes Minister, but” and then hit him with your stats?  The stats you’ve politely buried in the Notes to Editors to the press release linked in the bibliography to the polite paper you’ve put together for the meeting?  Because, you know, he won’t have read that far.  Even his staff are unlikely to have read that far.  So when you have him sitting two seats away from you, you pass him another cup of coffee and give him your elevator pitch: invest £312.3m in us and we’ll bring you in eight billion quid (£8,260m)

As Saint Sir Bob apparently never actually said “give us the fucking money!”

Yes, Minister?

 

 

 

 

[note: edited 16/9/13 to add a link to the FDA reporting of the event – first link in the article]

Posted in Bit of politics, HMRC | Tagged , , , , | 3 Comments »

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Transforming Legal Aid: consultation response

June 3, 2013

OK then – you have until midnight tomorrow (4th June) to reply to the government’s consultation on “transforming” legal aid.  Basically, so far as I can see, they want to cut the cost by moving to a US “public defender” type arrangement, where you don’t get to choose a lawyer and have them paid for, you get appointed a lawyer and you like it or lump it.  Oh, and you’re not allowed to change them.  Ugh!  Here’s what I sent:

This is an individual’s response to the consultation “Transforming Legal Aid: Delivering a more credible and efficient system”. It will also be published, with commentary, on my blog, http://tiintax.com.

1. General comments. The document is 157 pages long with 36 consultation questions attached and Chris Grayling describes the proposals set out in those pages as “bold but fair”. I query the “fairness” in asking people to absorb 157 pages of closely argued text with an “executive summary” which appears to summarise what the government would like to get out of the consultation, rather than being a summary of the actual content of the document.

2. The total savings projected from the change are £220 million a year. However the “savings” seem to me likely to undermine the fundamental principles of justice for a comparatively paltry sum (this on a day when the projected £100 million saving from the proposal to abolish pensioner winter fuel allowances are described as “not much more than one thousandth of the projected annual deficit in 2015.”) You do not appear to include a regulatory Impact Assessment with your proposals, summarising the cost/benefit analysis of making these changes. To me as an ordinary citizen, however, a saving of 0.2% of the projected deficit does not outweigh the possibility of being falsely imprisoned because of a mistaken accusation dealt with by a cut-price lawyer wanting me to plead guilty to keep down his costs.

3. When you are dealing with a subject which is key to the relationship between citizens and their government and as important as the criminal justice system the first question shouldn’t, surely, be about how to cut the costs by restricting the eligibility and scope of financial support but, rather, how to improve the system administratively to prevent vital services like criminal advocacy being cut. For example, there are administrative reforms which would greatly cut the costs of the legal system. I realise basic administrative competence isn’t a “sexy” subject likely to gain headlines, but making sure that prisoners are brought to the right court at the right time, that prosecutors have the right papers in front of them (and are in the right place at the right time) and that interpreters are available, competent and, again, in the right place would, surely, contribute greatly to the efficient administration of justice and are all matters where you could make substantial savings via administrative competence rather than by cutting services? Surely this is a proposal which would be actioned before any cuts to services are considered?

In answer to your specific questions:

1) Restricting the scope of legal aid for prison law
Q1. Do you agree with the proposal that criminal legal aid for prison law matters should be restricted to the proposed criteria? Please give reasons.
No. If a person in prison was dealing with public servants then I might be prepared to agree that their rights could be protected by recourse to a complaints and ombudsman system. However when someone has been deprived of their liberty and imprisoned in a privately-run prison where they become a profit-centre for an unaccountable company I think it is vital that they are able to access legal assistance.
2) Imposing a financial eligibility threshold in the Crown Court
Q2. Do you agree with the proposal to introduce a financial eligibility threshold on applications for legal aid in the Crown Court? Please give reasons.
No. See para 3.24 of the consultation! This basic “interest of justice” is not overturned by a temporary fiscal panic.
Q3. Do you agree that the proposed threshold is set an appropriate level? Please give reasons.
No. See answer 2 above.
3) Introducing a residence test
Q4. Do you agree with the proposed approach for limiting legal aid to those with a strong connection with the UK? Please give reasons.
No response
4) Paying for permission work in judicial review cases
Q5. Do you agree with the proposal that providers should only be paid for work carried out on an application for judicial review, including a request for reconsideration of the application at a hearing, the renewal hearing, or an onward permission appeal to the Court of Appeal, if permission is granted by the Court (but that reasonable disbursements should be payable in any event)? Please give reasons.
No. Judicial review is a vital way of enabling a citizen to challenge government overreaching its authority. There are already high financial barriers to pursuit of cases, and the fact that a proportion of cases were lost does not mean that arguing them was without merit. I would also like to see an impact assessment showing a cost/benefit analysis of this individual strand of the proposal – my suspicion is that it would not support the proposal.
5) Civil merits test – removing legal aid for borderline cases
Q6. Do you agree with the proposal that legal aid should be removed for all cases assessed as having “borderline” prospects of success? Please give reasons.
No. This takes the decision away from the courts – where such matters should be decided – into a quango having financial prospects as a major decision-making criterion.
Chapter Four: Introducing Competition in the Criminal Legal Aid Market
i) Scope of the new contract
Q7. Do you agree with the proposed scope of criminal legal aid services to be competed? Please give reasons.
No. Putting contracts out to tender does not favour “competition” – there is already competition, between small firms with specialist expertise in different types of law. What you are talking about with “tendering” is encouraging them to band together under the umbrella of a financing organisation and produce representation at the lowest possible cost with no consideration of value or quality. It is, frankly, an appalling idea.
Q8. Do you agree that, given the need to deliver further savings, a 17.5% reduction in the rates payable for those classes of work not determined by the price competition is reasonable? Please give reasons.
No! But please, if that’s a reasonable idea, let’s see all Members of Parliament receive a 17.5% reduction in their salaries and expenses and revert to the idea after three years of successful operation.
ii) Contract length
Q9. Do you agree with the proposal under the competition model that three years, with the possibility of extending the contract term by up to two further years and a provision for compensation in certain circumstances for early termination, is an appropriate length of contract? Please give reasons.
No response
iii) Geographical areas for the procurement and delivery of services
Q10. Do you agree with the proposal under the competition model that with the exception of London, Warwickshire/West Mercia and Avon and Somerset /Gloucestershire, procurement areas should be set by the current criminal justice system areas? Please give reasons.
No response
Q11. Do you agree with the proposal under the competition model to join the following criminal justice system areas: Warwickshire with West Mercia; and Gloucestershire with Avon and Somerset, to form two new procurement areas? Please give reasons.
No response
Q12. Do you agree with the proposal under the competition model that London should be divided into three procurement areas, aligned with the area boundaries used by the Crown Prosecution Service? Please give reasons.
No response
Q13. Do you agree with the proposal under the competition model that work tendered should be exclusively available to those who have won competitively tendered contracts within the applicable procurement areas? Please give reasons.
No response
iv) Number of contracts
Q14. Do you agree with the proposal under the competition model to vary the number of contracts in each procurement area? Please give reasons.
No response
Q15. Do you agree with the factors that we propose to take into consideration and are there any other factors that should to be taken into consideration in determining the appropriate number of contracts in each procurement area under the competition model? Please give reasons.
No response
vi) Contract value
Q16. Do you agree with the proposal under the competition model that work would be shared equally between providers in each procurement area? Please give reasons.
No response
vii) Client choice
Q17. Do you agree with the proposal under the competition model that clients would generally have no choice in the representative allocated to them at the outset? Please give reasons.
Absolutely not! It is an inquitous idea, that a citizen will be prosecuted by the state and defended by a cheapskate state-appointed lucky-dip lawyer with no right to choice!
viii) Case allocation
Q18. Which of the following police station case allocation methods should feature in the competition model? Please give reasons.
 Option 1(a) – cases allocated on a case by case basis  Option 1(b) – cases allocated based on the client’s day of month of birth  Option 1(c) – cases allocated based on the client’s surname initial  Option 2 – cases allocated to the provider on duty  Other
This is an appalling idea, but if (as I suspect) you go ahead with it anyway, then at least let the person allocated be random. So a duty rota system is preferable to one based on surname, and a day or month of birth option preferable to either – neither the police (by arresting someone when a firm perceived to be less competent was on duty) nor a provider (by avoiding taking surnames beginning with a particular letter because of a perceived racial bias) should be able to game the system, so far as it can be prevented.
Q19. Do you agree with the proposal under the competition model that for clients who cannot be represented by one of the contracted providers in the procurement area (for a reason agreed by the Legal Aid Agency or the Court), the client should be allocated to the next available nearest provider in a different procurement area? Please give reasons.
No response – I think I lost the will to live around this point in the condoc
Q20. Do you agree with the proposal under the competition model that clients would be required to stay with their allocated provider for the duration of the case, subject to exceptional circumstances? Please give reasons.
Good god, no! No matter how hostile, unhelpful, incompetent or just plain uninterested your state-appointed lawyer might be, you’d have to stick with them whatever? No!
ix) Remuneration
Q21. Do you agree with the following proposed remuneration mechanism under the competition model? Please give reasons.
 Block payment for all police station attendance work per provider per procurement area based on the historical volume in area and the bid price
 Fixed fee per provider per procurement area based on their bid price for magistrates’ court representation
 Fixed fee per provider per procurement area based on their bid price for Crown Court litigation (for cases where the pages of prosecution evidence does not exceed 500)
 Current graduated fee scheme for Crown Court litigation (for cases where the pages of prosecution evidence exceed 500 only) but at discounted rates as proposed by each provider in the procurement area
No response
Q22. Do you agree with the proposal under the competition model that applicants be required to include the cost of any travel and subsistence disbursements under each fixed fee and the graduated fee when submitting their bids? Please give reasons.
No response
x) Procurement process
Q23. Are there any other factors to be taken into consideration in designing the technical criteria for the Pre Qualification Questionnaire stage of the tendering process under the competition model? Please give reasons.
No response
Q24. Are there any other factors to be taken into consideration in designing the criteria against which to test the Delivery Plan submitted by applicants in response to the Invitation to Tender under the competition model? Please give reasons.
No response
Q25. Do you agree with the proposal under the competition model to impose a price cap for each fixed fee and graduated fee and to ask applicants to bid a price for each fixed fee and a discount on the graduated fee below the relevant price cap? Please give reasons.
No. How can you put a price on justice, before you even know what’s involved? What if you need expert witnesses, what if you need to bring in outside expertise. A price cap is an appalling idea.
Chapter Five: Reforming Fees in Criminal Legal Aid
1) Restructuring the Advocates’ Graduated Fee Scheme
Q26. Do you agree with the proposals to amend the Advocates’ Graduated Fee Scheme to:
 introduce a single harmonised basic fee, payable in all cases (other than those that attract a fixed fee), based on the current basic fee for a cracked trial;
No response
 reduce the initial daily attendance fee for trials by between approximately 20 and 30%;
How on earth do you justify reducing fees by 20-30%? What possible basis is there for this – are your figures plucked out of the air? Please see response to question 8 and come back to me when MPs have done it themselves for three or four years and
 taper rates so that a decreased fee would be payable for every additional day of trial?
Actually, you got me. That’s one that I actually think is in principle a reasonable idea. Well done you.
Please give reasons. Because once the research is done and the case is prepared, the actual number of days involved doesn’t add value… although of course conversely if the length of the trial is down to administrative incompetence on the part of the prosecution, then logically the fees should INCREASE rather than decrease, so as to discourage prosecutors from trying to game the system.
2) Reducing litigator and advocate fees in Very High Cost Cases (Crime)
Q27. Do you agree that Very High Cost Case (Crime) fees should be reduced by 30%? Please give reasons.
See response to question 26 point 2
Q28. Do you agree that the reduction should be applied to future work under current contracts as well as future contracts? Please give reasons.
No! Good grief, are you really saying there’s a 20-30% layer of fat in current pricing of legal work? Because I find that a bit improbable.
3) Reducing the use of multiple advocates
Q29. Do you agree with the proposals:
 to tighten the current criteria which inform the decision on allowing the use of multiple advocates;
No. There’s a basic fairness requirement. If the prosecution has two or three advocates, then the defence should be funded to a similar level.
 to develop a clearer requirement in the new litigation contracts that the litigation team must provide appropriate support to advocates in the Crown Court; and
 to take steps to ensure that they are applied more consistently and robustly in all cases by the Presiding Judges?
Please give reasons.
No: surely the state has all of the cards here. If we’re saying the citizen on the other side has to play by a set of cards dealt to them by the state, at least give them the same number from the same deck! Your proposals send the individual into a high stakes poker game with monopoly money.
Chapter Six: Reforming Fees in Civil Legal Aid
1) Reducing the fixed representation fees paid to solicitors in family cases covered by the Care Proceedings Graduated Fee Scheme:
Q30. Do you agree with the proposal that the public family law representation fee should be reduced by 10%? Please give reasons.
See question 8. No!
2) Harmonising fees paid to self-employed barristers with those paid to other advocates appearing in civil (non-family) proceedings
Q31. Do you agree with the proposal that fees for self-employed barristers appearing in civil (non-family) proceedings in the County Court and High Court should be harmonised with those for other advocates appearing in those courts. Please give reasons.
No: barristers get different fees for a reason (not least because they’re self employed businesses in their own right.)
3) Removing the uplift in the rate paid for immigration and asylum Upper Tribunal cases
Q32. Do you agree with the proposal that the higher legal aid civil fee rate, incorporating a 35% uplift payable in immigration and asylum Upper Tribunal appeals, should be abolished? Please give reasons.
No response
Chapter Seven: Expert Fees in Civil, Family, and Criminal Proceedings
Q33. Do you agree with the proposal that fees paid to experts should be reduced by 20%? Please give reasons.
No: see response to question 8
Chapter Eight: Equalities Impact
Q34. Do you agree that we have correctly identified the range of impacts under the proposals set out in this consultation paper? Please give reasons.
You have failed to consider the possibility of a person being allocated a lawyer who is of a different gender, ethnicity or other protected characteristic from their own and of the effect the lack of choice and lack of ability to change might have on the client/provider relationship. In very simple terms, if you are a woman and are allocated a misogynistic solicitor, tough!
Q35. Do you agree that we have correctly identified the extent of impacts under these proposals? Please give reasons.
As above. You do not appear to have considered the intangible elements – trust, support, confidence – vital to the relationship. A take-it-or-leave-it, no choice, no change service will leave people with a much lower degree of confidence that they are being treated fairly.
Q36. Are there forms of mitigation in relation to impacts that we have not considered?
An ability to exercise choice of advocate should be included in the proposals. If necessary you could prevent people “gaming” the system by allowing one change without reasons being given and a second change (perhaps at judges’ discretion) if a reason was put forward.
Regards

Wendy Bradley
http://tiintax.con

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Um… hello?

May 10, 2013

efficient secondary legislation and engagement with the public through the medium of consultation is, in my view, the very bedrock of an effective and inclusive parliamentary democracy.  (The Earl of Lytton, Hansard  11 March 2013 Column GC34)

 

Maybe I’ve just lost my google-fu, my ability to find stuff on the internet? I don’t know.  I’ve been busy with the day job (I’m a PhD student by day and a writer of science fiction and fantasy by night) so maybe I’ve taken my eye off the ball.  But it occurred to me lately that, as well as finishing off my responses to the consultation on closure of the HMRC enquiry centres (the consultation closes on 24th May and I’ve already blogged about it here, here and here.  Oh, and here.  Not to mention here.) I should also check out what other tax consultations are around and plan what work I’m going to do on this blog over the next few weeks and months.

Um… hello?

So there doesn’t seem to be a tax tracker on the HMT pages any more.  The Treasury has moved all its consultations over to the new GOV.UK website, and the links on the Treasury site now take you to the consultations search page on GOV.UK, here.

Which might be helpful, except that, at the time of writing, there are 991 documents under the “consultations” heading on that page, they include open consultations, closed consultations, and consultation responses (and there’s no way to filter by “open consultations”).  Oh, and they’re in date order – of the date they were published and not by the date which would actually be useful, ie the date that the consultation closes.  (Has anyone told the Secondary Legislation Scrutiny Committee? (see para 54 here))

Filtering this with “tax and revenue” as the topic brings up five documents, the enquiry centre closure consultation and four closed consultations.

Well OK then.  Filtering it again by department, brings up 87 documents under HMT, only three of which are open consultations. (Two on finance industry topics, the “special administration regime for payment and settlement systems”, and one on “opening up UK payments” which I may go back to, because from a cursory glance it looks to be about abolishing cheques) and – finally – a relevant one, yet another tweak to the REITs regime, the rules on Real Estate Investment Trusts.

Filtering it by department again but this time scrolling down to find HMRC brings up fifteen results.  Only one of those is an open consultation, and it’s our old friend “Supporting Customers Who Need Extra Help: A New Approach”, which is newspeak for “Closing the Enquiry Centres”

But look back at this time last year.  In April and May 2012 I was responding to a dozen open consultations resulting from Budget announcements and pointing out that there were no fewer than 21 formal consultations which were listed on the tracker as being due to open in May.

So where are the 2013 consultations?  Were there no tax changes announced in the 2013 Budget?  (They weren’t all consulted on in a fortnight via twitter while I wasn’t looking, were they???)

The HMRC Budget 2013 page says all consultations will be on the GOV.UK site.

So, um… hello?  Where are they?

 

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Language, Timothy!

March 4, 2013

Back to the Mail Online again today for the story about the top dozen UK companies that pay no tax.  Serendipitously, there’s some thoughtful material on the same subject from Robert Maas in the last issue of Taxation (behind a paywall, sorry) where he asks “Are organisations really dodging tax, or are they just following the rules?”

This brings me back to the language of tax; Maas makes some reasonable points

  • Amazon makes its UK sales through a Luxembourg subsidiary.  It has warehousing in the UK, but under the 1968 Double Taxation agreement with Luxembourg a warehouse doesn’t constitute a “permanent establishment” that would make the sales from that warehouse taxable in the UK.
  • Starbucks has its intellectual property in a Netherlands company (in other words the know-how of how to run a branch of Starbucks) and it franchises UK shops.  So the profits made by an individual franchise would be payable by the franchisee in the UK, but would be decreased by the amount it pays to Holland for the know-how.

but his conclusion – “Most of the so-called avoidance schemes that are being publicly criticised are not avoidance at all” is a bit more difficult if you’re not a tax expert.

The fact is that the person on the Clapham omnibus – the tax muggle, if you will – doesn’t care about the complexity of tax legislation but applies the “it’s not fair” test.  It doesn’t feel fair that I have spent £100 on books without leaving my chair and that a British postman has brought them right to my door, but because I bought them from Amazon instead of [insert name of non-Amazon book seller here.  There must still be one somewhere, right?] then the profits the seller made aren’t taxed here but in Luxembourg.

Similarly it feels wrong if I’m sitting in Sheffield drinking a caramel macchiatto and eating my red velvet cake but somehow the profits from selling them to me get taxed in Holland.

But if we talk about tax avoidance in these terms it seems to me we’re generating heat without light.  “It’s not the firms, it’s the system” yes, maybe – but where does that get us?  The interesting thing to me is the government’s ambition to make the UK a “competitive” tax system, to show that it’s “open for business”.  That’s where I can shrug and agree with Maas that it’s not necessarily a “fault” for a company to arrange its trade in a way that takes advantage of the “competitiveness” of the different tax regimes in different countries: the issue isn’t with the actions of the company but with the people who designed the system in which they operate.

Perhaps, though, the issue takes us back to the one which didn’t really get bottomed out in the PAC hearings – if the fault is in the way the government makes its tax legislation, then the whiff of something smelly comes from the involvement of the same big businesses that profit from “tax competitiveness” in designing the competing systems.  That’s why we shouldn’t have a revolving door between industry and civil service, and why we should have records of meetings between Ministers and civil servants and industry representatives.

And, while we’re at it, why we ought to have the Small Firms Impact Test back in the list of things that must be included in the work of policy development, rather than archived at the back of the bus and replaced by some meaningless warm words.

Posted in Bit of politics, Consultation, SFIT | Tagged , , , | 1 Comment »

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Consultations in hiding?

January 31, 2013

Did you know the Government Digital Service has a blog?  Well, yes, all right, a better question might be did you know there actually WAS a Government Digital Service…

Ahem… well, anyway their latest blog entry describes how they improve their services by using, amongst other things, remote user testing, or in plain English, by getting people to use their pages whilst logged on to some kind of key logging thing that lets them examine how people muddle through finding the stuff they want.  And what did they find?

Users did, however, struggle to find consultations on the site. Users didn’t understand where to start looking, or under what navigation heading it would be listed. This issue was also picked up in the face-to-face lab testing, so it was quickly addressed by the product team and a solution is now undergoing further testing.

(Pause for another round of the “told you so” dance)

Because, in case the Government Digital Service hadn’t already noticed, the House of Lords Secondary Legislation Scrutiny Committee have already asked for an urgent review of government consultation policy, and suggested (para 11) that a 21st Century government ought to be able to produce a single website listing open consultations in the order in which they close.

Is that the “solution” now undergoing “further testing”?  Somehow, I’m not holding my breath just yet.

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In which I am grumpy and middle aged about the government’s ability to manage the consultation process

January 28, 2013

Anything happening?

Have the Treasury updated the tax tracker since December 7th?

Erm… that’d be a “no“.

Has the government decided to follow the advice of the House of Lords Secondary Legislation Scrutiny Committee and appoint someone like the NAO to undertake an urgent review of their changes to consultation policy?

Erm… that’d be the people who accused them of “sneaking” their consultations out just before long holidays?  Unlikely.

If they DO decide to review the changes, are they planning on meeting the House of Lords suggested deadline of reporting by Easter?

“We believe that the process needs to be reviewed urgently.  We are calling for the review to be done by an independent organisation such as the National Audit Office, and for the outcome of the review to be published by Easter.”

Erm… given it’s practically the end of January now and Easter is in, what, 61 days (and that’s calendar days, not working days) I leave that question for discussion.  Please use one side of the paper only, and be careful to show your workings in full.

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One point one billion

January 9, 2013

The coalition government doesn’t like the additional income tax rate of 50% on people with incomes of more than £150,000 a year. It says that the previous government’s estimates of the yield were wrong and published a detailed paper reviewing the actual amounts raised, to support its argument that the rate should be reduced from April.

The detailed report is here and if you will be kind enough to turn to page 39 and look at table 5.3 you will see that the adjusted figure for yield in 2010/11 is £1.1 billion.

In other words, if I’m reading it right, the government says that the additional rate didn’t bring in the five or so billion that Labour had suggested, but it did bring in £1.1 billion.  The conclusion (paragraph 5.64 on page 45) agrees:

Although the estimates are subject to a wide range of uncertainty, they suggest that the underlying yield is much lower than originally forecast, possibly only raising £1 billion at most.

Now, there was some comment yesterday during the debate on the Welfare Uprating Bill, because the Impact Assessment hadn’t been published till a couple of hours before the debate, so the information in it couldn’t really be used to inform the discussion.

Let’s look at it now, shall we?  Here it is: and, oh look!  Here’s what it says about the yield (the amount of money the government will “save” by not uprating benefits to keep pace with inflation)

Overall, it is estimated that savings to the Government from up-rating certain benefits by 1 per cent rather than by the CPI inflation rate, will be around £1.1 bn in 2014/15 and £1.9bn in 2015/16 in cash terms.  The savings will continue into the future and gradually increase in cash terms.

Of course it’s not a straightforward comparison – if it were, would even this coalition think that spending £1.1 bn on tax breaks for those earning over £150k was so important they’d take £1.1bn off of people working in low paid jobs and earning tax credits to pay for it… would they?  The £1.1bn from the top rate tax is the adjusted estimated total yield from the tax and not the total estimated reduction in tax take due from reducing the rate.  But if you look here at the tax information and impact note for the rate change you’ll see that the government aren’t really sure what the effect of reducing the rate will be, which is of course entirely in tune with their argument that we aren’t really sure what the tax brings in in the first place.

The impact assessment, of course, is a tool of evidence-based policy-making, and on these documents the evidence looks a bit uncertain to me.  Is the argument made?  Time will tell.

But in cash terms, what we seem to be talking about is whether incentivising the 300,000 people who pay additional rate income tax by giving them a tax cut of five p in the pound for their income over 150k is more important – more useful to  society?  More likely to get the economy moving?  More just?  More fair?  More… civilised?  Than taking it from people on job seekers allowance because there are no jobs, or on working tax credit because the jobs that exist are low paid?  It seems to be a question of priorities rather than evidence.

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Tax simplification and better regulation

December 11, 2012

Does the use of “better regulation” tools like consultation and impact assessment promote a simpler tax system? (And, yes, I know it all depends what you mean by “simpler”, thanks)

Well, the coalition has four objectives for the tax system – they’re written into the Coalition Programme for Government, no less.  They  say (at item 29, page 30)

The Government believes that the tax system needs to be reformed to make it more competitive, simpler, greener and fairer

So I did a “quick and dirty” analysis of OLD (the “overview of legislation in draft”) published today on the Treasury site – yes, I know it’s on HMRC’s too, but a helpful twitter correspondent pointed out that HMT had it earlier. (Oh, and while I’m here: hint to the Treasury.  When you compile the TIINs into one document, you could add numbers instead of bullet points, so that we didn’t have to manually count them to realise there are tax information and impact notes for eighty-four measures in it.  And a decent editor could have cut out quite a few extraneous blank pages.  And added page numbers that were actual consecutive numbers instead of “A267”.  Ahem.  Yes, well.)

I had a quick look at the “policy objective” field for each of the 84 TIINs and tabulated which ones say they are aimed towards making the tax system

  • more competitive
  • simpler
  • greener
  • fairer

and the results are:

 More Competitive   2
 Simpler  10
 Greener    1
 Fairer  20
 Other  53
and, yes, I’m well aware that this adds up to 86 rather than 84, but there were two measures which plainly said that their policy objectives were to be fairer AND more competitive, and simpler AND fairer.
Like I say, it’s only a “quick and dirty” analysis and if you go through and do it for yourself you might come up with a slightly different answer, depending on how much inference you’re willing to put in.  I resisted inferring policy objectives this time around and stuck to straightforward statements.
Why does this matter?
Well there are some obvious questions – the “greenest government ever” ™ can only manage to come up with ONE tax change aimed at being green?  (It’s page A115 by the way: capital allowances for business cars, and it’s fair to say that it’s one where I actually did have to infer that the “environmental objective of reducing overall CO2 emissions” was a green objective.  It makes a difference of a fair few millions in tax and thousands in administrative burden, but produces an unquantified “indirect impact” of reduced carbon emissions.)
A remarkable number of measures are in the “other” category because the policy makers don’t seem to have answered the basic question of “why are we doing this?” which, yes, I recall from being involved in designing the TIIN process, is actually one of the considerations they’re supposedly taking into account.
Look at page A267, for example. Why are we cancelling the fuel duty increases?  Because “This measure will ease the burden on motorists and businesses”.  OK then.  That isn’t one of the objectives the coalition set itself, but you could, I suppose, say it’s a legitimate policy objective (even if it is startlingly anti-green in context!)
But what about this, from page A171:
This measure will encourage UK bingo promoters to grow their business and expand their customer base by amending bingo duty legislation to modify the restrictions and allow UK bingo promoters to link with overseas operators to offer ‘combined’ games of bingo
Are you seriously telling me that encouraging UK bingo promoters to “grow their business” is a legitimate objective of tax policy?  Or, if it is, is it not part of the overall narrative of making the UK a more “competitive” tax system?
But look at page A75 and tell me where there is an actual policy objective and what it might be:

Policy objective

The measure ensures that the switching of assets in a trust settled by a non-UK domiciled individual to investments in OEICs and AUTs is exempt from IHT charges. It also ensures that no tax will have arisen on those trusts which held OEICs or AUTs when the changes introduced in 2003 came into force.

I’ll have a closer look over the next few days at the ten measures aimed at making the system “simpler” – again, watch this space.

 

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