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Finance Bill haste makes 'a travesty of democracy'

12th Apr 2005
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The Low Incomes Tax Reform Group has hit out at what it called the "travesty of democracy" made when Parliament passed more than 200 pages of Finance Bill measures in four hours of debate last week, and claimed that the "originators" of the legislation "do not understand everything that is happening in the real world".

Echoing the Tax Faculty's concerns about a lack of democratic "checks and balances", LITRG said: "'No taxation without representation' was one of the battlecries from which our democratic structures have evolved. But it has been seriously undermined in 2005."

LITRG warned of pitfalls likely to be hidden in the drafting. "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."

The group said in a statement: "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."

It added that "this ill-examined further lump of legislation" will add to difficulties faced by officials in the two revenue departments "struggling valiantly, but all too often without success, to keep on top of the further complexities which Parliament loads onto them".

LITRG pointed out that Parliament did not have to pass "this Finance Bill" before the general election. "The annual taxes had to be reimposed, but that could have been done in two pages," it said.

It continued: "The two-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."

The intention of Parliament
LITRG concluded: "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."

Andrew Goodall
Editor, TaxZone

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Replies (2)

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Richard Murphy
By Richard Murphy
12th Apr 2005 13:12

The Tax Justice Network would agree with the thrust of the argument from the LITRG.

We make much of the fact that taxation supports the deomcratic process. Its harder to argue this when the mother of parliaments is asked to pass legislation in such inappropriate fashion.

It is regrettable that past precedent on having a "holding" finance act creating no new initiatives could not have been followed on this occassion.

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By User deleted
13th Apr 2005 13:36

John, nice diatribe. I really fail to see what the European Parliament/whole Euro set up has to do with the fact that the incumbent Labour administration chose to sidestep democratic process.

My personal view is that this is the wrong forum for views such as those you have expressed. Pay your £150 and stand for election.

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