Truss to Treasury, Gauke draws pensions

Liz Truss
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Tom Herbert
Acting Editor
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The government’s latest reshuffle has seen former management accountant Liz Truss move to chief secretary to the Treasury, with previous incumbent David Gauke promoted to work and pensions secretary.

Accountants crying out for a steady hand on tax policy may take solace that one of their own has been appointed to the second most senior ministerial position in HM Treasury. However, Truss does take on a rather full inbox.

This includes resurrecting or amending a Finance Bill heavily trimmed in the rush to get it passed before the snap election, and big decisions regarding the government’s much-discussed Making Tax Digital plans: whether to scrap the quarterly reporting requirements of the scheme, keep the exemption thresholds at £10,000 and finalise the yet-to-be published consultations for partnerships and ‘complex’ businesses are among the most pressing issues.

A CIMA member, Truss spent 10 years working for both Shell and Cable & Wireless in executive and accountancy roles before winning the seat of South West Norfolk for the Conservatives in 2010.

Environment, food and rural affairs secretary from 2014 to 2016, Truss took over the Justice brief as the first female Lord Chancellor in the thousand-year history of the role. There she came under criticism for her lack of legal training (traditionally a requirement for the role), and for failing to defend three judges attacked by the media following the Article 50 court verdict.

Gauke pensioned off

Truss replaces David Gauke, who has been handed a promotion to the work and pensions department. Gauke, along with former financial secretary to the Treasury Jane Ellison, was seen as a leading figure in the government’s Making Tax Digital plans.

A former solicitor, Gauke moves to the DWP after seven years at the Treasury, first as Exchequer secretary in 2010, then financial secretary in 2014 and finally as chief secretary to the Treasury from July 2016 to June 2017.

During his time at the Treasury Gauke firmly nailed his colours to the mast of HMRC’s digital strategy, and in 2015 spoke with AccountingWEB about the need to move the tax system into the 21st century. At the time, errors were still cropping up from the real time information for PAYE system. This issue could continue to haunt Gauke in his new role, where he will be responsible for overseeing the universal credit system that is fed by HMRC’s data.

His personal website also claims he has played “an important role” in reducing tax avoidance and tax evasion.

Commenting on the appointment, former pensions minister and now Royal London director of policy Steve Webb said that there were few candidate in the Conservative Party who know more about pensions than Gauke.

“In his five years at the Treasury during the Coalition he played a key role in developing the detail of the pension freedoms and was a keen supporter of automatic enrolment,” said Webb. “I always found him to be knowledgeable and willing to engage in discussion and debate.

Webb went on to warn that the lack of an outright Conservative majority means radical reform in any area will be hard to get through Parliament, but we may see “sensible incremental changes” as a result of the auto enrolment review.

Other news and appointments

In a bruising night for the Conservatives, financial secretary to the Treasury Jane Ellison lost her seat in Battersea – a replacement has yet to be named at the time of writing.

The economic secretary to the Treasury, otherwise known as the city minister, Simon Kirby was also unseated, with a replacement yet to be announced.

For other accountants in the cabinet it was business as usual, with ICAEW member Justine Greening remaining as education secretary, while former KPMG tax manager Karen Bradley is still culture secretary. 

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13th Jun 2017 11:48

Overall very positive changes for those of us who think the MTD plans are bonkers.

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to mr. mischief
13th Jun 2017 14:08

Am I right only the bare minimum of legislation is going to be put through by the current Government? If so, I don't see the quarterly reporting being passed

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13th Jun 2017 16:40

That is right. Much depends on whether Truss falls for all the made-up savings that MTD is going to deliver, per HMRC. If she does MTD will be in there because of the extra spending the DUP will force through.

But if she is aware that all of the independent people who've looked at MTD think it is a load of Cobblers, she will can it because her career has taken a step backwards in this reshuffle and she'll be the one copping the blame when MTD goes tiits up.

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By DJKL
to mr. mischief
13th Jun 2017 16:47

Maybe the funds they were going to expend on MTD are now going to be earmarked for Northern Ireland.

A Bridge too Far, perhaps.

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13th Jun 2017 17:00

Truss is not known for her listening skills.

She went ahead with the "titan" jails despite all the evidence saying they were a bad plan, in particular with re-offending rates likely to rocket.

Oddly enough the private firms lobbying to build and run the jails don't seem to concerned with repeat custom.

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13th Jun 2017 17:12

Quick update from me, Mel Stride has now been named as Jane Ellison's replacement as financial secretary to the Treasury.

MP for Central Devon, Stride ran his own business specialising in trade exhibitions, conferences and publishing before entering Parliament in 2010.

Any thoughts on what direction MTD could take with a CIMA member and a former businessman at the helm?

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18th Jun 2017 12:40

It looks like the Queen's speech is going to contain practically nothing other than Brexit. The Great Reform Bill will take up huge amounts of Parliamentary time, so lots of other stuff such as grammar schools will simply be ditched.

So when it come to MTD, we are left with 2 questions:

1. Will they try to go ahead?
2. If so, how will they go about this?

If they decide to go ahead, I for one will lobby the DUP about it. Having reviewed my own client base, the lower income sole trader people are precisely those most likely to be adversely affected. Northern Ireland, I would guess, much like my own county of Cumbria, will have a higher proportion of those people than the UK average.

I doubt if they will risk putting this into the Finance Bill because that will risk getting the Bill voted down. So we'll be looking at some kind of Statutory Instrument or that sort of thing. Not the most democratic approach of bringing in the biggest change to tax administration of the century so far.

Whatever happens, the election and its aftermath has undoubtedly reduced the chances of MTD going through on schedule in full without a load of watering down.

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By cfield
20th Jun 2017 11:09

Good to see the back of Gauke from the Treasury before he got the chance to finally steamroller MTD through, but now we must worry about what antics he might get up to as Work and Pensions Secretary. Hopefully none that affect us. Let another group of professionals put up with him for a few years, financial advisors maybe.

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