What scrutiny really looks like. Really.

If you work in tax you’ll know the routine. Chancellor stands up. Talks. And talks. But you just want him to sit down. You want him to sit down so that someone, somewhere will press the ‘publish’ button on the huge blog that is the gov.uk website. You can then join the rest of the profession in the first difficult task of the day: trying to figure out where HM Treasury have hidden the Budget documents this year. Once found, you print them out – and sit back briefly and imagine another world, a better world, in which a thoughtful colleague is just now hurrying towards you with a cooling towel for your forehead.

What you won’t have realised is that what is true for you is also true for the Opposition. They’ll engage a temp, hired for fast running, to rush the collection of Budget documents from the MP’s office nearest the House of Commons Chamber into the hands of the Leader of the Opposition. There’ll be a special phone available on which, hapless individual, he or she can be briefed (by text message) on what the measures really mean so as to have something, anything, intelligent to say by way of reply to the Chancellor. It surely is the toughest gig in politics.

And that’s kind of how life in Opposition is generally. When you’re in Government you have an army of civil servants to help. There is no clause in the tax code so obscure that a civil servant cannot be found who has spent her entire professional life pondering its meaning. She may even have worked up a theory! In Opposition, it’s just you. She’s not going to rush to your aid. Indeed, you’re an especially fortunate Opposition if you can afford to employ even one person to help you work up tax policy ideas – or scrutinise those of the Government du jour.

You get by, as a Shadow Exchequer Secretary, with a little help from your friends. And anyone else who happens to be passing through Parliament Square. Professional Institutes, Think Tanks, Business lobby groups, professional service firms. Even the odd blogger.  They all have axes to grind – and you know this. But you trust yourself – you have no alternative – to separate the good from the bad. And when you’re trying to work up policy you need even more. You need continuity, deep expertise, water carriers who can do the unglamorous business of drafting. And you need it right across the tax code.

And one of the places you get this from is the Big Four. They can afford to second staff to you for a decent period of time. You can have confidence that – supported as they are by the enormous resources of the firm – they will be technically adept and well informed. You know that they want influence – but then that’s true of everyone. And you’re just in Opposition so you’re reassured that if you get into Government you’ll be able to get civil servants to give your policy ideas the once over.

All of this is true of this Opposition. As it was true of the last.

I say this because of a distinctly adolescent piece yesterday on the Guardian’s website. It posed as straight reportage of the size of the cash value – now there’s a tendentious assertion – of the contribution made by professional services firms. It was, in reality, a complaint about the purported ‘capture’ of national interests by business (the Dark Side being played, today, by PWC and KPMG).  The fire was concentrated on Labour – despite the fact that exactly the same points could and should have been made about Oppositions generally. And as for actual evidence of ‘capture’? Nada – not even assertion.

Would I prefer a world in which the Opposition was better funded to perform the critically important task of scrutinising Government policy? I would. Indeed, I argued for it in Sir Hayden Phillips’ review . Did the Guardian call for that? It did not.

And can we all agree that scrutiny is important? We can. Who reading this blog trusts the Government du jour consistently to look after the broad public interest rather than the narrow political one? And is over 11?

‘Cui bono?’ I was asked on twitter last evening. ‘Who benefits from all of this?’

You do.

Postscript: David Gauke, the present Financial Secretary to the Treasury has, as is his wont, commented on this blog:

And that is why he is universally liked and admired.

8 thoughts on “What scrutiny really looks like. Really.

  1. Jolyon,

    As you say, the current system of resourcing is far from satisfactory but it applies equally to all parties – on the basis that the distinction is between Government and Opposition. I think you have (as always) hit the nail squarely on the head in condemning the Guardian’s attack. This is simply the Guardian jumping on the bandwagon of popular criticism of the tax profession in general and the Big 4 in particular.

    As many in the profession (and many others outside it) are well aware, Government departments as well as political parties (in or out of Government) gain great value from the technical/business input of those in indsutry or professional practice (of whatever flavour) who are able to give their time. Indeed, this is not limited to the tax profession, HMRC is not the only Government department to make use of such expertise.

    In addition to the specific technical/business experience being sought from the secondees, this type of arrangement has great value to everyone, including the receiving department/party. I know many in the profession who have been seconded to HMT or HMRC and they are (in my opinion) better advisers for it. Not because they suddenly have inside knowledge or because they have managed to slip a secret “back door” into legislation (an absurd notion, frankly, that demeans the professionalism of the civil servants as much as of the secondee). No, they are better advisers because they have a first hand understanding of the culture and workings of HMT or HMRC.

    You have oft argued on Twitter that those who disagree with a position should propose an alternative. Whilst I’m not sure I agree wholeheartedly with that position in every case, it really does seem to apply here. If you don’t believe that the political opposition should be using secondees from professional firms, propose a working alternative.

  2. Thanks David. A lot of good thinking there.

  3. The Guardian piece makes – and, if I may say so, your ‘put up or shut up’ call reinforces – what I see as a straw man argument about the secondments issue. It is too simplistic an assertion to propose a cause and effect relationship in which a tax adviser from the Dark Side saunters into the Treasury or Labour Party HQ and ‘captures’ policymaking on behalf of shady corporate interests. I think it’s unfortunate when the argument is made in that way.

    A much more subtle analysis is the influential ‘epistemic communities’ concept from international relations. The idea here is that a community of professionals, defined by their technical expertise, naturally forms its own set of values, beliefs and policy objectives. I think precisely the problem with public debate on tax avoidance is that tax experts’ way of seeing the tax world differs on this fundamental level from lay people’s, I wrote about this it in a blog some time ago, here: http://martinhearson.wordpress.com/tag/epistemic-communities/

    A mode of operation in which political parties rely on members of the tax epistemic community for their technical expertise creates a big risk. This is that politicians are not scrutinising the community on the level of its aims, assumptions and value judgements. The danger is that they will take these foundational aspects as given, and allow themselves to be constrained by them.

    One possible example is the parliamentary scrutiny of tax treaties. I was disappointed that Labour didn’t ask a single question about the renegotiated UK-Zambia treaty when it was ratified earlier this year. (Here is the link: http://martinhearson.wordpress.com/2014/07/02/time-we-scrutinised-chinas-tax-treaty-practice-too/). Was the lack of debate perhaps because, among the community that I have described, it is an article of faith that such treaties are a good thing?

  4. One day, Martin, one happy day, you’ll send me something to publish.

  5. Just thinking about your post a little more, I think your ‘epistemic communities’ point articulates a personal unease that I have felt (unspoken but deep in my ‘waters’) of their technical merits. I must subconsciously have recognised that, speaking at least in the capacity of a tax expert (which I sometimes but not invariably do), I haven’t really been qualified to express a view about anything more than mechanics. One day, I shall call upon you to help me understand my feelings a little better: Hearson (MSc Psychology)

  6. I have a draft. We’ll get there. But my own blog is also neglected at present…

  7. It was absolutely a plea rather than a criticism.

  8. Well, there is the Short Money, but only so much and that only goes so far. Certainly not as far as the full resources of the Civil Service.

    Certainly, members of the professional bodies (Law Society, ICAEW, CIOT, etc) provide a significant public service in reviewing HMRC proposals, responding to consultations, suggesting amendments, etc etc, which is largely overlooked by the public at large. Not because the tax professionals want to achieve a result for clients – although it would be naive to suggest that that never happens – but mainly because they want to make the tax system function better. Suggestions may be made that a legislative proposal will not work, or create unintended results: sometimes changes are made, more often than not the comments are ignored. And now such engagement with government (and even the opposition!) is seen as some species of “corporate capture”?!

    Cui bono? Some might think professional tax advisers would want the most difficult, complex, impenetrable tax legislation possible, but they almost universally advocate simplicity, transparency, and consistency. Why? Because they want the tax system to work as efficiently as possible, to make it as easy as possible for taxpayers to comply with their legal obligations.

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