The Written Case to the Supreme Court for the Northern Ireland Applicants is – to the best of my knowledge – not available elsewhere. I have been given permission to publish it here.

agnew-and-others-uksc-written-case

There are two points, in particular, to note.

First, the Applicants are (to the best of my knowledge) the only parties gently to moot the possibility of a reference to the Court of Justice of the European Union on the question of the revocability of a notification under Article 50. Even occasional readers of mine will know that I believe that establishing the revocability of a notification to be the key to changing the political dynamics of the Brexit debate. So I regard this as a significant development.

The relevant extract reads as follows:

Second, the Applicants are Crowd Funded (and look to be operating on a shoestring). It seems to me to be a brave and commendable stance to seek a better balance (at least as I see it – others do differ) between long term strategic goals (opening the door to a better or no Brexit) and short term goals (winning the case).

I have made a donation to the Crowd Justice bid – and I would encourage other readers (who are able) to do so too.

A kind donor who wishes to support the work I am doing has given me a sum of money. From it I hope to, amongst other things, engage a series of interns beginning in the New Year. I envisage month long internships, based with me in Devereux Chambers in Central London. The internships will carry London Living Wage, currently £9.75 per hour.

My thoughts are currently taking shape. They will be better shaped come the New Year. And better shaped still with the help of whoever I appoint. But, for the moment…

I am presently working, in particular, to ensure that Parliament (and through or via it the electorate) controls the process and outcomes of the United Kingdom’s Brexit. But I am also interested in ‘cause lawyering’ more generally. How can we use the law and lawyers to achieve positive change? And how do we engage and engage with non-lawyers in that exercise?

Intern One will help me write a brief for and work with third party technical support to set up a website to advance the project. S/he will help me identify what I should want in terms of architecture, functionality, database, merchant account services, and so on.

Intern Two will explore and report on existing cause-lawyering models and how to drive public engagement in cause lawyering.

An applicant for one of these internships should demonstrate experience of or an interest in the relevant field. Applications are particularly welcome from groups under-represented in the law. And from those who can show they’ve achieved what they’ve achieved by the strength of their own right arm.

Please apply by letter of no more than two pages and single page CV to me at Devereux Chambers. Apply, please, by 9 December 2016 stating your availability from the New Year. I envisage full time but applications for half time or more would also be welcome.

I will update this page. Please revisit it.

By Jeremy Cape @jeremydcape

Tax simplification is in the news.  It forms a central part of President-elect Donald Trump’s legislative programme.  The IEA recently produced a report – Taxation, Government Expenditure and Economic Growth – which includes an eye-catching proposal to abolish 20 taxes.  And the Chancellor is facing the usual calls to simplify the tax system in the Autumn Statement, 

There are few, whether they are tax experts or not,  who consider that the UK tax system works adequately.  But the expression “simplification” is loaded with ambiguity,  and implies that we can change to a utopian tax system, usually with fewer taxes, lower rates and easier compliance, without making hard, political choices.  Simplification should more sensibly be seen as a likely outcome of a more coherent tax system, and the debate should focus on how we can make our tax system more coherent, rather than more simple. 

Let me set out some of the different ways in which “simplification” is used by those who talk about it. 

1 Simplifying compliance

Many businesses spend considerable time and expense on tax compliance.  Simplifying compliance is driven by a desire to see shorter tax returns and more straightforward calculations, leaving businesses more time to focus on – well – doing business.  “Reducing tax compliance burdens on both businesses and individual taxpayers” is the stated objective of the Office of Tax Simplification.  Since its establishment in 2010 the government has implemented about 200 of its recommendations, such as abolition of reliefs (e.g. the 15p luncheon voucher), aligning legislative definitions and introducing easier compliance regimes for small businesses.  It’s estimated to have saved taxpayers £20M per year in compliance costs, and also resulted in the abolition of a small amount of tax legislation, but ultimately it’s all a little underwhelming.

Simplifying compliance is a laudable aim, but reducing the compliance burden by, say, an hour a year per business is unlikely to be the main thing taxpayers are seeking from simplification.

2 Shortening tax legislation

There is a popular view that the increasing length of the UK tax legislation is a cause of it becoming more complex.  The increased length is in fact a function of an attempt to simplify legislation through the Tax Law Rewrite Project.  But most tax practitioners generally find the re-written Acts more user-friendly than the Acts they replaced and prefer the longer form. 

This is not to say that UK tax legislation shouldn’t be shortened.  The recent diverted profits tax (DPT) takes up twenty pages of Tolleys and, even given that it deals with some fairly complex concepts, is (in my view) longer than it needed to be.  

3 Simplifying concepts in tax legislation

Let’s turn to the DPT.  The stated policy objective of the tax was “to counteract contrived arrangements used by large groups (typically multinational enterprises) that result in the erosion of the UK tax base.”  It consists of two rules.  The first rule has seven conditions.  The existence of some of the conditions is relatively easy to determine, such as whether a company is UK resident.  Others are not.  Some of the concepts are borderline-impossible to understand.

One question is whether the policy objective behind the diverted profits tax could have been achieved without pages of fiddly legislation.  Most practitioners think it could have been which would allow them, in turn, to advise taxpayers with more clarity whether it applied or not.  (The diverted profits tax also provides a good example of the pitfalls of bad legislation because, if the intention was to make Google pay considerably more UK corporation tax, it appears to have failed.  It does not follow, however, that complex legislation always creates loopholes, and it is unquestionably true that loopholes have been closed by complex legislation.)

So why not give a smart civil servant a month to bring it down to four pages?  Well, it probably couldn’t be done without some consequences.  The likelihood is that it would impact more companies and arrangements; at the very least, there would be more inherent ambiguity (and more HMRC and judicial discretion) regarding its application.  But, again, the question of whether the DPT, or any other tax, could be drafted in a more simple manner for the practitioners who have to read it, seems to me to be a sideshow: the general public and business don’t ultimately care all that much, because they don’t themselves generally look at legislation.

4 Simplifying or abolishing reliefs and exemptions

Waiting for Tax has previously written about this.  If Philip Hammond were to announce the abolition of CGT private residence relief, pension tax relief, ISAs, VCT and EIS, Gift Aid, group relief, the substantial shareholding exemption, etc. then this would immediately simplify the tax system.  But, again, there would be consequences for taxpayers (many of whom would have to pay more tax) and the government (who would need to respond to the change in behaviours, such as the impact on pension savings and investment in start-ups, in the short time before it got wiped out in an election).

One example of a simplification measure (not strictly the abolition of a relief) was the infamous “pasty tax”.  The Treasury, correctly identifying that this had been an area of litigation, decided to “apply VAT at the standard rate to all food which is at a temperature above the ambient air temperature at the time that it is provided to the customer, with the exception of freshly baked bread …[to] ensure that all hot takeaway food is taxed consistently”.  This would have added around 20p to the price of a £1 pasty.  The subsequent furore caused Osborne to abandon his plans.  Imagine the reaction if homeowners were told that they would now have to pay CGT on the increase in the value of their primary residences in the name of simplification.

Abolishing reliefs ticks most boxes of what simplicity might be, but it is not simple to achieve.  And those advocating simplification of reliefs tend to support the abolition only of those reliefs that do not affect them or their families, friends or commercial interests.  Funny that.

5 Abolishing taxes

In many ways, this is the opposite of 4.  For some, the concept of tax simplification is part of a broader policy to reduce the role of the state.  Legislation will be shorter, concepts will be simpler, reliefs will be fewer, but the state will necessarily receive fewer revenues and spend much less.  Take the IEA’s recent paper, for example.  This calls for the abolition of, inter alia, corporation tax, capital gains tax, council tax, SDLT, stamp duty and alcohol and tobacco duties.  Even if you buy the IEA’s argument that this will result in increased growth in the UK, it results in a very different UK (broadly, much better if you’re rich).  Although the IEA’s modelling suggests that the poorest decile would enjoy tax cuts worth 26% of their gross income, with the richest decile enjoying a tax cut of only 13%, a starker comparison is that someone earning £300,000, currently taking home £170,000 after tax, would take home £256,500 after simplification (£86,500 more).  Someone earning £30,000 and taking home £23,500 now would instead take home approximately £27,000 (£2,500 more).

It’s hard to see the IEA’s approach working in the real UK, or to imagine even 52% of people wanting it, even though I admire their boldness and their attempt to devise a coherent system.  My problem with their approach is that their use of “simplification” implies a non-existent neutrality to appeal to those whose desire for simplification does not extend to such radical reform of tax and public expenditure.

I’ve tried to set out the different ways in which people think about “simplification”.  The more I think about it, it’s not really about tax simplification.  None of us will be happy in the long term solely by reducing red tape for businesses or shortening the tax code or making it easier for tax practitioners to understand tax law.  These may be desirable outcomes but they are symptoms of a broken tax system, and not a sole cause of it.  The main cause is the lack of coherence in our tax system and its design, which is partly a function of history, but is exacerbated by having effectively two Budgets every year, with the focus on the short, rather than medium or long term.  

Making the tax system more coherent will not be – for want of a better word – simple.  It requires a huge amount of political capital that the Brexit-beleaguered government does not have.  For now, we can but hope that Chancellor Hammond will avoid gimmicks (such as hints on the future rate of corporation tax or VAT) and indicate that he will take a broader, more considered view of the UK tax system as a whole.

His aim should be that one day a Chancellor can stand up on Budget Day and announce no changes to the tax code because – thank you very much – it is working perfectly well as it is.  Simples.

Some editions of today’s Telegraph quote extensively from my piece on their front page.

But, so that the full text can be read, I reproduce my piece following.

***

In just over a fortnight the Supreme Court will hear the most important legal case our generation will ever know. The Scottish Government will be there, represented by the Lord Advocate, Sir James Wolffe.

But what will he say?

The question at the heart of the case is whether Theresa May can remove rights granted by Parliament without first obtaining Parliament’s permission. That – or so the argument runs – is the effect of triggering Article 50, the mechanism by which we start divorce negotiations with our EU partners. Once the Article 50 process is started, rights will be lost without Parliament’s consent. Rights that cannot be wrenched back.

Although the legal argument is couched in terms of individual rights, it has particular resonances for Scotland – and Wales too which also plans to intervene. It may well be wrong to, as the First Minister put it:

bypass the Scottish parliament and take steps that will involve fundamental changes to the devolution settlement with no proper scrutiny here in Scotland.

But that is precisely what Theresa May intends to do.

Unless.

You see, there is one wrinkle in the argument.

When the case came before the High Court in London, it suited everyone to pretend that triggering Article 50 would have the inevitable consequence that we leave the EU. That the bullet, once fired, could not be called back to the chamber. It suited the Pursuers, because it made their legal arguments easier. And it suited the Westminster Government because it removed any legal impediment to them pursuing exactly whatever course they chose to.

The Pursuers pretended. The Westminster Government pretended. There was a cosy consensus. But should the Scottish Government pretend?

We don’t know if an Article 50 notification can be withdraw. What we do know is that a lot of very well placed people believe it can be. Lord Kerr of Kinlochard, who drafted it, thinks so. So does Donald Tusk, the President of the EU Council. And so does Sir David Edward, former judge of the Court of Justice of the EU. But the only view that matters is that of the Court of Justice itself.

Nicola Sturgeon can explode that cosy consensus. She could instruct the Lord Advocate to seek a reference to the Luxembourg court so that it can answer the question. And she should.

A decision that a notification can be revoked enables Scotland to wrest back control of its future.

If triggering Article 50 doesn’t commit us to leaving the EU, the SNP can hold out a realistic threat, alongside the other opposition parties, of voting down any deal negotiated by Theresa May that ignores Scotland’s interests. Voting down the deal – and here’s the important bit – would mean withdrawing the Article 50 notification and Remaining. ‘Deliver for Scotland what is right,’ Nicola Sturgeon could say, ‘or our MPs will vote against Leaving.’

And although that vote would almost fall in the House of Commons today, who knows how Brexit will look in two years’ time? It is possible that the “sunlit uplands” promised by Boris Johnson will hove into view – but it may also be that they dissolve to mere mirage.

If in two years’ time the evidence shows that prosperity has deserted the United Kingdom in anticipation of a Hard Brexit, MPs will vote against Brexit. They will vote to Remain because that is what their constituents will demand. And the Brexiteers fear that.

A decision by the Court of Justice that Article 50 can be revoked leaves the door ajar to the whole United Kingdom remaining. But it also gives Nicola Sturgeon a real bargaining chip in her negotiations with Westminster. Deliver what is right for Scotland, protect our interests, or we will vote to keep the whole United Kingdom in the EU.

Nicola Sturgeon has accused Theresa May’s Government of “disrespecting the whole devolution settlement” by taking a decision of “this magnitude and with this degree of impact on our devolved responsibilities… without the Scottish parliament being consulted.”

And she is right to demand proper respect for the will of the Scottish people.

And this is how she gets it.

Writing yesterday, I observed that Labour’s pro-Brexit positioning was unfathomably removed from both:

its 2015 Voters (65% or 63% of whom voted Remain) and its MPs (218 for Remain versus only 10 for Leave) in light of polling showing limited support for a Brexit without strings.

The same point is made afresh by recent polling from Labour List which demonstrates overwhelming Labour support for a possible second referendum

My post yesterday speculated that Labour’s present pro-Brexit positioning was likely to be borne of two defensive factors: first, a need to keep the red tops onside and, second, perceptions of the effects of keeping the door ajar on Labour’s vote share in 2020. 

Of the first I said:

Faced with a vigorous and scornful media [Labour] seems determined to repeat its mistakes from the last Parliament. Then MPs bowed their heads regretfully to ‘overspending’ allegations and the need for austerity. Now they genuflect to demands for a Brexit that ignores the limitations of the mandate.

They do so because they understand it to be what the electorate wants. They do so because they are frit. But they ignore that they will take the blame when things go wrong. And they ignore that no one wants a Party that follows where others lead.

Of the second, to demonstrate the source of the concerns, I attached some charts (reattached below) which illustrated that a 15% loss of Labour votes in Leave voting constituencies in England and Wales would (all other things being equal) involve a loss of 44 constituencies. These would only be partially compensated for by the mirror image of a 15% gain of Labour votes in Remain voting constituencies in England and Wales delivering an extra 18 constituencies.

The additional point I want to make today is this. 

Few, if anyone, is suggesting voting against triggering Article 50 or somehow otherwise blocking Brexit. What is being suggested is that Labour should in the A50 Bill leave the door ajar to a second referendum.

And, critically, the relevant time to judge the popularity of that course is not today. We don’t have a general election today. It will be in 2020, when we do. 

By 2020, MPs will already have voted on the article 50 deal. That vote will probably have taken place in early 2019. If the evidence in 2019 is that the economy is performing well then, of course, Labour will, and rightly, support the Government’s Brexit deal. There will be no second referendum. And MPs in Leave voting constituencies will not face a Brexit penalty at the polls.

If, on the other hand, the evidence in 2019 is that the economy has tanked, inflation is rising, living standards have slumped, and the deficit has ballooned MPs would be applauded for having in the Article 50 Act enabled a second referendum. Far from being punished at the polls, Labour will benefit in 2020 from being the Party that delivered a way out of the mess.

So the very best that can be said about the argument that Labour shouldn’t support a  second referendum because voters in Leave constituencies won’t like it is this. It’s an answer to the wrong question: ‘what is popular today?’

The worst thing that can be said, the really unfathomable thing about Labour’s decision to rule out a second referendum now, is this: it has the option. It can wait and see. It can have its cake and eat it too. 

But instead it is doing neither.

Follow @jolyonmaugham

Illustrative Charts

The following two charts show Labour seats in England and Wales by margin of victory, support for Brexit and (by colour, Runner Up).

The first shows all Labour seats.
The second highlights those Brexit supporting seats where Labour’s margin of victory was less than 15% (they total 44: 39 Conservative, 3 UKIP, 1 Lib Dem and 1 Plaid Cymru).

The following two charts show seats in England and Wales where Labour was Runner Up by margin of victory, support for Brexit and (by colour, Winner).
The first shows all seats where Labour was Runner Up.

The second highlights those Remain supporting seats where the winner’s margin over Labour was less than 15% (they total 18: 14 Conservative, 2 Lib Dem, 1 Plaid Cymru and 1 Green).

Any attempt to analyse Labour’s position on Brexit faces a difficult initial hurdle: understanding what that position is.

It has a number of different iterations. But let me take the most coherent: that fleshed out by Labour’s Shadow Secretary of State for Exiting the European Union, Keir Starmer.

Here’s what Sir Keir said in Parliament:

The majority of those voting voted to leave. That result has to be accepted and respected, notwithstanding the fact that many of us, including myself, campaigned for remain. However, that is not the end of the matter. The next question, and one that is increasingly pressing, is: on what terms should we leave the EU? That question was not on the ballot paper.

So far so good (For what it’s worth, I’ve explained why I think those statements are true here.  If you remain unpersuaded, this blog post is probably not for you).

But what are the terms on which we should leave the EU – and how does Labour plan to control them? (Making the traditional assumption for this sort of thought piece on the stance of the Opposition: that it can deliver its strategy in Parliament.)

Speaking outside Parliament Sir Keir proposed this:

We are clear that we need the fullest possible access to the single market, that we should be in the customs union, and that there should be special arrangements for Northern Ireland, Wales and Scotland.

(And let’s call this a “Good Brexit”). So far so good.

But what happens if the Government doesn’t secure them? Not a modest failure of the type described by Sir Keir:

Of course the starting position may not be the end position. We all accept that; we are all grown up.

but a wholesale failure. What then? How does Parliament react?

Logically it has three options.

• First, it waves the deal through anyway. In that world Parliament would have failed to control the terms on which we Brexit.
• Second, Parliament blocks the deal whilst respecting the result of the Referendum. Assume as is inevitable that the other 27 members of the EU won’t allow us to reopen negotiations. We would then leave the EU without any deal. Again Parliament would have failed to control the terms.
• Third, Parliament asserts a residual right to block the deal because the Government only has a mandate to Leave on the terms dictated by Parliament. It would say, in effect: ‘Unless you the Government do what Parliament has demanded MPs will either reject the deal and Remain or put the deal to the electorate in a Second Referendum.

Here’s the thing.

The first two don’t achieve Parliamentary control. Only the third does. And so long as Article 50 is legally revocable – a matter which will need to be ascertained from the Supreme Court A50 or other proceedings – it is a meaningful threat. Indeed, it is the only meaningful threat. Unless Parliament issues it, Labour demands for Parliamentary control are mere sound and fury. They signify nothing.

So what consequences – procedural and substantive – follow from Labour adopting this third position?

(1) It makes a ‘Good’ Brexit more likely. 

The Labour Party collectively – if reality permits such a phrase – seems to be cohering around the line that, if it opposes Brexit it loses the ability to influence a ‘Good Brexit’. But, as I have shown, that is near to the exact opposite of the truth. It is a refusal to contemplate a world in which Labour might oppose Brexit that delivers that loss of influence.

(2) It has the advantage of being right.

Writing in the Financial Times, I said (of the possibility of a Parliamentary vote on the final deal or second referendum) this:

That last sentence is unanswerable. If the evidence – as opposed to the cheap speculation of unaccountable politicians – demonstrated that prosperity has deserted the country in anticipation of Brexit we would be mad to ignore it.

Only someone scared of what the evidence will show tomorrow chooses to make a decision based on assumptions today.

(3) The question of legal revocability must be resolved.

This Commons Library paper, released yesterday, addresses the possibility of the question being resolved in the Supreme Court proceedings. If it is not, there are various mechanics, which I will write on shortly, whereby it can be put and promptly in other proceedings.

(4) Timetabling.

Unless agreement can be reached with our neighbours – and Donald Tusk has signalled it would be (see his answer from 24’55”) – the timetable for Article 50 negotiations should recognise the need for Parliamentary approval or a referendum before the expiry of the two year term.

Standing well back, the logic of this line of reasoning is compelling.

If the Referendum result gave no mandate for any particular type of Brexit then Parliament must provide one. Faced with Brexit terms that do not deliver on what Parliament has mandated, Parliament is entitled to reject them. But, in any event, as I have explained above, there is no alternative.

Sadly, speaking yesterday, and without mention of any alternative, John McDonnell appeared to reject this possibility:

we must not try to re-fight the referendum or push for a second vote and if Article 50 needs to be triggered in parliament Labour will not seek to block or delay it.

Frustrating, short-sighted and logically incoherent. How has Labour found itself here?

Germany’s Social Democratic Party has accused Labour of a misplaced need to follow where the electorate leads. As The Times reported:

Along with other centre-left parties in Europe, the SPD is bitterly disappointed that Labour appears to be going along with Brexit. “It is a big mistake of Corbyn to say the majority of the people were in favour, therefore the Labour Party supports Brexit,” Mr Schäfer, 64, deputy head of the SPD in the Bundestag, told The Times.

“Of course they have to vote against Brexit. If the majority of people are in favour of this, Labour should say, ‘OK, we are sorry but we cannot follow always the majority’. Otherwise this is the end of different parties.”

Mr Schäfer warned that Labour would not get any credit for the successes of Brexit but it would share blame for failures if it did not oppose it, as the Liberal Democrats plan to do.

The Libs Dems are leading a campaign supported by some Scottish Nationalist and a few Labour MPs to vote against Article 50 unless the government guarantees a second referendum on the result of the Brexit talks.

The German politician urged Labour to think strategically about the next decade rather than worrying about losing seats at the next election for opposing Brexit. “Labour should vote against Article 50 to make clear they were in the campaign for Remain, because otherwise they are also responsible for the worst outcome of the negotiations,” Mr Schäfer said.

For information, I have set out, at the end, of this post some illustrative charts showing what a 15% loss of votes in ‘Leave’ seats or gain of votes in ‘Remain’ seats would mean for Labour.

But this still does not account for quite how far Labour has moved from the position held by its 2015 Voters (65% or 63% of whom voted Remain) and its MPs (218 for Remain versus only 10 for Leave) in light of polling showing limited support for a Brexit without strings.

In the face of that heavy Remain position, John McDonnell has nevertheless managed to spin 180 degrees from a pre-referendum ‘Brexit will help the corporate elites‘ to a full-blooded post-referendum ‘Brexit will hurt them‘.

Even the thoughtful members of the Labour Party have engaged in repeated attempts to burnish the quality of the democratic mandate. Writing in Prospect, Ed Miliband, for example, argued: “There is a clear mandate for Brexit from the referendum. I am not seeking to reverse the result. We are leaving the EU.” I do not find it easy to understand the impulse to airbrush away the lies of a campaign rich with them or the fact that a 2% swing would have delivered a different result. These facts might not change the mandate but it defies reality to pretend they are irrelevant to is quality.

The answer is that the Party is cowed.

Face with a vigorous and scornful media it seems determined to repeat its mistakes from the last Parliament. Then MPs bowed their heads regretfully to ‘overspending’ allegations and the need for austerity. Now they genuflect to demands for a Brexit that ignores the limitations of the mandate.

They do so because they understand it to be what the electorate wants. They do so because they are frit. But they ignore that they will take the blame when things go wrong. And they ignore that no one wants a Party that follows where others lead.

Follow @jolyonmaugham

****

Illustrative charts

The following two charts show Labour seats in England and Wales by margin of victory, support for Brexit and (by colour, Runner Up).

The first shows all Labour seats.

The second highlights those Brexit supporting seats where Labour’s margin of victory was less than 15% (they total 44: 39 Conservative, 3 UKIP, 1 Lib Dem and 1 Plaid Cymru).

The following two charts show seats in England and Wales where Labour was Runner Up by margin of victory, support for Brexit and (by colour, Winner).

The first shows all seats where Labour was Runner Up.

The second highlights those Remain supporting seats where the winner’s margin over Labour was less than 15% (they total 18: 14 Conservative, 2 Lib Dem, 1 Plaid Cymru and 1 Green).

I’ll leave others to do the editorialising.

​[This is a republication of my article in this week’s New European].

It wasn’t Brexit that invented attacks on the judiciary. 

Ten years ago Prime Minister Blair said of a High Court Judge that he had “taken leave of his senses”. The Express also weighed in, describing the Judge’s decision as “tantamount to a judicial coup against Parliament.” That same year The Sun criticised “the arrogance of judges in their mink-lined ivory towers” – I assume time has been unkind to that metaphor – over the sentencing of the child molester Craig Sweeney. And the then Lord Chancellor, Charlie Falconer, was widely criticised for his slow and feeble defence of the judiciary. More recently Theresa May herself – as Home Secretary – criticised Judges for, as she put it, “ignor[ing] parliament when they think it came to the wrong conclusion.”

But we didn’t feel imperilled by it then. So why do we now?

Brexit, of course, bears upon our lives more directly than the Secretary of State’s immigration policy – or a paedophile’s jail term. But there is something more. 

Our times upset the applecart. The thoughtful pluralism of the broadsheet Fourth Estate feels no match for the vigour of the Red Tops. In Parliament, the Burkean ideal of representative democracy has up and gone, capitulated. And Her Majesty’s Opposition is only so in name. 

The consequence is that to have voted Remain is to feel yourself cast as unwitting participant in a Brexiteerian psychodrama. Who will restore us our agency? 

We find our unlikely heroes in what Lord Devlin, giving a lecture to the LSE in 1975, described as a “body of elderly man who have lived on the whole unadventurous lives… old-fashioned in their ideas.” And we throw ourselves in the path of their attackers who take, today as since time immemorial, the form of the Executive and the Press. But what are we to make of the allegation that they failed to respect the will of the people? 

I leave to others an analysis of whether that is true of the Article 50 case. Let me tackle, instead, the predicate. It is right judges should be more responsive or accountable? 

Fortunately this question was considered by a grand Committee of Lords back in 2007. The case for was put by, among others, the Daily Mail’s Editor, Paul Dacre. Our times, he no doubt rightly observed, are characterised by a lack of reverence. He observed a public that has “great faith in the judiciary but there are worries that it is not reflecting their values and their instincts” and judges making political judgments.

He wanted a strong judiciary: “the free press needs an independent judiciary in the extreme. If I may be so bold, the judiciary needs a free press to support it against an over-powerful executive. The two can help each other.” But his suggestion was that judges become a little less Olympian and a little more responsive to public concerns, a little more media savy.

There are profound dangers in this course – but also opportunities too.

Judges are not democratically elected. Their legitimacy derives not from their responsiveness to democratic demands but, in a sense, their irresponsiveness. Parliament makes the law. The Government applies the law. The role of judges is to ensure that they do. And the closer they bind to this narrow role the greater their legitimacy; the further they leave it behind the greater the deficit. 

Giving evidence to that same Committee, Sir Igor Judge pointed out that:

“The independence of the judiciary is something which is precious to every single member of the community. You must be able to go into court and know that the person sitting in judgment is neutral – not on one side or the other – coldly applying the law that applies to your case.” 

For judges to become more responsive to public instincts would mean them giving up that neutrality. And it would also deliver more power to those who channel – or create – those public demands, both the media and the Government. And if judges bend to those instincts who is to police their limits?

It’s apposite, writing on a day when America elected a new President to remember the words of an earlier one, often referred to as the Father of the Constitution, James Madison. 

“The accumulation of all powers, legislative, executive, and judiciary, in the same hands… may justly be pronounced the very definition of tyranny.” 

But there is something to take from what Dacre suggests. 

Judges are, usually at least, keenly aware of the impact of their decisions on public perceptions of themselves and the law. Certainly those who heard the Article 50 case went to almost painful lengths to avoid controversy. The very first paragraph of their summary states: “The court is not concerned with and does not express any view about the merits of leaving the European Union: that is a political decision.” They could sensibly do no more. 

But there is no good reason why Judges should not appoint a spokesman to perform that job for them the function of explaining to the media their decisions. This is an age of democratic irreverence. Those who have held power have failed equably to distribute its fruits. It is right that the establishment is held vigorously to account. And it ignores its duty to be responsive at its, and sadly our, peril.

Follow @jolyonmaugham

Yesterday, alongside Chris Boardman and British Cycling, I launched three proposed tax reliefs, drafted at the invitation of the Department for Transport, to increase the numbers of people cycling to work.

You can read the press release here; and the tax reliefs, their design, purpose and illustrative costings here.

Please do pile in; let me know in the comments section below what you think of the proposals – their design, purpose, intention, costings.

You can read the decision of the Employment Tribunal in Uber here. What I want to flesh out is what, at least as it seems to me, the Decision does and doesn’t do.

The Decision will not fix our malfunctioning labour market (see here for my primer). That malfunction stems from two systemic flaws in our law. First, in our tax law – which imposes on relationships that are economically equivalent substantially different burdens to tax. Second, in our employment law – which imposes on relationships that deliver to the engager of labour the same end result substantially different employee protection burdens.

As I’ve written elsewhere, we should be concerned about these flaws. Businesses worth billions of dollars are constructed to exploit the arbitrage opportunities they create. These arbitrageurs can drive out ‘good’ business actors. And the arbitrages can deliver to shareholders and customers unearned subsidies borne by taxpayers and workers. These are very material failures in capitalism, they’re not news to Government, and it’s pretty abysmal that Government has failed to respond.

The flaws cannot be resolved separately. They must be resolved together. Government is constantly (albeit tentatively) reviewing the tax flaw. Separately it is currently reviewing the employment law flaw. But there is no review that examines them together. And whatever the quality of those separate reviews their separate outcomes will not, because they cannot, resolve the malfunction. Wearing a monocle will address certain consequences of myopia but you’ll still be lousy at football.

The Uber Decision demonstrates a muscular judicial response to the employment law flaw. Such a response will be familiar to those of you who have read me on how judges have responded to tax avoidance. It should be applauded. But the Uber decision is fact specific – it has no direct read across to any other engager of labour. And, unlike in the tax avoidance sphere, rule arbitrage in the employment sphere has yet to draw any meaningful response from our legislators.

As to Uber itself, the consequences of the Decision must be examined through two lenses. One which looks backwards: what does the decision mean for the past? And one which looks forward: what does it mean for the future?

As to the past, the Decision is fact heavy and this, to a lawyer, makes a successful appeal unlikely. It’s not perfect: it majors, and compellingly, on the true factual characterisation of the relationship between Uber’s UK entity and drivers. But its analysis of the legal consequences of that factual characterisation is thin. (Indeed, it is largely to be found in a single paragraph, 94). However, this on its own is unlikely to enable the Employment Appeal Tribunal to overturn the finding that the driver is a worker. The Decision could, however, be more vulnerable on the question when the driver is a worker – at all moments when the Uber app is turned on, or only when the driver has a passenger?

If you assume the Decision survives the inevitable appeals, it will (at least until Uber changes its arrangements) deliver some employment law benefits to the affected workers. The most meaningful of these is likely, in practice, to be holiday pay. But it could also land Uber with a very substantial bill for unpaid NICs.

“Could” because the Decision only concludes that drivers are ‘workers.’ It does not examine whether they are also ’employees’, a subset of workers. If they are found, in what would have to be separate proceedings before a specialist tax tribunal, to be employees then, assuming the 40,000 drivers engaged by Uber earned an average of £600 per week, Uber would accrue a NICs bill of over £13m for every month it has operated – or continues to operate – these arrangements.

Will HMRC take the case? There’s ample reason to think it should: watch this space.

As to the future, even the Employment Tribunal recognises that Uber may adapt its arrangements to seek to avoid these tax and employment law consequences going forward.

I would expect these adaptations to look, in practice, like Uber reducing the control that it exercises over drivers. I do not understand Uber to be contemplating engaging drivers as “workers” going forward. So the gain for drivers is likely only to be temporary.

Of modest and temporary effect, and Uber specific. The Decision is little more than straw in the wind.

How should the ‘elites’ address mistrust? And the Government Departments thought soft on them? Pull down the shutters – or let the light shine in?

Nowhere are these question raised nowhere more sharply than in the sphere of tax dodging – avoidance and evasion – by wealthy individuals and powerful corporates.  We are worried – and we are right to be worried. The best that can be said about our tax system is that it does not function as it should. But the worst is that HMRC fails to apply the law in an even handed fashion: it is, to borrow Ed Miliband’s compelling phrase, strong with the weak but weak with the strong.

Many of us can understand that responsibility for the misfiring international tax system does not lie entirely with our own Government. But the idea HMRC pushes hard against small businesses struggling to turn a profit whilst failing to collect tax from the likes of Google and Facebook is deeply corrosive. And only yesterday the National Audit Office reported that, over the last five years, HMRC had closed 72 fraud investigations into high net worth individuals with only two prosecutions and one conviction.

It’s a brave Government that ignores the question ‘why should I pay more taxes when he doesn’t pay his?’ Brave or – given that we check less than 2% of personal self-assessment returns – stupid. And greater transparency is an important – and perhaps the only – way to answer it; greater transparency alongside meaningful scrutiny.

Last month the Supreme Court handed down a decision in the Ingenious case. The case concerned a briefing given in 2012 by the then Head of HMRC, Dave Hartnett, to Alexi Mostrous, a journalist at the Times. During the course of it, Mr Hartnett made some corruscating remarks about Patrick McKenna, a then high profile promoter of tax avoidance schemes. And those observations drew upon confidential material held by HMRC.

You can read the remarks at paragraph 10 and 11 of the decision. They disclose nothing about the tax affairs of Mr McKenna. Or, indeed, of anyone else. They merely signalled that HMRC disapproved of the arrangements promoted by Mr McKenna; that very, very substantial sums of money were at stake; and that HMRC anticipated that it would establish that those arrangements did not work.

The Supreme Court found that, in making those remarks, HMRC had breached its duty of confidence owed to Mr McKenna. Even though, only weeks earlier, the specialist Tax Tribunal had found that Mr McKenna had promoted tax avoidance arrangements; that very, very substantial sums of money were at stake; and that the arrangements did not work.

In practice, such arrangements can be difficult even for highly skilled professionals to differentiate from ‘good’ tax mitigation. Individuals without professional expertise have little choice but to rely on the advice given to them by their advisers. And their advisers are usually or often financially incentivised to encourage their clients to invest.

The consequences can be disastrous. We know from numerous media reports (see, for example, this) that a number of hugely successful footballers face bankruptcy as a result of participating in Ingenious schemes.

Even in the tax field, some stuff is beyond sensible argument.

HMRC must be able in the public interest to communicate with those it serves.

It must be able to warn taxpayers off avoidance schemes that it considers dangerous, as it sought to do with Ingenious and film schemes more generally.

It must be able to address public concern about possible sweetheart deals – for example, this story that Bernie Ecclestone was able to settle a £2bn tax bill for £10m. It must be both free to engage with and forced to confront legitimate Parliament scrutiny of sweetheart deals.

It must be able to address misrepresentations by powerful individuals or corporates. Tax conduct is reputational and wealthy taxpayers and corporates do publicly misrepresent their tax behaviour. Where these representations damage public trust in HMRC, HMRC must be free to counteract them.

I intend no criticism of the Supreme Court – it addressed a narrower question – when I say it is a mistake to conceive of taxpayer confidentiality as an absolute value to which the public interest must genuflect. Like all values it must be balanced, here with the importance of maintaining public confidence in HMRC. Should this remark be thought controversial I would invite putative critics to grapple with the rule that compels the full public disclosure of the relevant personal financial affairs of individuals of anyone seeking to appeal against a decision  of HMRC.

To strike that balance, it is now clear that Parliament must legislate. It must explicitly authorise disclosures of confidential information to protect HMRC’s assessment of the public interest. Parliament can, should it wishes, make that assessment justiciable before the courts by listing a range of factors to which HMRC is to have regard in reaching that assessment. Those factors could include the obligation to have regard to the objectives listed above – and also the desire, where consistent with their achievement, to preserve taxpayer confidentiality.

But the status quo, after the Supreme Court’s decision in Ingenious, is unsustainable. It will damage HMRC’s ability to raise tax, it will foster public distrust in the institutions of Government, and it will inhibit Parliament’s already poor scrutiny of a field of proper public concern.