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27 Jul 2016 01:23pm

Treasury Select Committee seeks scrutiny of OTS senior appointments

The influential Treasury Select Committee (TSC) is proposing an amendment to the Finance Bill which will ensure the independence of the Office of Tax Simplification (OTS's) chair and tax director from the Treasury

TSC chairman Andrew Tyrie has written to new chancellor Philip Hammond urging the government to accept the amendment, which “bolsters the independence of the OTS’s senior leadership and entrenches their accountability to Parliament” by giving the TSC the right of veto over their appointment and dismissal.

In February this year, the committee published a report on scrutiny of appointments. This recommended that there should be closer parliamentary scrutiny over the appointments of, among others, the heads of the Financial Conduct Authority (FCA) and the OTS.

The then chancellor, George Osborne, later gave a binding commitment that the government would ensure that Parliament in general and the TSC in particular were “content” with decisions about the appointment or dismissal of the FCA’s chief executive.

But earlier this month, the government rejected the recommendation that the TSC should have the right to veto the appointment or dismissal of the OTS chair and tax director.

In his response, Osborne said that “such independence would not be proportionate to the function of the OTS”.

He explained that, unlike the role of the FCA’s chief executive, the OTS’s brief was limited to advising the chancellor on the simplification of the tax system, with ministers taking the final decisions on tax policy.

The TSC disagreed. As Tyrie states in the letter to Hammond, “in order to be successful, the OTS must be in a position to provide you with robust, dispassionate and high-quality advice.

“That advice can only be improved if those charged with providing it are independent, and seen to be so.

“This issue sits independently of the breadth of their scope for making recommendations, which is clearly set out in the provisions of the Finance Bill that put the OTS on a statutory footing.”

The amendment will be introduced at Report Stage of the Finance Bill on 5 September.

The current incumbents are portfolio non-executive director Angela Knight, who is the OTS chair, and former PwC tax partner John Whiting, who is the part-time tax director.

Julia Irvine

 

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