This is an important and interesting book showing yet again that tax law provides the material for major research. Each word of the title of John Snape's book is important. The raw material is to be found in the changes made to corporation tax in the United Kingdom from 1997, with occasional looks back to earlier times, to 2011. It does not stop with the arrival of the Coalition so is essentially an examination of/commentary on these years but taking in the Coalition's ‘New Approach’ and ‘Corporate Tax Road Map’. It is not the purpose of the book to look at the technical detail of the changes but rather to examine the changes as a process – and to evaluate what is happening against a theory of public law formulated by Martin Loughlin. The writings of political scientists such Andrew Gamble and Colin Thain appear regularly. This is very much a law-in-context book, meaning law in a political context.
The scene setting chapter 1, Introduction (pp. 1–16), defines terms and sets out the thesis of the book. Chapter 2, A theory of Corporate Tax Reform (pp. 17–45), explains the constitutional theory to be applied to the reform; here the emphasis is on politics and “prudence”. Chapter 3, The Reformers (pp. 47–98), looks at those involved in the work; not only the civil service, but also the accounting firms and others – including the Cambridge Centre for Tax Law. Chapter 4, The Process of Reform (pp. 99–156), looks at whether “prudence” is achieved or maintained. Chapter 5, The Evolving Corporation Tax Base (pp. 157–211), looks at how the system decides what the tax should be charged on and contains the most technical material. The title of a brief chapter 6, Conclusions (pp. 212–223), is self explanatory. It will be seen that Snape moves by very careful steps from the general to the particular. Non tax lawyers should not be intimidated by the thought of a weight of technical detail; there is virtually none. One might even say that one of the purposes of the book is to put mere technical expositors in their place. Helpfully, Snape spends a great deal of time at the beginning and end of each chapter explaining to the reader how far the reader has come in the theoretical scheme of things, and where the reader is going to go next. He asks readers to imagine that each chapter is a fresh wash of colour progressively yielding an ever fuller interpretation of the material.
The case for this theoretical approach is made out at p. 7 where Snape says that the gap between what we hope for, and what we actually get, needs to be conceptualised in some way that anatomises the nature of the engagement between the corporate sector and the government. This is the province of theory, and he goes on to analyses the choice between particular policies in terms of politics and history. In order to make sense of these reforms, one has to ask what kind of endeavour it is. This means focussing attention on the ability of political institutions to act ‘effectively’ in this area. Like others, he calls for greater efforts on the part of Parliament to consider how effective tax reform efforts have been.
This approach has a rich literature. Readers will be reminded not only of their Hobbes and Locke, but also their Adam Smith, Montesquieu, Rawls and Sen. Snape uses Loughlin to make the scarcely new point that Adam Smith's famous canons of taxation are not prescriptive norms – since they clash – but in a nice fresh phrase describes them “as providing a sophisticated handbook of the science of legislation” (p. 180). The canons are “factors to bear in mind when making sure that a new tax or tax rule will actually work” (p. 180). This, of course, used to be the role of the old Inland Revenue in informing and restraining the wilder spirits of the Treasury.
The 30 page bibliography needs to be skimmed before one plunges into the sometimes overwhelming footnotes to the text. There readers will find the wonderfully entitled, S. Ringen, The Economic Consequences of Mr Brown; How a Strong Government was Defeated by a Weak System of Governance (Oxford, 2009). Apart from providing us with a sharp if long title, this work also highlights Snape's extensive use of the literature on governance; another source is G. Stoker's “Governance as Theory: five propositions” (1998) 50 International Journal of Social Sciences 17.
This approach is new to many tax people, especially the more technically absorbed. Tax theoreticians have over the years had to cope with the triumph of relativism over claims for objective truth. They have then turned to economics for validation of their beliefs and have ended up with the Mirrlees Review's Report Tax by Design (2011) and the wonderful volume of supporting papers, Dimensions of Tax Design (2010). While Snape rightly makes extensive use of the Mirrlees Review, his point is that these essentially economic arguments need to be evaluated in the light of public law and politics. The economic literature in chapter 2 shows the centrality of economic need to compete for investment capital, a process turned by the current Chancellor of the Exchequer into a wish to make the UK economy the most competitive in the G20. Snape's constant refrain is that economics has to be combined with an ideological dimension and vision which combines economic growth with fairness (a phrase found often in the book e.g. p. 219). All this he carries out with drive and enthusiasm.
A part of the book's area of concern is the relationship between government and British operations of multinational companies. Snape sets out to use this very technical area of corporation tax changes of the New Labour government 1997–2010 and after, to see whether the legislation as enacted represents a coherent public interest or the narrow self interest of multinational groups (p. 98). Those familiar with Sol Picciotto's International Business Taxation, or with more recent forays by Committees of the House of Commons, will need no persuading that this is both important and current. Snape also wrestles with the major rearrangement of the relations between the Treasury and HMRC proposed in the O'Donnell Review and implemented by the Revenue and Customs Commissioners Act 2005. In this area he relies on the experience of Dr Chris Wales and his article (C. J. Wales. “The making of tax policy in the post-O'Donnell world: can the HMT-HMRC ‘policy partnership’ meet the challenge?' (2009) 3 British Tax Review 245). He regards Dr Wales' analysis as less than strong, noting that O'Donnell was, by its particular scope, silent on this issue.
In Chapter 3, Snape's conclusion (repeated at p. 216) is that he hopes to have shown how well equipped Britain's political institutions are to act effectively in this area of legislation. He looks at tension between a state's sovereignty and the forces of globalisation. But he also looks at tensions between UK Government (Treasury and HMRC) and Parliament and finds Parliament lacking (p. 97). He launches into the problems that arise from the extensive use of people who are not in Parliament or the civil service. Such experts may be brought in either to work out the policy or to translate the policy into something practicable. They are not political advisers, but simply provide expertise that the departments lack. The 2013 statutory residence tests will no doubt provide another example in due course. Governance issues arise and are dealt with interestingly.
Snape likes to ask whether what we are doing is the right way of doing things, usually then remarking tartly that to do this we have to understand – get a better idea of – what it is that we are doing. This is addressed in chapter 4, The Process of Reform. Here too Snape relies much on the writings of Dr Wales and on the O'Donnell report (it would be interesting to read a review of this book written by Dr Wales). Chapter 4 looks at how measures are initiated (pp. 128–136) by striving for the right degree of prudence yet too often remain mired in pragmatism; a matter all the more troubling if it is true that the links between the Treasury and the HMRC have been weakened as the Mirrlees papers suggest. In the longest part Snape considers how measures are developed (pp. 137–152). Here, he has a nice section on the importance of knowledge and at p. 138 cites Manin's praise for the United Kingdom's eighteenth century “Gothick prudence, a strength born of experience and of history and with a logic of its own”. There is also a sharp section on the Consent of Parliament, where Snape lays about him, striking at almost everyone who has participated in the process for failing to realise that the role of the House is simply to provide what Manin again (Principles of Representative Government at p. 326) has described as “argumentative scrutiny”. Although the relationship between the government and the Commons is portrayed initially as one of tension, Snape does later suggest that this may be less so under the Coalition (p. 217). He concludes that this is matter for a revived and reinvigorated House of Commons and a much reformed Committee system – certainly not the House of Lords, as suggested by Chris Wales and Malcolm Gammie. This is followed by brief sections on presentation and delivery.
In chapter 5 Snape explains how the corporation tax base embodies a particular ideology of the relationship between the state and the corporate sector. This is an area with detailed discussions of instability and complexity, with John Cullinane much cited. The section on the prioritisation of the political values takes us back to the values of efficiency and fairness. Snape concludes that the values represent a consensus around the imperative of economic growth, around the importance of fairness and, in the code's shifting nature and constant change, a series of more or less prudential responses to the contingencies of a changing world. “If politics really is about governing then corporate tax reform is about management. The world is too uncertain London's financial markets at once too fragile and too valuable to the present ideological consensus for it to be otherwise.” (p. 210)
Despite the tone of many of the passages used in this book review, the conclusions in chapter 6 are mildly optimistic. So the incremental nature of the reform of corporate tax remains a source of strength, as it involves the constant re-evaluation of political possibilities p. 215). Snape's (almost) final provocative remark is that lawyers have tended to ignore the emphasis on fairness.
Clearly Dr Snape wishes us, his readers and his students, to look at the tax law in a fresh way. In this he succeeds. There is scarcely a page without a provocative thought.
