The ICAEW – arch defender of vested interests and the status quo against democratic accountability

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There are occasions when I find my own professional institute - the Institute of Chartered Accountants in England and Wales - intensely annoying. I can even understand why another outstanding accountant of my acquaintance, Tim Bush, has now quit the Institute in disgust, but I persevere with membership in the hope that one data, maybe, the ICAEW will do the right thing. And then along comes something to dismay me.

On this occasion at was the 'Taxline' publication of its Tax Faculty of which I am a member. In it Frank Haskew, the head of the faculty, offers his review of the year, in which he, amongst other things, refers to 'tax avoidance in the eye of the storm'. Unsurprisingly he notes that 'The Public Accounts Committee continues to be very active in highlighting some of the many issues involved' before moving straight on to say 'There is debate to be had about whether the international tax rules work, but this is now being addressed as a matter of urgency through the OECD BEPS  project'.

The implication is clear. Let's pat Margaret Hodge on the head and tell her to shut up now. Or as Askew puts it "While the PAC has performed a valuable role and helped to identify areas that need to be addressed the danger is that its approach is beginning to damage the UK's reputation." That's absurd: without the PAC hearing in December 2012 Cameron would not have picked up on tax and so we would not have the OECD process. But now that the process is working Haskew wants the PAC to stop, saying "ultimately if parliament does not think the UK tax rules are doing their job then it must change them". Quite so, but he apparently has no clue that this is a job for the government alone and the PAC is a back bench committee undertaking that essential task in a democracy of holding the government to account. His confusion belittles him and the ICAEW.

But that's not surprising: the reality that Haskew is deeply biased on many issues is revealed in his writing. Let me take some other examples from the same piece such as "It is difficulty not to have some sympathy for HMRC's staff who have faced the wrath of the PAC". Read that and you'd think all of HMRC's staff  have been alienated by the PAC, but that;s very far from being true. In fact, most will be only too happy with what it has been asking because what the PAC has revealed is the hopeless inadequacy of HMRC's leadership. Hodge exposed Hartnett. And she's now shown that HMRC did a duff deal with Switzerland, has not been disclosing appropriate data on the tax gap, has not managed charities well, has not pursued evidence on tax avoidance and much more. And she's also criticised staff cuts. I have a very strong impression miost staff in HMRC are 100% behind Hodge. Haskew obviously thinks those staff believe in their leadership; nothing could be further from the truth. This is the department with the worst morale in the civil service.

take another example: Haskew blithely says "Given the government's policy to make the UK's tax system the most competitive in the G20 there mist be danger that the PAC's approach is starting to be counterproductive rather than a helpful contribution to tackling problems". I can only presume at this point that Haskew would feel very comfortable in a one party state where if the government decrees all will fall into line. What Hodge has made very clear is that she does not agree with this policy - and a significant number on her committee clearly do not. Indeed, as Hodge said on November 25:

"They [ministers] believe we should engage fully in the global race to the bottom … I now believe David Cameron doesn't mean what he says when he says multinational companies should 'wake up and smell the coffee'."

But in Haskew's one party state run in the interests of corporate well being this comment would not be allowed. Such is his sentiment throughout.

It's pure arrogance.

It shows the ICAEW has forgotten its public interest duty - which in no way can be aligned with these comments.

And it shows a profound misunderstanding of or disquiet for our political process, either of which is unappealing.

The ICAEW has a long way to go if it is to do anything to mend the enormously damaged reputation of accountants, and this is not the way to go about it.