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Select committee slams property Sipp U-turn

The Treasury select committee has attacked the Government for the last-minute U-turn on property Sipps, saying that it had warned about the potential for abuse two years ago.

The committee recommended the Treasury to assess the opportunities for abuse on the issue back in 2003. It says the reversal in December was an appropriate measure but late in the day and called on the Treasury department to review the episode.

The report quotes Price- waterhouseCoopers tax partner John Whiting who voiced concerns about the amount of time that the Government spent on worrying about the policy rather than recognising the potential problems from the start.

Separately, in the House of Lords this week, Tory peer Lord Fowler said the Treasury acted unfairly to investors who relied on Government promises while fellow Conservative Lord Campbell of Alloway suggested that the episode resembled a polit- ical con trick.

Representing the Government, Lord McKenzie of Luton said it was not fair to say ministers did not make people aware of the potential for such a U-turn as it had indicated that the measures would be kept under constant review because of the potential for abuse.

TSC chairman John McFall says: “This is not a very good example of decision-mak- ing on Gordon Brown’s part. We alerted him to these dangers over two years ago and the Treasury must examine this episode to ascertain why the likelihood of mis- use was not more apparent at an earlier stage.”

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