Case Review: Pepper vs. Hart, 1992
Hansard is the official daily report of parliamentary debates and the record of what was said during the introduction of legislation. As one of the external aids, referencing to Hansard can help the courts to discover how Parliament intended the law to apply and put that into practice. Initially such documents could not be consulted for the purpose of statutory interpretation. In 1992 the House of Lords delivered a blockbuster in the case of Pepper v Hart [1992], which overturned the rule against consulting Hansard. However, more and more people argue that its drawbacks outweigh its advantages.
The case of Pepper v Hart was between teachers at a fee-paying school and the Inland Revenue, and concerned the tax which employees should have to pay on perks. The school allowed its teachers to send their sons there for one-fifth of the usual fee. Since the amount paid by teachers covered only the extra cost rather than the school’s fixed costs, the perk cost the school little or nothing, and so they maintained that they should not have to pay tax on its. Nonetheless the Inland Revenue disagreed and argued that according to tax law the perk should be taxed on the basis of the amount its saved the teachers on the real cost of sending their children to the school.
The reason why the issue of consulting parliamentary debates arose was that, during the passing of the Finance Act 1976, the then Secretary to the Treasury, Robert Sheldon, had specifically mentioned the kind of situation that arose in Pepper v Hart. He had stated that where the cost to an employer of a perk was minimal, employees should not have to pay tax on the full cost of it. By a six to one majority the House of Lords decided to allow reference to be made to Hansard.
The permission was made in limited circumstances. First, legislation is ambiguous, or leads to an absurdity; Second, the material relied upon consists of statements by a minister or other promoter of the Bill. Third, the statements
The case of Pepper v Hart was between teachers at a fee-paying school and the Inland Revenue, and concerned the tax which employees should have to pay on perks. The school allowed its teachers to send their sons there for one-fifth of the usual fee. Since the amount paid by teachers covered only the extra cost rather than the school’s fixed costs, the perk cost the school little or nothing, and so they maintained that they should not have to pay tax on its. Nonetheless the Inland Revenue disagreed and argued that according to tax law the perk should be taxed on the basis of the amount its saved the teachers on the real cost of sending their children to the school.
The reason why the issue of consulting parliamentary debates arose was that, during the passing of the Finance Act 1976, the then Secretary to the Treasury, Robert Sheldon, had specifically mentioned the kind of situation that arose in Pepper v Hart. He had stated that where the cost to an employer of a perk was minimal, employees should not have to pay tax on the full cost of it. By a six to one majority the House of Lords decided to allow reference to be made to Hansard.
The permission was made in limited circumstances. First, legislation is ambiguous, or leads to an absurdity; Second, the material relied upon consists of statements by a minister or other promoter of the Bill. Third, the statements