§ Motion made and Question proposed, That this House do now adjourn.—[Mr. Major.]9.40 pm
§ Mr. Terence Higgins (Worthing)
I am grateful that we have an opportunity to debate the first report from the Select Committee on Procedure (Finance). When the history of the last Parliament is written in about 25 years' time, the Falklands war will undoubtedly feature as the most dramatic event. However, the reform of parliamentary procedure that occurred during the last Parliament may prove to be the most important development in terms of its long-term impact. During the last Parliament, Parliament began to reassert its control over the Executive.
The establishment of the departmentally related Select Committees was in many ways a watershed. Undoubtedly, some of the reforms that occurred during the last Parliament and the other reforms that we envisage would not have been and will not be possible without the establishment of those Committees. Much of the credit for that must go to successive Leaders of the House—my right hon. Friends the Members for Chelmsford (Mr. St. John-Stevas) and for Cambridgeshire, South-East (Mr. Pym) and to my right hon. Friend the present Leader of the House, whom I am glad to see present this evening.
As a result of the setting up of those Select Committees, the Select Committee on Procedure (Supply), of which I had the honour to be Chairman, was able to put forward a series of recommendations that the Government accepted. Those recommendations included, in particular, improvements in our procedure with regard to such items as debates on the Consolidated Fund. The central aspect of those reforms was the reassertion of parliamentary control. We made provision for the House, once again, to debate individual Estimates and items of public expenditure. That measure had fallen into disuse because the Opposition had effectively taken over the control of Supply days. We have abolished Supply days and instead we have Opposition days and the new Estimates days. That is a major change, and I shall relate it to some of my subsequent remarks.
In one respect, the House and the Government did not accept the recommendations of the previous Select Committee on Procedure (Finance)—that the selection of Estimates to be debated should be in the hands of an ad hoc committee. Instead, the Government decided, and the House agreed, that it should be in the hands of the Liaison Committee. On reflection, I am convinced that that was the right decision. It is appropriate that discussions on these matters, and especially on which Select Committee should have its Estimates debated on the Floor of the House, should be in the hands of the Chairmen of those Committees. It is probably true that that may in many ways be the Liaison Committee's most important function, together with the allocation of funds between the various Select Committees.
I am glad to turn to the report against the background of the developments that I have outlined briefly. The Committee's report is unanimous. We were successful in producing our report before the general election. However, that had one unfortunate consequence. I should like to toast absent friends, because hard work and 246 devotion to duty on the Select Committee on Procedure (Finance) was no guarantee of being re-elected in the subsequent general election. So, I pay tribute to some people who were not re-elected, especially Mr. Michael English, who, over many years served on the Select Committee; Mr. John Garrett, who did much to explain the details of the form of the Estimates; Mr. Frank Hooley, who had a number of original ideas; and Mr. John Roper, who from time to time introduced a sense of balance in our deliberations. None of those men is in the House to debate these matters, and therefore it is appropriate that the House should refer to them. I also pay tribute to my hon. Friend the Member for Bath (Mr. Patten) who has subsequently become a Minister, and will not be participating in the debate.
I gather that the Clerks of the Committee are, by tradition, never mentioned in the report. However, I know that members of the Committee are deeply grateful to Mr. Charles Winnifrith— whose blushes I hope to spare on this occasion — and to Mr. Poyser. They contributed greatly to the quality of the report.
The report has some pages that fold out and show the present financial procedures of the House and the timetable, as well as setting out our proposals for changes. I believe that that will be of value to the House, and especially to new Members of Parliament. Some time ago when I was new to the House, I was confused by the procedures of the House on finance, and the tables should be a help. Indeed, it has been suggested that they might be of value to other hon. Members as well.
In addition, we make specific proposals on the control of borrowing, the control of non-Supply expenditure, expenditure as a whole, long-term expenditure projects and the proposals put forward for budgetary reform with regard to the Armstrong committee's proposals. However, before turning to each of them as briefly as possible, I must point out that this debate is held against an unsatisfactory background. It is nothing short of deplorable that virtually six months after the general election, the departmentally related Select Committees have still not been set up. Even if Parliament goes its full term, for about one tenth of the time the Government will not have been scrutinised by those Select Committees as they should have been.
It would be presumptuous of me to allocate blame, but it is certainly not the fault of the Chairman of the Committee of Selection or of that Committee. We should not allow such a delay to happen again. It is true that this is the first time that we have been faced with such a problem after an election, but I believe that we should amend Standing Orders so that Select Committees must be set up within a month of the House re-assembling. If we set them up on that basis, and changes then have to be made, for example because of changes on the Opposition Front Bench, there is no reason why the membership should not be altered subsequently. It is unsatisfactory to go month after month without setting up the Select Committees, and we must take steps to ensure that that does not happen again. I very much hope that in due course the Leader of the House will table a suitable motion to deal with that point.
I come to the report's specific proposals. We rightly point out that with the exception of one or two minor historic aberrations, borrowing has never been controlled by the House of Commons. If Henry V wanted to do battle on the continent by borrowing money, Parliament had no control over what he did. On the other hand, if he wanted 247 to raise money by way of taxation, Parliament had some control, and went through the whole procedure of grievances being redressed and so on. Nevertheless, the Committee decided that it was high time that borrowing was subject to some control by this House. It is not true to say that if we have control over rates of taxation and expenditure, we have control over borrowing. Borrowing is at the very heart of economic management. We hear endlessly about the public sector borrowing requirements. As we point out, in March 1983 the projected PSBR was changed from £7.5 billion to £9.9.5 billion without the House having an automatic opportunity to debate that change.
We therefore believe that changes should be made. We asked that monthly figures for the PSBR should be provided. I am happy to say that that recommendation has already been implemented. We spent much time deciding what definition of borrowing should be the basis for control, but I shall not weary the House with the detailed arguments, which are all set out in the report. We also considered whether monitoring was satisfactory and whether we should have non-statutory scrutiny or some statutory control.
Objections were put forward in evidence, not least—perhaps not surprisingly—by the Treasury. One of the more surprising arguments to be put forward by the then Economic Secretary was that we knew what the taxation and expenditure were and that we could therefore do the arithmetic and tell the difference. However, although the House controls the amount of expenditure to some degree, it has no idea what the revenue is likely to be from the taxation proposals which it controls with considerable vigour. Therefore I am sure that the House, and the former Economic Secretary, who is now in another place, will agree that that is not a valid argument.
The second argument was that the control of borrowing would affect financial markets adversely, but we were not persuaded by that.
The third argument was that the margin of error between the two great magnitudes of expenditure and taxation was so great that no forecast would be meaningful. We thought that, within reasonable limits, that could be overcome.
Therefore we said in paragraph 43 of our report:As regards control of borrowing, we are convinced that there is just as strong a case for the House to be given formal powers to approve the Government's borrowing requirement as there is for it to control expenditure and taxation. The argument that the requirement is uncertain could equally well apply to the outturn of revenue and expenditure, yet no one has suggested that Parliament should not have a say in decisions over these.In many respects borrowing is a substitute for taxation and it is certainly so if one borrows to pay the interest on the borrowing that one has already made. In that respect, therefore, the case has been made and I hope that we shall have a satisfactory reply from the Treasury Bench.
I should like to refer to one other point on borrowing which was referred to by Sir Douglas Wass in one of his Reith lectures in the past few days. I refer to overfunding — the Government borrowing more money than they actually need, something which, for centuries, Governments of this country have managed to do without. Suddenly, during the Report stage of the Finance Bill a short time ago, we were—I am tempted to use the word "bounced" but I am sure that is unparliamentary—rushed into a decision on this issue. The Committee took 248 the view that, while it might be necessary in certain circumstances to overfund, it should be done only if the approval of the House has been obtainedby an Order subject to affirmative resolution".I should like to deal now with non-Supply expenditure. We point out that, of the total expenditure, only about 50 per cent. is directly met by Supply and some 20 per cent. indirectly. So a large chunk of public expenditure is completely outwith the control of the House at present; items such as national insurance, local authorities, Northern Ireland, the EC, and so on. We recommend that we should have more data and that public corporations other than nationalised industries should provide it in the same way as nationalised industries do. We go on to suggest that the external financing limits of the nationalised industries should be subject to approval by the House on an amendable motion.
We also make one other specific proposal which I think is important. We all know from experience that the House as a whole has felt it unsatisfactory that rate support grant orders should be presented to the House effectively as a fait accompli, so that the House cannot actually amend them. We put forward proposals that suggest that a provisional set of rate support grant orders should be made and that time should be provided for debate on them and decisions taken before the final orders are made. That is an important aspect of the matter.
With regard to other areas, we felt that we could not go into a greater control—for example, on local authorities or the EC — without raising important constitutional issues which were beyond our responsibilities. At the same time, given that that was so, and that a considerable amount of non-Supply expenditure would not be directly controlled, we suggested that it would be right for the Treasury and Civil Service Committee to report on the total of Government expenditure which was proposed, to agree on suitable definitions, and that its report should be considered by the House and then subsequently incorporated in the annual public expenditure White Paper.
Next, and in a different order to the report itself, I should like to deal with the control of long-term expenditure projects. There is a particular weakness in our financial procedure in that it is based on what the report describes as "annuality". The whole financial procedure is related on an annual basis. Consequently it is possible, with a particular project, on which expenditure will be made over a considerable period, for the House not to have control as the matter develops. We now have the new procedure on the Estimates and therefore we recommend that a special arrangement should be made in the Estimates whereby a project can be considered at the beginning to see whether it is likely to have long-term implications. If that is so, we show that in the Estimates and the appropriate Select Committee can then consider it in detail and monitor it year by year to see whether it is indeed conforming to the profile that was originally suggested.
§ Mr. Robin Maxwell-Hyslop (Tiverton)
If anyone should doubt the necessity for such a course of action on long-term projects, they should look at the financial history of the Concorde project that a Select Committee studied, and on which it reported. It is the best example that I can think of, of the need for this recommendation.
§ Mr. Higgins
My hon. Friend refers to the classic case for such projects, when the matter got out of control. 249 However, the matter goes much wider than such dramatic cases. Many Government projects start off with a comparatively optimistic estimate of what they will cost, but it escalates over the years, outside the control of the House of Commons. Other members of the Committee and I got the impression that procedures within Government as against those in the House are far from uniform with regard to the control of public expenditure long-term projects. The evidence from Sir Leo Pliatzky suggested that the idea of effective control within Government was overoptimistic. Therefore, the Government and, I am sure, the Treasury, which is always anxious to control public expenditure and waste, should view the recommendations sympathetically.
I refer to two comparatively minor points. One is about the contingency fund, on which we commented. Mr. Michael English had a great preoccupation with that issue, rightly so, as we had an example only last week of contributions to the EC, when payments had been made out of the contingency fund on a somewhat doubtful basis. Secondly, there are proposals on the provision of financial information, about which Mr. John Garrett was much concerned. He provided useful information to the Committee. In the House we cannot appraise estimates correctly if they are not presented in an intelligible form. We have made considerable progress in the past few years, but there is still some way to go. I am sure that by cooperation, particularly with the Treasury and Civil Service Select Committee, it will be possible to achieve that.
The Committee examined the proposals of the committee chaired by the late Lord Armstrong outside the House. It made specific proposals for changes, giving the ideas of, first, a green Budget, secondly, splitting the Finance Bill, and thirdly, bringing the expenditure and taxation sides of our affairs together. The House will recall that that matter was originally considered by the Procedure Committee. Subsequently it was considered by the Treasury and Civil Service Select Committee under the chairmanship of my right hon. Friend the Member for Taunton (Mr. du Cann). It produced a massive tome on budgetary reform. Then the matter was returned to the Procedure Committee for examination of the procedural implications of what had been suggested.
The Treasury and Civil Service Select Committee made specific proposals about a green Budget, some of which were accepted by the Government in their reply in July 1982, and some of which were not. We have made some progress in that direction, but we are still a considerable distance short of a true green Budget in the autumn. Therefore, we need to encourage the Government as much as possible to make further progress. No doubt some of my right hon. and hon. Friends will wish to comment on that. At all events, the matter needs to be considered by the various Select Committees, particularly the Treasury and Civil Service Select Committee. We recommend that there should be a debate in the early new year each year, when the reports of those Committees can be considered.
This year the procedure has been different. We were asked to approve, not to take note of, the autumn statement a few days ago. In the absence of the Select Committees, we have not had a report on those matters. None the less, I hope that that will still be possible. I hope that my right 250 hon. Friend the Leader of the House is listening. I hope that it will still be posssible to have a debate on the subject in the new year before the Budget is formulated.
We also made specific proposals on Armstrong's ideas about splitting the Finance Bill. They were sympathetically represented in the evidence that we took from the then Chancellor of the Exchequer.
We suggest that the Finance Bill should be split. A taxes management Bill should normally be introduced early in each Session. The Finance Bill should as far as possible be confined to proposals for changes in the rates of taxation. Proposals for new taxes, if any, should be introduced in separate legislation rather than in the annual Finance Bill. The evidence that we received suggested that such a split would improve the procedures of the House.
Finally, there is the question of the integrated budget. Our recommendation is simply that the House should be asked to express a view on the principle of integrated procedures for considering expenditure and taxation. That, indeed, is what we are doing this evening. We shall all listen to the views expressed by hon. Members.
§ It being Ten o'clock, the debate stood adjourned.
That, at this day's sitting, the Motion in the name of the Prime Minister for the Adjournment of the House may be proceeded with, though opposed, until any hour.—[Mr. David Hunt.]
§ Question again proposed.
§ Mr. Higgins
That is not a procedure that I would wish to change.
There is a clear case in economic terms for relating the expenditure side of the equation to the revenue side. The Treasury Committee considered that matter in considerable depth and came to the same conclusion. It endorsed with enthusiasm the proposals in the Armstrong committee's report. None the less, the procedural implications of that are substantial. The Select Committee on Procedure (Finance) set out quite clearly the two possible courses of action, one of which we might call a radical reform and the other a development of the existing procedures for an integrated budget. We have set out these two options. Clearly, the development of our existing procedures would enable us to go some way towards integrating the two sides of the equation.
It is my personal view—although I wish to listen to other views—that there is great attraction in modifying and reforming our procedures. However, the strength of the Treasury Committee's case is considerable and would mean a radical alteration in our procedures. It would mean that the Budget would be a budget in the true household sense, incorporating both the amount we expect to raise and the way in which we expect to spend it. However, it would also mean that debates on those subjects would be integrated, and we therefore set out in detail the way in which that could be done. What is proposed in the more radical reform is a practical change, but at some stage we would have to make a once-for-all jump from the traditional procedures to something completely new, and that would require a considerable effort on the part of the Government and of this House. That is something that we ought to debate. We should consider how best we can progress.
I am sorry that it has taken me so long to go through the Committee's recommendations, but these matters are vitally important. The previous Parliament was a turning point in which the House of Commons began to re-assert its traditional role. The power of this House has always 251 rested on the control of finance. It is important that we should do all we can to ensure that the House is able both to examine the detail of financial affairs and to consider, with the Government, the right course which the economy as a whole can achieve and maintain in order to produce the resources on which all other services must necessarily depend.
I have been honoured to chair the Committee. The report was unanimous; I hope that it will be of help and that the Government will also be able to help us in implementing its proposals so that we can continue the process of reform.
§ 10.4 pm
§ Mr. Robert Sheldon (Ashton-under-Lyne)
We are all grateful to the right hon. Member for Worthing (Mr. Higgins) and to his Committee for the excellent work that they undertook. The report is a valuable one and will have considerable influence on our deliberations on these matters for many years.
Like the right hon. Gentleman, I start from the view that the financial strategy of the Government must be under the control of the House of Commons. Taxation and its control lies at the heart of the operation of our procedures. In recent times, Government borrowing has been a major alternative to taxation. It has been used increasingly and has largely escaped parliamentary scrutiny. It is now time to remedy that omission.
Like others who have spoken on these matters over the past few years, I recognise the difficulties of definition and of forecasting the amount of borrowing that an economic strategy may entail. It is therefore right that, initially, such control over Government borrowing should allow considerable flexibility but greater control might be considered at a later stage.
I agree with the proposal to have the debate on the autumn statement following a report from the Treasury and Civil Service Select Committee. That Committee, like other Select Committees, is a servant of the House working on our behalf and uncovering information that is presented to us for our better understanding. The work of the previous Treasury and Civil Service Select Committee under the leadership of the right hon. Member for Taunton (Mr. du Cann) did much to improve our understanding of those matters and achieved for itself a recognition and respect which I hope its successor will be able to emulate. It helps to provide for a more constructive debate on the issues before us.
The absence of such a report was particularly noticeable during our debate a fortnight ago on the autumn statement. The Select Committee should be allowed time to do its work and present it to the House. It is not as if it were in any way dilatory in this matter. One astonishing aspect which has always surprised the House is the way in which such reports have been presented to us almost within days of the information being made available. Plainly, such speed of action does not allow much, if any, time for the taking of evidence. Any extra time could well be employed to the profit of the House and understanding generally. Such evidence could be taken before the report came before us, in time for the debate on the autumn statement.
In recent years, the Chancellor has been more relaxed about giving information on the broad lines of his annual Budget. That, plainly, needs to be encouraged. It is not surprising that there has been a move in that direction. 252 There are three main reasons why I believe it to be so. First, there was the introduction of value added tax. That new tax had a profound effect on the traditional secrecy of the Budget. Before that tax was introduced, not a whisper about tax changes could be heard from the Chancellor before Budget day.
VAT changed all that. The mechanics of the tax means that several weeks' notice have to be given of any changes. Whereas previously any indirect tax changes took effect from Budget day, now, that part of the tax changes attributable to VAT are delayed. At a stroke, the surprises associated with the mystery of Budget day, when no one really knew which taxes would be increased and which would be reduced were gone. Still less did one know by how much. At present one can make one's calculations and assessment and come to a better conclusion as to the direction and shape of the Budget.
At the same time, over the past few years, inflation, to which we have become accustomed, has meant that indirect ad valorem taxes require to be increased each year if they are to maintain their revenue. For that reason a substantial part of the Budget is known in advance.
Chancellors make use of that fact by leaking those parts which they consider might be of some help to them in preparing the public mind for their tax measures. I believe that it is time for the House of Commons also to take advantage of this new relaxation of secrecy by going further along the road to a green Budget setting out the tentative proposals for tax changes for wider consideration and debate inside and outside the House.
I note the proposal of the Select Committee to split the Finance Bill into two parts, one to deal with tax changes and the other to deal with technical changes. The main advantage of that proposal is that it would allow more time for debate, but it would also allow more tax legislation to be put on the statute book. Every Treasury Minister knows how the Revenue departments approach each change of Minister with a whole sheaf of measures which were rejected by the previous incumbent but which they hope will find a more ready response from the new Minister, who, like his predecessors, is convinced by the arguments but, unlike them, may not weigh fully the difficulty of parliamentary time and the deprivation of sleep in an all-night sitting of the Finance Bill Committee.
If our present archaic procedures keep Finance Bills shorter than they otherwise would be, I am frightened to think what they could become without the disciplines to which we have become accustomed. We have a virtual guillotine on the Finance Bill because of the statutory requirement to have the legislation enacted by the beginning of August. In the early hours of the morning during the Committee debates, any division of the Bill seems a sensible and obvious thing to do—the barbaric nature of our existing procedure can surely be bettered —but we must be aware that, once the debate is less confined, the amount of parliamentary time that these matters could consume would rise rapidly, and the amount of tax legislation would also increase.
I noted the prudence with which the Committee dealt with the question of the integrated budget. Rightly, it was in favour of it, but it was unsure how to handle the procedural aspects and left that open for the House to express its collective view. The problem of fitting an integrated budget into a sensible debate is a difficult task. That is not to say that one cannot achieve an integrated budget. Of course, one could have revenue on one side and 253 expenditure on the other side of the accounts, and one could have a general discussion on that. The difficulty comes when one starts to debate such a budget.
Any debate on taxation is reasonably coherent. There are, even now, only a limited number of taxes and hon. Members can express their views on them, on the effects they produce and on the wrongs and rights of the various issues. But when we come to debate expenditure, we can have a debate stretching over an enormous number of issues, ranging from the provision of nursery education for the under-fives to the Trident programme. It is difficult to get that wide variety of matters into one sensible debate, and those belonging to pressure groups rise and speak without reference to anything that went before.
A sensible way to approach the division of expenditure among different programmes — the only sensible way that we have so far discovered—is to have pressure groups acting on Ministers. I would supplement that by having pressure groups acting on Select Committees. It is surprising that pressure groups have not so far exercised themselves on Select Committees, which themselves can be pressure points on the Government. It is only by responding to all the pressures that Ministers reach their conclusions.
We must not forget that probably the most valuable way in which any Government bring about a change in public expenditure is by having the ablest, strongest and least malleable Minister in charge of those programmes which a Prime Minister thinks should be increased. It is just a question of responding to the various pressure points.
This a valuable report, and I am pleased to see the Chancellor of the Exchequer in his place tonight. I urge him to take these matters seriously, as I am sure he will. The advantage of the House of Commons is that Ministers frequently regard themselves as right hon. and hon. Members of this House first and Ministers second. I hope that, at least to some extent, that is still the case and that both will respond positively to the debate.
§ Mr. Edward du Cann (Taunton)
If I may start on a note both sweet and sour, first, I pay tribute to my right hon. Friend the Member for Worthing (Mr. Higgins) and his colleagues who produced the admirable report that obviously took them many hours of hard and devoted labour. Secondly, I say to my right hon. Friend the Member for Shropshire, North (Mr. Biffen), the Leader of the House, that I think that it is a great pity the House should be debating a matter of such constitutional and practical importance so late in the evening. This business is far more important than the business that went before it. It is very unsatisfactory that the House should deal with its affairs in this way. All the more credit then, as the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) suggested, that we have the Chancellor of the Exchequer with us tonight. His presence is greatly appreciated.
The great political divide in the House and in the nation is symbolised in the arrangement of the Chamber. The constitution recognises our confrontational parliamentary system. Thus the debate and argument range between the Opposition Members in general, who believe that a higher proportion of our gross national product should be spent by or influenced by the state, and Government Members 254 who take a contrary view. I think the fact that the argument has so dominated our political life is the chief reason for economic sluggishness ever since the end of the war.
Be that so or not, in this controversy there is one certainty that is agreed by all hon. Members. On whichever Benches of the House one sits, on whichever side of the argument one stands, as my right hon. Friend the Member for Worthing intimated, we Back Benchers have for some time been united in our view that it is essential that the burgeoning machinery of government, irrespective of its size, the huge influence and authority of the Executive — and huge it certainly is — be brought under a more careful and continuous scrutiny.
My right hon. Friend the Member for Worthing was right again. The last Parliament was a turning point in this discussion. We who are honoured by being the people's representatives have a severe duty. We are the trustees for those whom we represent. We are the only ones with the opportunity to engage in that process, the only ones with the power, if we will have the spirit to take it. We took action in the last Parliament and we established the departmentally related Select Committees. Like my right hon. Friend the Member for Worthing, I deplore the fact that six months after the election the Committees are still not re-established and we shall have to have a timetable for them enshrined in Standing Orders in future.
So far so good. There is another stage now to which we should move in this Parliament. By comparison with the best commercial experience, we exercise little financial control or surveillance over Government. For example, the Public Accounts Committee, of which the right hon. Member for Ashton-under-Lyme is now the distinguished chairman, is an inquest only. We need increasingly to get into the examination of contemporary accounts. We do not combine an examination of revenue and expenditure at the same moment. We do not budget in the ordinary sense of that term. We very rarely compare outturn with forecast. There is no examination of the expenditures of nationalised industries. We very rarely survey the bodies in receipt of huge amounts of public funds. Indeed, in the Parliament before last we even established two new huge quasi entrepreneurial bodies, the National Enterprise Board and the British National Oil Corporation, and established no machinery of any kind under which to survey what they were doing. Unlike an ordinary corporate affair, we do not survey the report of internal auditors, we muddle up capital and income and our Estimates —though something has been done to improve them—are unclear. At one moment we are looking at items of a few hundred thousand pounds and at the next moment we are looking at items of £1 billion or more. I repeat, by comparison with the best commercial experience, we exercise little competent financial control or surveillance over the Government and what they do. It is not surprising, therefore, that a number of us have had a determined ambition to change this state of affairs.
Not the least important reform of the last Parliament was the decision to allocate three days in every Session to a detailed discussion of the Estimates. It is a pity, through no one's fault, that the general election prevented a full Session's experience of the new Estimates day procedures. It would have been much easier to assess whether the Select Committees were ready and able to take on the additional financial functions referred to in my right hon. Friend's report if we had had at least one year's experience of Estimates days. One thing one can be clear about is that 255 when the new Select Committees are established they must give financial matters a very high priority indeed in their work.
We should remember that it was during the period of struggle with the Crown that Parliament established what was then an effective system of scrutiny of expenditure. It no longer exists and it should be our purpose now to do our utmost to restore it. That is the whole point of the debate. The question is, how far can that cause be advanced? Good government is our business, and good financial management is at the heart of good government.
For us on the Back Benches it is fundamental that we should be clear about our duty as Members of Parliament. It is not our function only to be legislators, mere critics after the events. We are not part of the Executive, as so many members of the public sometimes mistakenly think. We are, in effect, its auditors and its only auditors. Our job is to expose the Executive to effective scrutiny, to let daylight into what Government are doing and to insist continuously on value for money. Our sanction is the denial of Supply; and, if need be, we should use it. If we are careless or if we fail, who else will do this work? It would he a betrayal of democracy, I suggest, not to enhance the process of inquiry.
My right hon. Friend went through a number of detailed recommendations in the report — the control of borrowing, the parliamentary control of non-Supply expenditure, public expenditure as a whole, splitting the Finance Bill, the control of long-term expenditure proposals and the provision of financial information. Each one of those proposals has much to commend it. They are far-reaching. I hope that my right hon. Friend the Chancellor, during what I hope for him will be a long and successful period of office, will over the years ensure that they are progressively implemented.
For myself I want to concentrate on only one point, and to refer again, as my right hon. Friend the Member for Wothing did, to the sixth report of the Treasury and Civil Service Select Committee, published in 1981–82, on budgetary reform. I am pleased to see several members of that committee here tonight, including the hon. Member for Midlothian (Mr. Eadie), the hon. Member for Colne Valley (Mr. Wainwright), my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and my right hon. Friend the Member for Worthing, all of whom were marvellous members of the team.
What we considered as far back as that to be the key issues — I believe rightly brought up originally by Armstrong — deserve careful scrutiny by the House. They are referred to in part V of my right hon. Friend's report. There were two main themes in Armstrong. The first was that expenditure and taxation should be taken together at all stages of the budgetary process. I am sure that that is right. The second was that there should be a green period prior to the Budget when Parliament and others should examine, discuss and debate provisional proposals made in the autumn statement. If that were done, it would involve the nation very much more in the whole process of government and budgetary procedures.
After that, there would be a white period after the Budget when the final proposals would be subjected to appropriate parliamentary processes. We hoped in the Treasury and Civil Service Select Committee that all of the Select Committees would have a part to play in both periods. We were inclined to put a good deal of emphasis on the importance of the green period, as the right hon. 256 Member for Ashton-under-Lyne suggested, probably because that is where we thought the main reforming thrust of Armstrong lay. That was the point which I tried to make to the Procedure Committee when it was king enough to give me the opportunity to do so.
I hope that my right hon. Friend will not mind if I say that I am sorry that I thought that the Procedure (Finance) Committee was lukewarm about the green period. Paragraphs 95 and 96 of the report give little guidance about how the Committee would like to see a Green Budget developed. The report even goes so far as to exonerate the 13 non-Treasury Committees from participation in the exercise unless they especially wish to do some work. I am worried about that in that, if we are not careful, that is the type of approach which might give the Government an excuse to behave as they have done in this and in previous years—put the matter on in debate in the House soon after the autumn statement without waiting for any Select Committee reports and then regard the matter as closed to the Floor of the House. That is no good. The key to progress, as the right hon. Member for Ashton-under-Lyne suggested, might well lie in the public expenditure White Paper.
The Procedure Committee might be right to say that the autumn statement is not a satisfactory document for Select Committee purposes. What becomes ever clearer to me is that, nowadays, with the tremendous political emphasis that is placed on the run-up to the autumn statement, all of the decisions which are subsequently reflected in the Public Expenditure White Paper are taken at the time of the autumn statement exercise. There therefore seems to be no possible excuse for the Public Expenditure White Paper coming out two or three months later. It should be published before Christmas. That would greatly ease the path of Select Committees during the green period. We could easily make a reality of the green period. It is easy to do, given will and determination. I hope that right hon. and hon. Members on both sides of the House will express themselves clearly during the debate to that effect.
§ Sir Peter Emery (Honiton)
Having served on the Select Committee, I believe that it is important that my right hon. Friend should understand that examination of paragraphs 95 and 96 of the report to which he referred reveals that the limitation was that only two Chairmen of Select Committees — those which are departmentally aligned — were in doubt. It was not a case of the Committee being in doubt. We were recording the evidence which was put before us factually. The general feeling of the Committee coincided strongly with the views advanced by my right hon. Friend the Member for Taunton (Mr. du Cann). I am glad to see that he is nodding his head in agreement—I know that he would not want to mislead the House.
§ Mr. du Cann
If I have got the matter wrong, I am greatly reassured. My hon. Friend the Member for Honiton (Sir P. Emery) has great judgment in these matters. I am glad that he and my right hon. Friend the Member for Worthing (Mr. Higgins) are ready to affect leadership in this matter. It is much needed.
I hope that my comments on the white period will be right. In that regard, the Procedure Committee was a little uncertain as to how it might proceed. During this Parliament— I make this point in the presence of my right hon. Friend the Leader of the House—I hope that 257 when we have the new Procedure Committee established part of its remit will be to give more attention to finding ways in which to make the white period a practical reality.
I should now like to say a little about the machinery. If we put new duties on the 14 Select Committees, it is all the more essential that they are constituted in good time. As the former Chairman of the Treasury and Civil Service Select Committee, I should like to point out that full implementation of the report would put great burdens on it, especially if we have to take the lead in reporting on the autumn statement, not only report on the Budget but take a large part of the Finance or expenditure Bill through its Committee stage, conduct monthly exercises on borrowing, conduct twice-yearly monitoring exercises on the progress of expenditure, report on long-term expenditure and have several ad hoc initial tasks.
I wonder how the present Committee of 11 hon. Members, unless it were to abandon its past policy of holding wide-ranging inquiries into economic, Civil Service and other matters, which I hope have been useful to the House, could find time to carry out such tasks adequately. I am coming increasingly to the view, as expressed by the Liaison Committee in a report to the House in the previous Parliament, that there may well be a case for broadening the work of the Select Committees by allowing them to divide their work, some of which can be performed by Sub-Committees. There can be no earthly reason why the Government should decide whether the Select Committees should be allowed to establish Sub-Committees.
I hope that I have made it clear that I am a strong advocate of the Armstrong approach. My right hon. Friend the Member for Worthing said that that was what the Select Committee on the Treasury and Civil Service recommended in the previous Parliament.
I hope that my hon. Friend the Financial Secretary to the Treasury, in reply, will make it clear that he subscribes to what Armstrong and the Select Committee on the Treasury and Civil Service recommended in the previous Parliament, and to what the Committee of my right hon. Friend the Member for Worthing is now recommending.
The House can be pleased with the progress. Step by step advance is undoubtedly correct. We insist—I use that word advisedly — that the momentum must be maintained.
A majority of Back-Bench Members are determined to make their work in the House as effective as possible, to bring a new window and clarity into the work that Government and the Executive perform in our name, to act constructively as a spur to their confidence and to insist, above all, on administrative excellence. I truly believe that our people deserve no less.
§ Mr. J. Enoch Powell (Down, South)
The first duty of any hon. Member taking part in the debate who served on the Select Committee on Procedure (Finance)— it was penal servitude with hard labour—is to express the immense contribution made to its work by the right hon. Member for Worthing (Mr. Higgins). His determination, tact and perspicuity were essential to crystallising the Committee's work and getting it presented to this—indeed, to the previous Parliament.
258 The right hon. Gentleman said that the report was unanimous. The report would be unanimous if it were by a Royal Commission; but the House has an agreeable way of combining unanimity with dissent in the reports that it obtains from its Committees. The present case is no exception, as will be observed by those who follow the time-honoured rule, in reading the reports of Select Committees, of looking at the minutes and proceedings printed at the end. Those who are sufficiently curious to do so in this case will discover that a certain conservative —in the literal sense, with a very small "c"—frame of mind was made manifest especially in the later recommendations of the report—those concerned with attempting to defeat the principle of annuality with dividing the Finance Bill into triplicate and with endeavouring to remedy the separation of the Budget from the Estimates.
I was fascinated to note that the same hesitations as are expressed in some of those defeated amendments were expressed by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon).
There is a free masonry among ex-Financial Secretaries to the Treasury. All of us who have been Financial Secretary to the Treasury are never quite the same afterwards—"never glad confident morning" to the same extent again. I share the right hon. Gentleman's doubts as to whether we shall succeed in defeating some of the realities of the world and of human nature that are enshrined in those apparently illogical and objectionable forms of our procedure.
As regards green and white budgets, and the share of the House in making Budgets, I must tell the right hon. Member for Taunton (Mr. du Cann) that his panegyric upon the function of this House as essentially the check upon, and opponent of, Government is entirely salutary and entirely justified. But the House also sustains Government — Government sits in this House and is carried on by means of this House. Secrecy and power are two of the attributes of Government. We in the House may modify, and may sometimes, to some extent, break them down; but as long as there is Government, we shall never succeed in taking them over and embodying them in the procedures of the House.
A future historian of public finance in the United Kingdom will put a special asterisk upon the report of the Select Committee, and he will emphasise especially one of its recommendations. It is the recommendation in which we broke new ground by saying that the House should control borrowing as it controls expenditure and taxation. In a way, the wheel has come full circle. We are accustomed, with disputable accuracy, to trace the origin of this assembly to Simon de Montfort and the baronial quarrels with Henry III. But it was the borrowing habits of Henry III, as he successively sought to promote the fortunes of his brother as king of the Romans and his younger son as king of Sicily—if he was his younger son. [Interruption.] I did not mean to cast doubt upon the succession to the Throne, Mr. Deputy Speaker—which got him deeper and deeper into debt, in some cases to some very disreputable sources of finance, with the result that, sooner or later, he had to be bailed out by means of taxation. To that extent, it is true it was the consequences of the Crown's borrowing—the Government's borrowing—which, through the baronial opposition and Simon de Montfort and the rest, brought something passably resembling this assembly into existence.
259 In the succeeding centuries, the importance of Government borrowing diminished. Admittedly there was a great crisis of borrowing in the period of wars at the end of the 18th century and in the Napoleonic war, when immense finance for the waging of war was raised by selling Government debt; but at that time it was funded debt. Only in these degenerate days, when we discovered and developed fist money, have the Government threatened to escape from control altogether by means of borrowing — to use inflation as a more acceptable alternative to taxing visibly and parliamentarily.
It was, therefore, high time, if not overdue, that a Committee of the House should say that we must somehow manage to bring the third element—borrowing—under parliamentary scrutiny and control. But which borrowing. A student of the report will see the efforts which the Committee made to define the appropriate magnitude of borrowing for the purposes of control. There can be different magnitudes. The economist may be interested—I have never been absolutely sure that he is right—in that cloudy generality, the public sector borrowing requirement. Those hot on the heels of Government taxation by means of inflation will be more interested in the Government's borrowing for its own expenditure, or for loaning onwards to their creatures or their collaborators—CGBR, I think, but even in my long service on the Committee I never got the initials infallibly right.
It is those two magnitudes which initially the Committee sought to bring under scrutiny and control; but I do not believe that it will be found possible to stop there. We shall be forced to investigate the forms of borrowing, and the sources of the borrowings that add up to the total. It was a significant moment in the life of the Committee when we discovered that in order to play the money market the Government had been borrowing much more than they needed. A rather over-candid publication of the Treasury displayed this satanic practice so clearly that the Committee drew attention to it in a number of examinations of witnesses, and may actually have occasioned the amendment of the law that was introduced in the last Session of Parliament to give some respectability to the process.
This will have to be, as with much of these procedures, an evolving business. We must start by tackling the total magnitude and then we must go on to see how it can practicably be broken down and studied. Hon. Members who read the report will see how much in our work we leaned upon the Select Committees—and not only upon the Treasury and Civil Service Select Committee, although we leaned most upon that. Indeed at one stage we had to impose a self-denying ordinance, because we found ourselves saying whenever we struck a difficulty, that it would be dealt with by the Select Committees.
We have been able to produce, at any rate, an initial working structure for the control of borrowing, by charging part of the scrutiny upon the relevant Select Committee. I was much struck when the right hon. Member for Ashton-under-Lyne — I am perhaps paraphrasing him, but I think this is what he meant—said that it would be good for the Select Committees to have to pay attention, perhaps on a larger scale and perhaps more strictly than hitherto to the subject of expenditure. Perhaps even here there may be the first beginnings of a wheel coming full circle; for it was from 260 the public expenditure committees and their operations that eventually, through several successions of chrysalis and butterfly, the present Select Committees emerged.
The relevance, and indeed the essential function, of the Select Committee for making possible a new sphere of parliamentary scrutiny and control illustrates the way in which these improvements in our procedure should evolve. We shall now have digested, if the contents of this report are at all accepted by the House, three procedural meals in three successive Parliaments. There is a limit to the digestive capability even of this House and its powers of assimilation. Those powers depend greatly on experience in working a machine, watching it at work from year to year, and trimming it here and there as we go. There is a certain danger, if I may venture to say so. in the House of Commons innovating too much, too fast —possibly faster than the influence of experience can be brought to bear on its innovations.
I am glad therefore that the Committee found itself so closely concerned with the work of the departmental Select Committees. Those Committees are clearly the key mechanism in the structure of scrutiny and control. We must not overload them and we must learn from their experience. The new report has enabled us to see other ways in which they can be used to enable the House, as well as the Government to gain a greater grip upon Government finance and thus a greater grip upon the economy.
§ The Financial Secretary to the Treasury (Mr. John Moore)
I am grateful to you, Mr. Deputy Speaker, for allowing me an opportunity initially to intervene at this relatively early stage. I thought that it might be for the convenience of the House if I were to indicate in broad terms how the Government view the recommendations of the Procedure Committee and the basis on which we think it appropriate to approach them. With the leave of the House, and if I am fortunate to catch your eye again, Mr. Deputy Speaker, I should like to make some comments additionally at the end of the debate.
I welcome the opportunity to participate in such an important debate on the report of the Procedure Committee, so ably chaired by my right hon. Friend the Member for Worthing (Mr. Higgins). The Committee reviewed important and critical matters which go to the heart of the relationship between Parliament and the Government of the day. I have listened with great interest to the distinguished contributions which have been made so far.
My right hon. Friend the Member for Worthing, whose report we are now debating, served on the Select Committee on the Treasury and Civil Service throughout the previous Parliament. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) served with distinction on a number of Committees and is now Chairman of the Public Accounts Committee. My right hon. Friend the Member for Taunton (Mr. du Cann) is a founder Chairman of the Select Committee on the Treasury and Civil Service and of the Select Committee which considered expenditure nearly a decade ago. The right hon. Member for Down, South (Mr. Powell) has long been an expert in some of the most difficult of the areas that we are now discussing. It will be no easy matter for me to intervene in a debate in 261 which we have had speeches from one former Economic Secretary to the Treasury and three former Financial Secretaries to the Treasury. I feel suitably abashed.
Like my right hon. Friend the Member for Worthing, I shall say a word about each of the Committee's 17 recommendations. Before I do so, it may be helpful if I outline the Government's approach. The Committee's recommendations cover a wide area and are a large meal to digest. They can be grouped, as the Committee grouped them, in seven broad themes. First, there are those which deal with parliamentary scrutiny and control of public borrowing; secondly, non-Supply expenditure; thirdly, public expenditure as a whole; fourthly, reform of budgetary procedure; fifthly, parliamentary scrutiny and the control of major long-term expenditure projects; sixthly, the status of the contingencies fund; and finally, the means of presenting financial information to the House.
There are two overriding principles that have guided the Government's approach to the report. The first principle concerns access to information. The Government must try to meet the legitimate demands of the House for information about the public finances necessary for the proper performance of its functions. In doing so, the Government must have regard to cost and market sensitivity. But, subject to such constraints, we wish to be as helpful as we can. Secondly, in all these matters, it is essential to have regard to what it is practicable, as well as desirable, to try to achieve.
The Committee addressed itself first to the control of public borrowing. In fact, as hon. Members will have perceived, its first three recommendations are concerned both with the mechanics of control and with the information needed for that.
The Committee urged the Government to take steps to improve the flow of information about public borrowing through the year. This is an important point and, as my right hon. Friend the Member for Worthing said, we have already done something about it. As of last month, we now publish, about a fortnight after the end of the calendar month, the PSBR for that month broken down between its major components. This replaces the figures previously produced only quarterly and the more restricted monthly figures relating only to the CGBR. New figures include details of the central Government's borrowing on their own account—the CGBR(0)—on which the Committee particularly focused attention, although I take the point of the right hon. Member for Down, South. The new information also covers borrowing by local authorities and nationalised industries from the market which counts towards the PSBR, but not the CGBR. I believe this is a significant improvement on the previous published information.
But the Committee went further and suggested that it would be useful for the Treasury Committee to have information monthly about the performance of the borrowing requirement against the forecast. We have serious doubts about that. The course of the PSBR during the year needs to be assessed in the light of wider economic factors. That is why, under present arrangements, the Government publish revised forecasts of the PSBR outturn with the autumn statement and again at the time of the Budget, as part of their general review of 262 economic prospects. There is a risk of the markets being misled by over-interpreting short-term movements in the PSBR.
The Committee also asked for information about how the Government's borrowing is financed. I hope that the Committee did not underestimate the extent to which the available information is published already. The full money and banking figures, on a banking month basis, contain all the information available internally about the take-up of central Government debt by the non-bank private sector, analysed by class of instrument. Details of the financing of the CGBR and the PSBR are already given on a calendar quarter basis. There is no calendar month information available on the central Government financing by sector.
The Committee recommended legislation to provide for House of Commons control over the Government's annual borrowing requirement on their own account. I have to tell the House, as we told the Committee in evidence, that we cannot agree with that. I ask the House to recognise that the Committee's report does not deal with the practical difficulties—for example what would happen when the cumulative borrowing requirement reached its statutory limit, even though expected to come back within it by the end of the year.
There is a more fundamental dilemma. If new powers of control over Government borrowing are fairly loose they risk becoming ineffective. Yet, if they are too tight, they could conflict with policies on public spending and tax which the House has already approved.
I now turn to the Committee's third recommendation concerning what some describe as "over-funding". No responsible Government would pledge themselves not to use the instrument of higher debt sales to offset excessive growth in private sector demand for credit if that seemed the best way of achieving sound monetary conditions. I do not think that any hon. Member will wish to challenge that. But my right hon. Friend, the Chancellor said in his speech at the Mansion House on 20 October thatover the medium term there should be no systematic tendency either to overfund or to underfund the borrowing requirement.It is, in any case, mistaken to view the provision in the Finance Act 1982 allowing the Treasury to borrow for reasons of monetary control as marking a significant change in policy. Quite the contrary. It was designed simply to remove a technical obstacle to the continuing use of funding as an instrument of monetary control.
§ Mr. Higgins
Is it the case that previously there had been no significant overfunding and that the change embodied in the Finance Act enabled the Government to adopt a policy which had not been adopted by successive Governments during the previous century?
§ Mr. Moore
That is not true in this case. I draw my right hon. Friend's attention to the financial year 1977–78, when there was overfunding. There was no previous assumption that the manner of overfunding in that instance was illegal. The way in which the national loans fund was likely to go technically into surplus created a difficulty. It was clear that this needed to be overcome to ensure that the Government were not acting illegally.
I come next to parliamentary control of non-supply expenditure—those parts of public expenditure that are not met out of the Consolidated Fund and incurred on services covered by the Estimates laid before the House.
The Committee focused principally on expenditure by public corporations and the local authorities. The 263 Committee noted, with some justification, the present disparity of treatment, in terms of information in the White Paper "The Government's Expenditure Plans", of expenditure by the nationalised industries proper and the other, mainly smaller, public corporations. The financial information in the White Paper on many of the so-called "other public corporations" is rather thin and a little scattered. One reason for this, as the Committee recognised, is that the sums involved are rather small in the context of public expenditure as a whole.
None the less, we think it right that the House should have more information and we are planning to include additional tables in the next White Paper. We shall have to limit the information to what is then readily available, and it will not go as far as the "sources and uses of funds" statement provided for nationalised industries. But it will be a step forward which I hope the House will welcome, and we hope to move further in that direction in later White Papers.
As for the nationalised industries as a whole, the Committee expressed some concern that present arrangements did not, in its view, sufficiently provide the House with opportunities to scrutinise and control the annual external financing limits. Its solution was to recommend that the external financing limits should be subject to approval in total by the House, on an amendable motion.
The nationalised industries' EFLs are an important part of public expenditure. But we cannot agree that the House does not have adequate opportunities, under present arrangements, to bring its influence to bear on these matters. There are already a number of opportunities for the House to debate economic matters, when the question of nationalised industries external financing limits would naturally arise. But, in our view, it would neither be feasible nor desirable to subject the total of EFLs to approval by the House on an amendable motion. The nationalised industries are at present notified of their individual EFLs the previous autumn. The effect of the Committee's recommendation would be to introduce continuing and unsettling uncertainty for the industries concerned. Moreover, any subsequent changes which gave rise to an increase in the total of EFLs, however urgent, or however trivial, would need to be brought back to Parliament for approval. The industries' freedom to take commercial decisions and respond to rapidly changing circumstances would be reduced. I cannot think that that is something that the House would welcome. Of course, the House has regular opportunities to review the circumstances of individual industries.
The Committee made recommendations on local authorities' expenditure. Its views are embodied in two recommendations: Nos. (6) and (7). Essentially they argue for the publication of provisional rate support grant orders — what the Committee styled "Green" RSGs — to be published before the end of the summer recess, for discussion by the House. In the Government's view, that would not be practicable. On last year's pattern, when the orders were presented in December, it would mean advancing the timetable by three to four months. But we certainly accept the importance of giving both local authorities and the House as much early information as possible about these settlements. It is for precisely this reason that this year and last the broad outlines of the 264 settlements were announced in the summer, well before their formal presentation. Having regard to practicalities I hope that the House will see this as constructive.
The Committee dealt next in its report with parliamentary consideration of public expenditure as a whole. In paragraph 83 there is an important sentence. The Committee said:While we reject the concept of a binding control by the House over the totality of public expenditure, we believe that there should be more scope for effective scrutiny of the Government's management of the economy as a whole, as reflected by the public expenditure planning total.As I read that part of the report, the Committee saw this as an evolutionary process, and it noted that the House had already increased its scrutiny in many ways over recent years, not least through the operations of the new Select Committees, as the right hon. Member for Down, South mentioned.
An evolutionary approach is, I believe, what is required. The Committee's particular recommendations go further than we can accept, but improvements on the present position can be made, and indeed we are already making them.
On the question of definitions—recommendation No. (8) — the statistical coverage of the planning total definition, and analyses within the total, are highly technical matters, as an article to be published shortly in "Economic Trends" will testify. But changes on them are certainly not made arbitrarily. Where they are made, they are intended to improve either control or the realism of the figures.
I can give two assurances. We shall certainly inform the Treasury and Civil Service Committee before making any fundamental changes in coverage of the public expenditure planning totals. And we believe that we can also make it easier for people to make comparisons between one White Paper and another, where the definitions have changed from year to year. We shall be including additional material to that end in the next White Paper. The Committee recommended the publication of quarterly profiles of the public expenditure planning total for the year ahead. For the reasons that I gave in relation to borrowing profiles, we do not think that would be either practicable or appropriate.
We do wish to provide the House with earlier and fuller information about expenditure outturns. Quarterly outturn figures for the planning total have been published in "Financial Statistics" for some years. They are currently published some four months after the end of the quarter and we have been looking at ways of reducing, that interval. Supply expenditure outturn figures to the end of September were published on 17 November in my note on the winter Supplementaries. Figures on the rest of the planning total take longer to assemble, but we hope to give the Treasury and Civil Service Committee an estimate of the whole planning total about a month earlier than hitherto. I am hopeful of further progress in the future. We are also looking at ways of improving the presentation of these figures.
I turn now to the important section of the Committee's report which deals with proposals for budgetary reform. First, I refer to the recommendation No. (10) for a regular debate in January to take note of the autumn statement, together with motions to approve the external financing limits of the nationalised industries. I have already dealt with the latter part of this, discussing the Committee's 265 proposal on EFLs generally. As to the first part, for the past three years there have been debates on the economy in January on an Opposition motion, following reports on the autumn announcements by the Treasury and Civil Service Select Committee under the chairmanship of my right hon. Friend the Member for Taunton. However, hon. Members will be as aware, as I am, of the already severe pressures on the time of the House. Matters of finance have to compete for the available parliamentary time with other essential business, and it may be best for the precise timing and form of debates on them to be left for discussions through the usual channels.
In recommendation No. (11) the Committee proposed a wholesale and radical restructuring of the arrangements for tax legislation. Recommendation No. (12) is about integrated procedures for considering expenditure and taxation. They overlap to some extent. It may be helpful if I comment first on the Committee's proposals for handling tax legislation before coming to the idea of an integrated Budget.
There are three proposals: first, that a Taxes Management Bill should be introduced early in each Session of Parliament; second, that the Finance Bill should, so far as possible, be confined to proposals for changes in rates of taxation; and, third, that proposals for new taxes should be made in separate legislation rather than in the annual Finance Bill.
I shall take the last point first: separate Bills for new taxes. That is, of course, not a new idea. Hon. Members will recall a number of occasions when new taxes have been introduced in separate legislation, for example, Petroleum Revenue Tax in 1975, Development Land Tax in 1976 and the National Insurance Surcharge in 1977. To do so always is not something on which any Government could give an absolute assurance. But if, in future, we were to see the need to propose a major new tax, the Committee's recommendations would certainly weigh with the Government.
I fear that I cannot be as forthcoming in my view of the Committee's other two recommendations, which would involve splitting the Finance Bill regularly into two parts —a spring Bill confined to changes in rates of taxation and an autumn Bill, which the Committee called a Taxes Management Bill, for all other tax matters. A glance at any recent Finance Bill will show just how small a part is concerned with tax rates, and how large a part is concerned with other kinds of tax changes, many of which are important in financial, economic and distributional terms. Therefore the Committee is really suggesting deferring the great bulk of Finance Bill matters to a separate autumn Bill.
To separate those matters from the main Finance Bill and to put them into a separate Bill, at a different time of the year, far from making it easier for the House to judge the Government's proposals as a whole, would in our view make that task much more difficult.
§ Mr. Maxwell-Hyslop
Has my hon. Friend, in preparation for the debate, troubled himself to read the evidence given to the Select Committee by the previous Chancellor of the Exchequer? As the views that he is now putting forward are so different from that evidence, will 266 he be good enough to acquaint the House with the reason for the disparity between what he is now saying and that evidence, given by the previous Chancellor?
§ Mr. Moore
I have, of course, read the evidence. I would not seek to address the House without having addressed myself to the evidence to the Committee. I am not sure that I wholly share my hon. Friend's view about the views expressed by my right hon. and learned Friend the former Chancellor of the Exchequer. There is no question about the fact that sympathy was expressed with aspects of the matter. I shall re-read the evidence and reaquaint myself with the views of Her Majesty's Government on this issue.
The Committee's proposals for an integrated Budget would go on to add expenditure and borrowing provisions to its slimmed down Finance Bill, on the principle of bringing together for the House's consideration all decisions on expenditure, borrowing and revenue bearing on the Government's financial strategy. There is perhaps some element of conflict between the suggestion that the Finance Bill should be made more comprehensive in this way and the Committee's proposals to relegate to a separate autumn Bill many important tax proposals which go to make up the Budget and which shape its overall balance, revenue implications and effect upon individuals and firms.
I must therefore tell the House that we do not share the Committee's enthusiasm for the approach proposed in the first two parts of recommendation No. 11. However, we certainly share the Committee's aim of improving the scrutiny of tax legislation.
I need not remind the House of the extent to which, under this Government, consultation on tax matters before legislation has increased, with the issue of Green Papers, consultative documents, exposure drafts, and so on. We intend to build on that, and indeed a large part of next year's Finance Bill will have been through that process.
I need to say one more word about the recommendation for an integrated Budget. It is rather different from the Committee's other recommendations, in that the House is invited to express a view on the broad principle of integrated procedures for considering expenditure and taxation. For our part, I suggest there can be no disagreement about the principle. Indeed the Government made their position and objectives clear in the course of the very detailed examination carried out by the Treasury and Civil Service Committee in preparing their report on budgetary reform.
The Government have made a number of substantial changes, particularly in providing the House with more comprehensive information about their financial plans, as the Procedure Committee recognised. Indeed, recent discussions of the fiscal prospect this year and next following the Chancellor's autumn statement would not have been possible before 1982, since that was the first time such detailed figures had been provided in the autumn. But I shall certainly continue to listen carefully to the views expressed in the latter part of the debate.
§ Mr. Tim Smith (Beaconsfield)
Are not the Government taking a substantial step backward on the question of the Taxes Management Bill? Six years ago, my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said in a speech to the Addington Society that we should have a technical taxation Bill. If my hon. 267 Friend is so concerned to improve the scrutiny of tax legislation, is there not a case for changing the date when tax proposals are introduced? If there is a Finance Bill in April each year, it is inevitable that the consideration of detailed, technical tax proposals is rushed. Technical tax proposals should be contained in a Taxes Management Bill, as the Committee recommended much earlier in the Session.
§ Mr. Moore
I hear what my hon. Friend says, and I read his personal submission to the Committee. I am aware that there other views on the matter, but I am expressing the considered view of Her Majesty's Government at present.
I turn next to what the Committee had to say about our present procedures for dealing with long-term expenditure projects. I know that this is a matter of particular interest to a number of Members on both sides of the House. The Committee devoted a good deal of space to the subject and, since time is pressing on, I hope that the House will forgive me if I do not deal with it at great length.
Securing better management of long-term capital projects is an objective which we all share. But in our view, this is not an area where it would be appropriate to introduce any new procedures. As the Committee itself acknowledged, we have already done a good deal in the 1983–84 Supply Estimates to increase the information given to the House about these projects. We shall continue to look for scope for giving supporting information, either in the Estimates or in the Expenditure White Paper.
The contingencies fund is already subject to well documented and uncontroversial rules designed to restrict its use to the absolute minimum. We do not believe it to be necessary or desirable to introduce any new limitations. Nor, in view of other pressures on the time of the House, does it seem right to take up parliamentary time with legislation designed simply to confirm existing practice. I understand that some hon. Members — as my right hon. Friend the Member for Worthing has already said—take a different view. I shall listen further to what the House has to say on the matter.
The Committee's final recommendation, that there should be a full inquiry into the financial information provided for the House and its Committees, was addressed to the Treasury and Civil Service Committee and the Public Accounts Committee, and they will no doubt consider it.
The fact that I have taken so much of the time of the House is a mark of the importance of the inquiries conducted by the Committee under the outstanding chairmanship of my right hon. Friend the Member for Worthing.
§ Sir Kenneth Lewis (Stamford and Spalding)
I have listened to my hon. Friend with great interest, but I regret having to say that I feel that he has taken a great deal of time to give us practically nothing.
§ Mr. Moore
I might be persuaded to change my mind. I have spoken at some considerable length, and I regard that as showing the importance of the subject. I am glad 268 to have the opportunity to pay tribute to all of those who served with my right hon. Friend the Member for Worthing on the Committee including, as he rightly said, some who gave distinguished service and who are no longer Members of the House. I look forward keenly to the further contributions that hon. Members will make to the debate.
§ Mr. Richard Wainwright (Colne Valley)
The tone and content of the Minister's speech show that the submission of the report's proposals to the House is hazardous. The proposals, sound and timely as I believe them to be — many speakers have demonstrated how sound they are—comprise an intricate package. They should be treated as such. There seems to be a danger, clearly implied in what the Minister has said, that as the Government intend to use their majority to vote down or refuse some parts of the package, the House may be left with a new and rather burdensome structure for long discussion devoid of any capacity to make decisions.
There is a danger that discussion in the House of intricate economic matters and financial management can become something of an "in game". We could delude ourselves—myself included—into thinking that we have achieved great things simply by pronouncing upon the Government's policy without seriously influencing it in any way.
It is disappointing to me and to my right hon. and hon. Friends that the Government are apparently determined to resist those parts of the proposals which have a real bite —particularly, of course, the control over borrowing. The hours that in recent years have been spent in the Chamber ventilating wise and interesting opinions on the public sector borrowing requirement must be within the recollection of most, if not all, hon. Members who are still present. We might as well have saved our breath for all the difference that that has usually made to Government policy.
Some enthusiasts for the new departmentally related Select Committees will at once resist my argument and say, "Ah, but what about the publicity that the reports of these new Select Committees have received since they were set up? What an important weapon the unanimous views of a Select Committee has proved to be in influencing public opinion." I am not filled with as much euphoria about that as some hon. Members, because it seems to me that the Select Committees are beginning to exhaust the initial advantage of their impact on public opinion.
In the beginning, Select Committees were novel, and naturally the media were interested in what these strange new animals would do and say. There were some happy arrangements over chairmanships, and many of the Government's policies were novel, which added point to Select Committee comments on them. Finally, there was the initial difficulty of many witnesses in adjusting to Select Committee procedure. Some of our Select Committees had an entertaining field day during the first two or three years. All that is beginning to fade. It is not enough simply to provide new structures for Select Committees to scrutinise and comment upon Government financial policy.
Furthermore, one sees that relatively few of the Select Committee reports were debated in the House. When I remonstrated with colleagues in and about the precincts 269 that we ought to have more debates on Select Committee reports, the usual, and very fair, riposte was, "Well, what if we do—what does it lead to, where will it get us?"
If the Government have their way, the Minister will leave us with more opportunities for talk and learned scrutiny, but with no major opportunities for further control. Not only are the Government unwilling to submit their own policies to control, but they are being very shortsighted in failing to realise how valuable such control would be from the Conservative point of view when eventually the electorate deprive them of office and Conservative Members are opposing some other party in government. Conservative Members may then take a rather more positive tone.
I wish to draw the attention of the House to the crashing disappointment about the Treasury's new attitude to the idea of a taxes management Bill separate from the Finance Bill. This is walking backwards with a vengeance. I hope that Government Members will not allow the Treasury to get away with that sort of retrograde de-civilising action.
The Minister made an astonishing statement in an attempt to support his disdain for a separate Finance Bill covering the rates of taxation. He said that tax rates are much smaller than the tax arrangements, tax revisions and tax management parts of a Finance Bill. If the Minister is stooping merely to counting the words in a Finance Bill, he must be right, but could he get up in front of any body of opinion outside the House and suggest that all the pages of redefinition of some obscure points of a tax in a Finance Bill have one whit of the importance of the vital sentences which contain the rates of tax? If the Minister has leave of the House to speak again, I hope he will withdraw the suggestion that simply because the essential parts of a Finance Bill—the rates of the levy upon our citizenry—are few they are therefore of less importance.
One matter which gave the Treasury Select Committee the greatest confidence in examining the former Chancellor of the Exchequer in the last Parliament was the former Chancellor's persistent loyalty to what he had said to the Addington Society about splitting the Finance Bill. The House was told, without any apology or explanation of why the Treasury view has changed, that this is considered, as I believe the Minister was at heart trying to say, to be inconvenient to the Government. If that is not the reason, I hope the Minister will develop a rather better excuse for reneging on the previous Chancellor's clear commitment to a separate Bill. It will be a great opportunity missed if the Government try to withhold from the House the decisive parts of the proposals and leave us only with additional powers of discussion.
§ Mr. Robin Maxwell-Hyslop (Tiverton)
I am surprised that the Treasury Bench intervened at such an early stage in the debate. The Chancellor having withdrawn, the Financial Secretary is presumably in the position of having no licence to depart from anything he has already said in response to what was supposed to be a continuing debate, and I find that highly unsatisfactory on the part of the Government. If I am told that the Chancellor has withdrawn because of the lateness of the hour and because he has his boxes to deal with, my response is that is was the Government's choice to have the debate at this hour, not that of Back Benchers or of the 270 Committee whose work resulted in this report. That is a further reason why it is unsatisfactory to have a debate such as this at this hour of the night.
When the Chancellor of the Exchequer gives evidence to a Select Committee of this kind, the House—not just the Committee to which he gave that evidence — is entitled to expect the response from the Treasury Bench to the Committee's recommendations to be consistent with the evidence given by the Chancellor, otherwise the Committee has no basis on which to make recommendations to the House, unless there is a degree of predictability that the intentions of the Government are embodied in the evidence that they gave to the Committee, at any rate at that point.
§ Sir Peter Emery
Might we not be likely to conclude that we had a reforming Chancellor in the past and we now find that control has been re-established by Treasury officials wishing to revert to a policy which a reforming Chancellor was able to get them away from?
§ Mr. Maxwell-Hyslop
Unfortunately, we are left to speculate on whether that is the case, a speculation in which we would not have to indulge if the Chancellor had thought it right to participate in this debate.
§ Mr. Maxwell-Hyslop
One intervention at a time, please. However, it is not for me to deny the shrewdness of the prediction that my hon. Friend the Member for Honiton (Sir P. Emery) makes.
§ Mr. Maxwell-Hyslop
That exemplifies the attitude of the Treasury Bench—to answer, rather than respond to, the points that are made. It is to respond to the Committee's recommendations that we look to that Bench, not to answer them. It is a distinction with a difference.
In the summary of recommendations the report says:The Government should lay before the House, before the end of the summer recess, provisional rate support grant Reports or Orders, including a specification of the distribution formula.It is necessary and desirable not only for the House to exercise proper supervision, but to enable local authorities to make rational financial plans for the coming year. I bracket with the three recommendations Nos. (6), (7)(a) and (7)(b) the items under the headingControl of long-term expenditure projectsbecause one is apt to think of long-term expenditure projects being exemplified, for instance, by the Concorde project, but that is only one category of continuing liability.
There is another category that may interest the House, and that is the whole mechanism of repair and renovation grants by local authorities. What happens is that the Government announce—and change during the year—the percentage grant. By changing the percentage, the Government do more than what they purport to do, for if the percentage grant is increased that alters the pattern of demand. In other words, there are two variables. When it goes as high as 90 per cent., a response is generated that is not generated with a 50 per cent. grant. When that grant can be taken up not just in the financial year but after the end of it, that means that central Government are imposing on local government a continuing liability that is not under local government control.
271 The real situation is even worse. It is an interesting illumination of continuing liability. I think I am right in saying that the way in which central Government finances grants of this kind from the point of view of the Exchequer contribution is by 20 per cent. in the first year and then 10 per cent. per year for the following seven years, whereas many hon. Members believe that the Government's 90 per cent. contribution is paid in the year in which the grant is actually paid out to the individual householder. That is not the case, if I am correctly informed.
So what happens is that grants of this kind give rise to a liability on the consolidated fund which extends for seven years from the uptake. We are starting to get halfway to the sort of time span encompassed by the Concorde project, the Humber bridge or such things. It is particularly important that Parliament should be able to monitor the consequences for future years of measures adopted by central Government which then pass outside their control and, incidentally, outside the control of local authorities as well into a nebulous world of no control at all.
In passing, the old Trade and Industry Sub-Committee of the Select Committee on Public Expenditure once discovered in the course of examining witnesses an interesting example. British Leyland was set up under the National Enterprise Board in such a way that any expenditure of less than £1 million was not monitored by the NEB. The NEB believed that the Department was monitoring it; the Department, on the other hand, believed that the NEB was monitoring it. In fact, neither was. So at that time BL could have engaged in unlimited quantities of expenditure commitments so long as each one individually was £1 under £1 million. Yet the arrangements which brought that into existence were continuing rather than annual.
What this report had done in part is to illuminate that what appears to be a semblance of parliamentary control and supervision is neither in the case of continuing projects.
Although my hon. Friend, speaking so prematurely from the Treasury Bench, indicated that the House has what he called other opportunities of debating external financing limits for nationalised industries, it is necessary to point out that a debate on a statutory instrument is by its very nature a debate on a non-amendable question, whereas a Bill, including a Finance Bill, can be amended by the House; admittedly where expenditure is concerned, it can only be amended downwards, but amended it can be.
It is inherent in the characteristic of a statutory instrument that it is not amendable by the House. Therefore, to regard the occasions when there is an order before the House to alter the external financing limit of a public corporation or a nationalised industry as a substitute for a Select Committee as recommended reveals either that the Minister is unaware of the difference between what the Committee has recommended and the statutory instrument process through the House, or else that he needs to justify why it should be regarded as an acceptable alternative to what the Select Committee has recommended, which as yet he has not done.
Running through the unsatisfactory Treasury Bench intervention was a fundamental, though not specifically stated, objection which the Treasury always has to any control by the House — other than control which is formal rather than actual. Of course the Treasury finds 272 such control by the House distasteful. It often finds the process of the 14 functional Select Committees distasteful. Either the control, as opposed to mere monitoring, must be exercised by the Select Committees or it must be exercised by the House.
The pattern of the past few years, which the House has determined for itself because options were open to it, is not that it should subcontract control to the Select Committees but that the Select Committees should ferret out information and highlight for the benefit of the House the significant information which, in the view of the Select Committee, should be brought to the attention of the House so that the House, if it so wishes, can take effective action. If that is not the case, all that has been invented is a new way in which to waste everyone's time.
I do not share some of my colleagues' enthusiasm for the proliferation of sub-Committees, for several reasons. One is that every sub-Committee has to be manned by a Clerk. It is difficult enough to man the Select Committees with what, without disrespect, I shall call real Clerks. It has been customary to man some of the Select Committees with what are privately known in the Clerk's Department as retreads. They are people who have followed a career in the public service outside Parliament and come here specifically as Select Committee Clerks. They are outside the normal promotion structure of the Clerk's Department. Although that might have been satisfactory as an emergency measure, it is less satisfactory than having Select Committees manned by what I shall call career Clerks — those who have chosen the service of the House as their career. It is unfortunate that the so-called retreads include ex-members of the Diplomatic Service whose lives have been devoted to pretending that wholly incompatible interests are merely a confluence of opinions which just happen to differ on some trivial and passing phraseology. A Select Committee's cutting edge is removed if it is not served by a Clerk who is experienced in and dedicated to the service of the House. The Clerk's Department has no option but to employ retreads if there is an unpredictable proliferation of Sub-Committees. It cannot, from its own resources, expand its manpower to serve a proliferation of such Committees at short notice. Such demands could be met only after a long time and considerable retraining. Sub-Committees are apt to speak in the name of the Committee unless the Committee monitors the Sub-Committee properly.
Another undesirable matter is a Committee altering the recommendations of colleagues who have heard the evidence when the Committee has not. That was one of the principal criticisms of the old Select Committee system. Members of the Select Committee used to alter the report of the Sub-Committee in material ways. The changes were not simply to do with emphasis and phraseology. The result of the system was that the bulk of the menbers who had not read the evidence, and certainly had not heard it by participating in the questioning of witnesses, altered the recommendations of the Committee which had done the work. It is much better to set up more Select Committees with smaller membership, so that everyone knows where he is and responsibility is clear cut, than to have Select Committees that may be oversized—11 is too many—and have them spawning an amorphous mass of Sub-Committees.
§ Mr. John Maxton (Glasgow, Cathcart)
Will the hon. Gentleman consider the Select Committee on Scottish 273 Affairs, which covers a wide range of topics? It has 13 Members but is not allowed to appoint any Sub-Committees. That makes the work of the Committee very difficult.
§ Mr. Maxwell-Hyslop
If we agree that Scottish and Welsh Select Committees are necessary—and they can cut right across the terms of reference of the main Committees of the House — there is likely to be a proliferation of demand for sub-Committees. The Scottish Select Committee wishes to emulate the functions of the departmental Select Committees. That is the nature of the problem.
Of necessity, Sub-Committees will tend to sit in the afternoons, while the main Committees will sit in the mornings. That further impoverishes the lifeblood of Parliament on the Floor of the House. The party committees and the all-party committees also meet in the afternoons.
§ Mr. Maxton
The hon. Gentleman is missing my point. The Scottish Select Committee has other commitments. It covers a Department of State — the Scottish Office. It is unfortunate that the Scottish Office covers the functions of a large number of United Kingdom Departments within Scotland. Therefore, the Select Committee, in monitoring the work of the Scottish Office, cannot concentrate on single issues—as can other Select Committees—but must cover a wide range of topics.
Of course, I believe that there should be a Scottish assembly and that no Scottish business should take place in Parliament. But if there is to be a Select Committee on Scottish Affairs, we must look carefully at how it operates.
§ Mr. Maxwell-Hyslop
The hon. Gentleman has illuminated the need to give further consideration to whether there should be such regional Select Committees. Some of the detailed investigations— for instance, on airport policy — which the Scottish Select Committee examined, cut right across the main line functions of other Select Committees.
However, we are debating not the Select Committee system, but the first report of the Select Committee on Procedure (Finance). There is enough meat on that bone for us to confine ourselves to that.
It is a sad day for the House when a report which has involved such heavy work, and which has been so carefully considered and drafted, should be debated late at night when the principal Minister concerned is too busy to do more than sit through the start of the debate, and when the Government decide upon their response before they have even heard what many hon. Members have to say. It reduces the debate largely to a farce. That is not an acceptable response to the Select Committee's recommendations.
§ Mrs. Renée Short (Wolverhampton, North-East)
The hon. Member for Tiverton (Mr. Maxwell-Hyslop) has made some severe criticisms of the way in which the Select Committees work, and I do not agree with all that he says.
The Select Committees are not especially large. Nine hon. Members do not constitute a large Committee. The Committees as set up are satisfactory. I doubt whether more members would make them more efficient. I agree 274 with what the hon. Gentleman said about the absence of the Chancellor of the Exchequer. The right hon. Gentleman should be present to hear what hon. Members are saying about the report, but I imagine that we can manage without him.
I wish to add my congratulations and thanks to the right hon. Member for Worthing (Mr. Higgins), before whom I had the pleasant experience of appearing as a witness, which is a case of the biter bit. I survived my baptism of fire before the right hon. Gentleman's Committee, and I found the experience exhilarating.
I hope that the Lord Privy Seal and Leader of the House of Commons will have some regard to what has been said about the need to get the Select Committees working again. I advise the right hon. Gentleman that a parliamentary question has been tabled for a priority answer on Thursday, which I hope will be satisfactory.
It is quite deplorable that since the election no Select Committees have been set up and no work has been done. Several Select Committees have reports awaiting completion. We are performing a gross discourtesy to those who appeared before the Committees as witnesses, who submitted written evidence and who allowed us to visit their regions to investigate the problems that were being examined.
§ The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen)
The reason why the departmental Select Committees have not been established is that they were objected to on the Floor of the House. The sooner they are established, the better.
§ Mrs. Short
As there is a procedure for dealing with such arbitrary objection to the setting-up of Select Committees, why has it not been acted upon?
§ Mr. Biffen
Simply because the history and ethos of the departmental Select Committees is to proceed by agreement and conciliation, if possible, rather than by debate and vote.
§ Mrs. Short
I hope that the matter will be dealt with as expeditiously as possible.
Most of the recommendations directly affecting the work of the Select Committees apply especially to the Treasury and Civil Service Committee, and to those Select Committees which have the nationalised industries within their remit.
Two matters considered by the Select Committee on Procedure (Finance) would impinge on the work of the Select Committee on Social Services—I hasten to say, if only we had one. I informed the Select Committee on Procedure (Finance) that the Committee responsible for examining the policy, administration and expenditure of Whitehall's biggest spending Department cannot but take an interest. The Department of Health and Social Security, somewhat discouragingly, informed the Treasury and Civil Service Committee that the Government would be unable "without inefficiencies" to change cash-limited services between the appearance of the green Budget or autumn statement in November and the public expenditure White Paper in the new year.
I find this hard to believe. The Government are always in the business of adding or subtracting vast sums to or 275 from their planned expenditure either by transfer—by sleight of hand—or by raiding the contingencies fund. Select Committees can examine the autumn statement with some effectiveness. It is vital that the autumn statement should be informative, and as close as possible to the detail contained in volume 2 of the White Paper published in January or February. If such information were available in the autumn, any Select Committee could and should use it.
Sadly, nothing much has happened to make that more likely. The Chancellor of the Exchequer told the Procedure (Finance) Committee that he believed that the autumn statement was all right as it was, and I fear that the Committee swallowed that claim. At paragraph 96 the Committee observed:We do not see them"—meaning Select Committees—being able to put specific proposals to the House on the basis of the present Autumn Statement.But surely that is not the case at present. During the previous Session of Parliament the Social Services Committee produced a report on the pensions clawback proposed in the autumn statement, and this year, if the Committee existed, and if it were still minded to, it could examine the cut in housing benefit. That would be a suitable subject for examination, and I am sure that other Committees could do likewise with matters that affect them.
The Procedure (Finance) Committee was right to say that, on the current information available, Select Committees cannot do much. In this year's autumn statement, which related to £50 billion of expenditure, there were eight lines on health and personal social services, with not even the simplest breakdown of allocation, and there were seven lines on social security. That works out at £3 billion for each line of print, which is unsatisfactory.
I am disappointed that the report that we are considering does not demand more information but simply suggests a debate in January on a report by the Treasury and Civil Service Select Committee on the autumn statement. However, the Committee did not take up the suggestion made in oral evidence by the then Chairman of the Treasury Committee, that that Committee should act as an umbrella for reports from other Committees. I hope that the new Treasury Committee will be aware of other Committees' interests in the autumn statement, and that the house will ensure that those Committees are provided with the tools to do the job. I hope that the Government Front Bench takes note of that point.
Part VI of the Committee's report deals with the control of long-term expenditure projects. In the context of the DHSS, that means primarily hospital building. Those were the most expensive long-term budgets on which the Committee heard evidence from the Department's officials. I welcome the Committee's conclusion in paragraph 139 that, despite the disadvantages set out by civil servants,the obvious benefits to be derived from some system of specific project approval outweigh the practical difficulties.I look forward to the consultations on the definition and identification of projects as proposed by the Committee, as hospital building would be a fascinating subject to consider.
However, I have one reservation. I told the Procedure (Finance) Committee last October that I was attracted by 276 the idea of parliamentary budgetary authority being required. The problem is that, by the time a major hospital building project appears in the Estimates, much money has already been spent. Fifteen such projects appeared in the 1983–84 Estimates, on 10 of which more than £1 million each had already been spent. The original departmental approval in principle had been given, and in many cases there may have been delays or second thoughts. Schemes and plans can be altered. An example is the blowing hot and cold over the Telford new hospital. If that is built, it will affect the future of many small hospitals that are working and serving patients. I understand that the scheme has now been abandoned after long discussions and much money being spent. Another case in point is the Derbyshire royal infirmary. In general, we can expect to see the big schemes at Scarborough, Peterborough, St George's, Bournemouth, and so on, roll inexorably forward. If these are well-planned schemes, I hope that they do go forward.
If Parliament is to have any effective say at an early stage, it must be at the stage of approval in principle, when the Department can spend several months looking at the submissions from the regions. In April 1983, a dozen such schemes were being appraised by the Department, including major schemes at Ashington in Northumberland, Stafford and Manchester. There is no sign of these in the Estimates, although they may be in the 1984–85 Estimates. By then, effectively, irreversible decisions will have been taken. This reinforces my argument that we should be able to look at these schemes earlier.
The Procedure (Finance) Committee wisely observed in paragraph 143:departments should make their proposals available to the appropriate Select Committee as early as possible.I hope that all the Departments will take note of that. That may mean before an appearance in the Estimates. and the practice of token Estimates referred to by the Committee might usefully be employed to alert the Committee, which is important. The Committee should be alerted so that it can take action and carry out its investigations before it is too late and money has been thrown down the drain.
The DHSS witnesses to the Committee saw two disadvantages in specific projects approval—delay, and what they called dilution of the lines of responsibility. Neither of these is a serious objection. The process would ensure real ministerial accountability to the House, and that is what it is all about. No more than the occasional scheme would be delayed.
The new Select Committees must be able to carry out the tasks that Parliament has placed upon them. We need more time in the House to debate the Select Committee reports, and I hope that this will be provided by the Leader of the House because the Select Committees have an important function to play, not only in monitoring what their Departments and Ministers are up to, but in informing all those outside the House who take a great deal of interest in the reports of the Select Committees.
§ Sir Peter Emery (Honiton)
The hour is late, but the timing of the debate rests in the hands of the Government. I have to raise my voice to say that that should not be so when a matter of this importance for the reform and use of Parliament and the use of Members' time is debated. Many newer Members of Parliament are not paying attention to the debate because they do not understand what is involved, since they have not been here long 277 enough. If the report had been debated at the normal time, it would have been of great benefit to them to see what was being recommended. Therefore, the planning of the debate is wrong.
If anyone needed to see the benefit of membership of the Privy Council, it was demonstrated today. Privy Councillors spoke, and then came the diktat from the Government for the rest of us to follow afterwards.
§ Sir Peter Emery
I do not believe that other than a small minority understand the long-term parliamentary effect of the provisions before us on the work of Parliament, and especially the work of the Select Committees.
I agree with the presentation of my right hon. Friend the Member for Taunton (Mr. du Cann) in describing the role of Select Committees and the role that they will need to play in future in dealing with the review of Estimates and Supplementary Estimates. A small number of Members meeting in an advisory capacity could examine such matters in the greatest detail in a way which the House, or a Committee of the House, could never do.
If a sub-committee of a Select Committee were used specifically and solely for dealing with Estimates and Supplementary Estimates—this view is not shared by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop)—a detailed study could be prepared by three or four Members and presented to the whole Select Committee. That would be a sensible and reasonable way of carrying out a review. I accept my hon. Friend's for Tiverton's argument on the proliferation of Committees, which would lead to a Sub-Committee on every subject. That would obviously be nonsense. However, I urge my right hon. Friend the Leader of the House carefully to consider the merits of allowing specific sub-committees to the Departmental Select Committees to deal specifically with the financial and Estimates matters that will arise from the recommendations of the two procedure reports, one on Supply and the other on finance.
I was interested in the remarks of the right hon. Member for Down, South (Mr. Powell). If I have counted them correctly, the report has 15 divisions. The right hon. Gentleman was right to refer to the considerable variance of views, which was not restricted to party divisions. For example, I voted with the right hon. Gentleman at one time and with some Socialists on another occasion. The voting extended across the board when were dealing with the recommendations, but at the end of the day the Committee was unanimous in its recommendations under a skilled and hard-working chairman, my right hon. Friend the Member for Worthing (Mr. Higgins.) The praise given to him today is well earned.
The main purpose of the report was to allow the House to become involved—perhaps more than ever before—in the financial aspects of government. That extended beyond expenditure to economic and financial control, which is now so much a part of the general management of the nation. That is why I found some of the remarks of my hon. Friend the Financial Secretary to the Treasury very disappointing.
I believe that the Committee proceeded to do some of the work that the Treasury should have done for itself. It is not surprising that it welcomed that. However, it seemed 278 only to welcome the Committee doing those things which it should have done itself. When it came to considering the control of what Ministers and Government get up to, we returned to the normal Civil Service and Treasury response, the attitude that it is better to let sleeping dogs lie and proceed as in the past. I tried to give my hon. Friend the Financial Secretary some notice of the reply by the present Foreign Secretary when he was Chancellor of the Exchequer. Column 241 of Vol. 2 of the minutes of evidence show that it was clearly stated that the work of the ancillary Finance Bill dealing with management aspects wasan offer, we would suggest, to meet your need".The snag is that that matter would require parliamentary time. The Minister's answer was based not on the parliamentary time argument, but on a rejection of the concept.
§ Mr. Moore
I am sorry to interrupt at this stage. I shall try to address this point in more detail at the end of the debate. I hope that my hon. Friend draws the attention of those people who were not privy to the Committee meeting or who have not read the evidence to columns 236 and 237, as well as the column to which he referred. I hope that he will allow people to understand the difference between a particular debate on the character of the ancillary Finance Bill, to which the present Foreign Secretary referred, and the totally different procedure that is now recommended. There would seem to be—I shall elaborate on this point later — fundamental differences between those two points.
§ Sir Peter Emery
I am delighted that my hon. Friend referred to those columns, because they mainly concern my cross-examination of the Chancellor and it is not often that Ministers wish to bring those matters to the attention of the House.
Having played a fairly intimate part in that side of the evidence, it was my overall impression——
§ Sir Peter Emery
The Chairman of the Select Committee nods his head — that the Chancellor was willing to go along with the suggestion about the introduction of a taxation management Bill. I am disappointed to hear that that measure is now being rejected. I do not know whether I would call that a de-civilising step—that is a rather strange term from the Liberal Benches—but it was a very retrogressive step.
§ Mr. Keith Best (Ynys Môn)
Does my hon. Friend take heart from the fact that my right hon. and learned Friend the then Chancellor said in column 236 that he anticipated the ancillary Finance Bill becominga more ambitious thing later on if it works. At this stage what I am looking for is a bonus means of dealing with matters that are not otherwise dealt with, and to add another image—a bonus that can be channelled down a bypass, as it were."?Was my right hon. and learned Friend thinking that this would be just the beginning, and not the sum total of the advance?
§ Sir Peter Emery
I am delighted with my hon. Friend's help. He draws attention to parts of the evidence which support my argument and which I can only refer to Treasury Ministers for further consideration.
I suggest that the comments of the hon. Member for Colne Valley (Mr. Wainwright), that the Select Committees were running out of steam, were contrary to 279 the facts. He seemed to have misunderstood or not considered that the recommendations of the Select Committee on Procedure (Supply) that the work of those Committees will be brought to the Floor of the House on three Estimates days—this measure is in the Standing Orders — will go a long way towards meeting the criticism and show that the work of those Select Committees is being encouraged. We have only previously had one day for these debates because of the election, but the Committee's recommendations have now been included in the rules of the House.
§ Mr. Wainwright
I must have expressed myself singularly badly, because I had no intention of suggesting that I thought that Select Committees were running out of steam. I believe that the media who reported them so volubly and enthusiastically in the early years are running out of steam on this point.
§ Sir Peter Emery
I am delighted to have that extra definition, which I had not understood from the hon. Gentleman's speech.
I come to the major reform involving control over borrowing and long-term expenditure. Borrowing and long-term expenditure are at the very nub of the reintroduction of some parliamentary control over the whole area of Government finance. After all, when we spend so much time on Supply and taxation, it is nonsense to leave the Government with absolute control, to do what they like, as they like, without any reference to parliamentary control over borrowing. It is like trying to have a triangle with only two sides. We are trying to give it that third side by giving the House the financial control that we believe it should have.
The Treasury's response seems to be that it is impossible to give the House the information that will allow it that control. But does not the Treasury have that information? If not, we had better get rid of the whole Treasury. However, if it has that information, and the Minister knows it, why should it not be given to the House? Why would it be inconvenient for Members of Parliament to have it? I should like a full answer to that question, because it is at the heart of the matter.
The Committee suggested the most lenient form of control. Perhaps we bent over backwards too far to try to ensure that that control would not hamper the Treasury unduly and prevent it from carrying out its management functions properly. However, we thought it right that if statements that had to be given to the House were seen to be massively over-running, the Government should have to come to the House and explain why things had gone so seriously wrong, and allow the House to express its view on the subject. Does the Treasury think that that is wrong, and that the House should not have that power? Does the Treasury think it wrong that Members of Parliament should be able to debate such specific matters that are vital to the control of the economy? The Treasury's statement implies that the House should not be allowed to have that control.
The report refers to control of long-term expenditure projects. In my short time of about 24 years as a Member of Parliament, I have been worried by the way in which long-term capital projects have got out of hand. When they were first introduced, we did not envisage the amount of capital expenditure that would be required to bring many of those projects to fruition. Any sensibly managed 280 business that undertakes a major capital expenditure project ensures that a rolling estimate of the long-term cash requirements of the project is demanded at least annually.
We are only asking the Treasury to update annually exactly what the Departments really believe will be the total cash requirements of the scheme. We are not trying to suggest to the Government that capital sums may not alter. There will be many reasons why they should. We do not believe that there need be criticism if the criteria have altered, so that new and extra money is required. However, we think that the only way to stop Government worrying about future cash requirements is to ensure that annually they have to review the total projected or forecast cash requirements and report to the House.
That is a normal business requirement of any efficient organisation. If the Treasury does not have that hold over the capital requirements of projects within Government and the Departments, it darn well should have. On the whole, it is most likely that it has. I do not believe that it has at all times, but in most instances it has. If it has not, we should ensure that it has. If it has, the House has a right to that information as well. That is the way in which we shall get a much greater discipline in the control of long-term expenditure than we have ever seen in the past. Perhaps that is the second most important aspect of our recommendations.
I should have thought that not the borrowing requirement control of long-term expenditure was exactly what the Treasury wanted. We thought that it would help the Treasury. We thought that it would play into its hands against the spending Departments, and that it could say to the Departments, "You must look at the matter more carefully because that it was what the House is demanding." It is therefore strange that the Treasury Bench has rejected such suggestions.
I am sorry that I have had to be so critical of the Minister's speech, but I would be more than dishonest if I did not put forward my views as strongly as I have done. The matter is of the greatest importance. I only hope that we can ensure that at least the Minister will give stronger consideration to rethinking those two points than the Treasury has done in the past.
§ 12.1 2 am
§ Dr. Jeremy Bray (Motherwell, South)
The hon. Member for Honiton (Sir P. Emery), like the hon. Member for Tiverton, (Mr. Maxwell-Hyslop), has shown that there is a promising, bubbling Back-Bench revolt on the way. On such occasions that always adds an element of jollity that is welcome at this time of night.
The right hon. Member for Worthing (Mr. Higgins) is to be congratulated. Finance is deadly dull stuff. Financial procedure is the end of the world. For the right hon. Gentleman to have laboured through long Committee study and to present the report in the way that he did to an interested House, with more hon. Members present at this time than there often are during the day, is a credit to the right hon. Gentleman and his Committee.
The Financial Secretary, by his complete dismissal of the work and detailed recommendations of the Committee, laid the seeds of the revolt. The Chancellor, by his departure, fertilised those seeds. The reform of financial procedures usually takes place by agreement across the Floor of the House, which does not always necessarily embrace every member of the Government Front Bench. One instance with which I was involved, now part of the 281 useful "Do it yourself' kit that the Chancellor referred to in the autumn statement—the mini-Budget kit—is the Industry Act schedule that I was responsible for moving in 1975. It was carried by Labour Back Benchers, against the then Government, and with the support of the Conservative Opposition. We may find that such a development is needed to break through on some of the important issues that the House has debated tonight.
The political circumstances in which change takes place and in which change is needed have to be thought about on all questions of procedure. Financial procedures may not matter very much when there is a large majority and a confident Government in control of the House, but with a hung Parliament or a comatose Government—I am not suggesting that the present Government are yet comatose —the way in which resolutions arise on the Floor of the House can be critical in determining the outcome. In such circumstances, the more logical procedure set out by the Select Committee on Procedure (Finance) would make for much better government than the archaic, arbitrary and inefficient ways in which we work at the moment. It may not make any great difference when the Government think that they can get the votes when they need them, and put matters right. The Labour Government were defeated in 1976 in the debate on the public expenditure White Paper, for example, but shrugged off that defeat and carried on.
However, a problem definitely arises if the Government do not have a controlling majority and cannot put things right later on. In such a case, the green Budget, with a fairly firm cutting edge — a degree of commitment—could prevent the emergence of some stupid situations.
I strongly support the proposal for long-term projects. The hon. Member for Honiton outlined the circumstances in which he might get this through, despite Government opposition. He referred to paragraph 144 of the report and the use of Estimates days. It is obviously possible for an incipient long-term project to appear in an Estimate—a project which the procedurists do not like being there, all sewn up without commitment for the future, and which perhaps is unpopular in itself with another section of Government Members and with the Opposition. That might compel the Government to introduce the long-term procedure as outlined by the Committee as the only way of getting their proposal through the House.
That possibility will be considered carefully by the Select Committee. The Financial Secretary has not considered how the Select Committees will operate in relation to the Estimates days. They have now been given the additional incentive to add to the use of the Estimates days the introduction of the long-term procedure. That will need the detailed attention of both sides of the House, and if there is an initiative from the Government Back Benches the Opposition will give careful consideration to supporting it.
The other recommendations of the Committee are either old friends, or suggestions that I cannot support so enthusiastically. The improvement in the form of the Estimates and the Taxes Management Bill have been heard about before, and will probably be heard about again and again before they are properly embodied in our procedures.
On the question of a Taxes Management Bill, it might be helpful to take note of the experience of the Law Commission. Its useful work in no way derogates from the 282 powers of the House and brings under fully professional study the messes that the law can get into. It puts forward proposals that can then be considered first, perhaps, in another place—or, if they refer to financial matters, just in this House — and made the basis for a sensibly planned reform. The Financial Secretary moved towards that in his reference to exposure drafts, which was wholly welcome. The difference is that the exposure drafts are likely to be produced by the Treasury or the Inland Revenue whereas a tax commission would be an independent body, aiming not to alter the substance but to improve the effectiveness of the law. Such is our track record on the reform of financial procedures that we shall have to go through two or three Parliaments before the tax commission is on the stocks.
I flatly oppose the statutory control of borrowing. The hon. Member for Honiton did not understand the point made by the Financial Secretary. The Treasury does not have the information that the hon. Member was seeking. It does not know what options will be exercised by major taxpayers — for example, the oil companies over petroleum revenue tax— which can enormously affect the outturn of the borrowing requirement. It does not know what changes will be made to interest rates, which can make billions of pounds of difference to the outturn of the borrowing requirement.
Those matters are not economically important, and there is a good explanation in the original presentation of the medium-term financial strategy as to why the borrowing requirement is a silly variable to write on tablets of stone. To expect the Government to nail their flag to a statutory commitment on the borrowing requirement would be utterly to confuse and muddle not just the markets—it would certainly do that—but the conduct of sensible government.
By imposing certain limits on borrowing, whether or not it be central Government borrowing under the PSBR, there would be other aspects of Parliament's intentions that would thereby have to be frustrated. There is a fundamental difference in principle between parliamentary control of expenditure and taxation and the borrowing requirement. One borrows today and pays back tomorrow, or in 25 years' time. What is 25 years in the life of this place? It is not a once and for all transaction. The control of taxation and expenditure is fundamentally different from the essential basis of parliamentary financial procedures.
§ Sir Peter Emery
Why does the hon. Gentleman think that it is possible for it to happen in the United States Congress, meeting all the difficulties that the hon. Gentleman has outlined, but that it would be impossible for the House of Commons?
§ Dr. Bray
We can learn a great many things from the United States, but predictability of the outturn of budgetary control is not one of them. The chaos in Congress and Washington whenever Congress gets anywhere near debating the budget makes every member of the Executive there long for the Westminster model.
The Committee recommended approval of the EFLs. I do not believe that that is necessary. I am not sure that the control of the EFLs is an effective way to manage the nationalised industries. With the privatisation that is taking place, the nationalised industries have a number of major assets, often land, which they have ready to dispose 283 at the end of the financial year. They can either bring forward or delay the disposal of the land to rig the EFL so that it comes out right. One does not want to overweight the importance attached to the EFLs. The Government have already gone too far in their estimate on the EFLs instead of the more important aspects of nationalised industry management.
I know that the Financial Secretary has thought a great deal about that matter. He made a notable speech on the control of the public sector which excelled by many degrees of outrage and scandal what he said tonight, but we are not debating that on this occasion.
The approval of the public expenditure planning total is artificial. It is one of those indicators which, when allowed to become non-operational, is a useful thing to study. The moment that it acquired any procedural significance 1001 coaches and horses could be driven through it. It would not mean a thing. It cannot be covered by the Select Committee on the Treasury and Civil Service defining in advance what should be included in the total. There would be many ways round any definition that was produced, particularly from outside Government.
The report is one of a continuing series. I hope that in this Parliament the emphasis will be on the successful operations of the notable advances in procedures that have been made by the series of Select Committees in the last Parliament and that in the vigorous prosecution of the work of the Select Committees we shall see very useful and important advance in the financial procedures of the House during the remainder of this Parliament.
§ Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)
I join all hon. Members who have strongly criticised the fact that such an important debate is taking place at this unearthly hour, bearing in mind that the Government have had the report since 11 May. The Government have managed to find time for a lot of dreary matters because they were what they wanted to discuss. I criticise that only to the extent that the Government's task is to govern and Parliament's task is to inquire, to advise and to consent. The difference between Government and Parliament is profound and important.
Every modern Government—the present Government are no exception — take more and more executive power, grab more and more to themselves and look upon Parliament more and more as that wretched nuisance at the other end of Whitehall. The debate should have been considered to be more important because the report attempts to redress to some extent the balance that has been eroded and will continue to be eroded because Governments will not give. Parliament's duty is to try to take so that a balance can be maintained.
To take a subject in which I have an interest, local government, every Bill that has been introduced since 1979 had one object, to take more and more power to Government and more and more power away from the people we represent. We must be taken more seriously.
It was good of the Financial Secretary to congratulate my right hon. Friend the Member for Worthing (Mr. Higgins) five times on his distinguished chairmanship. It is a little like Emerson's comment, "The more he protests his honesty, the quicker I hide the silver." I often think that the same comment applies in the House. The more people are praised for their work, the more certain that very little 284 will come from it. In the debate a lot of thanks and cosmetic bits and pieces have emerged, but little of substance.
Coming to the items that I thought were of profound importance, first, on nationalised industries, if I understand the Financial Secretary correctly, we do pretty well already. I was not aware of that. It seems that there will be no concessions there.
If Parliament is to be anything except a talking shop, the House must have amendable motions and be able to put pressure on Government. I refer here not to this Government which obviously I support, but to Governments that the Opposition would not support or to Governments that Conservative Members in Opposition would not support. Hon. Members are meant to be the balance as parliamentarians, not just the voting fodder, which is how Governments clearly regard all Members of Parliament. The House has to carve out for Parliament and for the electorate something worth while to act as a true balance between the tyrannies of Governments and the freedom of Members of Parliament.
We shall get nothing on the subject of the nationalised industries. That is no surprise, but I warn hon. Members that if we do not take it we shall not be given it. It is also a sensible suggestion that at least once a year we should examine projects that are put forward. How many Concordes lurk in Ministers' minds? How many such projects will start and grow and cost only £20 million, or perhaps £200 million, or even £500 million? If we did what the Committee suggests, of course embarrassment would be caused to Government, but it is right for Parliament to embarrass the Government of the day, and the Government do not have to fall because somebody says "You have made a right mess of that."
It is clear that local government will end up being the Aunt Sally of the democratic process because of being 0.06 per cent. overspent, when Governments are often 20 per cent. over target here and there. Nevertheless, 0.06 per cent. overspent on public expenditure means that the Government will take dictatorial powers and be the majority voter on every council throughout the land. We are here to see that that sort of thing does not happen because every citizen loses part of his or her liberty when Government grab it and Parliament does not defend it. What is sought in the report for local government are small concessions that should be granted.
I hope that the report will not gather dust. It is no good criticising the present Government just because the Labour party is in opposition. It is up to us to see that this modest report, which has tremendous implications for Parliament to examine what the Administration do, comes to life. If it is left to Government, it will gather dust like all reports that suggest that the Executive should give up not aeons of their power but a little here and there. We support the Government, but in the end we are here to defend the people and the views that we hold. We should not fear somebody saying, "He is causing trouble again." If we are not here to cause some trouble, we have no reason to be here.
§ Mr. Terry Davis (Birmingham, Hodge Hill)
I approach this debate with some trepidation and the report with even more trepidation because every Labour Member who served throughout the period of the Committee lost 285 his seat at the general election. I hope that that was a coincidence and not a consequence of service on the Committee.
The House is grateful to all those who served on the Committee—those who were defeated at the election and those who survived—for the time that they spent—40 sessions in total—under the chairmanship of the right hon. Member for Worthing (Mr. Higgins). As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) pointed out, the Financial Secretary congratulated the right hon. Member for Worthing on five occasions during his speech. I shall congratulate him only once, but he may be consoled by the thought that I shall probably agree with him in more of the recommendations than did his hon. Friend.
It should not go unnoticed that the right hon. Member for Worthing and Mr. Michael English attended every session of the Committee, and therefore they undertook a great task on behalf of the House. The whole Committee is to be congratulated on the thoroughness with which it examined our financial procedures.
We should also express our appreciation of the careful and detailed exposition of the Government's attitude that we received from the Financial Secretary. I look forward with great interest to his further comments if he succeeds in catching your eye, Mr. Deputy Speaker. I wish that he had been more flexible and forthcoming about some of the recommendations. I am sure I am speaking for everyone on both sides of the House when I tell him that he says "No" in the nicest possible way. It would not be unfair to describe his position as being willing to give much more information to the House but unwilling to give any more authority or control of expenditure or revenue.
In regard to control over borrowing, I thought the Minister's explanation of the practical difficulties was convincing, and I agree with the comments of my hon. Friend the Member for Motherwell, South (Dr. Bray). The answer to the point made by the hon. Member for Honiton (Sir P. Emery) in his intervention concerning the experience in the United States of America was given by Mr. Bruce-Gardyne, as he then was, on 29 June 1982. I am referring specifically to the answer received by the hon. Member for Honiton to question number 370 in the proceedings.
The Financial Secretary was less convincing in his comments on the recommendations for control over non-Supply expenditure. Although he told us that the Government are willing to provide more information about the expenditure of public corporations, he is not willing to allow a debate about the finances of the nationalised industries because, I suspect, this is what would happen if we adopted the recommendation of the Select Committee to require a motion of the House to approve external financing limits of the nationalised industries. The Select Committee may be concerned that all borrowing by nationalised industries is on public credit. In practice, a debate on any such motion would become a vehicle for a debate about the performance and policies of the nationalised industries. I would regard any such debate as a welcome increase in the accountability of public corporations to the public through their elected representatives in Parliament. Therefore, I welcome that recommendation of the Select Committee.
286 As for the recommendations about the rate support grant, I suspect that the Government's reasons for resisting these recommendations are slightly different. Here it is not local government which would be brought to account in the House of Commons; it would be the Government themselves. If there is one thing that the Government must fear more than anything else, it is the public exposure of their treatment of local government, as we have just heard from the hon. Member for Selly Oak.
Then we come to the recommendations that are designed by the Select Committee to improve parliamentary consideration of public expenditure as a whole. Again, the Financial Secretary is in favour of providing more information—on an annual basis at least—but he does not want to run the risk of being forced to defend the Government's policies at the Dispatch Box at more frequent intervals than once a year.
On the other hand, I am somewhat concerned about the inner thinking behind the reference in the recommendation toserious divergence from original plans.The right hon. Member for Taunton (Mr. du Cann) drew attention to the difference between the two sides of the House about public expenditure. I would regard a serious divergence from original plans as including underspending as well as overspending, but I am not clear from the proceedings of the Committee whether that was its intention. There should also be an opportunity for debate at the request of the Opposition as well as at the request of the Select Committee.
I am even more concerned about the reference to the debate on the autumn statement being deferred until January to allow time for the Treasury and Civil Service Select Committee to report to the House on the statement. On this point I disagree with my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It may well be that the Opposition want a debate to take place much more quickly, as happened this year. Therefore, we would want the date for this debate to be arranged, as now, through the usual channels.
Of course, it would be helpful to the House to have the benefit of the report from the Treasury and Civil Service Select Committee and, even more, to have the benefit of the evidence taken by the Committee. That evidence would be even more valuable if it were taken on a public expenditure White Paper rather than on the autumn statement, but the House cannot allow the Committee to have a stranglehold over the timetable. That is the way the recommendation appears to be worded.
There have been several references to procedures in the United States of America. I would regret the introduction into our procedures of a veto or blocking mechanism by a Select Committee of the House that could prevent the House as a whole debating or discussing any issue including public expenditure.
§ Dr. Bray
If my hon. Friend examines the Treasury and Civil Service Select Committee's record during the previous Parliament in detail he will find that, far from strangling the timetable of the House, it was almost strangled by it on many occasions and it put in much fast work to ensure that the timetable of the House was not dislocated.
§ Mr. Davis
I am sorry if I upset my hon. Friend. I was not criticising the way in which the Treasury and Civil Service Select Committee worked during the previous 287 Parliament. I was criticising the recommendations of the Select Committee on Procedure because it seems clear that its recommendation would make it impossible for the House to debate the autumn statement until the Treasury and Civil Service Committee had taken evidence and presented its report to the House.
I am arguing for more flexibility. I want the Opposition to be able to negotiate with the Government through the usual channels to obtain a debate earlier than January. Otherwise there would be a delay of two months before we were able to debate the autumn statement. If we adopt the recommendation as it stands, we would block that ability to debate the autumn statement at an earlier date. If the Treasury and Civil Service Select Committee decided to delay its report, the debate on the autumn statement would be delayed still further. I am asking only for the maximum flexibility and expressing reservations about that one aspect of the recommendation. I welcome the continuing practice of the Treasury and Civil Service Select Committee in taking evidence on the details of the Public Expenditure White Paper. That is a different point.
I have some disagreement with the right hon. Member for Taunton about the work of other Select Committees. It is one thing to allow Select Committees to appoint Subcommittees as the hon. Member for Honiton put it, and it is quite another to insist that they do so or insist that they examine the Government's public expenditure plans for a Department. Imposing a burden on departmental Select Committees to undertake work that they do not want to undertake would be a retrograde step. It would be wrong if the Treasury and Civil Service Select Committee were regarded as in any way controlling the work of or setting the priorties for other Select Committees.
The right hon Member for Down, South (Mr. Powell) said that the Select Committee on Procedure, when considering its proposals, leaned on the Select Committees. The phrase "to lean on" someone or something has a popular connotation. I am sure that the right hon. Gentleman did not mean it in that way. That would be to take his remarks out of context. Nevertheless, I would regard it as wrong if the Treasury and Civil Service Select Committee were able to "lean" on other Select Committees
If I have reservations about that recommendation, I warmly welcome the rest of the Procedure Committee's recommendations. I include in that welcome the Taxes Management Bill. It was clear from what theFinancial Secretary to the Treasury said that the Government would not accept that recommendation. That is regrettable. It also represents a change of attitude from the time when the Select Committee took evidence.
The hon. Member for Tiverton (Mr. Maxwell-Hyslop) told us that it was not consistent with the evidence that was given to the Select Committee by the then Chancellor of the Exchequer, now the Foreign Secretary. I examined the evidence and found that on 25 January 1983 in reply to question 885, the then Chancellor said:What I should like is for the House to be presented, if not with my proposal then with some options from which the House and the Government could make a choice.That seems very reasonable. I regret that the Government have changed their attitude and will not give us the chance to choose between options and to choose whether to have a Taxes Management Bill.
288 There is an advantage in having more than one Finance Bill each year. I seem to remember that Conservative Members used to complain when a Labour Chancellor had more than one Finance Bill in a year.
At least some Conservative Members are now converted to the idea of examining taxation more frequently.
My strongest criticism of the Treasury's attitude is its response to the recommendation about long-term projects. That is the most interesting and important of all the recommendations of the Select Committee. We are concerned with long-term decisions that have been taken by all Governments in secret. They have implications for public expenditure for many years ahead and pre-empt future resources. The hon. Member for Honiton told us that business will always look more closely at long-term projects, and that the Committee was suggesting only that the Treasury should adopt the practice of industry. From my experience as an auditor, I have learnt that the control of long-term projects in industry and business has not always been effective.
§ Mr. Davis
I have worked only in efficient industries.
I do not envisage that the House or a Select Committee would examine individual hospitals, as my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) suggested. Of course, each hospital is very important, but the vitally important decisions would concern, for example, new weapons systems. As the hon. Member for Selly Oak said, overspending on such projects is far more serious than the amount of overspending by local government.
The response of the Financial Secretary to that recommendation, when he said that it was not appropriate to introduce new procedures, was the weakest part of his remarks. I hope that he will reconsider the Treasury's attitude to that recommendation. It would be worth while having an experiment. There is no better time for that than at the beginning of a Parliament. I accept the point made clearly by the right hon. Member for Down, South about too many experiments causing procedural indigestion, but there is a case for experiments being introduced at the beginning of a Parliament. There is no better time, especially when the Government have such a large majority. As my hon. Friend the Member for Motherwell., South said, better financial procedures are most important when a Government have a large majority. The Government should be able to withstand such scrutiny when they have a majority of more than 100.
I offer my sympathy to the Financial Secretary, who has a difficult task. He presented his brief very well. But I agree with the hon. Member for Colne Valley (Mr. Wainwright) that the burden of the Financial Secretary's comments was that the recommendations were inconvenient for the Government. Although I have sympathy with the Financial Secretary, I have much more sympathy with the right hon. Member for Worthing and his Committee. If he chooses to press the matter to a Division, there will be a free vote among Labour Members, but I shall advise my hon. Friends to join the right hon. Gentleman in the Lobby.
§ Mr. Moore
I thank the House for allowing me to speak again.
I recognise the points raised from both sides of the House, especially those made in the past five or 10 minutes. Opposition is always a cleansing virtue to some aspects of one's mind and mental frame. I know that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) will be having lengthy discussions with his hon. Friend the Member for Motherwell, South (Dr. Bray) about the intricacies and the problems associated with government as opposed to opposition.
I accept the rebuke of my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) for being over-complimentary to my right hon. Friend the Member for Worthing (Mr. Higgins). I meant it. If I said it five times, it may mean that I have made it more difficult for my right hon. Friend and his Committee. I was trying to say that all hon. Members recognise how inordinately great a task was performed by the Chairman of the Committee. Having said that, and recognising the work of all hon. Members on the Committee, that does not mean that the Government, whichever party is in office, must by definition accept the proposals of the Committee.
If in any way I inconvenienced the House — I especially apologise to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) — by seeking to intervene early as well as late in the debate, I apologise. It would be surprising if a Government who, as my hon. Friend the Member for Selly Oak said, had had sight of a substantive, important and key report for something in excess of six months had not in that period come forward with some measured views as a recognition of the serious and contentious nature of the report. The Government had to consider it with care. Those hon. Members who have had the privilege of serving in government will be aware that no one denies the Government's right to listen carefully to matters of such significance, as I have throughout the debate; but equally it would have been a great surprise for us not to have expressed clear views from the beginning, having thought through and read thoroughly all the evidence.
I wish to deal with a point raised by my hon. Friend the Member for Tiverton, by the hon. Member for Colne Valley (Mr. Wainwright) and by my hon. Friend the Member for Honiton (Sir P. Emery) about what was said by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. I recognise that selected pieces of the report from paragraphs 885 to 910 can give credence to the views of my right hon. and learned Friend. I read the evidence with considerable care. There is no doubt that the previous Chancellor of the Exchequer proposed that the Finance Bill should continue much as now but that an autumn Budget might, from time to time, be useful for introducing legislation that might otherwise be impossible.
My right hon. and learned Friend was concerned with the handling of relatively minor and essentially uncontroversial proposals, not with the major changes to procedure which were proposed by the Procedure Committee. I shall not refer to any details, but I was careful to say that we thought that there was a difference from the original speech that my right hon. and learned Friend gave to the Addington Society. We do not deny the 290 point that he sought to make in evidence. It was the fundamental nature of the changes proposed which the Government thought, on consideration, was wrong.
§ Mr. Best
My right hon. and learned Friend the former Chancellor of the Exchequer, the present Foreign Secretary, said in answer to question 885, to which I drew the attention of my hon. Friend the Member for Honiton (Sir P. Emery):It may be that it will become a more ambitious thing later on if it works.That was a reference to the ancillary Finance Bill. What does my hon. Friend think he meant by that?
§ Mr. Moore
I sat through the entire debate and I underlined that passage in case it was not drawn to the attention of the House. I could equally refer to parts of paragraph 887.
My right hon. and learned Friend saw merit, as appears from his evidence, in the ways in which uncontroversial tax legislation could from time to time be considered. He thought it might be possible for such an experiment to develop. No one suggests for one moment that that was not said.
The proposals that we are being asked to consider go far beyond that and create a radical and different structure that the Government, after careful consideration, cannot accept.
Several hon. Members spoke extensively about long-term project management. My hon. Friend the Member for Honiton asked for information about changing views of the costs of long-term projects. I understand the need for such information, but it was provided in considerable detail in the Estimates. I refer the House to the table at the back of the Estimates produced on the previous Budget day, which shows the data that my hon. Friend wishes to have. My hon. Friend's point also related to the way in which the Government have turned down —this is a completely different matter—the proposal that the House should have specific power to stop projects before they start.
However, if the Government gave Parliament the power to veto projects, or to delay their start until satisfied about them, Parliament would become involved in what should properly remain a managerial and executive function. There would be risks of delay, and an inevitable increase in uncertainty and in administrative cost, and in some cases there could be international repercussions which would add further complications—[Interruption.] Those who are in government must occasionally face the realities and the responsibilities of government. Some major projects would almost certainly have to be excluded from such appraisal for security reasons.
The hon. Member for Motherwell, South rightly drew the House's attention to some of the problems associated with the American method of government in this area. I remind the House that, at the end of October, the United States Senate refused a request to increase the ceiling on the United States public sector debt, although the House of Representatives had earlier approved the Administration's request for an increase from $1.389 trillion to $1.615 trillion. The uncertainty created by the Senate's refusal, together with other factors, depressed market sentiment and interest rates were pushed up. The refusal caused the American Government to run down their unusually large cash balances and to curtail their auctions of stock. The Senate later capitulated, and Congress finally agreed on 18 November—the last day 291 of the session—to raise the ceiling to $1.45 trillion, which should allow the American Government to continue funding their programmes until April 1984. The hon. Gentleman was right to draw the House's attention to the difficulties that flowed from such action.
The contributions to the debate from hon. Members, despite the late hour—the attendance has been remarked upon — demonstrates the value of the report. The recommendations of the report cover many aspects of the means available to Government to implement economic and financial policies, and relationships with the House. They would in total have a substantial effect on the financial procedures of the House, and some of them would change——
§ Mr. Moore
I recognise my hon. Friend's point. The recommendations would change significantly the respective roles of the Executive and the House, and especially the role of the Select Committees.
In my earlier intervention, and in these closing remarks, I have tried to describe the Government's views on the report. In some cases the Government, perhaps naturally, have given greater weight than did the Committee to practical considerations. It is also right that Governments should have regard to the delicate balance, in matters of financial responsibility, between Government and Parliament that has evolved over many years and which, more recently, has successfully accommodated the valuable addition of the new departmental Select Committees. We have reached the present position not by accident but by a process of careful evolution, and by a proper regard for that balance, as the right hon. Member for Down, South (Mr. Powell) rightly reminded us.
The Committee's report welcomed several substantial improvements during the past few years in the Government's provision of information to Parliament. The requirements of the House change over time, and the role played by its Committees developed substantially during the past few years. The financial procedures of the House should be reviewed from time to time, and the Committee's report can be expected to lead to further worthwhile changes.
The report and this debate have been valuable. I am sure that I speak for the entire House in thanking my right hon. Friend the Member for Worthing and the Committee for the work that they undertook.
§ The Lords Commissioner to the Treasury (Mr. David Hunt)
I beg to ask leave to withdraw the motion.
§ Motion, by leave, withdrawn.