Procedure Committee
Oral evidence: Scrutiny of the Government’s Supply Estimates, HC 774
Wednesday 4 May 2016
Ordered by the House of Commons to be published on 4 May 2016
Members present: Mr Charles Walker (Chair); Edward Argar; Helen Goodman; Sir Edward Leigh; Mr Alan Mak; and Mr Nuttall.
Questions 24-56
Witnesses: Sir Stephen Laws and Professor John McEldowney, academic members of the Study of Parliament Group, gave evidence.
Q24 Chair: Thank you, Sir Stephen and Professor McEldowney. I am sorry that we are a bit thin on the ground today, but when we scheduled this the Chairman forgot that it was the day before a load of elections across the country. We are obviously missing two of our Scottish colleagues, because they have some quite important parliamentary elections. Many of our colleagues have London elections and a number of them have local government elections. Nevertheless, we have quality here, and that is the most important thing.
Sir Stephen, why don’t you spend two minutes pouring out your frustrations and then, John, why don’t you do the same? Take no more than two minutes each and then we will get into the questioning.
Sir Stephen Laws: Can I ask Professor McEldowney to start? He wants to say something about the Study of Parliament Group first.
Professor McEldowney: The point is that although political issues are brought before it, the Study of Parliament Group, as you know, is done in a very Chatham House way, because it is made up of officials and academics. As you also know, in 2004 and subsequently with the Hansard Society, we took the view that the best way forward was to concentrate on Select Committees as a mechanism for improving financial scrutiny.
We have reached the point where we now think it is timely for you to look at Estimates, because, in a sense, there is a lot of reform generally in the Houses of Parliament in terms of Committee structures and so on, and it is now timely to both make the Estimates more transparent and give an opportunity to bring in more Members who are interested in financial scrutiny. In a sense, our memorandum goes to those issues about how to bring more attention to the Estimates, make them more transparent, improve the information flow and at least have a better debate generally so that they perform the function that they do. Constitutionally, they are the link between Supply and the constitutional imperative of the House of Commons approving the Estimates. This is a good opportunity and in a sense it opens up great potential for greater transparency and so on. That is basically it.
Chair: I want you to know that one member of this Committee thinks that your paper and this inquiry are ridiculous because they are playing round the margins and do not go far enough, so you are going to get a very good hearing and be challenged. That will come later.
Sir Stephen Laws: I have to say a couple of words about why I am qualified to be here. I was first parliamentary counsel from 2006 to 2012, during which time I spent some time on the Line of Sight project. I was then a member of the McKay Commission, so I have a particular interest in Barnett consequentials, I subsequently was on the advisory panel for Lord Strathclyde’s review, so I have some interest in the House of Lords and financial procedure.
I want to say something about my approach to reforming House of Commons procedure. There is a trap, into which the OECD fell, which is to assume that Parliament has a fixed role and then to try to decide whether it should perform that in a more efficient way. As I see it, the House of Commons is a forum for exercising influence over the Government and it should discharge that function in the way that it thinks is politically best for discharging its mandate from the electorate. I do not think there is a thing that Parliament should be doing that it is not doing, but reforming Supply procedure or doing something different by way of Supply procedure is an opportunity for exercising more influence over the Government than is exercised at the moment. I compare it with the scrutiny of legislation. Parliament spends a lot of time on the scrutiny of legislation, as I know, but legislation is really only a subordinate way of implementing policy. The guts of all Government policy are how it spends its money. That seems to me to be a thing that Parliament could take more interest in, thereby exercising better influence.
My experience of scrutinising legislation is that the greatest incentive for getting things right when you are legislating is random sampling. You introduce a Bill but you do not really know which clause Parliament is going to take most interest in. I do not think that you need a comprehensive system of Supply procedure, but you do need a system that shows that the sampling is truly random so you take care over everything.
I also wanted to say by way of introduction that I endorse all the reasons given in the Clerk Assistant’s paper for thinking that tinkering with the Crown’s initiative on financial matters is not a good idea. Indeed, I have one of my own, which is to do with the House of Lords, because it seems to me that Commons financial privilege and the Crown initiative are inextricably mixed up together and tinkering with one makes the other even more problematic than it is at the moment.
Q25 Chair: In what capacity do you have a concern? Is that in the capacity of the Strathclyde review, or is it to do with the concerns about Government resistance?
Sir Stephen Laws: As a retired civil servant, I am just expressing my own views, and my view is that it would be wrong to do anything about the Crown’s initiative.
Q26 Sir Edward Leigh: You had better explain to colleagues what Crown initiative means.
Sir Stephen Laws: It is the rule that expenditure can only be authorised by Parliament if it is proposed by the Crown and that the House of Commons cannot without the Queen’s recommendation put up proposals for expenditure; it can only reduce them. The pork barrelling argument seems to me to be overwhelming as far as that is concerned, because if you have a system in which Parliament can put up different—
Sir Edward Leigh: That is absolutely fine. But of course at the moment we never even reduce it.
Q27 Chair: Okay, thank you for that. By the way, I just want to alert you to the fact that I am very attracted to paragraph 17 of the evidence submitted by the academic members of the Study of Parliament Group, because what we want are some solutions, not just a fireside chat. You are suggesting that the arrangements in place now are not fit for purpose. Actually, as you point out in your paper, we have been talking about this for 50 years, and we have not gone forward; we have gone backwards. Why do you feel that this is the case?
Professor McEldowney: Bluntly, it is because Members find it difficult to take on board some of the technical difficulty—the transparency, the information flow. If you look at the PAC, for example, which has the advantage of informed NAO and Comptroller and Auditor General reports, there is no real reason why that should not be happening more in this matter. So it is a matter of highlighting the issues.
There is evidence that Select Committees have been, shall we say, more proactive than they were in the past in highlighting problems, but most go to policy matters, rather than to the technical issues that they need to go to. There is an understandable reluctance to get involved in something when there is a technical fog over it, and there is difficulty in taking account of the complexity of the information. Those matters can be solved, I think. There are mechanisms that you can use to make doable solutions, which make things easier, transferrable and more transparent. Once that happens, there is an incentive for Members to take greater interest, through the Select Committees of course, but also generally. That is important.
Dare I say that since 2008 financial matters have come higher up on the agenda? Therefore, there is a moment—which is now—when you can capitalise on these issues. But it is fair to say that in the past that is not what happened, and the reasons I have given make that perfectly understandable.
Sir Stephen Laws: I entirely agree with that. I think it is the lack of transparency in the present system that makes it difficult for Parliament to question what is going on, and to challenge it. The things we have listed in paragraph 10 are all things where Parliament might want to question how the Government arrived at their figures. It is difficult for Parliament, if it is just given figures, to challenge them, unless they are set in a context that provides scope for challenging them.
Q28 Chair: So it is not because you think that Members of Parliament lack the wit or wisdom to do it.
Sir Stephen Laws: No.
Chair: You think it is deliberately made opaque by Government and difficult to access.
Professor McEldowney: It is always this business of the balance between technical, Treasury-led issues, which they understand perfectly, and the translation of that. One suggestion was that there should be draft Estimates, which would give people more time and allow them the opportunity to highlight issues. That would bring in a more informed debate. I am absolutely confident that it is there for the taking. It is a matter of persuading Members by simply making it accessible to them, and then they will take up the issue.
Chair: Who is going to ask some more questions? I might come back and ask a few more around proposals contained in your representation to us.
Q29 Sir Edward Leigh: I don’t know whether you remember, but I was Chairman of the Public Accounts Committee, and there is no doubt that in the ability of the National Audit Office and the PAC to look at spending post hoc, we are probably a world leader. There is very little doubt about that. I wonder whether you think that has made us complacent, as a Parliament, about looking at Estimates.
Sir Stephen Laws: I don’t think it has made us complacent, but it shows how much more could be done in relation to scrutinising budgeting, as well as scrutinising the outcomes. The two things are inextricably linked. The Public Accounts Committee does have an effect on budgeting, because you approach it knowing that the outcome will be so well tested, but there seems to me to be an obvious case for going at it directly.
Q30 Sir Edward Leigh: I agree. That, in a sense, was a leading question. I don’t know whether you also know, but the present Chancellor asked John Pugh, the Member for Southport, and me to do a report on this. We reported to him and said that we should replicate the very effective structure that exists with the National Audit Office and the Public Accounts Committee on the Budget process, the Estimates process. We suggested that there should be an Officer of the House—similar to the Comptroller and Auditor General—appointed for 10 years, unsackable, reporting to the House of Commons, not to the Government, and supported by a budget Committee. We thought that the Estimates could come to that budget Committee. That was our proposal. Do you want to comment on that? Do you think it is an option that we could use, or do you have a better solution? There has to be some vehicle for Members of Parliament, as a Committee, to concentrate on the Estimates, because all the other Committees, such as the Treasury Committee, are so busy—the Treasury is looking after the economy and the Bank of England. That is my personal view, but I would welcome your comments.
Professor McEldowney: I respond very positively to what you have said. Such a budget Committee would also have the benefit of working with the Liaison Committee, which would bring it into the framework for Select Committees. We have to keep in mind what the Select Committees have achieved over the last number of years, but the formula you have is first rate. Namely, you have expertise plus specific and specified issues that can be highlighted, debated and discussed in an informed way.
The model of the NAO reports, especially in the past few years, where they have been shorter, more succinct and to the issue, would impact through the Estimates scrutiny and give abundant reason for the Estimates to become more highlighted, as is our experience with the PAC and the NAO. Whether you need an independent Officer who is different from the Comptroller and Auditor General is another issue, because it may be difficult to make sure that you have liaison between the two. It is an interesting issue. The idea of a budget Committee is good, but whether it is necessary to have an independent budget Officer is another matter. That is something that the House will have to think about.
Q31 Sir Edward Leigh: You mentioned the Line of Sight project. Do you want to say a bit more about that? You are on that, and I did some work with FRAB, the Financial Reporting Advisory Board. As you know, this is notoriously difficult. These Estimates, to a Member of Parliament or to any member of the public, have traditionally been completely incomprehensible. You make various suggestions, such as in paragraph 10 on a fuller account and resources. Do you want to say a bit more about that? It is quite an interesting subject.
I would have thought that it would be quite easy for the Treasury to devise the Estimates in such a way that it is apparent what is going on. With the MOD, for instance, surely it should be possible to devise Estimates that explain what the MOD spent last year on aircraft carriers or whatever, what they are going to spend next year and what Parliament could be doing, and all the rest of it. It seems to me that at the moment, even after the Line of Sight inquiry, and all the work that you and your colleagues did, these Estimates are still quite impenetrable.
Sir Stephen Laws: The really important thing is to put the Estimates in context so that you can see how they fit in with the spending review and how they fit in with expenditure last year, the year before and the other years in the same spending review period, because that gives Parliament the opportunity to say, “Why have things changed over that period? What is the difference?”
Professor McEldowney: I agree. I think Sir Stephen is right. Comparing what has happened, what was expected to happen and what is actually going on is an important evaluative tool. Once you have that, it becomes easier to analyse and to make positive comments. I think it is an excellent point.
Q32 Mr Mak: The present operation of the Standing Orders on Estimates, and the subsequent Supply and Appropriation Bills that come through Parliament, give the appearance that we are just rubber-stamping decisions that have huge financial implications. Why do you think we should persist with this type of activity?
Professor McEldowney: Constitutionally, we have an arrangement in place that is difficult to change. Therefore, the notion of Estimates as part of that is a long-ingrained historical part of the House. As you have heard in the evidence so far, building on the potential is easier than having a root-and-branch rethink of the whole thing. I think it is much better to build on what is practised and, in particular, to get the Treasury, which is accustomed to producing the various material, on side, if I can put it that way. We have to work with the Treasury to produce more information in a soluble form, shall we say, for Members. That seems to me to be a doable, achievable objective. If you start rejigging the whole system, it is more problematic and difficult. We want something that fits the position relatively rapidly and gets us to where we want to be in the time that is available. That is my sense of it: continuity and change.
Sir Stephen Laws: I think you need formal procedures as the trigger for the sort of scrutiny that Parliament can usefully carry out, which is to challenge the Government’s budget making, to scrutinise the detail of what is going forward and therefore to exercise its appropriate influence over Government policy making.
Q33 Mr Mak: One final question: what effective role do you think Parliament could play in the future scrutinising spending plans that come out of fiscal events such as Budgets and spending reviews?
Sir Stephen Laws: I go back to what I said before. Random sampling of the budgetary process—I have seen this on the inside with legislation—results in people taking more care. The things that people take most care of in government are those on which their Minister will have to appear and defend, and when Parliament is involved. The prospect that Parliament may be looking at the number you have come up with and questioning whether it is the right number is enough to persuade the whole system to get things right, or better.
Professor McEldowney: Just to add to Sir Stephen’s point, the notion of randomness is an important tool because it is not necessarily predictable what will come up, but the fact is that you then created the whole system through a sampling process—a sort of cost-benefit analysis. You go into detail and actually see what is going on. That puts the whole system on a warning to take a precautionary principle to ensure that if scrutiny is brought to bear, it will be adequate and timely.
Q34 Edward Argar: Let me jump back to something that was touched on earlier: rather than the actual process of scrutiny, the nature of what we are or would be scrutinising. For reasons probably best known to myself, I have started wading through the main Estimates book, which is about 2 inches thick, and I am beginning to think that it requires a degree in statistics. In terms of the information presented to us, how helpful or unhelpful is the format in which the Estimates documentation is presented to Parliament?
Professor McEldowney: The problem with them is that they are driven by the Treasury, as to how they have done budgetary procedures. What needs to be done is amplification of particular issues so that you can make a before, at and after judgment. That is the key. You can see what was promised, what was expected and what has been delivered. That can clearly indicate systemic problems in the system. It is a matter of translating—I use the word advisedly—into laymen’s or laywomen’s terms the issues that will give a model of how things have been done. You can take the issues of the day, contemporary issues—that is the advantage of what we are suggesting—and create the best possible position for Parliament, as Sir Stephen has said, to have its role in scrutinising Government. That is the key point. It must fulfil that expectation. If you set the expectation and it is not fulfilled, you get disappointment and frustration, which I suspect are at the heart of some of the problems.
Q35 Edward Argar: Picking up on that, you may be aware of how the Scottish Parliament presents its Estimates. We saw that in an earlier session and it is much clearer. It doesn’t go quite as far as you are advocating, but it is clearer. Given what you say about frustration and enough clarity, why do you think the Estimates continue to be presented in the way they are? Is it just one of those things in this place that has evolved in that way and has always been done that way, with perhaps a bit of tinkering around the edges but no real look at first principles? Or is there another reason for resisting change to their presentation?
Professor McEldowney: I think you have to begin with the expectation that it is a technical subject, so the Treasury wants to get the figures right. That is a defensible position. It would be interesting to look at the Scottish example that you pray in aid. When they have tax issues, will they have the same clarity? That is a good test. I think it is a bit too soon to jump to the conclusion that it is a model. Yes, it is in the right direction, but we must wait to see what happens when there is a big issue. That will bring us back to where we are in the House of Commons.
I don’t think it is absolving the problem. It is understandable why it is driven in the way it is, but I think this is the moment to regarnish the constitutional position of Parliament scrutinising Government. I think re-emphasising that is the key to it. It is not just a mechanical process, as it described by many. I think that should be looked at again, as you are doing.
Sir Stephen Laws: I think it is a matter of convenience. If the Department has only one ambit for everything it does, that is convenient. If nobody is asking it to break that up, of course it will allow that change to happen. It isn’t the way things were always done; quite the reverse. Over the time I have been involved in this, the ambits have become more and more consolidated into one.
Q36 Edward Argar: I have a final question, which picks up on a broader element of that context with Scotland. I know that our Scottish colleagues, were they here today, would probably be asking this. I will ask it in their absence, because I think it is an important aspect on which to probe your opinions. What scope do you think there is, in the context of reform or changing the way Estimates are presented, to make clearer the calculation of block grants based on the Barnett formula and the workings of that formula?
One of the reasons for this inquiry is partly that Sir Edward was championing the need to look at Estimates properly, but also, in the context of EVEL, the point is often made that EVEL works because Barnett consequentials and similar elements related to the Barnett formula can be dealt with in the context of Estimates and finance budgeting. What scope do you think there is for addressing that point through reforming or amending this process?
Sir Stephen Laws: I think it is very important that that point should be dealt with in this process. I am certainly one of the people who thinks that, logically and in practice, the causative link between changing rules in England and Barnett consequentials just doesn’t exist, but it is understandable that people think it does. One of the reasons it is understandable is because the Supply procedure doesn’t actually provide a very effective way of dealing with it in any other way.
I would not endorse the proposals from Mr Wishart. It is understandable why he has come up with what he has, but he treats the Barnett formula as the fixed point and then says we must have votes on everything that has a Barnett consequential. I don’t think it is any more justifiable to say you shouldn’t be allowed to change the expenditure in England because it has consequences in Scotland than it is to say you shouldn’t change the law in England because it might have consequences for expenditure in Scotland. The question is: what should be the consequences in Scotland?
If you are going to have a Union in which there are transfers of money from one part of the country to another, that ought to be a transparent process that people can see and approve on a regular basis, and have an opportunity to justify. At the moment it is assumed that this will be acceptable in England, Wales and Northern Ireland—certainly England and Wales, which probably do less well from it—if we don’t talk about it. I think that is a mistake. We need to talk about it and justify it.
Professor McEldowney: To add to that point, I think we are looking at one moment in time. It does not follow that that is going to be forever. I think there is an evolution process, and it could be that the Barnet consequentials issue is looked at again because of the fact of experience. Building that into the position of the Committee’s recommendations is a good moment to take forward ideas.
Edward Argar: Thank you.
Q37 Helen Goodman: I am sorry I was a little bit late. Sir Stephen, I was interested that you said things have changed in the time you have been working on this, because that is also my recollection. When I was a very junior civil servant in the Treasury in the 1980s there were two notable things. One was that a huge amount of energy and resource went into preparing the Estimates, which, given how much we look at them, one must question the utility of.
The other was, in those days, I am sure every Department had to produce an annual White Paper setting out its spending plans. That does not exist now, as far as I know. The reason I think it does not exist is because, in another part of my former life, I was a shadow Minister in the Department for Culture, Media and Sport, and I was trying to find out what they were spending and what was going on in the Department. I found it next to impossible. Have things actually got worse?
Sir Stephen Laws: They have certainly changed in the respects you say.
Q38 Helen Goodman: So I am right that there used to be departmental public spending documents that were published every year, and we have lost them. Am I also right in thinking that they facilitated an understanding in context of the individual numbers?
Professor McEldowney: I think it did, but I don’t have a historic memory of it. It is certainly a good point to look at again, to make sure that what you are saying is correct historically, but I think you’re right.
Q39 Helen Goodman: So can you remember—I certainly can’t, so maybe we need to find someone who can—why we went from that system to where we are now?
Professor McEldowney: Was it resource accounting that brought in the changes? It was an opportunity to change the system. I suspect it was around then. I may be wrong technically, but that is my memory. It would make sense.
Q40 Helen Goodman: So do you think this capacity is really there to serve the interests of the Executive and minimises scope for scrutiny?
Sir Stephen Laws: I think it is a combination of what is convenient to the Executive and what Parliament is demanding. If Parliament doesn’t demand it, they will do what is most convenient.
Q41 Helen Goodman: Have you at all thought about the way that the information and scrutiny aspects of this process fit together with the autumn statement? Have you looked at how in fact they don’t dovetail at all?
Professor McEldowney: I haven’t looked at it specifically.
Sir Stephen Laws: I haven’t looked at it specifically, but in a way there is a bit of a puzzle about how the expenditure proposals that come out in the autumn statement—indeed, sometimes in the March Budget—fit with the spending review and the budgetary process. I think it is because those things get squeezed into the system. The announcements that are made are effectively squeezed into what is there already. I think that is how things happen, but often it isn’t easy to work out how the two things relate.
Professor McEldowney: That odd lack of transparency that you allude to—it is not just you having problems with it. I think it is generally felt that it is hard to fit the documents together in a coherence that makes it seamless. That may be due to perfectly good reasons—economic changes, variations or whatever—but it is something that could be looked at in terms of getting back to where we are, which is the transparency issue.
Q42 Helen Goodman: Yes. The most striking difference between the autumn statement and the Budget is that the autumn statement is precisely that: a statement to the House. Everybody gets one question, with minimum documentation, whereas for the Budget we have five days of debate. Because it is spread over a longer time, and we have more documentation, we get an opportunity to do something much more thorough, and of course it is followed with the Finance Bill. So we need some sort of parallel process on the spending side if we are to make a reality of this, don’t we?
Professor McEldowney: Yes, I think that’s right. I think, to go back to the coalition Government period, it was obvious that getting the spending arrangements in place was probably difficult. There was therefore the sense that the autumn statement was highlighting and not highlighting, and that when it came to the actuality of the Budget there would be a difference. To go back to first principles: in order to scrutinise, you have to be clear that you have the same information on the same issues and you can make direct comparisons. That is what we are saying. If there have been lapses in the system, for very good reasons, then it is for Parliament to register its concern, so that the matter is looked at.
Q43 Helen Goodman: Wouldn’t you also draw a distinction between scrutiny and approval?
Professor McEldowney: Yes.
Helen Goodman: We can all discuss how to improve scrutiny; that is, relatively speaking, fairly straightforward. But approval would be more difficult, wouldn’t it? You would have to get the timetabling right: you can’t have the approval on 15 March for a Budget that comes into effect on 1 April. You would have to pull the whole year back—something like that.
Professor McEldowney: Yes, and that is difficult. That is one of the criticisms the OECD made: that there wasn’t enough contemporaneous alignment between approval and the Budget. That is right. But, again, I think that goes back to the House of Commons taking its role seriously and registering its concerns.
Q44 Sir Edward Leigh: On that point, if we are going to keep the Crown initiative, which I suspect we are all agreed on, to avoid pork barrel politics, we can only cut programmes. Would we be able to cut the individual programme? Say for the sake of argument that you cut some programme in the MOD like Trident, or part of it, would Parliament then have the power, or is it feasible for them, to increase other parts of the MOD budget? I am trying to think my way through how much we could do and what is practical on this. Would we just be able to say, “Because you managed the aircraft carrier programme or the Trident programme incompetently, following a recommendation of the budget Committee, we, Parliament, want to cut that particular budget?” How would it work?
Professor McEldowney: That is quite a difficult issue. At the end of the day, Government will govern and will wish to govern, and that is understandable. It is a question whether it is registering complaint or an ultimate decision. That is really difficult, because at the end of the day, Government will try to get it through one way or another.
Sir Edward Leigh: Of course they will. They can impose a Whip, of course, or at least we can ask the question.
Professor McEldowney: Yes, exactly, but that is the point. We must be realistic, but realism comes about through criticism and objection. The point is that there is a scrutiny function. Ultimately, Government may get its way, but that’s life.
Sir Edward Leigh: As happens with the Public Accounts Committee.
Professor McEldowney: Exactly. It is getting the critical edge, but that does not mean ultimate sanction.
Sir Stephen Laws: That is how parliamentary accountability works. The approval is the trigger for scrutiny, but if you ask who pays the price if Government makes a mess of how it spends money, the answer is the party in government does in the House of Commons in its role as an electoral college, rather than individual MPs accounting to their own constituents about how they have managed money. But you can be accountable to your constituents for how you scrutinise what the Government did and what influence you exercised over them.
Q45 Helen Goodman: Sir Edward’s question reminds me of another aspect of this that it seems to me is not working very well; I don’t know whether you have thought about it. At the moment, everything is presented in this departmental way. It is cut departmentally. That makes sense, because of the accounting officer and so on, but there can be other dimensions which are significant, and which people are interested in.
For example, my constituency is in the north-east, so I am very interested in the regional spend. Some colleagues might be interested in the economic impact, and they might want to cut it according to the capital and the current. They might want to go across. So if we were to move beyond finger-wagging at individual Departments, we would need to have considerably more analysis than we get now, wouldn’t we?
Professor McEldowney: Yes, and that supports the budget Committee, which provides that analysis and a heads-up of where the problems are. It is precisely the point you are making, which is excellent, about a holistic view. That is effectively what you are saying: not just the Department but intra-Department is very important.
Q46 Helen Goodman: As well as being on the Procedure Committee, I am also on the Treasury Committee. Could you explain to me why you think the Treasury Committee is inadequate to this task?
Professor McEldowney: It does not imply inadequacy. On the contrary, it suggests that one benefit of the budget Committee is to draw on the strength of all the Committees. I think that’s right. The sum of the parts is better than one single part alone. I think the problem is that the Treasury Committee, thus far, has not been able to exercise the sort of control over Estimates that a budget Committee might be able to do. That is what I am trying to say. That is not necessarily a criticism of the Treasury Committee; it is just about remit.
One has to be careful about criticising Committees that are busy and are set agendas, as you well know. There are only so many hours in the day, and so much time. It is easy to look academically and say, “You ought to,” rather than being realistic about what is doable. The point about the budget Committee is that it has a remit across, and it can make selections. That is the key point: I can draw on the benefits. It is not as if it is counter to an argument against; it is actually strengthening the system and pulling together the knots in the system.
Sir Stephen Laws: It should not be a competition. You will know better than me, probably, but I assume that the Treasury Committee and the PAC have ways of finding how they will divide their work. The same thing would happen if you had a budget Committee.
Q47 Sir Edward Leigh: I will just make one comment. The Leader of the House told us in the context of our EVEL inquiry that it does not matter that Scottish Members have lesser powers than us because all Members are equal during the Estimates process, but of course he did not add that there is no effective scrutiny during the Estimates process.
Professor McEldowney: That is why they are equal.
Q48 Sir Edward Leigh: You suggested that large programmes such as the Trident renewal should have separate requests for resources. How would that work? What would be the benefit of that? Talk us through how that would work. Give us an example.
Professor McEldowney: It is difficult sometimes to do that, but the idea would be that you would identify a particular project like this and then highlight it as being something that required special discussion and analysis beyond the normal Committee, and that would then highlight the need for transparency on particular accounts and so on. That transparency would bring to it the degree of self-criticism and analysis that is needed. So it is going deeper as well as going broader. We are trying to get two things happening: depth and breadth.
Q49 Chair: Would you do that for HS2?
Professor McEldowney: Yes. HS2 is a hybrid Bill, as you know, and the special procedure for that is an example of an unusual use, because it is not used very often, but it did give clarity and it did highlight issues that would not have been highlighted in the normal process.
Just to stand back from where Parliament is, pre-legislative and post-legislative scrutiny applies to legislation. What we are trying to borrow is ideas from both of those processes to enter into the Estimates. That is where we are coming from, to try and bring together some of the values that are clearly evident in those processes. In other words, catching up with what has already been achieved, but has been, as it were, put to one side with the Estimates. That is how I see it, anyway. I do not know if that helps. That is the best I can do.
Q50 Mr Nuttall: If we were to sit down and just imagine for a moment that we were starting this process from scratch, do either of you think that we would finish up with a system like we have now?
Sir Stephen Laws: I think we both think we wouldn’t.
Q51 Mr Nuttall: We wouldn’t, would we? That is the reality. We have a mess, frankly. If were to sit down as a group, we would not be in the position we are in today. It therefore begs the question that if we did do that exercise, we would by definition produce a different system entirely from the one that we have now. Therefore, again, the logical progression of that argument is that what we ought to be doing is trying to get as near to what we ought to have from the position where we are in the wrong place. It’s a bit like the old joke, “How do you get to X? I wouldn’t start from here.” We have to start from here because we cannot uninvent where we are.
Another analogy has just sprung to mind. When you are building a property, it is always a lot easier for the builders if they have got a green space and they can build from scratch. It is much easier than when they have got an old building and they have to start tinkering with it. They always tell you it is much more difficult, much more expensive and much more complicated to do that. And that is where we are, isn’t it? It is much more complicated to redesign an existing—frankly, deficient—system than it would be to do as perhaps the Scots have done. The Scottish National party representatives are not here today, but, to be fair, the Scottish Parliament was able to design a system from scratch, starting with a blank sheet of paper.
With regard to Select Committees and going back to where we are, every departmental Select Committee should have a distinct piece of work every year, the responsibility to examine in detail the spending plans of its Department, and should issue a report as a matter of course, because it is difficult to think what other things could take precedence over that. Do you agree with that as a proposition? Is there any reason why that would not be the case ?
Sir Stephen Laws: I would be happy for the Select Committees to formulate their own priorities. If it comes to designing a new system—I have spent my career where there has not been a blank sheet of paper to work on, so far as legislation is concerned, since about the 13th century, so I am used to this idea that you have got an existing system and you have got to change it to make it do what you want to do; and I think the important thing, if you are designing a new system or operating on an old one, is to decide what you want to get out of the system. Once you have decided what you want to get out of the system, you can then decide what it is you want to change in order to better get from it what you want from it. That is the approach I would recommend.
Q52 Mr Nuttall: Okay; I accept that. Going back to the question, the Select Committees, surely, would want to check and be happy that they understood, and were confident that they understood, the spending plans of their Department. You would agree with that.
Sir Stephen Laws: Yes.
Q53 Mr Nuttall: Fine. There is then the wider question of the whole House having the ability to debate and discuss, rather than just 15 members of a Select Committee. It seems that the options are there—there are all sorts of comments, and I have read your opinion. You have got the Liaison Committee. There is the role for the Public Accounts Committee and possibly the Backbench Business Committee; and already we are starting to get “Well, whose job is it?” Who would actually decide?
The next question that flows from that is I don’t think, personally, again—I would be interested in your views—whether the amount of time on the Floor of the House is anywhere near remotely enough to properly give scrutiny or a proper examination of these spending plans. I would be interested to know what you felt would be an appropriate length of time.
Chair: Right. Those were the questions. See if you can answer them.
Sir Stephen Laws: The problem with the history of Supply procedure is that time has been allowed on the Floor of the House and the House of Commons has on the whole preferred to use it for something other than scrutinising the Estimates; so it is difficult to say how much time would be enough if the time that is given at the moment appears to be too much. As I say, I think there is a good case for saying it is a missed opportunity for Parliament to spend the time that it has got on other things, when Estimates are so important; but the priorities are determined by the House of Commons.
Professor McEldowney: I think what is interesting is your observation about what do the Select Committees actually raise on the Estimates. If you look at the list: DEFRA on flood risk; Defence on NATO, and so on. These are policy issues, you see, and it is understandable that the Select Committees are driven by those matters. What we are trying to do is go to the stage which you are talking about, which is the more technical scrutiny. It seems to me that the mechanism for doing that, that allows this—the door that has to be unlocked—is transparency and information; and that is where I think the budget Committee may in fact operate quite successfully. I think you have defined it quite well. The Liaison Committee has a role but it would supplement that role with the budget Committee doing it. That is where I think there is an argument. I think you have made a good argument for the case for a budget Committee to do that.
Q54 Chair: Professor, can you talk us through paragraphs 17 to 22 of your evidence?
Professor McEldowney: This is a mechanism for making use of the Estimates days that are already there. We went through a check list of things that might trigger various issues that have come both from the Select Committees and from other Committees, generally; so if you look at the Estimates days that we have identified, we think that—point 19—departmental Select Committees could recommend a particular debate. This would be done in the way that we have indicated. The second trigger would be from the Public Accounts Committee, recognising that that is a role that the PAC might have and might encourage through the NAO. Thirdly, early-day motions: this is not the only way of doing it, but it is one way of getting the whole collective discussion going, from a certain number of Members being interested in the issue. The whole point would be that we could have debates triggered by issues that come out, driven not by anything other than specific information that has come from an improvement in the information flow. In a sense, the precursor of this is getting better information so that Members will make use of it. These are just some ideas. There are maybe others. We thought about how we make the existing system work and what is already there. These were the ones that we came to, if you can see where I am coming from. This is not a definitive list, but an attempt at one.
Q55 Chair: I understand that. Your suggestions are within the bounds of reality.
Professor McEldowney: Exactly.
Chair: There is perfection that we will strive to achieve, and we will always fall short, and then there is what we can do within the bounds of reality. What I would like—you can of course decline my invitation—is for you and your colleagues to produce a two-page recommendation of what something that is realistic looks like; something that will not frighten the horses, but is a start. I am going to be blunt: I do not want any nonsense around early-day motions. I am sorry if that sounds—
Professor McEldowney: I saw your eyes flick on that. I passed over that very quickly.
Chair: We can discuss why later. There are lots of issues.
Professor McEldowney: Point taken.
Q56 Chair: We want two pages of what something realistic looks like. We want to make it as difficult as possible for the Government to oppose some small baby step in the right direction. As you say, there are two days to discuss Estimates. Even if there are eight bids and we end up discussing each one for 45 minutes, that still gives us an opportunity to do more than we are doing now, when we discuss everything including the weather on Estimates day.
Secondly, I have been handed this very useful note by the Clerks of the House. In the early 1980s we had 23 Supply days. We changed that. We now have 20 as Opposition days and 3 retained as Estimates days. It does not make any difference, because we never discuss Estimates anyway, but we need to recover some ground.
Colleagues, we have had a really entertaining evidence session. As I came here, a colleague in the Tea Room said that it would be like eating cheese biscuits without cheese and butter, because it will be so dry, but it has not been at all. It has been very interesting. Is there anything that colleagues would like to add?
Sir Edward Leigh: I think we are making enormous progress. My colleague John Pugh stood up once on Estimates day and started talking about Estimates. He was ruled out of order by Mr Speaker. If we get nowhere else, we should only talk about Estimates on Estimates day. The problem with the present Select Committees is that quite understandably they are interested in policy. It is much more sexy and exciting than following the money. When you do your two-page report, I urge you to bear in mind the concept of the budget Committee, which would be a dedicated Select Committee to focus laser-like on Estimates.
Professor McEldowney: Just one point, Chair. In terms of timescale, when do you want the prep in for? When do you want my homework?
Chair: You have done a lot of the thinking, so sooner rather than later, but we are coming up to a recess. Can we have it by the end of the month or in a few weeks?
Professor McEldowney: End of the month would be perfect.
Chair: Is that reasonable for colleagues?
Professor McEldowney: I would like to consult with colleagues.
Chair: We might bring the two of you back when we have a fuller Committee, because you have been enormously good value and made great television. We need great television, now that it is measured on how much exposure you get.
Sir Edward Leigh: It may indeed be eating cheese crackers without butter, but this is about £600 billion of taxpayers’ money.
Chair: Fascinating. Well done. Fantastic. Thank you very much. Shall we call it a day, colleagues?
Oral evidence: Scrutiny of the Government’s Supply Estimates, HC 774 13