David Howarth (Cambridge, Liberal Democrat)

I beg to move, That the clause be read a Second time.

It is something of a shame that a new clause that looks modest but would have the effect of changing our system of Government entirely comes before the Committee with only seven minutes to go before the knife. I therefore do not expect that it will get a proper airing or any proper debate tonight.

The new clause deals with the control of expenditure by the House before that expenditure is made, as opposed to the auditing of expenditure once the money has been spent, which we tend to be rather better at. It is emblematic that most of this afternoon's debates on this part of the Bill have been about the Comptroller and Auditor General in his role as an auditor, rather than in his very important role as Comptroller.

The Exchequer and Audit Departments Act 1866, which is one of the great Gladstonian reforms of the 19th century, puts on the Comptroller the job of making sure that Government expenditure drawn from the Consolidated Fund is authorised by statute or by a resolution of the House. It is fundamental to the system of supply whereby the House, in theory, controls Government expenditure that the Comptroller has that job.

This should matter because policy debates are intimately connected with expenditure. A great American political scientist, Aaron Wildavsky, once said that policy is expenditure and expenditure is policy. That is because a policy that does not have any resources attached to it is generally just hot air, and any spending decision is, in reality, a decision about what to spend money on, as opposed to not spending money on something else, and therefore is a policy decision.

Over the past couple of centuries we have seen a great decline in the practical control of the House over that sort of expenditure decision. There is no time tonight to go through the detailed history of the decline of the supply procedure of the House. By 1896 most of the remaining power of the House was removed by the Conservative party when Mr. Balfour, who was Leader of the House, decided to change the procedure so that all the Government's supply requirements would be decided on one day in August, just in time for the grouse shooting season to start.

The main purpose of the clause is to suggest to the House—I am sure that the Government will not be interested—that it is now time to try in some way to wrest back our control over Government expenditure before it happens. An important consequence of the House's giving up of its power over supply and expenditure is that it spends all its time talking about legislation instead. This problem is part of the wider problem of there being far too much legislation. What has filled the time that in previous centuries was taken up with discussing Government expenditure before it happened is legislation—new laws. That is what we talk about instead.

I admit that the new clause would not make a vast difference in itself. We need to get hold not just of the annual process of Government expenditure, but of the comprehensive spending review—the multi-year framework which is generally a process from which we are entirely excluded. Select Committees find themselves excluded from that as well.

In local government, the systems for controlling expenditure in advance are far better. Even the smallest parish council gives the elected representatives better information and more power over spending decisions than happens in the House. In the end that lack of control leads to worse policy. There is not time to go into the details of what would be different if control were different. I simply leave hon. Members with the thought that the House is withering in its power and in public esteem, and that it will continue to wither until it takes back a role in the setting of policy. That is what the control of expenditure in advance is all about.

Sarah McCarthy-Fry (Parliamentary Secretary, HM Treasury; Portsmouth North, Labour)

I thank David Howarth for his contribution, which reflects his passionate views that the House should have better scrutiny of Government spending for future years. I know that that was one of the themes of his speech on Second Reading, in which he said that serious reform was required of the way in which Parliament relates to Government on money issues.

The hon. Gentleman will know that the Government published a memorandum in March containing formal proposals to Parliament for better alignment between budgets, estimates and accounts. The memorandum explained the plans to simplify the Government's financial reporting to Parliament, ensuring that they report in a more consistent, transparent and straightforward fashion on spending plans, estimates and expenditure outcomes.

The hon. Gentleman will know that an important plank in moving towards alignment is covered by part 8, on the transparency of Government financial reporting and, in particular, the inclusion in departmental estimates of resources used by designated bodies.

On 3 July, the Liaison Committee responded to the memorandum on behalf of the other Select Committees, and in its response it covered some of the same ground as the hon. Gentleman has. In particular—

Debate interrupted (Programme Order, 3 November).

The Chairman put forthwith the Question already proposed from the Chair (Standing Order No. 83D), That the new clause be added to the Bill.

Question put and negatived.

The Chairman then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Clause 51 ordered to stand part of the Bill.

Clause 52 ordered to stand part of the Bill.

The Chairman left the Chair to report progress and ask leave to sit again (Programme Order, 3 November).

The Deputy Speaker resumed the Chair.

Progress reported; Committee to sit again tomorrow.