Orders of the Day — Parliamentary Control of Expenditure (Reform) Bill

Part of the debate – in the House of Commons at 1:08 pm on 28th January 1983.

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 1:08 pm, 28th January 1983

Some hon. Members have sought to put the Bill into its historic perspective, going back to Gladstone and earlier, and it is right that that should be so. However, let us look forwards instead of backwards. In 10, 15 or 20 years' time this Session may not be remembered so much for turbulences in the foreign exchange market, or even the Falklands crisis and its aftermath, as for the extent to which the procedures, particularly the financial procedures, of the House were reformed. I hope that more reforms are to be made in this Session of Parliament than were made in any previous Session. In that respect, a great tribute should be paid to my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), the promoter of the Bill.

The establishment of the new Select Committee on Procedure (Finance) has provided a foundation on which we can build. The recommendations last Session of that Committee, of which I had the honour to be Chairman, have largely been implemented. Consequently, for the first time in centuries we have an opportunity to debate and vote upon individual Estimates and the totality of Estimates. That is an important part of the procedural reforms based on my right hon. Friend's original idea of Select Committees. I hope that we shall make further progress.

The House will know from the public sessions of the Select Committee on Procedure (Finance) that recommendations are expected on the Armstrong committee report, on the idea of "Green Budgets," on bringing taxation and expenditure together, on public sector borrowing, on the control of long-term projects, and on the question of controlling non-supply expenditure. It is important to place the Bill in that overall context.

It is true to say that the new procedures for the Estimates will enable us to look at the expenditure Estimates ex ante, but it is necessary that proper scrutiny should be applied to the huge sums of public money that are expended in other ways. In bringing these changes about the House has had the support of successive Leaders of the House, not only my right hon. Friend the Member for Chelmsford but the present Foreign Secretary and the present Leader of the House. They have been sympathetic to these reforms and have facilitated them.

I listened with some concern to the speech of my right hon. and learned Friend the Chief Secretary to the Treasury and his reaction to the Bill. When my right hon. and learned Friend rose to speak just before noon, hon. Members on both sides of the House gained the impression by about 12.40 or a little later that his objective was to talk the Bill out. In the event, I do not think that he was successful in that operation. His reaction, particularly in the latter part of his speech, was not appropriate in the circumstances.

The debate has centred on the nationalised industries. The unnecessary fears that have been expressed by the chairmen of the nationalised industries turn on a number of separate issues. The first issue is that of confidentiality. The chairmen fear that there might be a leak of confidential information from the CAG's department. That is not a risk compared to the inevitable result of any commercial operation. The record of the CAG speaks for itself. There are no reasonable grounds to suppose that material published as a formal report will in any way be commercially damaging to the nationalised industries.

There are several other aspects of the views expressed by the chairmen of the nationalised industries which ought to be commented upon. The Bill suggests that as a result of introducing these new procedures the Monopolies and Mergers Commission should no longer have power to investigate the nationalised industries. That is right. It is important to stress that it has been inadequate in its accountability to the House. We all know that references are decided by the Government, not by the House. We equally well know—and recent experience confirms it—that it is often difficult to reach a sensible decision on the findings of the commission. The Government can decide not to go ahead with its recommendations, and the proposed change will be beneficial.

My experience of the commission—admittedly many years ago—is that its investigation is disruptive because it is more concentrated than the continual involvement in the affairs of nationalised industries that is envisaged in the Bill. The argument about the commission being a reasonable substitute for the Bill is not justified.

It is true that Governments sometimes put in accountants to carry out specific investigations, but that is also on an ad hoc basis and can be disruptive. It would be better to have a sensible basis, with regular, organised machinery to carry out the investigation.

There has been argument about the total amount of information available. The Government argue that nationalised industries are responsible to their sponsoring Departments, which are responsible to their Ministers, who are responsible to the House. I have grave doubts about whether the information from nationalised industries to the sponsoring Departments and then to the Treasury is adequate for Ministers to fulfil their functions. The extent to which Ministers are accountable in any practical sense is not a matter about which we should be complacent. Additional information such as that which will be given to the House by the CAG may enable Ministers to fulfil their functions properly. We know that sponsoring Departments sometimes have difficulty in obtaining the facts and tend to be rather protective of their nationalised industries.