The Financial Secretary to the Treasury (Jesse Norman)

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I beg to move,

That the Bill be now read a Second time.

This is a technical measure that concerns cash management. Its purpose is to allow the Government to use cash advances to act swiftly and decisively to safeguard the people of this country, both from the impact of the covid-19 pandemic and from other unexpected events. But I would emphasise that money from the Contingencies Fund constitutes a cash advance, which will have to be repaid once a Supply estimate is voted through the House; it is not additional spending. It is important to be clear that the House will still be able to scrutinise and debate where resources have been allocated in the usual way when the Government publish the Supply estimates.

As hon. Members will be very much aware, Parliament provides the Government with the authority to expend resources in the form of capital and cash. However, the Government must also sometimes provide a swift financial response to national emergencies and other pressing events. That is why the Contingencies Fund exists. In the Contingencies Fund Act 1974, Parliament put a limit on the amount that could be issued from the fund at 2% of the previous year’s cash spend. That cap has normally proved to be sufficient to meet unexpected and sudden financial requirements, but we are not living in normal times at present, and uncertainty as to the impact of covid-19 has required a degree of flexibility in setting the cap.

As colleagues across the House will recall, a year ago, as the full implications of the pandemic started to emerge, the House agreed to change the limit on the Contingencies Fund from 2% to 50% of the previous year’s cash spend for the financial year 2020-21. That had the effect of raising the amount in the fund from a possible £11 billion to £266 billion. This cash advance has been invaluable to Departments in dealing with the unprecedented events that have been set in motion by the pandemic. In fact, over the past 12 months, requests from the Contingencies Fund have totalled over £210 billion. It has provided the cash for Government interventions to support businesses, to support frontline workers and to pay for the furlough and other schemes. In addition, it has provided the financial firepower to help the NHS through the crisis, and it has funded numerous other measures that have helped to safeguard lives and livelihoods throughout this extraordinarily difficult period. As is the case in every previous year, the fund has also paid out on business-as-usual requests.

This Bill again seeks to adjust the limit on the amount that can sit in the Contingencies Fund for the financial year ending 30 March 2022 to 12% of last year’s cash spend. I will set out the reasoning behind that decision. With the new cap, the amount in the fund will total £105 billion. By contrast, with the 2% cap—the normal percentage limit—the fund would have contained £17.5 billion. That is clearly a substantial sum, and it would be more than ample to deal with spending requirements in the normal run of things.

While the Government will provide Departments with suitable resources for the 2021-22 year, it is prudent to be prepared in cash terms. While the resounding success of the vaccination programme offers us light at the end of the tunnel, it is equally true that we must remain vigilant. The crisis is not over, and therefore the Government believe it is only right to retain flexibility on the amount in the Contingencies Fund. However, given the experience accrued by each Department over the last year in dealing with the virus, we can scale back the limit from 50% of the previous year’s cash spend to 12%. Once again, let me assure Members that the House will still be able to scrutinise and debate where resources have been allocated in the usual way when we publish the supply estimates.

This is a small and technical but important Bill that will allow the Government to deal with unexpected events over the coming year. It provides Departments with a mechanism to respond swiftly and decisively to emergencies and sudden, unpredictable needs so that they can safeguard our public services and support the wellbeing of people across the country. It does not impinge on Parliament’s right to scrutinise and question, but it does underline this Government’s commitment to do whatever it takes to protect lives and livelihoods in order to overcome this virus, and I commend it to the House.

James Murray (Ealing North) (Lab/Co-op) [V]

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I thank the Financial Secretary for setting out the case for the Bill so clearly. The Bill seeks to amend the Contingencies Fund Act 1974, which is one of the monuments of a previous Labour Government. The 1974 Act embodies principles that are central to the accountability of Government, so its amendment should not be taken lightly.

This time last year, the Opposition fully accepted that the conditions of the pandemic made it necessary, expedient and right for there to be provision for the Government to act swiftly. We accepted that, in the rush of the early response to the outbreak, there could be times when it would not be possible to follow normal procurement processes. We accepted that, at certain points, the spot price paid for particular goods facing global shortages might be higher than it would otherwise have been, and we accepted that, on occasion, at a time when the Government were taking on entirely new responsibilities, some mistakes would be made. But we do not accept, and the British people will not accept, that what may have been excused in the early days of the outbreak has turned into a succession of failures and scandals, which it seems Ministers can no longer even see as wrong.

Last year, the Opposition agreed to a rise in the provision of the Contingencies Fund to some 50% of annual expenditure. While we accept that a higher than usual level for the Contingencies Fund is again in order and we will not be opposing the Bill, Ministers would do well to remember that the fund was created as a fall-back and that its extension is an emergency response, not an opportunity for unaccountability. Ministers seem to have forgotten that public money needs to be spent effectively, in a way that achieves value for money and commands public confidence.

The starkest example of failure by this Government must surely be their flagship Test and Trace scheme, a programme outsourced at great expense and the subject of a report published yesterday by the Public Accounts Committee, which was truly damning. The Government should be embarrassed and deeply apologetic over Test and Trace, which Lord Macpherson, who led the Treasury civil service from 2005 to 2016, described as

“the most wasteful and inept public spending programme of all time.”

What makes it even worse is that everyone in the country desperately wanted Test and Trace to work. Everyone was willing the programme and its team to succeed. We all wanted and needed that money to be spent on a programme that would achieve its stated goal, and we have all witnessed the profound consequences of incompetence on such a scale. I lost count of the number of times that my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), my right hon. Friend the Member for Leicester South (Jonathan Ashworth) and my hon. Friends the Members for Oxford East (Anneliese Dodds) and for Houghton and Sunderland South (Bridget Phillipson) called for the Government simply to focus on getting Test and Trace working, yet Ministers did not.

The opening summary of the Public Accounts Committee’s report contains the following telling sentences:

“The Department of Health & Social Care justified the scale of investment, in part, on the basis that an effective test and trace system would help avoid a second national lockdown; but since its creation we have had two more lockdowns. There is still no…evidence to judge”

Test and Trace’s “overall effectiveness”.

Only people who have no real understanding of the value of money or the importance of public investment in changing lives for the better could be so reckless about how it is spent. We believe that the Government really need to learn from the last year, not only by accepting that the outbreak exposed the weakness of our rights at work and the impact of a decade of cuts to our public services, or by recognising that they repeatedly did too little, too late to protect the public’s health and our economy, but by making serious structural reforms to how they initiate and examine spending.

The shadow Chancellor, my hon. Friend the Member for Oxford East, has set out how the next Labour Government would do things differently, by taking a robust and determined approach to ensuring that public money improves the lives of those we serve. She has explained how we would invite the Comptroller and Auditor General to submit an annual report to Parliament, bringing together the National Audit Office’s findings throughout the year into a single assessment of the effectiveness of public spending in those areas that it has examined. As my hon. Friend has said, we must hard-wire value for money into the budgetary process.

But the value for money aspect is not the only part of this extraordinary year for public spending that commands our attention. It would be possible to achieve value for money and yet still fall far short of other standards we expect. That is why the new clause that the Opposition will move in Committee seeks to improve the transparency of Government spending.

We know only too well, as my hon. Friend the Member for Leeds West (Rachel Reeves) has set out, that the way in which procurement is conducted also matters very much. Put simply, the time to end emergency procurement is overdue. Covid, as she rightly observed, is no longer a surprise. Supply chains have been established and, while there are of course still significant challenges and responding quickly remains essential, there is no longer a case for the continued widespread use of emergency measures of procurement for items that the Government now know how and where to find.

Contract publication should now follow the normal rules, and when contracts fail to deliver, the Government should get money back. That is public money. “Deliver or you won’t get paid” is what contractors expect from every other organisation and company they supply. The Government must not be the softest touch in the market.

We must drive a culture of transparency throughout public spending. The new clause that we will move today seeks to improve the transparency of the Contingencies Fund, because that is what the Bill before us concerns, but it is time for every part of public spending to achieve better value for money and for the Government to use their spending power to improve standards in the way the public would expect. The Opposition believe that achieving these changes need not be difficult or controversial.

We recognise the power of public investment to transform people’s lives for the better. That is fundamentally why we, like the British public, cannot bear to see Ministers casually and carelessly waste public money on deals that do not deliver, on contracts that do not work and on outsourcing that should never have taken place. Every pound that this Government misspend makes it that bit harder for nurses to accept the Chancellor’s pleading that a 1% pay rise is all he can afford. Every penny that this Government waste could have gone towards building a fairer, more secure future for our country. We will not be opposing the Second Reading of this Bill, but our new clause in Committee will set out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money and make sure we have more money to spend on the things that matter to us all.

Mr Deputy Speaker (Mr Nigel Evans)

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Before I call Andrew Jones, I want to point out that although what we are dealing with is very important, we also have the Committee of the whole House and Third Reading, and then we have 70 contributions in the International Women’s Day debate. If people could keep that in mind as they consider the length of their contributions, I would be extremely grateful.

Andrew Jones (Harrogate and Knaresborough) (Con)

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I will, of course, follow your advice as scrupulously as ever, Mr Deputy Speaker.

This Bill is about cash flow. It is not about all the stuff that we have just been hearing from the shadow Minister. All organisations have to manage their cash flow and meet their liabilities, and failure to do so is a significant reason for corporate collapses. It is, obviously, different in the public sector, but the rule about meeting liabilities remains as Government react to urgent situations. There are also clear mechanisms for making sure that in the event of a cash need, the cash will be there. That is what the Contingencies Fund is.

This Bill is about the Treasury’s capacity to make repayable advances to other Departments, so that they can react to events if needed. Parliament has long recognised that principle. The legislation governing it is 45 years old, but in fact the principle was established by Treasury minute in 1862, when the Contingencies Fund was created. For this financial year—and the next, if we pass this Bill—the threshold allowed in the legislation has been increased, and for obvious reasons. We are dealing with the greatest health crisis in 100 years.

Jim Shannon (Strangford) (DUP)

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I spoke to the hon. Gentleman beforehand. Although I understand that this is specifically about cash flow, the whole House recognises that there is a real crisis in cancer treatment when it comes to diagnosis and surgical operations, and many people have died waiting for those to happen. Does he agree that covid-19 has increased the demand for cancer care, and therefore all requests that come from the NHS and the Department of Health and Social Care must be treated sympathetically and urgently?

Andrew Jones

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The hon. Gentleman makes a very good point. There is no doubt at all that we have seen some health treatments delayed as a result of the crisis, and that is a real tragedy. He is right that cancer is one of those where we should be most concerned, and the requests that come in should be treated with urgency and compassion as we seek to catch up on the treatments that the people we represent urgently need. That was a wise point.

I go back to the core purpose of the Bill and why it has been introduced. The Government needed to respond quickly and at scale, and they have done so. The Bill before us is about renewing the increased capacity for the next financial year, and we are only three weeks away from the new financial year. We are being asked to approve a one-year increase in the limit from 2% to 12%. That is, of course, a big jump, which amounts to more than £100 billion. We should also perhaps remind ourselves that the House approved an increase in the limit to 50% for this financial year—truly exceptional in every way.

I support increasing the limit in the Bill. We are not through this pandemic, and it is not hard to imagine circumstances where the Government have to react urgently ahead of the regular voting provision under the normal supply procedure. One of the lessons of the past year has been that the course of the pandemic has not been linear. None of us can guarantee that the future will not require urgent action. In reality, we can probably all predict that it will.

As my right hon. Friend the Minister said, this is quite a dry Bill, but once a Treasury Minister, always a Treasury Minister. That does not mean, however, that we should not scrutinise; of course we should. But the Bill does not increase budgets, and it does not give the Government a blank cheque. These are cash advances, which are highlighted to Parliament through the normal estimates booklets and memoranda, and then we vote on them. There is transparency as funds are drawn upon by Departments. There is guidance agreed between the Treasury, the National Audit Office and Parliament. That means that written ministerial statements are published throughout the year and cash advances are included in the main or supplementary estimates. I hope we will not be facing a contingencies Bill for the 2022-23 financial year. The progress that we are making in tackling the virus is obviously fantastic, but the consequences will be felt for a long, long time.

It is too early to spend time on an inquiry on the lessons from the pandemic, but one thing I am sure we will consider in due course is how well and how quickly government—I am talking about the UK Government, devolved Administrations, local government and, above all, the NHS—have responded. They have been nimble and dynamic in their response. This Bill is simply about facilitating the cash flow to allow that quick response and that is why we should all support it.

Richard Thomson (Gordon) (SNP) [V]

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This is a short but important Bill. Last year’s measures in the Contingencies Fund Act 2020 were absolutely unprecedented. Setting a level of 50% on the fund ensured that the rapidly evolving policy response to covid-19 could be matched with the necessary resource. It was important that we did so. At that time, we were heading for a lockdown and a parliamentary recess for Easter. It was unclear when Parliament would be able to return and we had no means at that point, at least as I recall, of enabling virtual participation in Westminster, so it was essential to allow necessary and perhaps even extraordinary expenditure to take place in the short to medium term to support the policy responses to covid that were deemed to be necessary, without the requirement for us to reconvene Parliament to ensure that further spending could be authorised.

This year’s Bill, by extending the scale of the fund beyond the usual 2%, clearly recognises a need for that flexibility to continue. Setting this year’s contingencies fund at 12% may well give access in the short term to the same amount of resource that was used in practice last year. In the light of experience, it may be felt that out of all the arbitrary figures that could have been chosen for the Bill this year, this is the figure that somehow just feels right. However, for all the progress that has been made with vaccines and vaccinations in recent times, we are not out of the woods yet. There have been mutations to the virus, which have increased its virulence and forced us in consequence to change our behaviours and responses. There may yet be further mutations that force us to further reappraise our plans on how we wish to emerge from the present restrictions.

The only thing that we can predict with certainty about the future of living under this virus is that we cannot predict it with certainty. As such, while the Scottish National party group supports the Bill and will not oppose the 12% level being set on the fund, I will place on the record that we would have been content, in the interests of prudence and good governance, to see a higher figure being used.

Let me turn to the proposed amendment; I am aware of your injunctions about time, Mr Deputy Speaker, and that the Bill will have a Committee stage. I have looked at the amendment, which has been tabled in the name of the Leader of the Opposition and the shadow Chancellor, and although it increases the length of the Bill tenfold, it clearly seeks to tackle important issues regarding transparency and accountability in Government spending. I have a lot of sympathy with its intent and will listen carefully to the arguments in Committee.

There is, however, a much wider issue regarding the ability of this House to properly scrutinise Government expenditure, which extends to the estimates process. For someone who entered the House with a background in local government and who bore the scars of passing budgets as a co-leader of a minority council administration, it is remarkable, in contrast, how contested local authority budgets running to just hundreds of millions of pounds can be, when hundreds of billions of pounds across the year in central Government expenditure can still sail through relatively untroubled by the interference of competing views from the Opposition. Although there have been some recent changes to the estimates days’ debates—the estimates can now be debated rather than needing the vehicle of Select Committee reports related to them—it is still extraordinary to my mind that there is no meaningful way to seek to amend Government spending through the estimates process or an ability, as a matter of course, to scrutinise planned departmental expenditure before it is approved.

That brings me, in closing, to the current fiscal framework. The Scottish Cabinet Secretary for Finance has repeatedly pressed the UK Government to provide extra flexibility so that the Scottish Government can mobilise funding when it is most urgently needed through this crisis. While the UK Government have indeed confirmed that the late funding allocated in this financial year could be carried forward into 2021-22 without having to use the Scotland reserve, that flexibility is still limited and temporary. The crisis has revealed a fiscal framework in the UK that is not fit for purpose. As the previous furlough extension for England demonstrated, no matter what the devolved Governments might wish to do in policy terms, problems still have often to be felt first in Whitehall before a budgetary response is triggered for England, which then triggers its way through to other Governments.

In my view, the best people to take decisions for Scotland are those of us who make our lives here. The policy choices we make should be restricted only by the limits of our own resources, the limits of our own choices and the limits of our own imaginations, and not by limits and constraints that are set elsewhere. We will continue to press for these additional flexibilities as part of the fiscal framework review.

Saqib Bhatti (Meriden) (Con) [V]

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I refer Members to my entry in the Register of Members’ Financial Interests. I also take note of your indication to limit our contributions, Mr Deputy Speaker. I could speak for hours on the Bill, but I will refrain from doing so.

I want to speak in favour of the Bill because, quite frankly, if there was ever a time when we needed a contingencies Bill it would be during a pandemic, and we are still in a pandemic. As the Financial Secretary said, for those members of the public who will be watching today, the Contingencies Fund Act 2020 enabled Government Departments to increase their percentage of spending at a time when the country needed it most. It was vital to make sure that the Government could act in a timely manner to safeguard the people of our country.

This is, of course, a contingency. It is not additional spending. It is there to ensure that Departments have access to funds if needed. If there is one takeaway from the past 12 months, it is that we should be prepared for every eventuality. It is appropriate that the percentage of the total supply expenditure is reduced to 12%, as opposed to the 50% it was last year. Of course, last year, when the previous Bill was passed, we knew we had a crisis, but it would have been near impossible to estimate the full cost of Departments’ needs at that time.

Today, we know more. We have a world-leading vaccination programme, which means we have vaccinated over 22 million people. We know that infection rates are falling and, thankfully, the Prime Minister has laid out a road map as to how the economy will open up. In the light of that, it is correct to reduce the contingency need while not yet returning to the normal 2%. We are, after all, not in normal times, so the normal 2% cannot apply. I would go further. This Bill, in my view, represents strong leadership, as the previous one did at the start of the pandemic.

We should not forget what the previous Bill allowed Government Departments to do. The urgent procurement of contracts allowed the Government to be swift in their response. It allowed us to deliver 32 billion items of personal protective equipment—32 billion, Mr Deputy Speaker—and 22,000 ventilators, when at the start of the pandemic there was an acute need. Those were quite literally matters of life and death. In such instances, the Government have but one duty: to take every possible measure to provide security and safety for their citizens. Since then, we have also completed 96 million tests. That is a phenomenal achievement and we should not downplay that.

As we look to the Bill, it is correct to think about how the resources will be applied until the supply and appropriation Bill is voted on in this House. The Chancellor last week set out a characteristically world-leading Budget, ensuring, to name just a few: the furlough scheme, which has been a lifeline for so many, continues until September; more money for apprenticeships and restart grants to get our worst-hit businesses back up and running; and the extension of universal credit. There are also infrastructure spends across the country, which are a testament to my right hon. Friend’s focus on the next stage of dealing with this pandemic. As we emerge from the public health crisis, we must look to the economic recovery stage.

Accountability and transparency matter, of course, and the Bill does not take away the usual mechanisms that have been in place for ensuring that expenditure is met through the contingency fund and that it is scrutinised. Advances made in this way are presented in the usual way in the estimates booklet and the memorandums that Parliament can scrutinise and vote on.

To hinder the Bill would in my view seriously hinder the Government’s response in dealing with the pandemic. It would risk undermining the measures by the Government to help those who need our urgent support. That is why I am supporting the Bill.

Dawn Butler (Brent Central) (Lab)

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It is correct that a contingencies fund Bill is vital when the Government need to react, especially during the pandemic, but it relies on trust. Trust requires transparency, truth and honesty. Most colleagues in this House will have noticed the Conservative party’s habit of gaslighting the nation over the past decade. “We’re all in this together,” Osborne and Cameron said, before axing the safety net that the poorest in our country relied upon. I recently read a quote that said:

“We’re not all in the same boat, but we are going through the same storm”—

some of us are in yachts, some of us are in boats and some of us are in dinghies and just holding on.

Recently, Boris Johnson and Rishi Sunak promised to take care—

Mr Deputy Speaker (Mr Nigel Evans)

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Order. I have to correct my hon. Friend—I will put it that way. Please do not refer to current serving Ministers or other Members of Parliament by their names.

Dawn Butler

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My apologies, Mr Deputy Speaker.

The Prime Minister recently promised to take care of the nurses who sat at the nation’s bedside during one of our darkest moments, before offering them an insulting and paltry 1% pay rise—a real-terms pay cut. The question of cronyism is no different. Ministers on one hand claim that they did nothing wrong. They say that Opposition Members are stirring up fake news, and that we are not patriotic if we dare to question their actions and how they are spending public funds, yet when the evidence is too powerful and shocking to ignore, when it is so stark that the Government have to respond, they say that their mistakes can be excused because they were rushing to procure vast amounts of equipment in a national crisis. Both those things cannot be true, so which is it? Which do they believe?

Of course, the country is willing to accept that mistakes were made, but that was a long time ago—a year ago, in fact. Ministers must have the humility to admit their mistakes and errors, and work with the Opposition to ensure that the current situation, which has eroded many people’s basic trust in democracy, is never repeated. Supporting this amendment is a start.

The truth is that the evidence is overwhelming: as Byline Times has calculated, more than £900 million in coronavirus-related contracts has been awarded to firms that have donated to the Conservative party—a huge return on their donations. The country’s purse is not the Government’s piggybank. Countless more deals have been awarded to former Government advisers, chums of Dominic Cummings and former drinking pals of the Health Secretary. Ministers may dispute why so many deals have been awarded to firms with close ties to the Conservative party and senior Government figures. Some of those firms were not even suitable or equipped to deliver what was needed.

The reason could be the Government’s infamous VIP lane, which meant that some firms with links to Ministers, MPs and officials were 10 times more likely to win contracts. Some of it could be down to the old boys network—who knows? We still do not know, but we should know before we continue to trust the Government. Some Ministers may know what is going on and why, and what the cause is of this rampant cronyism, but all Ministers and Conservative Members must recognise the basic facts: vast amounts of public money have been spent and wasted on firms with Tory and Government connections. People across the country are angry and disillusioned.

The Conservatives’ own constituents, and constituents of Members on both sides of the House, are questioning why the Conservative party has abandoned its belief in the basic principle of accountable, transparent public spending. It is imperative that Ministers and officials figure out the root cause of this rampant cronyism, admit their errors and safeguard public money so that, in the future, it cannot end up in the hands of Conservative donors.

Some in the Conservative party might say that the money is not wasted because some of the money that has been given to companies is finding its way back to the Conservative party through donations, but that is wrong and corrupt. If I am wrong in what I am saying, the Minister, when he gets to his feet, must admit the mistakes and errors made.

Anthony Browne (South Cambridgeshire) (Con)

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I welcome the Opposition’s interest in this motion. It is incredibly important. I particularly welcome their conversion to the importance of value for money. It is the Conservative party that has always been the party that realises that we are just guardians of public money. It is not the Government’s money. It is taxpayers’ money and we should treat it as carefully as if it were our own.

I arrived at City Hall after Ken Livingston was there and when the current Prime Minister was Mayor of London. We went through the accounts and were absolutely shocked at the staff’s attitude towards money—it was just there to be shovelled out the door. We imposed a very strict control regime, which dramatically reduced costs and improved value for money. If Labour Members want to learn more about value for money, I would welcome them to the Conservative Benches, so that we could discuss it.

This whole debate reminds me slightly of discussions that I have often had with environmental activists about nuclear power. They come out with lots of arguments against nuclear power. One by one, those arguments are knocked back. Finally they say, “Well, it costs too much.” When they resort to that argument, we realise that they have lost the argument. The reason the Labour party is focusing so much on value for money is, I fear, not because it has converted to this cause, but because there are no other lines of attack for it to follow.

If we look at the progress of this pandemic since it started, we will see that, at the very beginning, we were really worried about not having enough ventilators. We now have 22,000 ventilators. We have far more ventilators than we need at the moment. Then there was the personal protective equipment crisis—remember that? There was shock, questions and attacks the whole time from the Opposition, who were saying that we did not have enough PPE and asking why we did not have it in stock. Actually, we only made 1% of the PPE in this country. We did not have manufacturers that we could turn to and say, “Can you ramp up supply?” There was a global shortage. We now have, as my hon. Friend the Member for Meriden (Saqib Bhatti) said, 32 billion parts of PPE in stock and 70% of it is made in this country. There is no line of attack that the Labour party can make on PPE.

Then we come to vaccination. The Labour party previously made many attacks on vaccination. What can I say? We all know, everyone knows, the voting public know that it is a great success. It is an absolute triumph and truly world leading, as is so well documented, thanks mainly to many teams across the NHS and the public sector, but also to the vaccine taskforce led by Kate Bingham.

The Labour party has raised test and trace because of the Public Accounts Committee report yesterday. The report said many things. It did not say that 80% of the cost of test and trace is on the testing. On the testing, we are very much a world leader. I was looking at the figures for the G20 countries—the 20 main countries in the world—and we are doing twice as much testing as any other G20 country in the world. According to Our World in Data, we are doing 10.54 tests per 1,000 people a day in the United Kingdom. The next highest in the G7 is Italy, at 5.2. We are doing four times as much as Germany, and three times as much as Canada. We are truly world-leading in testing and that costs money. It also means that all the children can go back to school. We did 1.5 million tests on the day that they went back to school. It is only because we can do the testing and the tracing that follows that children can go back to school to regain their education and we can slowly return to normality.

All these are great successes and the Labour party should welcome them. The British public can see it: we can see the mood of the nation changing and, fingers crossed, that will continue. However, we are still in the middle of the pandemic. It is not over yet. It is too soon to take the hands off the brakes and say, “Let’s roll down.” Things could go the wrong way and it is absolutely right that the Government continue with their contingency policy, with 12% of supply, in case other things flare up. This is not about spending more money. It is about giving us the ability to spend money should it be needed and I fully welcome it.

Kevin Hollinrake (Thirsk and Malton) (Con) [V]

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Accounts mean accountability. Every set of accounts needs contingency lines—sometimes quite annoyingly, in my experience—but this crisis has shown the importance of having a contingency fund.

I agree with my right hon. Friend the Minister: the Government have acted swiftly, decisively and with a great deal of flexibility in respect of the schemes they have rolled out. Almost every businessperson I speak to in my constituency is supportive of what the Government have done in this regard. It is not just the Government who have acted swiftly and decisively; bodies such as Her Majesty’s Revenue and Customs have done a tremendous job in getting some of the grant aid out to businesses, and we should be grateful for those efforts.

When I listened to the shadow Minister, the hon. Member for Ealing North (James Murray)—who I do not think is even in his place at the moment—all I got was a deep suspicion of the private sector. It was quite astounding. It was reminiscent of that great Churchill quote:

“Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.”

I just do not understand why the private sector is still anathema to Labour, even though it has been responsible for so many things in this crisis, not least the development of the vaccine, the first of which, the Pfizer vaccine, was rolled out without any public support whatsoever.

Things such as bounce back loans and coronavirus business interruption loans have all been delivered by the private sector, through the banks. As I am sure you recognise, Mr Deputy Speaker, I am not shy of criticising the banks, but this year they have done a tremendous job in getting the money out to businesses, yet we see no recognition from those on the Opposition Front Bench of what the private sector has done throughout this crisis.

All the money that flows through the contingencies fund will of course be accounted for and the Government will be held to account for the related spending. It is important that the Opposition should also be held to account for their spending. I find it quite astounding that the shadow Minister talks about value for money; I have sat through so many debates over the past five years in which Labour has called time and again for more spending via pensions, social security, health services and social care—whatever—despite our spending challenges and without any assessment of value for money. Labour just wants that money to be spent without any consequence or accountability. That cannot be right and the shadow Minister’s claim about value for money was quite laughable. Every bit of spending has to have somebody to pay for it, and that is, of course, the taxpayer, which is why we have to be careful and judicious with Government or public money. It comes from the taxpayer.

Most recently, Labour has been calling for a greater increase than 1% for nurses. Who is not sympathetic to that? But I do not hear Labour saying what pay rise it would give or how it would pay for it. It is surely a responsibility of any responsible party that wants to be in government to say how it would pay for things.

Finally, I think the hon. Member for Brent Central (Dawn Butler) was quite disgraceful in some of her comments. I may be wrong, Mr Deputy Speaker, but I thought she described Ministers as corrupt. I think that is something you might look at, because it is entirely inappropriate and entirely inaccurate. I am very much looking forward to talking more in Committee about procurement and why the Opposition are wrong again.

Bill Esterson (Sefton Central) (Lab) [V]

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The Government’s test and trace scheme, outsourced to companies such as Serco, has been one of the most scandalous wastes of public expenditure in living memory. It is quite difficult to imagine what £37 billion looks like, but here are some examples. In 2015, the Northumbria Specialist Emergency Care Hospital was constructed at a cost of around £75 million; £37 billion is enough money to build nearly 500 brand-new state-of-the-art hospitals. With around 670,000 nurses on the permanent NHS payroll, £37 billion is enough to give every single nurse a pay rise of not £3.50 a week but around £50,000. But instead, what did the Chancellor, in his recent Budget, announce for nurses? Not even, actually, a pay rise of £3.50 a week, but, in real terms, a pay cut of about £5 a week.

It is a disgrace that this Government are so profligate with their cash that they will give £37 billion to private outsourcing giants, including Serco, and at the same time choose to take money away from our nurses with that real-terms pay cut. Of course, if that £37 billion had kept people safe—if it had worked—that huge sum of money might have represented value for money. Yet as the National Audit Office said:

“The Department of Health & Social Care justified the scale of investment…on the basis that an effective test and trace system would help avoid a second national lockdown; but since its creation we have had two more lockdowns.”

The ineffectiveness of the outsourced test and trace system is one of the reasons the UK has experienced the worst death rate of any major country. Yesterday, Serco’s top two executives, one of whom is the brother of a Conservative MP, received £7.4 million each in pay, including bonuses worth about £5.5 million. The company has previously handed out over £17 million in dividends to shareholders while reaping the rewards of its role in the grossly wasteful and ineffective test and trace programme. Today we read that the Business Department has invited Serco bosses, among others, to apply for new year’s honours. We now have a Government all too happy to waste billions of pounds on dodgy contracts for companies with Conservative party links, and when the scheme invariably fails, they give the people responsible a title as a consolation prize, all the while starving our public sector of funding and our public sector workers of pay.

After £37 billion, no test and trace, and the failure to prevent the second and third lockdowns, Ministers and those profiteering from this say it was a success. The National Audit Office says that there is no evidence of effectiveness. England has had the worst death rate in Europe. Other countries were able to balance value for money with support for the public’s health and the economy. If other countries can do better, the Government at Westminster can and must do better too.

All this is to say nothing of the disastrous PPE contracts. PPE Medpro was incorporated on 12 May. Just 44 days later, it was awarded a contract worth £122 million for single-use medical robes, which it intended to import. The contract was not advertised, but the company had links to the Conservative party and a Conservative peer. In contrast, my constituents who own Florence Roby Ltd, a uniform supplier with a track record of more than 50 years’ trading, spent months trying to get a contract for medical robes but were given the runaround and eventually had to lay off staff. I am afraid that these examples illustrate perfectly everything that has been wrong with procurement during this crisis: wastefulness and poor value for money. No wonder so many people think this is corrupt.

Compare this with the situation in Wales, where decisions on PPE are devolved. Since the outset of the pandemic, well over 450 million items of PPE have been distributed in Wales, and the vast majority of the PPE issued has been directly sourced by NHS Wales Shared Services Partnership, with all contracts awarded subject to robust governance. That includes additional scrutiny from a finance governance group, and all contracts over £1 million are approved by the Welsh Government directly. The UK Health Secretary has said that urgency is the reason that the Conservatives paid billions of pounds to their mates for PPE contracts, but that does not excuse the fact that companies with connections to the Conservative party such as PPE Medpro—which, remember, was awarded a contract 44 days after incorporation—were 10 times more likely to win contracts than those without those contacts.

In Wales, with a Labour Government, the situation was just as urgent, but the oversight and accountability were in place. Instead of waste, we have seen local public health boards delivering effective contact tracing, without the scandalous payments that we have seen in England of up to £7,000 a day to consultants. The Westminster Government must be able to spend the money needed to address the public health emergencies of the pandemic—everybody agrees on that much—but they must also listen to the National Audit Office, put an end to the cronyism and put public health first. The day of reckoning will surely come for the gross negligence, waste and cronyism displayed by this Conservative Government.

Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]

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May I use this opportunity to personally thank the Financial Secretary to the Treasury, who has met the gaps in support all-party parliamentary group several times over the last few weeks? That was good of him, and it has been a constructive relationship with Opposition MPs.

That takes me to the first of two brief points that I want to make. Clearly my constituency is very different from other constituencies. It is vast, it is very far away, and we have particular challenges with distance, sparsity of population and even temperature. During the pandemic, my constituency has had particular problems to be dealt with. I understand, and indeed I support, the mechanism that we are debating, which is about getting the money to where it is needed at the right speed. It might be useful if the Government agreed to meet Opposition MPs such as myself slightly more often, to look at the overall package and how it is hitting or not hitting where it should.

I will give one example. I have said many times in the House that businesses involved in tourism and hospitality are fundamental to the economy of my constituency and, indeed, of all the highlands and islands. The package of support during the pandemic needs to be best tailored to ensuring that those businesses can be got off their knees and got going again once the pandemic starts to recede. It would be tragic if we lost any of those businesses during this time, because that would impoverish our tourism product, which people come from not only most of the UK but all over the world to see.

We need a tailored package for tourism and hospitality businesses, and I am happy to talk to the Government about that. There is a precedent. Last summer, the Chancellor of the Duchy of Lancaster came to my constituency, and, as he will agree, we had a constructive meeting with tourism businesses, which was helpful. I am quite open about this: I will work with a Minister of any political colour if it is for the betterment of my constituents and the economy of my constituency.

The second and final point I want to make is one that needs to be stressed. A lot of this money is going to the devolved institutions—the Welsh Assembly and the Scottish Government. I support the Secretary of State for Scotland’s plea that, when the pandemic is over, we look at what the Scottish Government have actually spent the money on. As other Members have said, this is not our money—it is public money; it is taxpayers’ money—and I want to be absolutely sure that it has been used in the most prudent fashion by the Scottish Government and has gone where it should have gone. I support the Scottish Secretary’s plea for some sort of audit, balance sheet or, if you like, profit and loss account to be produced at the end of this.

I have listened to the debate with the greatest of interest—there have been some very high-quality speeches—and I shall listen to the rest with great interest.

James Murray [V]

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With the leave of the House, I would like to respond briefly to the debate and pick up on some of the contributions. First, I would like to address a comment by the hon. Member for Thirsk and Malton (Kevin Hollinrake), who seemed to claim that I was not in my place during his speech. I would like to reassure him that I have been listening carefully throughout in the virtual Chamber, but perhaps he was not here earlier when I began my contribution virtually.

My hon. Friend the Member for Brent Central (Dawn Butler) made a powerful and important case about the link between trust and transparency and how important it is for us to take action in this place to reassert that link. She also set out how insulting the 1% pay rise—a real-terms pay cut—is to the nurses in our country. My hon. Friend the Member for Sefton Central (Bill Esterson) mentioned the huge waste that has happened through Test and Trace and the private outsourcing giants that have benefited from that money. It is telling that no Conservative Members today addressed Test and Trace and the spending on that programme, as far as I could tell. I found it curious, however, that the hon. Member for South Cambridgeshire (Anthony Browne), when trying to make a case around value for money, chose to focus on the time that the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) spent in City Hall, given that one of the most notable achievements of that right hon. Member in that office was to oversee £46 million of public money being spent on a garden bridge that was never built.

As I made clear in my opening remarks, we will not be opposing the Bill’s Second Reading, but in the Committee debate that follows, I will set out how our new clause aims to introduce a new standard of transparency, which we believe is urgently needed after the Government’s approach over the last year.

Jesse Norman

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I will not detain the House for long. By leave of the House, let me just say a couple of words. I thank all Members who have spoken so far. I thank the hon. Member for Ealing North (James Murray) for the Opposition’s support for this, but I think he was mistaken in relation to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who was making a point about the absence of any person on the Labour Front Bench during the debate. That has largely been a characteristic of this debate so far, and that is a pity. I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for his recognition of the way in which I and colleagues at the Treasury have leant into the difficult issues he raised in relation to the excluded. That does not bear directly on this debate, but the wider point he makes is welcome.

I am mindful that this debate has featured several contributions from Labour Members that have resolutely failed to engage with the substance of the Bill under discussion, and that is a particular shame. This is a party that talks about proper accountability but simply finds it impossible to exercise that accountability in the Chamber by asking the Minister questions. I hope that hon. Members will do that in the next stage of the debate, so that we can have a proper discussion about this. They have, after all, just had a long period of debate on the Budget in which any of the points they wished to raise—irrelevant to the Contingencies Fund Bill but relevant to that topic—could have been discussed. Instead, they have indulged in cheap and irrelevant political posturing, and that is a particular shame—all the more so as their contributions have had the effect of delaying an important and much needed debate in this House called by the Backbench Business Committee on International Women’s Day.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Contingencies Fund (No. 2) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Contingencies Fund (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums to be issued out of, or paid into, the Consolidated Fund which is attributable to increasing, in relation to times before 1 April 2022, the percentage specified in section 1(1) of the Contingencies Fund Act 1974 to a percentage not exceeding 12%.—(David T. C. Davies.)

Question agreed to.

The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)

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Before I ask the Clerk to read the title of the Bill, I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing I will remain in the Speaker’s Chair, although I will carry out the role not of Deputy Speaker, but of Chair of the Committee. We should be addressed as Chairs of the Committee rather than Deputy Speakers.

Clause 1

Temporary increase in capital limit of Contingencies Fund

Question proposed, That the clause stand part of the Bill.

The Second Deputy Chairman

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With this it will be convenient to discuss the following: 

Clause 2 stand part. 

New clause 1—Contingencies Fund: reporting in financial year 2021-22—

“(1) The Treasury must lay before the House of Commons within 15 days of the end of each calendar month in the financial year 2021-22 a report which includes a complete list of each advance from the Contingencies Fund, in each of the following categories—

(a) during the Vote on Account period, to meet urgent cash requirements (other than supporting a new service) in excess of the net cash requirement granted in the Vote on Account;

(b) to meet the cash requirement supporting an urgent service which Parliament has already approved through specific enabling legislation but for which existing provision is not available;

(c) to meet the cash requirement supporting a new service which is urgent and cannot await Parliamentary approval of both the specific enabling legislation and the necessary Estimate;

(d) to meet a further urgent cash requirement for existing services when provision for the total net cash requirement on the Estimate is exhausted; and

(e) in the case of an Estimate where expenditure is largely financed from income, advances made in anticipation of the receipt of cash associated with such income.

(2) The report under subsection (1) must include a reference to any written ministerial statement made to the House of Commons in relation to each advance from the Contingencies Fund in financial year 2021-22.

(3) The report under subsection (1) must include any relevant formal written direction to the accounting officer where a Minister of the Crown decided to continue with a course of action which the accounting officer had advised against.

(4) If a report under subsection (1) mentions in relation to subsection (2) or subsection (3) anything in connection with procurement from the private sector, the Treasury must refer the matter to the Comptroller and Auditor General for a preliminary opinion on the regularity and propriety of the procurement referred to.

(5) Nothing in this section affects access by the National Audit Office to any documents as provided for under section 8 of the National Audit Act 1983.”

This new clause is intended to enhance accountability to Parliament for as long as the increased flexibility of the Contingencies Fund is in place, and in particular to provide an additional check on the regularity and propriety of any procurement decisions which lead to advances being required from the Contingencies Fund.

James Murray (Ealing North) (Lab/Co-op) [V]

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The new clause is intended to ensure that the Government learn from the past year and, as I set out in my earlier contribution, not only recognise that they have repeatedly done too little, too late to protect the public’s health and the economy through the outbreak, but make serious and structural reforms to how they initiate and examine the spending of public money. The new clause would ensure that the extra financial freedoms that Parliament grants in the Bill are used in a manner that reflects the importance of transparency with public money.

I shall not repeat the arguments that I and other hon. Members made on Second Reading, but address the substance of the new clause. Our new clause is simple. Subsection (1) sets out that, in respect of each plausible category of unforeseen Government spending—urgent cash requirements for existing services; urgent cash requirements for new services, whether yet approved in principle or not; increased cash requirements; and short-term cash flow issues—the Treasury must lay before the House a report of all the advances made that month.

Subsection (2) sets out that each payment from the fund should be explicitly associated with ministerial statements, which explain the purpose of such expenditure. Subsections (3) sets out that where such payments have been carried out only on the basis of ministerial direction, the fact and nature of that direction should also be disclosed. We fully accept that on occasion ministerial directions are a vital part of how our country and political system responds quickly and effectively to unforeseen circumstances. There are occasions when the accounting officer will not be able to align urgent needs with normal accounting procedures. What matters is not the fact of the direction, but its nature.

Subsection (4) ensures that where rapid procurement decisions are taken, they provide an opportunity for the Government to improve and are assessed as such. The role of the Comptroller and Auditor General is crucial in our system of parliamentary control over public finances. There are lessons to be learned from the specific practice of emergency procurement. It is wrong to see each instance of rapid procurement as a special case.

Subsection (5) reflects the premise of subsection (4) and ensures that there is no conflict with the wider role of the National Audit Office. I very much hope that the Government will feel able to accept the new clause in the spirit in which we propose it.

The Financial Secretary will be aware of the many extraordinary and frankly irregular arrangements, which have been explored in the court and in the media recently, for the disbursement of public money in the past year. I will not take the Committee through the full annotated catalogue as time is so limited, but I will mention just two of the most egregious examples to emphasise our concerns.

First, there was the contract given to Randox Laboratories for £133 million in respect of tests. Randox is a company that we understand is advised by a Conservative Member. The Department of Health and Social Care ordered that 750,000 of those tests be withdrawn from use for safety reasons. Secondly, at least £150 million of a £252 million face mask contract with Ayanda Capital seems to have been wasted owing to the unsuitability of one type of mask in the order. We understand that the contract included FFP2 masks, which did not meet requirements for use by frontline healthcare workers because they had ear loops instead of head loops. The sum of £150 million pays the salaries of some 4,000 nurses. That fact alone should make clear why it is so important for public money to be spent on improving the lives of those we serve.

The new clause sets out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money, and ensure that we have more money to spend on the things that matter to us all. With such concerns in mind, I ask the Committee to support the new clause.

The Second Deputy Chairman of Ways and Means

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Before I call Andrew Jones, let me just say that I am grateful for the restraint that people demonstrated on Second Reading. We have a rather extensive call list for the International Women’s Day debate that follows, so if people could show the same restraint in Committee, whether they are remote or in the Chamber, I would be grateful. A number of people withdrew from the Second Reading debate; if anyone wishes to withdraw from Committee stage, please will they do so in the normal manner, through the Speaker’s Office?

Andrew Jones (Harrogate and Knaresborough) (Con)

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I will keep my remarks as short as possible; I fully recognise that we have a very well-subscribed and important debate to follow.

I read new clause 1 with interest, but it should be rejected. On Second Reading, I outlined the transparency and accountability mechanisms already in place when funds are drawn from the Contingencies Fund. I will not repeat any of that, but what the Contingencies Fund does not need is extra layers of bureaucracy, and that is what the Opposition are seeking to bring in. The whole point of the fund is to facilitate speed of response. Adding monthly reporting to the existing reporting is not necessary, and it goes against the whole purpose of the fund.

For one year, in the midst of the greatest health crisis in a century and the consequential biggest economic crash in three centuries, the suggestion from the Opposition is more bureaucracy. What problem are they seeking to solve? Accounting officers are still accountable. Departments must still notify Parliament. The Contingencies Fund is managed by Treasury officials. The agreed procedures must be followed.

The Opposition also want to bring in extra measures when dealing with the private sector. How does dealing with the private sector reflect the cash flow in a Department? Liabilities are liabilities, to whichever organisations they are owed. Speed of response is need-based, not sector-based.

Basically, what we have here is Labour distrust of the private sector underpinning its suggestion. It is not relevant to the Bill, and it underlines Labour’s lack of relevance to the nation. That is why the new clause should be rejected.

Saqib Bhatti (Meriden) (Con) [V]

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I cannot support the Opposition’s new clause 1 because, in my view, it would do nothing but introduce an additional layer of bureaucracy where, frankly, sufficient and robust transparency and accountability systems are already in place.

As I said on Second Reading, of course accountability and transparency matter. The Bill does not take away the usual mechanisms already in place to ensure that expenditure met through the Contingencies Fund is scrutinised. Requiring private sector procurement to be referred to the National Audit Office would do exactly what businesses cry out against time and again when it comes to procurement practices. They want less bureaucracy and less burden, not more unnecessary red tape that would hinder engagement from the private sector.

To me, the new clause speaks to the intent of the Opposition and their general attitude to the private sector. It does not recognise the crucial role that business has played over the last 12 months in helping to tackle one of the greatest public health crises of our times. It does not recognise the businesses that otherwise would have been shut down—Formula 1 teams such as McLaren, for example—that adapted their processes to make ventilators; the companies, such as Burberry, that retooled to make personal protective equipment; or the companies, such as the National Exhibition Centre in my constituency, that gave up part of their business to build Nightingale hospitals to ensure that the national health service was not overwhelmed.

The new clause does not recognise, either, the big pharma companies that came up with new drugs at unprecedented rates, using innovative methods that only the private sector can come up with to vaccinate and protect the most vulnerable in our society. Frankly, it is time that the Opposition recognised the role that the private sector played in overcoming this crisis. While it is not yet done, we on the Government side of the House certainly will not forget that role.

While I am on the subject of intent, I commend the Government for their aspiration to reform procurement rules. The Green Paper put forward by the Government puts value for money and transparency right at the heart of the United Kingdom’s procurement rules. The Government buy around £292 billion-worth of services from the private sector. Their proposed reforms will allow UK procurement rules to be more modern and flexible, allowing the Government to consider things such as social value, including economic, social and environmental factors.

These new measures will also allow competition for Government contracts under £4.7 million for public works and £122,000 for goods and services to be limited to small businesses, whether they are voluntary, community or social enterprises. Fundamentally, that will improve the quality of suppliers’ output, and it will also increase competition, ensuring that taxpayers get a better deal while our small and medium-sized businesses have greater access to Government procurement contracts.

That intent can only be applauded, in contrast to the Opposition’s desire to make the process clunkier, more difficult and less accessible.

On accountability, as has been said, Ministers cannot choose to use the Contingencies Fund. That is managed entirely by Treasury officials, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the National Audit Office, and the Treasury. Such rules can be found in the Estimates Manual. Finally, business is and can be a force for good. We would do well to recognise that.

Sarah Owen (Luton North) (Lab)

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I rise to speak in favour of the amendment tabled by the Leader of the Opposition, which hopes to improve the transparency behind emergency spending that we are being asked to sign off. When the Conservative party took office 11 years ago, it promised people transparency and responsible spending. The Prime Minister’s predecessor even told us that sunlight was the best disinfectant—could we not do with some disinfectant to rid us of the stench of cronyism right now?

One hundred and eight million pounds to a pest control firm to make PPE; £60 million on antibody tests that did not work. To top it off, a £37 billion test and trace system that at times did not test and did not trace. It was run not by clinicians or the NHS, but by a failed phone company executive, who just so happened to be one of the Prime Minister’s mates from the other place.

Cronyism, irresponsible spending and sweetheart deals that handed the public’s taxes to their mates are what this Government are all about—a £133 million testing contract to a Tory donor, £108 million to Serco, and a £40,000 pay rise to Dominic Cummings. Under this Government, someone who breaks the rules and fails at their job gets a pay rise; those who save people’s lives get a pay cut. If the Conservative party cannot be trusted to spend people’s taxes wisely, it does not deserve to serve our country.

The Minister asked for questions, and I am sure we all look forward to some answers. Will he tell the House why as much as £11 million was spent on the initial trial version of the NHS Test and Trace app before it was abandoned? Will he confirm whether he personally played any part in recommending contractors to the Government over the past year? We are often told by the party of Government that money cannot be found to feed hungry schoolkids, or that the healthcare heroes who looked after our loved ones during the pandemic cannot have a pay rise. We are told by Conservative peers that nurses should be grateful for the job security they have.

The public have a right to know how their money is being spent. Covid contracts handed out to Tory friends and donors have now risen to almost £2 billion. Such money could have provided free school meals to each of the 1.4 million children in poverty, including nearly 4,000 children in Luton North. If there is money for the Prime Minister’s mates, there is money to feed hungry kids. If we can find £30 million for the bloke down the pub, we can find money to give nurses, and every other healthcare worker, a pay increase.

Conservative Members will say there was no choice at the start of the crisis and that it was an emergency, as it was. However, there is always a choice. Instead of turning to established PPE providers from the UK safety industry, Ministers chose a deal that handed £30 million to the Health and Social Care Secretary’s mate from down the pub. That is a cruel and blatant failure by this Government. The Bill asks us to sign off up to £266 billion in emergency loans by the Government. That might be necessary, but it is unnecessary for such a number to go unchecked.

It is our job as MPs across the House to hold the Government to account. The public expect better and for us to spend their money properly, which is why Labour has tabled this amendment. We are not saying that the Government should not do everything in their power to help people in an emergency; we are saying that they must never forget whose money they are spending, and who they need to answer to in the end: the British people.

Anthony Browne (South Cambridgeshire) (Con)

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I agree with the shadow Minister that we need accountability and transparency, but there is already a whole framework for public spending. As others have said, all the amendment does is introduce more bureaucracy into the Contingency Fund, without adding any value from the perspective of public accountability.

We need to learn the lessons from all this. It is an unprecedented thing that hopefully will never happen again, but we must ensure that we learn those lessons. Fortunately, there are bodies that help us learn those lessons, such as the National Audit Office, which has already done several reports into procurement.

Given that the speeches made by various Members on the Opposition Benches have been all about scoring cheap party political points, casting aspersions on the Government and Ministers and so on, I thought it was worth quoting the finding of the main National Audit Office report about the issues to which they are referring. It said:

“In the examples we examined where there were potential conflicts of interest involving ministers, we found that the ministers had properly declared their interests, and we found no evidence of their involvement in procurement decisions or contract management.”

That is the National Audit Office, which has strong powers of investigation.

I find it rather disturbing that the Opposition are trying to use this important issue just to score cheap political points. I suppose I should not; I am a new politician, and I should get used to it. What I find most concerning about the Labour party is its clear disdain for the private sector. It is using this issue to criticise private sector manufacturers. The speaker before me, the hon. Member for Luton North (Sarah Owen), for example, criticised companies that were trying to produce PPE. We did not have a PPE industry in the UK at the start of this—we imported it all—and I welcome the fact that lots of companies that had not made PPE put in the effort to develop it and then supply it to the national health service. That is to be welcomed.

The drugs company in my constituency, AstraZeneca, did not do any diagnostic testing. That was not what it did; it had no arm doing that. It said, “Right, we will learn how to do this”, and it did it. It set up a whole arm to do diagnostic testing. It did that at no profit, and that is now a huge part of the testing industry in the UK. It also agreed to produce the Oxford-AstraZeneca vaccine at no profit to itself and to give that to the developing world on a not-for-profit basis throughout the pandemic.

That is a private sector company, as is Pfizer, which produces the Pfizer vaccine, and Moderna, which does the Moderna vaccine. All these are private sector companies coming to our rescue and to the rescue of other countries around the world when we need it, and that is very much to be welcomed. I wish the Opposition would pay tribute to the efforts of the private sector, often working in collaboration with the public sector. It is a partnership.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)

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Will the hon. Gentleman give way?

Anthony Browne

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I will just give way to the hon. Lady before I finish.

Meg Hillier

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The hon. Gentleman has talked a lot about money going out into the private sector, but a lot of this contingency money has gone into the public sector. The key point is, as my hon. Friend the Member for Luton North (Sarah Owen) highlighted, that it is taxpayers’ money. Surely the hon. Gentleman agrees that we should have clear oversight and regular reporting of how taxpayers’ money is being spent.

Anthony Browne

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I agree, and I welcome the points that the hon. Lady makes. I did say in my speech on Second Reading that I welcome the fact that the Labour party have this new-found interest in value for money, because I absolutely believe that taxpayers’ money is not the Government’s money. It is taxpayers’ money and it should be treated as such. As I said earlier, we have sufficient mechanisms for accountability and transparency. We do not need this new clause, and I will not support it.

Kevin Hollinrake (Thirsk and Malton) (Con) [V]

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I would like to speak to new clause 1. First, I am grateful to the Financial Secretary for putting the record straight. It was a reflection of the fact that there was no Opposition Minister on duty. It is suboptimal to have an Opposition Minister speaking by video link: Members have no opportunity to challenge some of his statements, many of which I thought were absolutely out of order. You are obviously the judge of that, Chair, but to call Ministers corrupt, as other Members have in this debate, or to accuse them of cronyism, is basically bringing this House into disrepute.

Yet again, we have the Opposition’s obsession that everything public sector is good and everything private sector is bad. It is simply outrageous. It goes back to that sturdy horse analogy. It is pulling the whole wagon, whether it be vaccine companies or indeed our GPs. Our GPs have done a wonderful job disseminating the vaccine to so many people, and it is heart-warming to go to those centres and see that. GPs are private practices. The health service has never been totally public sector, and we should recognise that. We should recognise the benefits that the private sector brings, just as the public sector clearly brings huge benefits, too.

I agree with my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) that this new clause would simply bring an unnecessary added layer of bureaucracy. I absolutely support the need for accountability and the proper assessment of where taxpayers’ money is spent—we absolutely must be responsible about that—but I do not know where it would end under the new clause, because much of the money that we have provided to deal with the coronavirus crisis has been provided through the private sector, not least the loans through the banks. The hon. Member for Luton North (Sarah Owen) seemed to think that there were no checks on that process, which is clearly not the case. Banks go through a lot of checks, even when the Government are guaranteeing loans, so that is simply not correct.

The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)

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The next speaker, by video link, is Jamie Stone. [Interruption.] Jamie, you may be on mute—I know that you are audio only. [Interruption.] We will try to get back to you. Waiting in the wings is Meg Hillier.

Meg Hillier

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It gives me pleasure to rise to speak on the Bill and perhaps slay some of the misstatements that I have already heard in the short while I have been in the Chamber.

First, I should point out to the hon. Member for South Cambridgeshire (Anthony Browne) that value for money in respect of taxpayer spending is not a new-found interest for most of us on the Opposition Benches. I have spent 27 years being responsible for either spending taxpayers’ money wisely or scrutinising that spending. I am very aware, as are the shadow Chancellor and her team, that every pound of public money saved is a pound to spend on something else. We may disagree about what that something else might be, but scrutiny is really important.

Contingencies Fund Bills are interesting pieces of legislation. They are about as old as the Public Accounts Committee, which I chair, and are an important mechanism for making sure that the Government cannot just routinely spend over budget. It is fair to say that in this House we are very bad at scrutinising Government spending. That is not down to individual Members or the official Opposition; it is because the structures of this place do not allow us properly to discuss estimates, excess votes and so on. In fact, some time ago the OECD said that as early as the 18th century our scrutiny of finances in this place was “reduced to hollow ritual.”

The change in this legislation, which will allow the increase in contingency funding, has been rushed through. I do not deny that it is necessary to have additional contingency. The way it works normally is that if a Department overspends on its budget as granted, albeit inadequately, by this House, the matter then comes to the Public Accounts Committee and we have to examine whether the excess is justifiable and reasonable. Pretty much our only weapon is the ability to call in the officials who have made a mistake and get them to explain the issue in public, but then a Government majority can certainly agree the excess vote regardless.

In Ghana—Mr Evans, you might be interested to know this, and officials might be quaking as I say it—if an official overspends taxpayers’ money, they have to go to court, and if they take an appeal to court, they have to pay up front half of the money that has been wasted. Certainly, that would sharpen minds.

The point is that it is right that we have a Contingencies Fund Bill. I accept it is necessary, but I welcome new clause 1, because the mechanisms for oversight of this are very flimsy; they are reports on paper after the event. This is not about more bureaucracy. I see it as being about greater transparency. As Chair of the Public Accounts Committee, which has had an important constitutional position in this place for 160 years, I get passed information by Government—from Ministers and senior officials—about issues relating to the finances of Government, sometimes confidentially, and that is counted as the scrutiny of Parliament.

I believe there is a very important role for the constitutional position of the Public Accounts Committee and thereby the Chair, a role I am privileged to occupy at the moment—it is not about me, it is about the position—but that is not enough scrutiny. We are in the middle of a pandemic, and spending eye-watering sums of money—hundreds of billions of pounds—with the public sector and the private sector. It does not matter where the money goes, in this sense; it is about scrutinising that expenditure and making sure that Treasury Ministers, whom I would have thought would be aligned with me completely on this issue, are clear that we are not allowing Departments to overspend willy-nilly. Although the Treasury has its checks, it is important and vital that Parliament has its checks too and that we have sunlight on these issues in real time. This is important, and I would say that the new clause is really pretty anodyne. It is saying that we want better reporting to the House of what the Contingencies Fund Bill already allows to the Government.

The National Audit Office has been much quoted, and I do not have the exact phrase in front of me—forgive me, Mr Evans, but for once I paraphrase, which I really try not to do—but the NAO has looked in detail, as other Members have commented, at the Government’s approach to procurement, and this is its clear message. All these allegations are out there, but part of the reason for that is the lack of transparency and the lack of information being published in real time on some of these issues. We have seen, heard and talked about in this place the many contracts that were not published on time, and that undermines public and parliamentary trust in the process. Whether or not anything has gone wrong, it is undermining trust, and people start asking questions and laying down allegations whether or not they are true.

It is in Government’s interests, the taxpayer’s interests and Parliament’s interests to agree to this new clause. I am disappointed—I am embarrassed really—that those on the Treasury Bench can come forward with a change at such short notice and not have a meaningful discussion about what is a reasonable new clause to allow this place greater scrutiny over what are unprecedented amounts of spending in the middle of a pandemic. At a time like this, we need more transparency, not less. This is actually a minor change. It is not about bureaucracy; it is about accountability and transparency, and taxpayers deserve better.

Charlotte Nichols (Warrington North) (Lab)

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Labour’s new clause seeks to make contingency spending more transparent and accountable to our Parliament and, through us, to the public—taking back control, if you will. It is right that Governments have the flexibility to act in an emergency such as this pandemic, but this greater latitude for Ministers should oblige them to be additionally vigilant about the value for money of the decisions that they make and the contracts that they sign. This has unfortunately not been the case. As we have heard from my hon. Friends, this year we have seen case after case of appalling mis-spending of taxpayer money, too often on procurement from Tory friends and donors—with, according to The Times in November, £1.5 billion to Tory-linked firms. Companies and individuals with no track record of producing the materials needed were given vast sums on a promise, and businesses in constituencies such as mine, with experience in manufacturing this sort of equipment, were denied on spurious grounds.

Some of the examples sound as though they come from an old episode of “Yes Minister”: £150 million of the £252 million of unusable face masks ordered from an investment firm advised by an adviser to the President of the Board of Trade; a £60 million contract to provide free laptops for disadvantaged pupils that delivered less than half of what was needed, leaving too many pupils in Warrington North without the tech they needed to learn; and £208 million to provide food boxes wholesale for people who were clinically sheltering, at a cost of £44 a box, when analysis showed that the content could have been bought for £26 from their local Tesco. There was the £133 million to a Tory donor, a private healthcare firm, to make testing kits that were withdrawn for safety reasons. Its contract was actually extended for another six months for a further £375 million, without any other companies being invited to bid. During this time, consultants have been employed on up to £7,000 a day, equivalent to £1.5 million a year, by a Government who believe that nurses and other NHS staff should not even receive a pay rise at least in line with inflation.

We understand that there was an urgency to get contracts in place for PPE in particular, but this was not just a case of suck it and see, as Ministers doubled down on their projects, such as the £37 billion on the outsourced test and trace programme—or test and waste, as it is increasingly known locally. The National Audit Office says that this incredible amount of money has been spent for no clear impact, while the skills and expertise of our local public health staff were spurned. Should we not be demanding better?

We understand that the Government had to act quickly to put contracts in place at the beginning of the pandemic, but we are now a full calendar year on from then. They should no longer be operating in crisis mode, but should be able to make clear, sensible and justifiable decisions. Since the Chancellor announced that he is to run the biggest deficit since the second world war, with public debt at over 100% of GDP, I think our constituents should expect us to be as open about our financial decisions as we can possibly be. It is not onerous to request that the Government make a monthly report on its contingencies expenditure, and improved transparency would help to halt bad decisions earlier, rather than waiting for spendthrift contracts to finally be revealed in court.

This is a reasonable and responsible new clause. A fiscally sound Government should not fear it or have any objection to it.

Ruth Jones (Newport West) (Lab) [V]

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This is a technical Bill, but it is important and so is parliamentary authorisation of public expenditure. That authorisation is an absolutely crucial part of our democracy and of the principle of parliamentary control over the decisions taken by Ministers in this Government.

Of course, I accept that the Government need to be able to act swiftly and decisively, and that financial control provisions may need to be relaxed proportionate to the need for the Government to take unforeseen and unforeseeable actions to reduce, resolve and mitigate the threats we face. As such, I fully accept the approach taken by the shadow Minister and support the fact that Labour is not opposing the Bill. However, while it is vital that the Government have the space and ability to respond to the crisis, it is vital that Ministers do not take the people of this country for fools. Contracts for cronies, pals from the pub and family members cannot be the order of the day and must be rooted out fast.

The Tories, as we have already heard, have wasted hundreds of millions of pounds across Government during the pandemic, from failed tracing apps to useless PPE to insufficient provision for disadvantaged children. The analysis by my party and other independent organisations shows that the Government have made the wrong decisions throughout the crisis. I hope they will listen and learn. Every penny of public money must be accounted for and the people who pay their taxes must be able to see that these monies are spent wisely and properly.

I support the Bill. I hope Ministers will accept Labour’s new clause and will look to spend the people’s money wisely, sensibly and properly.

Naz Shah (Bradford West) (Lab) [V]

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We recognise that in the circumstances of a global pandemic the Government need to be able to act swiftly and decisively, and that financial control provisions may need to be relaxed proportionate to the need for the Government to take bold actions to reduce, resolve and mitigate the threats we face. However, we know full well that the Government’s record on proper and transparent procurement processes, and on securing value for money on public spending for emergency purposes, has been shameful.

The Times estimates that during the crisis £1.5 billion of taxpayers’ cash has been given to companies linked to the Conservative party with no prior experience of supplying the Government, from failed tracing apps to useless PPE to insufficient provision for disadvantaged children. Analysis by Labour shows that the Government have made the wrong decisions time and time again throughout the crisis.

That is exactly the story of Tory waste, negligence and cronyism, but the Tories want a pat on the back for spending over £700 million on coveralls, despite NHS records showing only 500,000 out of 13 million were actually used. In April, £16 million-worth of antibody tests were sourced from two Chinese firms. Two million units were purchased, but the test did not work. A PPE contract worth £108 million was handed to a pest control company, PestFix, which has just 16 members of staff. Some of the masks failed checks by the Health and Safety Executive and emails obtained by the BBC suggest that the HSE came under political pressure to ensure that PestFix’s PPE passed necessary quality assurance tests.

Rachel Hopkins (Luton South) (Lab) [V]

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I refer to my entry in the Register of Members’ Financial Interests as a member of the Public and Commercial Services Union.

Parliamentary authorisation of public expenditure is critical, but we all recognise the need for this Bill to ensure that the Government can act quickly to support the economy. That said, the Government should not be able to act without accountability and transparency. I support the comments made earlier by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) with regard to transparency and scrutiny. Indeed, just this morning, as part of business questions, the Leader of the House reiterated the point that Members have a right and a duty to hold the Government to account. He also said that scrutiny leads to better government, and that it is in the interests of Government that scrutiny takes place.

It is with those principles in mind that I want to speak in favour of the amendment in the name of the Leader of the Opposition, which seeks to improve Government accountability to Parliament for as long as the increased flexibility of the contingency fund is in place. I want to speak specifically with regard to the checks on the regularity, propriety and value for money of any Government procurement decisions, particularly the importance of the reporting of any written ministerial directions given, so that Parliament can be clear when Ministers have decided to override objections made by senior civil servants.

Throughout the pandemic, the Government’s record on transparent procurement processes and securing value for money on public spending has been, sadly, too often completely inexcusable. Despite NHS Test and Trace being allocated a total of £37 billion and a Conservative peer being handed the top job, the Public Accounts Committee’s report on test, track and trace made this finding. In terms of tackling the pandemic, it said:

“There is still no clear evidence to judge NHST&T’s overall effectiveness.”

I also ask the Minister whether he has reflected on yesterday’s report by the National Audit Office on Test and Trace and whether it contained any lessons to be learned by the Government as well.

The theme of incompetence and cronyism does not end there. In a Westminster Hall debate back in December, I joined many other MPs in highlighting the fact that the National Audit Office report on the Government’s procurement during the pandemic had found that contracts had been awarded without due diligence, with a lack of documentation, and no clear audit trail or transparency. Just a few weeks ago, the High Court ruled that the Government had acted unlawfully by not publishing details on the contracts awarded within 30 days, including many awarded through the Government’s VIP lane. The judge ruled that the Government’s inaction breached a vital public function of transparency regarding how vast quantities of taxpayers’ money was spent. The passage of the Bill should not allow the Government to act without accountability and transparency. There are too many instances of the Government’s poor procurement policy representing poor value for money.

In conclusion, I wish to press the point that Ministers must be accountable and civil servants must not be scapegoated for the Government’s poor decision making. The legally binding protection of written ministerial directions ensure that they are not implicated in the Government’s incompetent decision making and cronyism. This is not unnecessary bureaucracy, as referred to by the hon. Member for Thirsk and Malton (Kevin Hollinrake); it is right for Parliament to be able to scrutinise them in a timely manner in the public interest.

Richard Thomson (Gordon) (SNP) [V]

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I will be brief. The concerns of Scottish National party MPs over certain covid-related Government procurements are well known and on the record, and we will continue to hold the UK Government to account for them. Nevertheless, whether the new clause is viewed through that particular lens or not, the fact remains that taken on its own terms it would greatly improve scrutiny, oversight and accountability, without creating any disproportionate impact on the Government or the overall efficiency of the spending process. Trying to equate the improvement in process that would result with an attack on business, as we have heard today, is frankly nonsense. It smacks of desperation, and I am certain that that is exactly how it will be seen.

The SNP will be supporting this amendment. If the Government have any care at all for transparency on these matters, and for being able to demonstrate that there is proper stewardship of public funds, there is frankly no good reason for them not to support it as well.

The Financial Secretary to the Treasury (Jesse Norman)

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As you will be aware, Mr Evans, clause 1 provides for an increase in capital for the Contingencies Fund. It raises the limit from the standard 2% to 12%, providing a sum of approximately £105 billion for the financial year 2021-22 only.

We are all agreed across the House on the central importance of accountability to Parliament, but it is the Government’s very firm view that new clause 1 is not needed in order to achieve accountability. It is important to say again that supply processes continue to be used in the usual way with expenditure still subject to parliamentary scrutiny and a vote. This Bill simply permits an advance on expenditure that will be included in the main or supply estimates.

Let me set out four points that make this quite clear. First, the Contingencies Fund is about ensuring cash flow, restricting it to urgent services in anticipation of parliamentary provision becoming available and temporary funds required for necessary working balances. It is not additional spending; it is simply a cash advance to be repaid. It does not in any way preclude the scrutiny by Parliament of additional provision sought by a Department through the supply estimates, nor does it preclude the Comptroller and Auditor General from expressing his view on the regularity of departmental expenditure.

Secondly, each and every departmental accounting officer remains fully accountable for expenditure; and, of course, that expenditure will be audited by the NAO in the usual way as part of the annual reports and accounts of each Department. Transparency arrangements for ministerial directions—where they are sought under the requirements of the doctrine of “Managing Public Money”—will also continue in the usual way. Accounting officers are already required to publish any direction that they receive as soon as possible, unless there is a broader public interest in keeping it confidential.

Thirdly, the House has seen throughout 2021 that Departments must notify Parliament by way of a ministerial statement agreed with the Treasury where a commitment will be or has been entered into in advance of supply. I would like to make it clear that the mandatory WMS wording agreed with Parliament and the NAO already distinguishes whether this advance is a new service, new expenditure or simply a cash requirement ahead of a supply estimate.

I remind hon. Members that the Contingencies Fund is not a tool—some hon. Members have made this point—that Ministers can choose to use; it is not discretionary. It is managed entirely by the Treasury, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the NAO and the Treasury. These rules are set out clearly in the published estimates manual. Every Department makes an application outlining the urgency of their case and how they plan to meet the listed requirement. It is worth mentioning that the NAO also audits the Contingencies Fund accounts, and that includes a full list of advances.

Let me turn to a couple of the points raised by Members in the debate. I did ask for questions on the Bill, but the hon. Member for Luton North (Sarah Owen) somehow found that difficult. She raised another irrelevant issue about public spending. She asked me about my own link. I assure her that I had nothing to do with the awarding of any contracts. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) pointed out, this is true for Ministers across the Government, according to the NAO.

The hon. Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, made a speech, wonderfully—and I thank her for it—on the Bill. I am very grateful. She asked whether the Bill is rushed through. The answer to that question is no, it is not. It is important to do it, we think, before the beginning of the new financial year. The same Bill was put through in March last year, and so it is here. She asked about Treasury controls. We fully, strongly believe in them. She recommends Ghanaian principles of public finance, but I am not sure I can follow her in that direction.

James Murray [V]

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With the leave of the Committee, I will respond briefly to the debate and pick up on some contributions that hon. Members have made. My hon. Friend the Member for Luton North (Sarah Owen) made powerful remarks and drew our attention to how hollow the phrase of the former Prime Minister—that “sunlight is the best disinfectant”—now rings, given how the current Government have behaved. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) spoke from great experience about the weakness of Parliament in scrutinising Government spending. She set out how the claims of bureaucracy from Government Members are misplaced and that, in fact, new clause 1 is about transparency and accountability. My hon. Friend the Member for Warrington North (Charlotte Nichols) set out clearly the consequences of vast sums being given to companies with no track record of delivery, underscoring why this really matters to people’s lives.

My hon. Friend the Member for Newport West (Ruth Jones) made it clear that the Government should listen and learn from the events of the past year and regain the trust of the public, while my hon. Friend the Member for Bradford West (Naz Shah) highlighted the Government’s shameful record on transparency, value for money and, crucially, the outcome of what is actually delivered. Finally, my hon. Friend the Member for Luton South (Rachel Hopkins) made some critical points on scrutiny leading to better government. She spoke from great experience of why it is so vital that the reporting of written ministerial directions is taken into account so that they can take responsibility for their decisions.

I thank the Minister for his comments, but I was disappointed that he did not use the opportunity to refute or respond to any of the comments about the Public Accounts Committee’s report on Test and Trace. I noted that despite some Government Members having spoken for a second time today, they still did not find time to justify and explain how the spending on Test and Trace has been value for money. The Minister fundamentally failed to address the inadequacy of current scrutiny arrangements, given what has happened over the past year.

As I made clear in my opening remarks, our new clause aims to introduce a new standard of transparency. We believe that it is urgently needed after the Government’s approach over the last year. I am not convinced by the Minister’s argument. I welcome the SNP group’s support for new clause 1 and we will seek a Division on it.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Question put, That new clause 1 be read a Second time.

Mr Deputy Speaker (Mr Nigel Evans)

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We will now suspend for three minutes for sanitisation of the Dispatch Boxes, and to allow the safe exit from the Chamber of those leaving and the safe arrival of those entering for the next debate.