Budget Responsibility and National Audit Bill [HL]

Lord Bishop of Chester Excerpts

Wednesday 1st December 2010 Grand Committee

[Lord Higgins]

My Lords, I agree with the point that has just been made. It is true, as the Minister has said, that we are breaking new ground here, but the other bodies to which he referred are very different from this one, which is unique. I would have thought that the case for having the whole board approved by the Treasury Select Committee gave greater weight to the committee’s authority and would certainly make the committee, which is going to be dealing with this whole issue a great deal, more acceptable to it in future proceedings. I am not clear why the Minister objects to adding this.

[The Lord Bishop of Chester]

My Lords, it would be a great mistake to regard being opposed to sin as the sole prerogative of the Church of England. I hope that the whole Committee is opposed to sin.

I have some sympathy with the Minister on this. My problem with this part of the schedule is that it feels too in-house to me—too much the same. The Chancellor of the Exchequer is involved in the appointments and perhaps the Select Committee will be involved. I should have thought that the office needs a certain amount of diversity; its independence requires a greater diversity. It strikes me that the schedule is too tightly constrained as it is and to constrain it further by saying that the Select Committee of the other place has to be involved each time feels odd. I would almost expect the Governor of the Bank of England to nominate a member. We need a greater sense of diversity and independence in what is supposed to be an arm’s-length body. This body is in danger of not being sufficiently arm’s length from government. On that ground alone, I support the Minister’s resistance. However, I have a problem in that the whole thing seems a bit too in-house as it is.

[Lord Turnbull]

The noble Lord, Lord Higgins, referred to making this more acceptable to the committee. I remember reading the report of the committee in another place: it did not actually ask for this. It asked for powers on appointment, and for powers of dismissal, which are built in here. Members of that committee did not think this was necessary and I am prepared to back that judgment.

--- Later in debate ---

[Lord Sassoon]

My Lords, that is indeed the position. It may be extraordinary but, as I have tried to explain, it is entirely consistent with the fact that, as far as I am aware, no other non-executive appointments to a wide range of public bodies are subject to a parliamentary committee veto. Of course, it will be up to the Treasury Select Committee to decide whether it wants to interview the non-executive members individually, collectively or as part of the total board of the BRC, and it will have an opportunity to see them in accordance with its normal processes.

[The Lord Bishop of Chester]

Can the noble Lord comment on the fundamental point I made in my earlier contribution that, as it is set up, it is all rather in-house and too tight and that it does not draw from a wide enough range of sources—for example, the Governor of the Bank of England? One could no doubt think of others, but can the Minister comment on that point?

[Lord Sassoon]

Certainly it is important that the non-executives are people of independent standing and stature who are able to challenge as well as support. That is why there is a critical distinction. It may bring with it some lack of clarity but the expert/non-expert distinction makes the critical point that the non-executives should come from people who are capable of a broader challenge and support role. That is why there is a distinction between experts—which implies a closed group of economists—and a wider group. The posts will be advertised and subject to competition. It will come down, as it should, to the description of the posts, which should allow for people from wider backgrounds to come in. I welcome the right reverend Prelate’s reminder that that would be healthy.

--- Later in debate ---

[The Lord Bishop of Chester]

My concern was that they are nominated by the office itself in an almost self-perpetuating sense. Whether or not they are approved by the Select Committee is a secondary issue. The more fundamental issue is how an arm’s-length body in such a sensitive and politically charged area should properly draw its membership. The danger is that this is too much like a self-perpetuating body, with the Chancellor involved in every appointment.

[Lord Sassoon]

My Lords, on the latter point, I say again that the fact that it is intended that, as part of the nomination process, there should be an openly advertised way in will make it clear that we looked widely for the non-executives.

Implicit in the remarks of the noble Lord, Lord Myners, about the non-executive members not going through the process of getting the imprimatur of the Treasury Select Committee is the suggestion that all the non-executive board members of a huge range of public sector boards who do not go through parliamentary scrutiny are subservient and subordinate. I do not know why it should be different here. As I have explained, we are applying the same rigorous, high standards to these appointments as are applied to all other bodies. I see no reason why they should be subservient or subordinate simply because they have not had Treasury Select Committee endorsement.

The critical thing is that these are non-executive non-experts carrying out an important role similar to that of non-executives in a huge number of bodies across the public sector. That is very distinct from the expert members who, because of their special role at the heart of economic forecasting—the Treasury Select Committee agrees with this distinction—should be subject to the special veto.