Supply and Estimates Procedure

Margaret Ferrier Excerpts

Wednesday 20th July 2016 Westminster Hall

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

I beg to move,

That this House has considered reform of the supply and estimates procedure.

It is an honour to serve under your chairmanship, Mr Evans. I am delighted to have secured this brief but important debate. It has taken some time for me as a new Member to become acquainted with some of the workings of the House. Some procedures are fairly straightforward, others completely bewildering, and some rather insufficient. I do not feel that it is entirely unfair to say that the supply and estimates process—the way in which Parliament approves spending—is both bewildering and insufficient. That view is shared by many hon. Members across the House. Both the current and previous Chairs of the Public Accounts Committee have been scathing of the estimates process. Several academics have also raised serious concerns about it, and some have given evidence to that effect to Committees of the House.

Dealing with complex spending plans is never likely to be a straightforward matter, but the Supply and estimates process is in dire need of reform if we are to ensure that Parliament can exercise real scrutiny of the Government’s finances. I welcome the current inquiry being held by the Procedure Committee on the Government’s Supply estimates, and I hope that the Leader of the House will engage with the Committee on the recommendations that are likely to be made.

I will speak about the wider matter of Supply estimates today, but I want to focus particularly on the implications of devolution. In reality, the estimates process is an outdated system, designed before devolution, that does not function as an effective scrutiny of Government finances. There is no real opportunity for MPs to give expenditure the scrutiny it deserves, unlike nearly every other Parliament in the world; the Parliaments of the UK and Chile are the only two that do not have the freedom to examine and adjust spending. That is yet another example of why Westminster needs to be dragged, kicking and screaming, into the 21st century.

At present, we are offered blunt tools to amend estimates. We can vote to reduce expenditures for the entire Department for which we are debating a Select Committee report. However, we can vote down all Government spending—something that has not happened in 111 years. The estimates process is not fit for purpose. It allows the scrutiny of Select Committee reports but not the scrutiny of estimates. Topics to be debated are decided by the Liaison Committee. It is unreasonable to expect that Committee alone to represent all the interests of the House in debatable estimates motions within the confines of three days each Session. If we want to scrutinise Barnett consequentials fully, we need a lot more than the estimates days allowed by Standing Order No. 54.

[Patrick Grady (Glasgow North) (SNP)]

I congratulate my hon. Friend on securing this important and timely debate. I am a member of the Procedure Committee and I am taking part in the inquiry she referred to. In that inquiry, Professor David Heald from the University of Glasgow, which is in my constituency, gave his view that the estimates process is completely irrelevant to the Barnett process. That view is borne out in other evidence we received and stands in complete contradiction to what the House, the Scottish National party and Scottish Members in particular were told during the English votes for English laws process, which was that our opportunity to scrutinise the consequences of EVEL legislation would be through the estimates process.

[Margaret Ferrier]

It is good to see a member of the Procedure Committee here today. He will be fully up to speed with everything that is happening there. We look forward to the report—we hope that it will be published in November this year—and I hope the Government listen to its recommendations and respond constructively.

As I said, three days is completely inadequate. Furthermore, it is an oddity that more time is given to supplementary estimates than main estimates. After all, main estimates are where the vast majority of the decision making occurs. It seems eminently logical to switch the number of days available at the very least, so that two are set aside for consideration of main estimates and one for supplementary estimates. My hon. Friend the Member for Perth and North Perthshire (Pete Wishart), the SNP shadow Leader of the House, who has joined us in this debate, has submitted written evidence to the Procedure Committee’s inquiry into the estimates procedure in which he makes a common-sense proposal to allow both Opposition days and Backbench Business Committee days during the estimates windows, which should take the form of amendable or debatable motions to approve estimates or parts of estimates.

My hon. Friend also advocated the case advanced by the hon. Members for Gainsborough (Sir Edward Leigh) and for Southport (John Pugh) back in 2012 for the establishment of a separate Budget Committee to examine Government expenditure plans and to make recommendations to the House. I, too, think that has great merit and warrants serious consideration. It is currently all too easy for the Treasury to bury important changes within hundreds of pages of information. We owe it to the taxpayer to ensure both transparency and effective scrutiny, neither of which are possible in the current system. A Budget Committee would allow for a much more thorough inspection of spending proposals and could complement a heavily reformed Supply and estimates process. Such a Committee should also play a vital role in the scrutiny of Barnett consequentials to Scotland, Wales and Northern Ireland.

Furthermore, Westminster should introduce a proper Budget expenditure debate, such as those held in the United States or the Scottish Parliament. That sensible measure would allow a much closer assessment of spending. The compelling case for the inclusion of Barnett consequentials in estimates has been further compounded by the introduction of English votes for English laws. The complicated EVEL process reduces the ability of Scottish MPs to influence matters with funding implications for Scotland. The Leader of the House has repeatedly claimed that the estimates process provides a suitable avenue for us to affect those matters of great financial importance. However, in reality, it does not.

The Chair of the Procedure Committee, the hon. Member for Broxbourne (Mr Walker), said during an oral evidence session of that Committee last September:

“the way we execute Estimates and appropriations is less than satisfactory in the House of Commons, and for those colleagues who are concerned about Barnett consequentials, perhaps the concerns could be alleviated if we had proper debates around supply procedure.”

Legislation that might be considered to fall within the rules for the exclusion of non-English MPs might have important expenditure implications for Scotland, Wales and Northern Ireland. The previous Leader of the House showed reticence in accepting that fact. I urge the new Leader of the House to give proper consideration to the argument being put forward. Will he agree to review the interaction between the Supply and estimates procedure and EVEL arrangements as part of the review of the latter?

Legislation passes through the House that could have a significant impact on the block grant available to the devolved legislators. Members who represent constituencies in the devolved nations are now denied a right to vote at crucial stages of that legislation. Many other Members and I have raised serious concerns regarding Barnett consequentials and the effect that such legislation could have upon them. The Government contend that the estimates process provides ample opportunity for all Members to address that. However, there exists a complete lack of relevant information available to Members regarding amounts derived from each Department’s spending, which makes up elements of the block grants. That is wholly inadequate.

Pursuant to Budgets and autumn statements each year, the Treasury provides information to the devolved Administrations of the amount within the block grant derived from the spending of each Department. However, Members of this Parliament are not given access to that information when they are asked to give formal approval to Government spending. It seems incomprehensible that absolutely no consideration is possible of the full implications of Government spending, including the effect on the budgets of Scotland, Wales and Northern Ireland. Will the Leader of the House engage with the Treasury specifically on that issue?

The current measures for the estimates day debates were put in place before the process of establishing separate legislatures for the devolved nations commenced, so there is a fundamental inadequacy in how we examine Barnett consequentials under the current process. As a member of the Scottish Affairs Committee, I heard evidence last September from Sir William McKay, who said:

“There is neither possibility nor opportunity”

to do so, and that

“estimates opportunities are limited in both time and matter.”

In fact, he commented that EVEL is “a dog’s breakfast”—a phrase my hon. Friend the Member for Perth and North Perthshire loves to use in the Chamber.

In evidence recently given to the Procedure Committee, Dr Joachim Wehner, associate professor of public policy at the London School of Economics, said:

“The UK generally does extremely well in terms of macro fiscal disclosure, but it does less well when you look at the details of public spending. That is a weak spot in the overall transparency assessment of the UK. So the quality of the estimates is below par compared to the UK’s own high standards in this area, but also compared to its peers and other OECD countries.”

The mother of Parliaments, like many mothers, is not as in touch with the modern world as its younger descendants. The OECD wrote that we have some of the worst levels of scrutiny of estimates of any country in the developed democratic world. The House does not formally consider, debate, amend and vote on expenditure in the same way as with the Budget and taxation. There simply must be more opportunity to consider, debate and make amendments. MPs should have some measures to amend or affect estimates short of attempting to vote down all Government spending. There must be a way for Members to amend spending without having to defeat the Government on a major money motion. If nothing else, such a system makes minority Budgets much harder and, in doing so, cements a tendency in this place to move towards a two-party system with power pooling with the Executive. That is not a healthy way for a democratic country to operate.

Before I summarise, I would like to quote Adam Tomkins MSP, professor of public law at the University of Glasgow and the Scottish Conservative spokesperson on the constitution. In his written evidence to the Procedure Committee, he said:

“Whether these procedures give MPs the means fully to scrutinise any Barnett consequentials of England-only or England and Wales-only legislation may be doubted. If they prove to be inadequate, it may be that one unintended consequence of EVEL will be to reform the House of Commons’ supply process. From the perspective of parliamentary openness and effective parliamentary scrutiny, that would be no bad thing. The Treasury, however, may take a different view.”

I urge the Leader of the House to engage specifically with the Treasury about reforms to the timing and presentation of estimates, including the case for draft estimates, and the need for clear information on Barnett consequentials, including a statement of change from the previous year. Will he agree to examine specifically any lessons that can be learned from the Scottish Parliament’s procedures on the consideration of spending? Will he agree to engage with the Procedure Committee about the likely recommendations of its current inquiry on this matter?

Will the Leader of the House agree to look at the arrangement for estimates days, with a view to increasing the number available and making more time for main estimates than supplementary ones? Will he have discussions with the Treasury, with a view to making estimates motions more easily amendable? Will he seek to engage with relevant parties to explore the merits of establishing a Budget Committee? Lastly, will he agree to review the interaction between Supply and estimates procedure and the arrangements for English votes for English laws as part of the review of the latter?

[Mr Nigel Evans (in the Chair)]

I welcome the Deputy Leader of the House to his new role.