Supply and Estimates Procedure

Patrick Grady 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 In reality, the estimates process is an outdated system, designed before devolution, that does not function as an effective scrutiny of Government finances.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?

--- Later in debate ---

[Michael Ellis]

I know the hon. Gentleman would not wish to reduce the value and impact of Select Committees and the work they do—the Chairmen and Chairwomen of those Committees would resist that strongly—but I recognise the point he makes. However, there are processes—recognised ones that have worked for some considerable time and have been examined hitherto—that frankly have allowed Members, through the Chairs of those individual Committees, to make representations to the Liaison Committee. That is our current process. I recognise that he finds it unsatisfactory, which is why it will be particularly useful to examine in full the recommendations of the Procedure Committee, on which his hon. Friend, the hon. Member for Glasgow North (Patrick Grady), sits. One can see why some consider Select Committees to have a role to play. Select Committees are very important in the process.

It is important to note that motions for Supply come in two forms: we have the debatable and amendable ones, and we have the ones that are rolled up. I think most people would recognise that, because of the sheer complexity and volume of some estimates and because they are so involved, we have to have a process whereby they cannot be considered on estimates days and whereby we restrict the amount of discussion. Otherwise, because of the quantities of money involved, we could almost discuss them for an entire fiscal year.

[Patrick Grady]

I congratulate the Minister on his appointment. Does he accept that that level of complexity bears out our argument that the estimates process is irrelevant and does not provide us with an opportunity to discuss the Barnett consequentials? We were told by his honourable predecessors during discussion of the EVEL process that the estimates process was how Scottish Members could debate and vote on the Barnett consequentials of legislation that are now subject to the EVEL procedure.

[Michael Ellis]

I do not accept the hon. Gentleman’s contention. Of course it is possible to do exactly as the previous Leader of the House suggested. I followed and read about the processes that apply to, for example, the Scottish Parliament and other legislatures that have been cited, but one must bear in mind that the fiscal quantum and complexity involved are sometimes considerably less. As somebody pointed out in the written evidence to the Procedure Committee that I have seen, the Scottish Parliament was established with a clean sheet, but we do not start with that. This system has evolved over time and is necessarily somewhat more complex.

That is why we have the House of Commons Scrutiny Unit, which provides a range of briefings for Select Committees and helps to explain the main areas of interest. It may be that the Scrutiny Unit should be brought more to the attention of hon. Members, but it is there and it provides a good range of briefings for those Select Committees, helping to explain the main areas of interest.

The Clerk of Supply is also available to provide advice on procedure and the drafting of amendments to estimates motions. That is another mechanism whereby the process can be carefully assessed and analysed by individual Members, including those with a particular interest in Scottish, Welsh and Northern Irish affairs.

It is open to any Member to request a debate, as the hon. Member for Rutherglen and Hamilton West has done on this occasion, on certain aspects of particular estimates. That is another process and another area of scrutiny. A debate on the estimates process as a whole can also be accessed, as she has done today.

I recognise that a number of issues have already been raised in the Procedure Committee—the hon. Lady referred to them briefly in her earlier submissions. The timing, laying and approval of the main and supplementary estimates is something the Committee will want to look at. I have read that sometimes it is several months after the start of the financial year before those estimates are ready, and I know the Committee is looking at that.

The hon. Lady referred to the presentation of documentation, which is another issue that has been raised with the Procedure Committee. Presentation is important because it makes documentation more readable and accessible to a larger number of people. If it is possible to increase the use of graphs or other mechanisms by which presentation can become more accessible, clearly that should be looked at.

The hon. Lady mentioned the role of departmental Select Committees in the scrutiny of estimates and that is also being considered. She also referred to a possible role for the Backbench Business Committee in determining the estimates to be debated on estimates days. That is clearly of interest and can be assessed in the detailed Procedure Committee report.

As is clear from my points so far, my right hon. Friend the Leader of the House will consider a range of issues. They will, of course, relate to the estimates procedure and to the points made by the hon. Lady. He will be able to answer questions on the matter when he appears before the rather robust questioning of the Procedure Committee, some members of which I know—I am sure he will do so when he has considered the matter in the intervening weeks and months.

When the Procedure Committee has completed its evidence taking and produced its report, the Government will take time to carefully consider the recommendations. The hon. Lady asked for that assurance and I can give it. This is an important matter that involves large sums of money. It is of interest to the House, and the Government will of course, as we always do, consider carefully any recommendations contained within it. I cannot give any undertakings about the assessment that Her Majesty’s Government will come to after considering the recommendations, but I can say, I think without fear of contradiction, that those recommendations will be carefully considered. I do not wish to pre-empt the outcome of that report or the pending evidence of my right hon. Friend the Leader of the House, but I am confident that the points raised by the hon. Lady will help very much to inform the thinking of the Leader of the House and no doubt the thinking of the Procedure Committee.

Question put and agreed to.