Committee stage in the Commons
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Pete Wishart (Perth and North Perthshire) (SNP)Scottish National Party- Quote
- I support Government new clause 43 and hope that this is the end of a protracted and difficult saga for Scottish Ministers in respect of human rights legislation. The Minister’s account of the history of the saga is right: it is based on the House of Lords judgment back in 2007, commonly referred to as the Somerville case, which meant that there was no one-year time bar for human rights claims against Scottish Ministers under the Scotland Act. The judgment resulted in a number of claims for compensation and legal fees against Scottish Ministers, who were frustrated that they could not legislate to reverse the position, given that the Scotland Act was reserved to this House. The Scottish public faced the prospect of millions upon millions of pounds going into the pockets of Scottish criminals and convicts instead of into front-line services and improving the Scottish prison stock. The judgment would probably have meant that 20,000 prisoners previously thought to have been time-barred would have been eligible to claim under the anomaly. Therefore, it was important to put the matter right. Unfortunately, progress was not as speedy as the Minister suggests: it took many lengthy negotiations and protracted conversations before we got to the happy stage where we could get the legislation through. The Minister is again right that an order was passed in the House that allowed the Scottish Parliament to legislate on the Scotland Act. As soon as that was decreed, the Scottish Parliament moved quickly to enact emergency legislation.
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Mr. David Heath (Somerton and Frome) (LD)Liberal Democrat- Quote
- The order passed in this House enabled the Scottish Parliament to pass amendments to the Scotland Act to introduce a bar of one year or less. Will the hon. Gentleman advise the Committee on whether the Scottish Parliament has in fact legislated for a bar of one year, or for a bar of less than a year?
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- Pete WishartScottish National Party
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- I am grateful to the hon. Gentleman for that intervention. In fact, the House passed an order through delegated legislation that allowed the Scottish Parliament, under section 100 of the Scotland Act, competence to legislate on the issue. Following that, the Scottish Parliament enacted emergency legislation, which amended the Scotland Act by imposing a one-year ban. As the Minister has said, on 23 July the legislation received Royal Assent as the Convention Rights Proceedings (Amendment) (Scotland) Act 2009. Under the Act, the one-year time limit will apply to all proceedings raised on or after 2 November this year. The amendment supersedes all current legislation passed by both the House of Commons and the Scottish Parliament, and it has parity across the United Kingdom. I also welcome the other Government amendments, which will introduce parity across all the devolved institutions throughout the United Kingdom. My only hope is that, now that we have reached the happy stage at which everything seems to have been resolved, we shall see an end to this whole sorry saga.
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- Pete WishartScottish National Party
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- Perhaps I have been a little less generous than I should have been. Of course I understand that a protracted process has been necessary to take us to our present position. Nevertheless, this has been going on since devolution started back in 1999. It has been going on for a long, long time, and it is not beyond the realms of possibility to suggest that things might have been done a little more quickly. We accept that there are problems with the legislative consent motion, but I know that my colleagues in the Scottish Government are trying to deal with them. Perhaps, again, I have been a little unfair to the Minister. I think that we are all grateful for the fact that the matter has now been resolved, and I am aware of his involvement in its resolution. I know that there have been lengthy, fruitful and productive discussions with our Scottish Government colleagues. I am glad that, regardless of the history, the background and the pain and grief that have been suffered, we have reached the happy stage at which a solution has been found, and in that respect I am happy with the amendment.
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- Mr. HeathLiberal Democrat
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- I do not intend to oppose the amendments and new clause. I entirely understand the route by which they have been arrived at. It is good news that, albeit following a bit of delay, an agreement has been reached between the Scottish Parliament and the Government in fairly short order. However, I want to enter a few words of caution. The decision of the House of Lords in Somerville etc. v. Scottish Ministers correctly stated that there were two alternative statutory routes for the vindication of convention rights in Scotland, the Human Rights Act and the Scotland Act, and that there was a discrepancy between the two. That discrepancy has now been dealt with. My first concern is whether there may yet be any challenge to the compatibility of the new provision in the Scotland Act with convention rights. I suspect that there will not be, but it is a possibility none the less. My second concern is that the arguments that may have been used to add weight to the claim for compatibility between the two statutory routes are based on some fairly crude assessments of the potential liability under human rights legislation in respect of prisons in Scotland. I do not believe that the liability that was described was a real liability, and it worries me that far too often criticism of human rights legislation is couched in terms of the claims that might be made rather than the outcome of cases that are actually heard. There is, I think, an important distinction between the two.
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- Mr. HeathLiberal Democrat
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- And I am grateful to the Minister for his intervention. Such arguments often go without adequate rebuttal, but those of us with an interest in ensuring that human rights are properly upheld in this country believe that there is a huge mythology that it right for us occasionally to address and, where appropriate, argue against. Having looked at some of publicity surrounding the case and some of the claims made in support of the need for compatibility, I am not sure whether I entirely recognise the contingencies being described. Perhaps I should be more explicit. I am concerned about whether the retrospectivity in the new arrangements will find favour if challenged under human rights legislation. That aside, however, I think it sensible for there to be a clear co-ordination between the two statutory routes, and I see no reason not to support the amendments and new clause.
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Mr. Nigel Dodds (Belfast, North) (DUP)Democratic Unionist Party- Quote
- I welcome the Government’s approach to the introduction of time limits for human rights action against Northern Ireland, Welsh and Scottish Ministers. I will not rehearse all the arguments, but I think that this is a sensible provision, and, as the Minister will know, it has been welcomed by the Northern Ireland Executive. Although the Somerville judgment did not deal with claims under the legislation governing the devolved arrangements in Northern Ireland—or, indeed, legislation relating to Wales—the problems that arose in Scotland could arise there.
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Mrs. Eleanor Laing (Epping Forest) (Con)Conservative- Quote
- We also welcome these provisions. I welcome the provisions already in the Bill, and I was pleased to see that, albeit belatedly, the Government had tabled the new clause. I do not blame the Minister for the delay; I appreciate what he said about the complexity of the issue, and I agree that it is not surprising that it has taken some time to present measures to deal with it. I must tell the hon. Member for Perth and North Perthshire (Pete Wishart) once again—I am making a habit of this, and I shall have to be careful about it—that he was absolutely right in all that he said. The potential cost to the taxpayer—and the actual cost so far—of the mistake that was made in allowing an anomaly to arise have been considerable, but let us hope that that flow of taxpayers’ money will now be stemmed. I am still concerned about one thing, however. I do not know whether the Minister will be able to answer my question, and the hon. Member for Perth and North Perthshire may wish to intervene It appears that there is now a different time limit for the bringing of an action where there is potential delictual liability—or, indeed, an action in a personal injury case—to that for bringing an action under human rights legislation. The following situation could therefore arise under the terms of the Bill. Somebody who has been injured would have a right to bring a case under human rights legislation on which there would be a time limit of one year, but they would also have a right to bring a normal personal injury case or a case under the normal Scots law of delict—which is when someone has had an injury caused to them by someone else—and that would have a normal time limit of three years, or in some cases six or seven years. A person could therefore bring an action under the normal law of delict but by the time they discovered they were not going to succeed in that action it would be too late to bring an action under human rights legislation. The opposite situation could also arise: they might bring forward a human rights case and then discover that they had run out of time under the normal law of delict or personal injury law. I am taking a long time to explain this in order for the Minister to have a chance to consider the matter.
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- Mrs. LaingConservative
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- I thank the Minister for that answer, which is perfectly in order, and I appreciate that that is as far as he can go in discussing this Bill and his responsibilities. I am merely putting down a marker that there could be a further anomaly here which somebody somewhere within the Scottish or UK Governments might wish to look at before an injustice occurs as a result of it—let me put it no more strongly than that. I am glad that the Minister has taken the point on board, and I am sure his colleagues will look into it. As the Minister has said, this matter is complex and addressing it has taken quite some time, and I do not blame him for that. Not for the first time, however, these mistakes and injustices have arisen because of the way in which devolution has been implemented and as a result of matters not having been properly thought through in advance.
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- Mrs. LaingConservative
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- I am grateful for the Minister’s protection, and I fully appreciate, and agree with, what he says about decisions taken by the courts as, of course, I also support the doctrine of the separation of powers. Let me explain what is of concern to me, however. I acknowledge that the Minister had nothing to do with the discussions a decade ago on the legislation that became the Scotland Act 1998 and other devolution measures, but those of us who were sitting on the Conservative Benches warned time and again that these anomalies would arise. In this case, it has cost the taxpayer several million pounds. Let us hope that further anomalies do not arise as a result of devolution not having been properly thought through in these areas. We warned about this a decade ago, and I am still warning now.
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- Pete WishartScottish National Party
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- The hon. Lady was articulating a powerful point before she was interrupted in full flow by the Minister. She is entirely correct that this is all to do with an anomaly. The Somerville case was successful because it identified that anomaly and was able to progress and make a case on the basis of flawed work in respect of the Scotland Act. Like me, the hon. Lady spends many hours in Delegated Legislation Committees trying to clear up some of the mess caused by that Act, so it is disingenuous to try to suggest that it was a perfect document.
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- Mrs. LaingConservative
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- I thank the hon. Gentleman for agreeing with my point. Like me, he spends many hours in Delegated Legislation Committees correcting the anomalies of the devolution legislation, and I and many of my colleagues—and many of his colleagues, and also many of the Minister’s colleagues—spent weeks and months in this Chamber raising these matters when we dealt with the Scotland Act. I am merely saying that we were right then and the Government were too complacent.
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- Mrs. LaingConservative
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- The Minister shows great faith in his Government, but neither the hon. Member for Perth and North Perthshire nor I share it. The Minister is right that there is an alliance of sorts; it is an alliance of those who care about the Scottish legal system and the protection of Scots law and its principles. I have not said anything different from what I said when we discussed these matters and the Scotland Act was passed a decade ago; I have not changed my position at all. I have always argued that the United Kingdom can work perfectly well and properly with different legal systems, as it has done for centuries. I declare an interest: I am a Scots lawyer by profession. Because of that and the fact that I am also conversant in the practice of English law, I have always argued that it is perfectly possible to have a United Kingdom that functions properly for all its citizens throughout our entire country under different legal systems—indeed, as the Minister has said, under a devolved system, which we now have and which we all want to work properly. In order for it to work properly, however, it is incumbent on the Government to consider the pitfalls that might lie ahead and to consider possible anomalies that might arise, and to protect the legal system, the people, the principles of justice and, indeed, the taxpayer from the consequences of those anomalies. I appreciate that the Minister has today brought forward the right legislation to do that. I still agree with the hon. Member for Perth and North Perthshire that it is unfortunate that it has taken so long, but at least we have it today and we welcome it. Amendment 90 agreed to. Clause 33, as amended, ordered to stand part of the Bill. Clause 34 Time limit for human rights actions against Welsh Ministers etc Amendment made: 91, page 17, line 12, leave out lines 12 to 14 and insert— ‘(3C) In subsection (3A) “rule” has the same meaning as it has in section 7(5) of the Human Rights Act 1998.”.’.— (Mr. Wills.) Clause 34, as amended, ordered to stand part of the Bill. New Clause 43 Time limit for human rights actions against Scottish Ministers etc ‘(1) In section 100 of the Scotland Act 1998 (c. 46) the following (as inserted by the Convention Rights Proceedings (Amendment) (Scotland) Act 2009 (asp 11)) are omitted— (a) subsections (3A) to (3E); (b) in subsection (4), the words “Subject to subsection (3D),”. (2) The Convention Rights Proceedings (Amendment) (Scotland) Act 2009 (asp 11) is repealed. (3) Omit paragraph 4A of Schedule 4 to the Scotland Act 1998 (c. 46). (4) The Scotland Act 1998 (Modification of Schedule 4) Order 2009 is revoked. (5) Subsections (1) to (4) above do not apply to any proceedings brought before this section comes into force. (6) After subsection (3) of section 100 of the Scotland Act 1998 (c. 46) insert— “(3A) Subsection (3B) applies to any proceedings brought by virtue of this Act against the Scottish Ministers or a member of the Scottish Executive in a court or tribunal on the ground that an act of the Scottish Ministers or a member of the Scottish Executive is incompatible with the Convention rights. (3B) Proceedings to which this subsection applies must be brought before the end of— (a) the period of one year beginning with the date on which the act complained of took place, or (b) such longer period as the court or tribunal considers equitable having regard to all the circumstances, but that is subject to any rule imposing a stricter time limit in relation to the procedure in question. (3C) Subsection (3B) does not apply to proceedings brought by the Lord Advocate, the Advocate General, the Attorney General, the Attorney General for Northern Ireland or the Advocate General for Northern Ireland. (3D) In subsections (3A) and (3B) “act” does not include the making of any legislation but it does include any other act or failure to act (including a failure to make legislation). (3E) In subsection (3B) “rule” has the same meaning as it has in section 7(5) of the Human Rights Act 1998.” (7) In subsection (4) of that section at the beginning insert “Subject to subsection (3D),”. (8) Subsections (6) and (7) above apply to any proceedings brought after this section comes into force (including proceedings in respect of an act taking place before this section comes into force).’.— (Mr. Wills.) Brought up, read the First and Second time, and added to the Bill. Clause 35 Judicial appointments etc Question proposed, That the clause stand part of the Bill.
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- Mr. David Heath (Somerton and Frome) (LD)Liberal Democrat
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- I wish to ask the Minister exactly what the words “pared down” mean. That was the Government’s description of what they have done to the proposals included in the draft Bill in this respect. In this instance, “pared down” appears to mean omitted in their entirety, rather than anything that could satisfactorily be described using that term. I am curious to learn exactly why the Government have thought again. In 2007, a clear commitment was given that the Government would surrender some Executive power, and judicial appointments was one of the 12 areas explicitly mentioned. The 2008 draft Bill made some explicit proposals in this area: it proposed that the Lord Chancellor’s role be reduced by removing his power to reject or require reconsideration of selections made by the Judicial Appointments Commission for all judicial offices below the High Court; it proposed to remove the requirements for the Lord Chief Justice to consult the Lord Chancellor or obtain his agreement before exercising functions such as deploying judiciary to certain leadership posts; it proposed to place new duties on the Lord Chancellor, the Lord Chief Justice, the JAC and the selection panels to ensure that selection processes are fair, transparent, efficient, flexible, proportionate and effective and to have regard to the JAC’s need to act independently; and it proposed to place new duties on the Lord Chancellor and the Lord Chief Justice to encourage diversity in judicial appointments. The only thing that has remained from that list is the removal of the Prime Minister from the process, but as I suspect the Prime Minister has never actively intervened in this process, other than on the express advice of the Lord Chancellor, that is, in effect, a cosmetic change. The only argument that I could advance that the Government may have for dropping these changes is the opposition from the Joint Committee on the Draft Constitutional Renewal Bill, which expressed a view that to introduce reforms at this stage might create an imbalance in the proposals contained in the Constitutional Reform Act 2005. That might be an argument, were it not for the fact that the Government have already rejected the Joint Committee’s views. The Government response to the Committee’s report clearly stated that they do “not accept the overall view of the Committee”. However, the response also stated that the Government “remains committed to nearly all the proposals seen by the Joint Committee”. That commitment seems to have lasted barely a year before this paring down, which is, in effect, the removal of most of the changes to the Executive power of the Government in this area of judicial appointments. I simply seek an explanation from the Government as to why they have changed their view. Why have they decided not to proceed with that which they promised?
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- Mr. HeathLiberal Democrat
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- I just want to be clear, Sir Michael, whether we are dealing with schedule 5 stand part at the same time, in which case I have one other point to make. I am in your hands, Sir.
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- Mr. HeathLiberal Democrat
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- rose—
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- Mr. HeathLiberal Democrat
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- Thank you for getting us out of a procedural conundrum in respect of exactly who should be speaking, Sir Michael. The point that I wish to raise on schedule 5—this may assist the Minister in collecting his thoughts—relates to the Government’s response on the order-making power to exempt positions from the JAC’s remit. In response to the Joint Committee’s report, the Government said: “The Government remains convinced that the most appropriate way to resolve this issue is an order making power”, but they went on to say that the Government “no longer believes this Bill is the appropriate vehicle for such a change, and in the meantime will explore further non-statutory options available.” I would like to know precisely what that means. What are those “non-statutory options” that the Minister is exploring? When does he expect to bring forward more detailed proposals? What will they encompass? Schedule 5 removes magistrates from the JAC’s remit by deleting them from schedule 14 to the 2005 Act. Presumably there is a good reason for that. The 2008 draft Bill also proposed an extremely broad order-making power allowing the Lord Chancellor to amend any part of schedule 14 to the 2005 Act to exempt candidates to certain offices from being selected by the JAC. I think that procedure was intended to allow redeployment, rather than appointment, and to facilitate matters within the field of judicial appointments. It would have been a sweeping power and, as such, it was not entirely surprising that it met with opposition from the JAC itself, the Lord Chief Justice, the House of Lords Constitution Committee and the Joint Committee. Although that proposal has now been dropped, we face the threat or promise of arriving at the same result by alternative means. We are entitled to know from the Minister exactly what those alternative means are and what the Government’s intention is.
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Mr. Edward Timpson (Crewe and Nantwich) (Con)Conservative- Quote
- The Minister has mentioned that some minor amendments to this Bill are being proposed to try to streamline the judicial appointments process. Can he tell the Committee what assessment is being made of the effect that these streamlining measures will have on attempts to reduce the unfortunate delay that there still is in the appointment of judges, which is causing such problems in our court system?
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- Mr. TimpsonConservative
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- As the Minister might recall, this was an issue that I raised with the Lord Chancellor on Second Reading. I have in fact written to him to set out specific examples of where there are some holes in the number of judges in certain circuits across the country. Clause 35 and schedule 5 will, on the face of it, reduce the time that the medical assessment of a potential candidate will take, but they do not set out in any practical terms how that will affect the time from application to appointment. Can the Minister give us some idea of how much of an effect that process will have?
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- Mr. TimpsonConservative
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- indicated assent.
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- Mr. HeathLiberal Democrat
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- I think that we can take it from what the Minister has said that, when the Government told the Joint Committee that they did not accept the recommendation, what they meant was that they did accept it and that they would remove the promises to remove certain areas of judicial appointments from Executive control. Are those promises are now shelved sine die, or does he have firm proposals to bring them back at an early date?
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- Mr. HeathLiberal Democrat
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- I have a couple of very brief questions about clause 36. They also relate to Government new clause 23, which is a very similar provision relating to Northern Ireland. I therefore hope, Sir Michael, that it will not disturb our proceedings too greatly if we do not repeat these questions later. First, why have the specific offices mentioned in the clause been chosen? Do any similar offices exist for which the Government have not felt it necessary to provide this protection? Secondly, what is the position of the lay members of tribunals? Chairmen have salaried posts, but do lay members have the same protection? I was approached over the summer by a lay member of an employment tribunal who was extremely concerned that there appeared to be arbitrary changes in what he was expected to do as a tribunal member, the conditions under which he was expected to work and the remuneration that he could expect in terms of appropriate expenses. To what extent does the protection offered to what are quasi-judicial tribunal appointments extend to the lay members who sit alongside them? Lay members provide a very important resource to the country in helping to arbitrate sometimes extremely difficult issues.
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- Mr. DoddsDemocratic Unionist Party
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- I welcome the Minister’s comments on new clause 23. I have a couple of brief questions. I should be grateful if he could outline the extent to which there was consultation with the Northern Ireland Court Service and others in the Northern Ireland Office on the matter, given the current debate on the devolution of justice powers in respect of Northern Ireland. Further to the questions posed earlier by the hon. Member for Somerton and Frome (Mr. Heath), can the Minister outline what the measure will mean in relation to those judicial and tribunal officers in Northern Ireland who are not covered? There is an extensive list in new clause 23 but what about the officers not covered? Are any posts in Northern Ireland specifically related to the Province not covered by salary protection provisions?
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Mr. Henry Bellingham (North-West Norfolk) (Con)Conservative- Quote
- I beg to move, That the clause be read a Second time.
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- Mr. BellinghamConservative
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- I should declare an interest as a barrister. I should also point out that I am not at present seeking any judicial appointments. I did at one stage have serious ambitions to become a high-flying QC who might go on to one of the highest judicial appointments in the land, but I suspect that what I am going to say in a few minutes will probably not endear me to the Judicial Appointments Commission. New clause 20 removes from the scope of the JAC the appointment of Court of Appeal judges, the Lord Justices of Appeal. It does this by removing the relevant sections of the Constitutional Reform Act 2005. New clause 22 clarifies section 88 of that Act by stating clearly in the legislation that the JAC will not be able to continue with its unpopular and, I would suggest, discredited written tests. Why are we proposing these two new clauses? We need to have a quick look at the JAC and the background to it. It was set up by section 61 of the 2005 Act. It was a completely new system and represented a significant departure from the previous system, which was based on recommendations to the Lord Chancellor. This was part of a much wider package of constitutional changes involving the position of the Lord Chancellor, the new Supreme Court, which we shall discuss later this afternoon if new clause 21 is reached, and judicial appointments in Northern Ireland. Another important part of that package of constitutional changes was the creation of the Ministry of Justice, which took over the former Department for Constitutional Affairs and took over from the Home Office responsibility for prisons and the probation service. When the proposals were announced, they were notorious for the lack of proper consultation. There was no Green Paper and no White Paper. As I understand it, there was no consultation even with Her Majesty. There was no consultation with the judiciary, the Lord Chief Justice or the senior Law Lords. The then Lord Chancellor, the noble Lord Irvine of Lairg, was not consulted. He was told about the changes only after the decisions had been taken. He was told that, as part of the original package, his own post was to be abolished. As the noble Lord Neuberger recently commented, all this was completely unprofessional and seemed like the product of late night whiskeys and back of an envelope calculations by the then Prime Minister, Tony Blair, and some of his sofa government cronies. He did not look carefully at what would be required in getting rid of the post of Lord Chancellor. He did not appreciate at the time that it would require primary legislation, and he did not realise that there are 5,000 references to the post of Lord Chancellor in our law. Lord Irvine of Lairg has now broken his silence and accused the then Prime Minister of blocking his ideas, botching the reforms and humiliating him. Perhaps we should not worry too much about the latter point. He spoke about “the chaotic, even cavalier way” in which the business was conducted, with the then Prime Minister “winging it on hunches, using inadequate advice” and having “scant regard for procedure.” It is indicative in many ways.
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Mr. Oliver Heald (North-East Hertfordshire) (Con)Conservative- Quote
- Is my recollection correct, and does my hon. Friend remember, that the Lord Chief Justice was told five minutes before the press release went out from No. 10? That was the extent of consultation for our most senior judge.
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- Mr. BellinghamConservative
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- My hon. Friend is right about that. It indicates the Government’s cavalier attitude to parts of the constitution that we regard as precious. They cannot look at those parts of the constitution without wanting to kick them hard.
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- Mr. BellinghamConservative
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- I am grateful to the Minister for taking over the role of the Chair. It is important to understand the background to the JAC because that is the context of the constitutional reforms. I should now like to consider the system of judicial appointments and consider whether the old system worked, because we need to look at the previous system before we can reach a considered opinion on how the new system is working.
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- Mr. HealdConservative
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- Does my hon. Friend agree that the JAC is an important part of the patchwork of compromises and decisions that had to be made following the decision to abolish the position of Lord Chancellor? For example, there was also the concordat, a very lengthy document agreed with Lord Woolf, which had to be produced because the Government had no idea of the complexity of what they were trying to do during the ministerial reshuffle.
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- Mr. BellinghamConservative
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- Again, my hon. Friend, who followed the issue carefully at the time, is absolutely spot-on. Indeed, many of us took the view that the JAC, which was established by the relevant sections of the Constitutional Reform Act 2005, was created on the basis that the position of Lord Chancellor would be abolished. But of course the position was not abolished, because it was discovered that, as part of the reform of our constitution, it would be almost impossible to do that without introducing a much lengthier Bill.
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Jeremy Wright (Rugby and Kenilworth) (Con)Conservative- Quote
- Does my hon. Friend agree that this issue is part and parcel of the problem with the Government’s overall approach to constitutional reform, whereby they start down a road with no clear idea of their destination? The later provisions of the Bill will show that the same thing is happening to the House of Lords as happened to judicial appointments.
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- Mr. BellinghamConservative
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- My hon. Friend is 100 per cent. correct, because we have seen a hotchpotch of different reforms. Indeed, they were initially predicated on getting rid of the post of Lord Chancellor and moving the Law Lords out of the House of Lords and into the new Supreme Court. But, as my hon. Friend rightly points out, a decision was taken at the time without any clear idea of how the legislation would be framed, and as a consequence we are picking up different bits of it. Did the previous system of judicial appointments work? Did it deliver an exceptionally high calibre of judges? The answer is undoubtedly yes, and the system cost virtually nothing. One issue that has been raised at the Bar for as long as I can remember is diversity, but we are looking at it from the wrong direction in terms of judicial appointments. The key point is to look at it from the point of view of access to the professions, because if the most able and competent people, from all backgrounds, are attracted to them and do well at the Bar, for example, as solicitors or in other, linked professions, they will be appointed to the Bench and, I hope, secure judicial appointments. At the Bar, for example, which is the part of the profession I know most about, the percentage of ethnic minority students at law school and in paid pupillages is far greater than the percentage of ethnic minorities in the population as a whole. The Bar has reached out to schools throughout the country, and explained to schools and universities what a career at the Bar is all about. My hon. Friend the Member for North-East Hertfordshire (Mr. Heald) and I virtually had to pay for our pupillages, but now one has paid pupillages. I pay tribute to those former chairmen of the Bar Council, Geoffrey Voss and Timothy Dutton, who worked incredibly hard on ensuring that the Bar made sterling efforts to reach out to schools throughout the country, and on widening access to the Bar. That work has been continued by Desmond Browne QC, the current chairman of the Bar Council, and he has stated time and again that he is passionate about the issue and feels strongly that the Bar must ensure that access is widened as much as possible. I am sure that the Minister agrees that, on this issue, the Bar sets a glowing example. Law schools are full of overseas students, students from Commonwealth countries, Dominion countries and people who will undoubtedly go on to great success in their own countries. I remember that when I was at law school, I had a number of fellow pupils from Commonwealth countries, and they have since gone on to high judicial appointments and, indeed, to high political office. In fact, one contemporary has even gone on to become king of a country.
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- Mr. HealdConservative
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- Does my hon. Friend agree that one great thing about ethnic minority solicitors is that they have been able to set up small firms that cater for the interests and needs of a particular community? One damaging aspect of the Carter review has been the attempt to force all firms to conform to a particular size and way of working. It has impacted, and will impact, badly on many ethnic minority solicitors, who until now have been able to become the senior partner in a firm and move on to judicial office later. Does my hon. Friend agree that the reforms, though well intentioned, may establish a glass ceiling?
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- Mr. BellinghamConservative
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- I am grateful to my hon. Friend for that observation, because it illustrates the Government’s complete lack of joined-up thinking. They have made various changes to legal aid, and, as a result, their absolute obsession with consolidation and “big is best” will drive out of business many small firms, particularly small minority ethnic businesses in city centres. They are often the launch pad for members of the ethnic minorities to go into law. With the loss of that launch pad, those people may not go into the legal profession, and they will not be available to take up judicial appointments later.
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- Mr. BellinghamConservative
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- The Minister is obviously desperate to join the Chairmen’s Panel, whereupon he will be able to control debates in that way. It is up to a Committee’s Chairman to say whether I am in order, however, and it is important that we look at the background to the JAC. If we do, we will be able to see whether the clauses make sense. The issue is also about judicial appointments and what our constituents expect from the judiciary. When our constituents appear before a court, be it a magistrates court, county court, Crown court or the High Court, above all else they want to encounter a level of expertise, wisdom, fairness and professionalism. After all, at that juncture in their lives, they may be facing the loss of their liberty, property or finances, or the removal of a child from their custody, so they are not interested in the gender, race or able-bodiedness of the judge. All they are interested in is competence, expertise, wisdom and the judge’s ability to deliberate upon the case and reach the right conclusion.
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- Mr. HeathLiberal Democrat
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- I am listening intently to the preamble to the subject of the hon. Gentleman’s new clauses. I understand that he has concerns about the way in which the JAC works, but why is he exclusively concerned about the way it selects Lords Justices of Appeal and not, apparently, about the way it appoints Lords Chief Justice, heads of division or puisne judges?
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- Mr. BellinghamConservative
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- If the hon. Gentleman waits a little while, he will hear the answer, because I am about to come to it and he will be all the wiser, I hope.
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- Mr. BellinghamConservative
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- I think that they are excellent appointments, but they could have taken place under the old system anyway without the need for this extremely costly bureaucracy. Section 64 of the Constitutional Reform Act 2005—my hon. Friend the Member for North-East Hertfordshire spoke eloquently on it at the time—is headed, “Encouragement of diversity”. It states: “The Commission, in performing its functions under this Part, must have regard to the need to encourage diversity in the range of persons available for selection for appointments.” It then says in subsection (2): “This section is subject to section 63”, which stresses that the appointment “must be solely on merit.” That is meaningless window-dressing and tokenism. We need to get coming into the professions, from an early stage, more people from ethnic minorities, more women, and more people who are enthused by the idea of a career in the law, either as solicitors or as barristers. We will do that by widening access to those professions. The chairman of the Bar Council feels incredibly strongly about that, as do I. The JAC is incredibly bureaucratic, and it is growing in size. I think that its annual running costs are £8.5 million; the Minister may well correct me, as he probably has the figures directly to hand. That may not seem a vast amount of money. However, we should look at it in the context of the changes that his Department is making to the legal aid budget, or the changes being made to the family law advocacy scheme, which has caused a huge amount of anger among barristers. The initiative to introduce best-value tendering for police station work will have a significant impact on several smaller firms. Yet the savings that will be made through those changes to the legal aid budget involve sums that are sub-£10 million. That is why the £8.5 million cost of the JAC, an organisation that is doing work that cost virtually nothing before, is significant.
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- Mr. BellinghamConservative
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- We have no plans to increase the amount of money for the legal aid budget. That budget is £2.1 billion, and we feel that far better value for money can be got from it. We feel strongly that we need to bear down on some of the drivers of costs, particularly the very high-cost cases, and that there is ample scope for bringing in new money to the legal aid budget from outside the MOJ. If the Minister is saying that he expects me to make a pledge to increase that expenditure, he knows the answer to that, unfortunately, as well as I do: whoever wins the next election, the Treasury will say that there will be no increase to that £2.1 billion. I hope that when the economy improves there will be more money for legal aid, because the legal aid budget is a vital part of the welfare state. Access to justice is something that all Conservative Members feel strongly about.
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- Jeremy WrightConservative
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- In the context that my hon. Friend is correctly describing, is it not all the more important to ensure that money already being spent within the legal system is being spent wisely, which is why we are interested in the specific workings of the JAC?
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- Mr. BellinghamConservative
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- If my hon. Friend asked me, “Is the JAC working?”, I would say that it is not doing a bad job. However, we should put our hands on our hearts and think to ourselves that this is a time when this country’s public finances are in an horrendously vulnerable state. The country will probably be spending about 10 per cent. of gross domestic product on the interest on our national debt. Bearing in mind that the figure in 1976, when the then Chancellor went off to the IMF, was 9.5 per cent., we are moving into Argentine or Guatemalan territory. That is why we must look at every single item of expenditure and ask ourselves, “Is this organisation doing a good job?” The answer is that it is not doing a bad job. If we ask, “Is it necessary? Was the previous system inadequate and not delivering?”, the answer is that it certainly was delivering. That is why we must look at how much money it costs. Going back to the point made by my hon. Friend the Member for Crewe and Nantwich (Mr. Timpson), one of the problems with the JAC is that because it is so bureaucratic, incredibly cumbersome, very costly and an empire that is growing the whole time, it is moving very slowly. I have heard similar stories to him about judicial appointments that are not being filled. The JAC is not conducting its affairs as efficiently as it should be. The competitions for different types of judicial appointment are not being run as speedily or efficiently as they should be. I have been round several combined courts over the past year or so, and I have had compelling stories put to me by presiding judges who are concerned about the speed at which these appointments are being made and the impact that that is having on their ability to conduct justice and to deliver the services that Ministers rightly expect presiding judges to deliver in their combined courts. The JAC must look into that.
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- Mr. TimpsonConservative
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- Does my hon. Friend agree that the Minister should welcome new clauses 20 and 22, as they would contribute to his stated aim of bringing about the maintenance of good-quality, high-calibre candidates for the bench? They would provide a system that does not have in-built delay, is efficient and brings candidates as good as those that we have had in the past without unnecessary costs. In the process, they would ensure that more judges are sitting in the courts, hearing more cases, and they would therefore reduce the cost of the courts system. We could then use that money to ensure that we continue the process of increasing access to justice for all those people who are currently denied it.
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- I thank my hon. Friend, who until his spectacular by-election victory was active in the courts day in, day out, as a family law barrister, appearing before judges at different levels of the judiciary and developing an in-depth understanding of what was going on. He is far better qualified than me, and probably than the Minister, to tell the Committee what is happening. I have a letter from a well known judge, who will, of course, remain nameless. After we had a discussion the other day, he wrote to me: “There is an arrogance about the JAC which refuses to recognise that the persons most able to judge are those before whom the applicant appears on a regular basis. Instead the task is assigned to persons who have no experience whatsoever of this work. No private company would tolerate such a procedure.” He is right, because the people who are best able to assess the ability of applicants to the Court of Appeal are the judges before whom their decisions and judgments are assessed and appealed against. They know very well the ability of the applicants, and they are best placed to advise the Lord Chancellor. New clause 20 represents a small step, and as part of our reforms of the JAC, we will consider a number of ideas, but it is an important first step to remove judges in the Court of Appeal from the JAC’s scope. I urge Ministers and other Members to support that modest proposal and thus reduce the costs of that body. We have ideas for the future, but this is a modest first step forward. New clause 22 is about written tests. I shall explain for hon. Members who may not know what they are that very often someone applying for a judicial appointment, particularly a more minor one such as that of recorder, district judge or county court judge, is asked to take a written test. Those tests are extremely unpopular and incredibly controversial, and they are very public. In the past, top QCs, leading solicitors and academics—and patent or trademark attorneys, whom we should not overlook because they can now qualify for judicial appointments—would make their application in confidence. It was kept confidential, because it might well have been turned down, and there is a certain amount of humiliation if a top QC or a managing partner of Allen & Overy applies for an appointment on the High Court bench and is turned down. In the past, no one ever knew that they had applied. Now, they have to take a written test in a public place, and everyone knows that they have done it. A large number of solicitors and leading QCs tell us that that is having an impact on their practice. They obviously want to keep their clients in place and keep their practice going, and they want to ensure that their partners in their firms and the junior members of their chambers have confidence in them as senior QCs or managing partners. Yet when they apply for a judicial appointment, which in the past would have been kept totally confidential, everyone hears that they have done a test. I am less concerned about whether they fail the test, because I am not saying that it is necessarily unfair, but it is completely unnecessary because it puts the fact of the application into the public domain.
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- Jeremy WrightConservative
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- Given that the Government’s intention in setting up the JAC was to encourage those who would not otherwise come forward to seek judicial office, does my hon. Friend share my view that any obstacle to those potential applicants is to be regretted? Is it not at least possible that the written test is one of those obstacles?
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- Mr. BellinghamConservative
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- I am grateful to my hon. Friend for making that point, because it leads me on to a briefing that I have received from the Law Society. I was staggered by what it said: “The written tests are proving to be an invaluable method of screening applicants. According to the JAC they are…a good indicator”. Of course the JAC would say that. It continued: “Another beneficial result of the use of written tests is that more women, ethnic minority and solicitor candidates are progressing through to interview and eventual appointment.” I put it to the Law Society and my hon. Friend that most top QCs and senior solicitors are used to dealing with complex paperwork day in, day out. Most of them have top degrees from top universities, and they have the self-confidence and ability to flourish in a written test. However, we are trying to encourage people to apply who are not as fortunate in their background but have ample ability and may well be ideal people to be considered for a judicial appointment, and they may well fall at that first hurdle. As he has said, that puts an unnecessary obstacle in the way of such candidates and may well put them off applying in the first place. I do not know whether the Minister has had a chance to look at the JAC’s website or examine some of the tests, but some of them are Alice in Wonderland scenarios. We are asking senior people of his type of age, maturity and ability to take a written test in which they have to devise some imaginary legislative scenario and then work out cases based on it and deliberate upon them. They are not law students; they are top QCs, barristers and academics. The test is demeaning and completely unnecessary, and I have not yet met a single person who thinks it a good idea, apart from a few people on the JAC and the Law Society, which appears to regurgitate exactly what the JAC has said. If one speaks to any barrister or anyone who has been through the test, they say that it is completely unnecessary. Will the Minister tell the Committee what percentage of the £8.5 million a year costs of the JAC go into the running the tests? It must be expensive to devise the papers, put together the panels that write them, bring in outside consultants and expertise, book the halls where the tests take place, supervise the tests and put in place the necessary security. It is an incredibly expensive and bureaucratic exercise. The Minister talks about streamlining the system and making it simpler and easier. We have an idea for him: get rid of those tests, which are completely unnecessary. It seems to me that the JAC has found itself in new, uncharted territory, and of course any new organisation or commission will want to build an empire. The JAC is building its own little empire and wants to embed it, and what better way than to put in place something as bureaucratic as the written test procedure, which obviously means more work for people and more jobs? As I said to the Minister a moment ago, his budget is under huge pressure. Looking at the Red Book and the roll-forward of the Ministry of Justice budget, we see that he will be looking for cuts across the piece. There will be substantial cost cuts in prisons, in the Courts Service, maybe in legal aid, in the administration of the Legal Services Commission and in every other part of the MOJ because of what the Treasury has done to his Budget. Well, we are giving him a very good suggestion for reducing costs. At the same time, we are proposing the measures not just to reduce costs, but because we want a better system for judicial appointments. On that basis, I hope new clauses 20 and 22 will command the support not only of Opposition Members, but of the Minister and Labour Members.
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- Mr. HealdConservative
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- May I start by talking about the quality of judiciary that we want to attract in this country? We have an honourable tradition and a high standard, which has been set by giants such as Lord Devlin, Lord Denning and Lord Reid. There is a history of legal figures who have commanded respect not only for their wisdom, but for their great intellect, their ability to interpret the law, and through the common law, their ability to make the law. That proud tradition brings me to the point the Minister made when he intervened on my hon. Friend the Member for North-West Norfolk (Mr. Bellingham). He asked my hon. Friend whether he could criticise any of the 12 appointments to the Court of Appeal. I would turn the question round to the Minister and ask him, “Look, you are spending £8.5 million extra; can you criticise any of those who went before?” I think the history of our appointment of judges, particularly at that level, is a marvellous one. I do not think that anyone could point to a Court of Appeal judge in England who was not of a high quality of intellect and wisdom. Some perhaps occasionally made judicial mistakes that were overturned in the highest court, but I do not think it could be said that they had no reasons for their decisions or for putting their decisions in the way they did. The problem of how to choose our judges for the higher courts all comes down to having a system that allows the best minds and the most wise to emerge. That is what happens. In the High Court, or dealing with tier 1 work in the Crown court, it becomes clear over a period which judges are doing an impeccable job. That happens not only by word of mouth, but because of decisions that go to appeal. Often when appeals are upheld, the judgment of a particular judge—his summing-up in a criminal case or his judgment in a High Court case—will be praised, and it will become the law in due course as the higher courts adopt his reasoning. Those legal minds and those people have emerged in the past and continue to emerge. Not only the lords justices of appeal sit in the Court of Appeal and the divisional court, but High Court judges sit there as flankers, helping the court as part of the court. Therefore, the lords justices of appeal get to see the High Court judges. They not only see their decisions, but see them in action. The High Court judges give judgments in cases and are often very highly regarded, particularly in specialist areas, so the idea that we need to have laymen in the JAC deciding who should be in the Court of Appeal is really a nonsense. The fact is that the people who should be there emerge through their talents, wisdom and intellect. That has always been the case, and we cannot point to a time when that did not happen. Why have we got the JAC? The commission has a worthy role—I am not against the idea that we should try to improve diversity—but I think merit should be the first and foremost criterion. In relation to the debate that my hon. Friend mentioned, my point was that it is all very well to have a two-track approach, but when it comes down to it, merit must be the greatest thing, because that will guarantee the rule of law and a system that holds water. Historically, it is true that the reason why we have a JAC is that Tony Blair, in the course of a reshuffle, decided he was going to abolish the Lord Chancellor. He wanted to do that not for any high and worthy reason—as far as one can tell—but because he had had enough of Lord Irvine. Lord Irvine says so, and I am sure that is the history. I thought it sad that our Prime Minister made a decision for that reason without even consulting the top judge in the country, Lord Woolf, who was told five minutes before the press release went out. It is said that his remark was, “What?” but that may be completely untrue. However, it is certainly the case that the concordat, which is a very substantial document, had to be agreed between the Government and the Lord Chief Justice before the new approach—retaining a Lord Chancellor but without many of the powers of before—was able to go ahead. At that time, various things were done to replicate the traditional role of the Lord Chancellor, such as his role in appointing judges. One thing that came out of that was the JAC. The Conservatives did not oppose the setting up of the JAC, but we made two important points on the matter. First, we said that merit should be the main reason for appointing a person, and secondly, we said that the higher courts should be treated slightly differently. If we look at what has been happening, we will see some encouraging signs in the law. When I first qualified as a lawyer, I think about 25 per cent. of solicitors were women; now the numbers coming through university law courses are roughly equal, so we can see improvement on that. There are greater numbers of ethnic minority solicitors and barristers coming through. The trend of ethnic minority solicitors setting up practices that cater to particular communities and their needs has been beneficial and we have seen some role models come through. It has enabled some pioneers to set the way. With that in mind, and on the subject of diversity and the role of the JAC, Lord Carter’s suggestion—it is now being implemented—of making solicitors’ firms larger so that they are more substantial entities that can undertake particular legal aid work, is not very helpful. The ethnic minority senior partners whom I have met have criticised that. They make the point that it creates something of a glass ceiling. If senior partners in small firms that cater to a particular community have to amalgamate with a larger firm, they will no longer be senior partners. Not allowing a member of an ethnic minority community member to be the senior partner in a small firm creates the glass ceiling, which worries me. The other point that is worth mentioning is that, as my hon. Friend said, the Bar Council has a very honourable tradition of trying to widen access to the profession. Geoffrey Vos, whom my hon. Friend mentioned, made that the keynote of his year’s chairmanship. Through that period, he worked with a lot of schools and other institutions to encourage people from poorer backgrounds to come into the law and encourage barristers’ chambers to offer proper scholarships, so that individuals had the money to train or undertake a pupillage. When I started—I went from a state education to the Bar—we had to find money from anywhere to survive during pupillage. I worked in an inner-city settlement in south London. In fact, I got to know the hon. Member for Eltham (Clive Efford) at that time—we used to run a youth football team together. However, it was not easy to become a barrister in those days. What Geoffrey Vos and others have done has been a good thing for the legal world. New clause 20 has a lot of merit, but I have mixed feelings about whether the written tests are a good idea. When they were first suggested, I worried that they would be about being a contemporary, modern kind of judge. We all know the story of the judge who famously asked, “Who are the Beatles?” during a case years ago, and there was the famous case in which a judge made an ill-judged remark about a soap star. I worried that the tests would be very politically correct, but my understanding is that they have not been about knowing who is in “The X-Factor” or who Simon Cowell is, or who Dannii Minogue is sitting next to—
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David Howarth (Cambridge) (LD)Liberal Democrat- Quote
- Who?
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- The hon. Gentleman obviously has all the necessary trappings to become a judge, as he is asking who Dannii Minogue is—[Interruption.] Perhaps he prefers another member of the panel or perhaps he does not know what the panel is. It is a good idea, in some ways, to ensure that candidates have an appropriate level of knowledge. My hon. Friend the Member for North-West Norfolk said that the top barrister or solicitor who wants to be a judge will be bound to know the basic information about how the legislature works and how to apply cases, but if we are trying to widen the ambit for the lower judicial appointments, it may be that having a written test that anyone can take will bring in a few more people. Does the Minister think that it is worth the cost of what is potentially quite a bureaucratic exercise? Historically, one would have said that the sort of people who would be able to apply to become a judge—after years of experience in the law—would not need to do a written test. What is the aim of the test? Is it about modernity, or some basic level of knowledge? Is it about encouraging new applicants but ensuring that they can read and write? In summary, I have great sympathy for new clause 20 and will be interested to hear the Minister’s answers on new clause 22.
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- Mr. HeathLiberal Democrat
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- I listened carefully to the hon. Member for North-West Norfolk (Mr. Bellingham) and I heard much background history of the events that led to the Constitutional Reform Act 2005, but I did not hear a convincing argument in favour of his new clauses. I will address the issues that he raised, but I am not yet convinced that I should advise my right hon. and hon. Friends to support his new clauses—[Interruption.] It is indeed sad that he was unable to persuade me, but perhaps I can demonstrate the holes in his argument. I start from the basis that the constitutional reforms to which the hon. Gentleman referred were, as he correctly said, a hurried and, in many ways, botched job. I was part of the Committee that dealt with those legislative changes and it was clear that, to a large extent, they had been written on the back of an envelope and were not subject to prior consultation. Indeed, they appeared as a complete surprise to most practitioners in the law, who quickly had to respond to what was being proposed and insist—properly—on certain conditions that were eventually part of the protocol that was decided with the Lord Chief Justice.
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- Mr. HealdConservative
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- Does the hon. Gentleman agree that a combination of Lord Woolf and the Conservative and Liberal Democrat parties saved the day by improving the Constitutional Reform Act considerably and, in Lord Woolf’s case, agreeing the concordat? Without that, the changes would have been a disaster.
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- I agree entirely, and it showed good co-operation between the two ends of Parliament and with the senior judiciary, who played an important role in achieving a good outcome from inauspicious beginnings. That is not to say that I object to the vast bulk of the proposals as they ended up, because I felt that they were right. They were changes that many of us had advocated for some time, but their genesis was more predicated—as the hon. Member for North-West Norfolk said—on the needs of political management than on the need for reform in good order. We now have these proposed changes to the proposals that were agreed then. I intervened on the hon. Gentleman to ask him why he felt that it was so important to remove the Judicial Appointments Commission process for the lords justices of appeal but to leave it in place for the other appointments, such as the Lord Chief Justice, the Heads of Division, the puisne judges and other office holders. I am not sure that I received a convincing answer. The argument was that the lords justices of appeal are senior judges, so the process was less appropriate. I would have thought that the Lord Chief Justice and Heads of Division were also fairly senior members of the judiciary, and if the argument held for one it would hold for the other. However, apparently that is not the case. The principal argument seemed to be that the process was bureaucratic, long and less than efficacious. I do not think there is any evidence that the latter is the case. There has been no serious objection to those who have been appointed lords justices of appeal since the process has been in place, nor has there been any criticism of their performance. So that is not a justified complaint. In terms of the length of the process, the hon. Gentleman made great play of what the Constitutional Reform Act says. It is a fact that when any sort of process is set out in statutory form, it necessarily sounds more complicated than it actually is. That is how the law works and how statutes look. In fact, it is a very simple process. The Lord Chancellor requests the JAC to fill a vacancy. The JAC appoints a selection panel, which submits a report to the Lord Chancellor about the person it has chosen, and the Lord Chancellor may reject the selection, require it to be reconsidered or accept it. Of course, once he has exhausted the other options, he must accept the JAC’s decision. That is not a difficult process. It is the sort of process that any appointment procedure, other than the most archaic or rudimentary, would follow. It is a simple system of setting up a shortlisting process and then accepting the recommendation of the shortlisting committee in due course. I do not accept that it is an unnecessarily prolonged process.
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- Mr. TimpsonConservative
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- Why does the hon. Gentleman think that the Joint Committee came to the position that the JAC was being criticised for inefficiencies and delays in the judicial appointments process?
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- Mr. HeathLiberal Democrat
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- Obviously, a process, however simple, can be delayed in its execution. It might well be that those criticisms were entirely justified, and if so, I hope the JAC takes them into account and addresses the cause of the delay. I hope, too, that the Ministry of Justice is equally engaged in the process. However, I do not think that we can criticise a process for delay if the cause of the delay is not inherent in the process. That seems to be the crux of the argument. The hon. Member for Crewe and Nantwich (Mr. Timpson) might have a justifiable complaint—I do not have the information to agree or disagree with him—but I do not see that the cause of the delay is inherent in the process set out in statute. There should be no substantial delay other than that necessary to do a good job in appointments.
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- Does the hon. Gentleman think there would be any difficulties with a system in which the Lord Chancellor asks the Lord Chief Justice for the runners and riders for the Court of Appeal and produces a shortlist? Would that produce a different list? If so, why?
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- Mr. HeathLiberal Democrat
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- In the case of the current Lord Chancellor and Lord Chief Justice, the difference would probably not be very great. However, the hon. Gentleman knows his history, and he knows that the history of judicial appointments has not always been a good one. He knows that, in the past, some Lords Chancellor have blatantly abused their position in respect of judicial appointments. He might recall Lord Halsbury, who had a fearsome reputation for advancing the careers of those who shared his friendship or political persuasion. There are many other examples. The House should identify with—and it has done so in the process proposed in the Bill—a system that moves us away from the old-school club, from the magic circle and from decisions made between chums in fine dining rooms about who to put forward. That touches on one of my great criticisms of new clause 22: it does not propose an alternative process for the appointment of Court of Appeal judges; the suggestion is simply that they will “emerge”—I have heard that expression used several times in this debate. Well, we know what emerges from such a process: people who are male, who are educated in certain institutions, who share a commonality of background, but who do not necessarily represent those with the greatest merit for judicial appointments and who certainly do not represent the diversity that is beginning to develop, quite rightly, among the judicial, and indeed lawyer, populations in this country. The hon. Member for North-East Hertfordshire (Mr. Heald) makes an important point about how the situation has now developed—he applauded it, and I know he is genuine. However, he cannot then have a process that, at the end of the day, depends on who someone knows, rather than on a proper, transparent appointment process.
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- It is one thing to hark back to the Victorian period, but the ladies justices of appeal, who have been so successful in recent years, were all appointed under the old system.
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- Mr. HeathLiberal Democrat
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- But not enough of them. And look at the Supreme Court—there are not enough there! We cannot hold up the current population in the higher levels of the judiciary and say that it reflects modern Britain. However, it is not because of a paucity of candidates that we cannot address that situation, which is why I think it is important to have the judicial appointments system as it currently is. I agree with the Law Society, which rejects the proposal from the hon. Member for North-West Norfolk. It says: “The fear must be that there would be a reversion to the old system of secret soundings and appointment by the Lord Chancellor. That would be a wholly retrograde step.” I, too, believe that it would be. I am surprised that the proposal has been put forward, not just because it is so partial—it would abolish the process for only one class of judicial appointment—but because of the effect that it would have in terms of reversion. On the written test, I am clear that there might be arguments on both sides. Criticisms have been voiced in legal circles about the tests, although some of them sound rather precious—as if there is some indignity involved in taking part in a proper appointments process. Senior appointments in other fields involving written tests, or something similar—presentations and so on—are made every day of the week. Nobody else sees it as an affront to their dignity to apply for a job and go through a proper selection process. Nobody else, whether a head of human resources or of a finance department, when they apply for a job as a chief executive, feels it an indignity to be known to be applying for a job and going through a selection process that might involve tests of some kind.
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- Mr. BellinghamConservative
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- Ministers don’t!
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- Mr. HeathLiberal Democrat
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- There is an awful lot wrong with ministerial appointments, but let us not divert ourselves by discussing what is wrong with those. The hon. Gentleman might well be right—but there we are! In any case, the sort of person who will be put off by the process is the sort of person whom I am not sure I want as a judge, because it suggests that they have such high regard for their own dignity that they perhaps could not do the job as I, and many others—I think—would want them to do it. I note again the partiality of the new clause. In this case, it deals only with the selection procedure for puisne judges, and not other selections that the JAC makes. They alone would not have the written test. There is another point here, and it is the exact opposite of what the hon. Member for North-West Norfolk said. He argued, I think, that the written tests will present an obstacle to diversity in the appointment of judges. That is the reverse, of course, of what the Law Society thinks. It says that they will be an assistance, and I think that they probably will be too. They will be an assistance to people who do not fit what has been—and I hope is no longer—the conventional view of what a judge ought to look like, because they provide an objective way for candidates to demonstrate that, whatever the preconceptions of those making the appointment, they have the technical ability, the level of judgment and the facility to perform in the way required of a judicial appointment. There is clear evidence that that process is helping well qualified, able and meritorious candidates to make progress in this area when otherwise they would not. But does that mean that the procedures cannot be improved? I am sure that if I had the ability, I could look at the written tests and see areas where they could be improved. Indeed, it would be remarkable if they could not be. However, I cannot see it as an affront to a well qualified barrister to ask them to go through a simple process before appointment or candidacy as a judge. I do not see engaging in such a process as below their self-esteem; indeed, for some candidates it is a benefit and helps to assess people who might otherwise not be considered as suitable for judicial appointment. On the basis of both those arguments, I am not persuaded by the case put forward by the hon. Member for North-West Norfolk. I fear that he seeks to take us backwards, to an era when the magic circle did everything, when everything was decided by nudges and winks, and when what emerged was the same old type of person, who conformed in every way to the same old image of a judge. That is exactly what this House has been trying to avoid in the legislation that it has put in place over recent years.
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- Mr. HealdConservative
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- Is not the fault in the Minister’s thinking the fact that, in Britain, that has never been our way of doing things? In Britain, all the power in the country is focused in the Cabinet, where we had the Lord Chancellor, a judge who spoke up for the judiciary, the Leader of the House, who spoke up for the Back Bencher, and the Attorney-General, who spoke up for the legal profession. That is an odd way of doing things, but it was our way, and now the Minister has broken it.
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- Mr. HealdConservative
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- I agree with the Minister that there are elements of separated powers in Britain, because each of the institutions has fought for its rights. The judges fought for theirs, Parliament fought for its right over the King, and so on. However, the compromise was that we had to have representatives of all the main interests right at the heart of power, at the Cabinet table, because the Executive are not separate from our Parliament. The Government fell into error by breaking the role of the Lord Chancellor, and that is why we have to have a massive concordat and a great big Bill to deal with this. I still worry that Ministers do not understand that we do not have a true separation of powers, as they do in America; that is not our system.
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- Jeremy WrightConservative
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- Is not the central thesis of the argument put forward by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) that if it ain’t broke, don’t fix it? The problem here is that the Government have embarked on a programme of constitutional reform with regard to the judiciary that they did not need to start and that they have no idea how to finish. The Minister cannot possibly argue that the independence of the judiciary was weak before these reforms and is stronger now. The judiciary challenged Executives of both political colours in a robust way well before the Judicial Appointments Commission was thought of.
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- David HowarthLiberal Democrat
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- May I support the Minister even further? It is clear to those who have studied the judiciary over long periods that the quality of judicial appointments under the old system was highly dependent on the quality of the Lord Chancellor of the day. There were some immensely good Lord Chancellors, but, to be frank, others were not so good.
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- Mr. BellinghamConservative
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- I will be brief. The Minister has been his normal charming self. I do not agree with everything he said, but I listened carefully to his comments on our new clause 20, and to the compelling points of the hon. Member for Somerton and Frome (Mr. Heath). Although we in no way resile from the arguments we put forward, I accept what the Minister has said. On that basis, I will not press new clause 20, but I would nevertheless like to put new clause 22 to the vote at the appropriate stage. I beg to ask leave to withdraw the clause. Clause, by leave, withdrawn. New Clause 21 Chief executive of the Supreme Court ‘(1) The Constitutional Reform Act 2005 is amended as follows. (2) Omit section 48. (3) Omit subsection (2) of section 49. (4) In subsection (1) of section 51, for “chief executive” substitute “President”. (5) In subsection (1) of section 54, for “chief executive” substitute “President”.’.—(Mr. Bellingham.) Brought up, and read the First time.
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- Mr. BellinghamConservative
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- I beg to move, That the clause be read a Second time. New clause 21 relates to the Supreme Court. Again, I declare an interest as a barrister. The background to the establishment of the new Supreme Court was due entirely to the Constitutional Reform Act 2005, the relevant section of which made it clear that the Supreme Court would be set up. Section 48 refers to appointing a chief executive. This reform was part of a wider package, which we discussed in detail on earlier new clauses, and I do not want to repeat those discussions. It is worth pointing out, however, that the Judicial Committee of the House of Lords—the Law Lords, as they were known—did a first-class job. No one complained that they were not doing a good job. No one complained that their location in any way inhibited or restricted their professionalism or their work. They started off, many years ago, in the main Chamber of the House of Lords, but as pressure on business increased they were exiled to a Committee room on Committee corridor.
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The Temporary Chairman (Janet Anderson)Labour- Quote
- Order. I remind the hon. Gentleman that we are discussing whether to have a chief executive of the Supreme Court. I would be grateful if he restricted his remarks to that.
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- Mr. BellinghamConservative
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- I will come on to that quickly, and I am grateful to you, Mrs. Anderson, for that reminder. Obviously, it is difficult to explain what the chief executive is about without looking at what the chief executive does, which is preside over the Supreme Court on which the former Law Lords are judges. Although one might well have taken the view that it was quaint, quirky, anachronistic and so on to have Law Lords sitting in a small Committee room, the arrangement worked very well. However, it was decided that they should be moved across to the new Supreme Court. Obviously, that decision was taken at a time when the economy was booming, and no one worried too much about the costs. The original estimated cost was £30 million, which then went up. As we know, the ultimate capital cost of the Supreme Court came in at £58.9 million: a vast amount of money to locate those judges in a new building when they had a perfectly good place to sit already. I believe that only one Law Lord agreed, and publicly stated, that it was a good idea to move across to the Supreme Court. The other Law Lords were all opposed to the move. They felt that the existing arrangements worked extremely well. I will not dwell on the capital costs, however, because I want to consider the current costs of running the new Supreme Court. Let us consider the previous arrangements that were in place in the House of Lords. Of course, it is difficult to work out exactly what the costs were, but the cost of the Clerks, the Librarian and the other officials who serviced the Law Lords amounted to roughly £600,000. That was not a huge sum, and I think that it represented very good value for money. Back in July it was announced in a written parliamentary answer that the running costs of the new Supreme Court would be £12.3 million. That is a pretty staggering figure compared with £600,000. The new chief executive, who is the subject of new clause 21 —
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- Mr. BellinghamConservative
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- I am certainly confident that I am comparing like with like. The actual costs of running the Judicial Committee of the House of Lords amounted to £600,000.
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- Mr. BellinghamConservative
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- Yes—the actual administrative costs: the running costs. As Hansard shows, in 2005 the Minister replying to the debate in the House of Lords agreed that the actual costs amounted to £600,000. Obviously the costs of the salaries and pensions of the Law Lords were additional to that. The original figure given for the running costs of the Supreme Court back in July was £12.3 million, to which must be added the salaries and pensions of the Law Lords. Between July and September, that figure rose to £13.5 million. May I ask the Minister who is in charge of these costs? Who is controlling them? Six full-time staff serviced the Law Lords, and I think that they did a very good job in looking after their interests. There are 39 people in the new Supreme Court. The other day I tabled a parliamentary question asking “how many employees of the new Supreme Court earn more than (a) £50,000, (b) £75,000 and (c) £100,000 a year.” The reply was as follows: “The Supreme Court has 39 employees. Of those 39 employees, four earn between £50,000 and £75,000, one earns between £75,000 and £100,000, and one earns more than £100,000.”—[Official Report, 2 November 2009; Vol. 498, c. 747W.] The employee who earns more than £100,000 is the chief executive. I take on board what the Minister has said about the separation of powers, but I disagree with it profoundly. I have always taken the view that we do not have an American-style separation of powers in this country. Our judiciary has always been entwined with the legislature: that is one of the great strengths that our constitution has had for many years. Do we really need 39 employees to run the Supreme Court in that fantastic building across the way? Do we really need a chief executive who is paid a salary of more than £100,000? Perhaps it is £140,000; I do not know. Certainly it is far more than the Minister earns. Why do we need a chief executive? The new clause seeks to make a start—a small start—on reducing the costs of the Supreme Court. I do not think that there is any justification for increasing the number of staff from six to 39, or for appointing a chief executive. What will the chief executive do? What will the director of finance do? What will the director of communications and the other directors do? Why cannot the Supreme Court be run with a senior Clerk, perhaps a few caretakers and a couple of librarians? Let us get the cost down to a sensible level. As the Minister well knows, the Conservatives would not have gone down the Supreme Court route. On the other hand, we are pragmatic politicians. We are not going to simply scrap the arrangement and spend a lot of money on reversing these changes. What we do want to do, if we win the election, is ensure that the court works more efficiently and gives better value for money. We do not believe that a cost of more than £13.5 million, and probably rising, represents good value for money.
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- David HowarthLiberal Democrat
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- I am now a little concerned by the hon. Gentleman’s argument, because it seems to me that it means that, whatever the current tasks of the chief executive, under the new clause those tasks will be transferred to the president of the court. Has the hon. Gentleman made any estimate of the increase in the president’s work load arising from his proposal, or is he assuming there would be none?
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- Mr. BellinghamConservative
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- The hon. Gentleman is a distinguished academic and we have debated such issues many times. He will remember that when he and I started out on our legal careers, judges ran their own courts. Long before Her Majesty’s Courts Service—employing 20,000-plus people—judges ran their courts, and they exercised control of all aspects of their administration. Those judges would run large combined courts, employing substantial numbers of people and manage a very complex case load—and they would also manage large numbers of litigants, solicitors and barristers who came before the court on a daily basis. On the Supreme Court, I entirely accept what the hon. Gentleman says. We do not want its president to be bogged down with a huge amount of administration and a lot of minor detail. That is why he needs to have a staff, but does he need a staff of 39, and does he need a chief executive? I suggest that this modest proposal of removing the post of chief executive would be a very good start, because it would send a signal to the Supreme Court that it must deliver value for money and be run efficiently. Furthermore, let us take another look at the Department’s budget, which is under immense pressure. There are court buildings that need to be repaired, the legal aid budget is in crisis, there is a crisis over access to justice, law centres and advice centres are closing by the dozen, legal aid deserts are appearing, and young lawyers are forsaking publicly funded work, and all because tiny amounts of money are being taken out of the legal aid budget. Yet here we are looking at the running costs of the ultimate appeal court in the land going up from about £600,000 to almost £14 million, employing a chief executive on a very large salary in a post that my party thinks is superfluous to requirements. The new clause has been proposed in the spirit of trying to get better value for money and making sure that the delivery of justice in this country is more streamlined and efficient—which is exactly what the Minister said that he wants too.
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- Mr. HeathLiberal Democrat
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- I was expecting a totally different argument from the hon. Member for North-West Norfolk (Mr. Bellingham). I thought he was going to present an argument with which I have a degree of sympathy. Indeed, given the words on the amendment paper, I can still make his new clause fit my aspirations—but for the wrong reasons, it would appear. I thought he was trying to make sure that the role of the chief executive and the running of the Supreme Court were transferred solely to the authority of the president of the Supreme Court, thus cutting out the middleman, the Lord High Chancellor, who is responsible at present for the staffing levels the hon. Gentleman has described and for the salary enjoyed by the chief executive. At present, the whole shebang is nothing to do with the president, other than in a consultative capacity. It is all down to the Lord High Chancellor, who has made his decisions about the proposals. I thought the hon. Gentleman would express support for the ongoing process of separating out the legislature and the Executive from the courts by giving the courts proper responsibility for running their own affairs in this discrete aspect. I have heard the arguments, however, and I now understand that he wants to do exactly the opposite. He wants this House to interfere with the running of the Supreme Court and its president to undertake a new raft of functions that involve making sure the lights are switched off and the boiler is mended. I am not sure that that is a sensible use of the time of the president of the Supreme Court of the United Kingdom. The hon. Member for North-West Norfolk believes that it is, but his argument in favour is based on costs that sounded rather speculative to me. He cited some figures—I shall be interested in what the Minister has to say about those—but the comparison being made did not seem to be exactly like for like; I did not note, for example, any property costs in terms of housing the Law Lords in the House of Lords. That apparently costs nothing at all and is, thus, not to be used as a comparator, and I suspect that some of the hon. Gentleman’s other arguments are not entirely accurate.
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- Mr. BellinghamConservative
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- rose—
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- Mr. HeathLiberal Democrat
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- The hon. Gentleman wishes to intervene on the subject of carpets.
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- Mr. BellinghamConservative
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- The hon. Gentleman obviously never appeared before a Crown court judge in that building when it was a Crown court. It was a lugubrious, grotty building then, but I agree that the work has been done to a very high standard, and the architects need congratulating. Obviously, as £60 million has been spent, one would expect a Rolls-Royce building, and that is what we have got.
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- Mr. HeathLiberal Democrat
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- We have got an excellent building. Those who represent the top of this country’s judicial processes deserve an appropriate building. Far from being lugubrious, I suspect that it is now a rather good place to work. It has retained the best features of the Middlesex Guildhall intact; I am particularly pleased that the building contains a very prominent portrait—there might be two in the building—of John Fielding of Somersetshire, who did so much to establish our modern judiciary and the role of modern courts. I am a great supporter of the Supreme Court and of how it has developed. Should it be for the Lord Chancellor now to have any involvement in the day-to-day running of that court? My answer to that is no. However, although I thought that I could have couched the hon. Gentleman’s new clause in more felicitous terms, it would achieve a result that I could support. That leaves me in a great dilemma were he to call a Division, because were I to support him it would be for reasons almost diametrically opposed to those for which he believes his proposal is necessary. I would be tainted by association with his arguments and I do not want that, nor do I want my hon. and right hon. Friends to be so tainted. I hope that the Minister will advance such a strong argument in rebuttal that the hon. Gentleman will withdraw his new clause. I also hope that on another occasion we will look at properly strengthening the role of the president of the Supreme Court, not by making him empty the dustbins, but by allowing him to appoint his own staff. He should make the dispositions on staffing and any other arrangements of the Supreme Court that he thinks best, rather than come back to the Lord Chancellor to ask for permission. I would support amendments along those lines, because having set up this new body, with which we should be very pleased, now is the time for the Lord Chancellor to let go. That takes us back to the debates that we had earlier this afternoon and the reluctance, it would seem, of the Executive entirely to let go of matters that are within their power. I hope that the Minister will be able to tell us that in the long term that is precisely what the Government intend to do.
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- Mr. BellinghamConservative
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- The Minister has challenged me, and I shall investigate this fully, but surely the point is that the Law Lords shared our security, which was in place anyway to protect the many thousands of people who use this Palace, and our facilities. One would often see Law Lords going down to the Terrace cafeteria for a snack. The cost was obviously heavily subsidised, because they were one—or 12—of a large number of people using the facilities. Now they have their own dedicated facilities, and of course it costs much more.
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- Mr. TimpsonConservative
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- I take the Minister’s point about the Supreme Court’s being the apex of our judicial system, but most members of the public who have to access our judicial system tend to do so at the lower end—in the magistrates courts and family proceedings courts. When they see their magistrates courts in a poor state of repair and, on occasions, see them closing, it makes it even more important that the cost of the Supreme Court—every penny—is justified. When we hear sums for running costs in the region of £13 million, compared with what it would cost to run a local magistrates court, it is important that that case is made clearly and forensically. I suspect that that is the point that my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) is trying to make, to ensure that we are getting value for money.
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- Mr. HealdConservative
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- Will the Minister give way?
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- Mr. BellinghamConservative
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- The Minister, in his usual charming way, has been extremely persuasive. Although he made some good points, we do not in any way resile from the arguments that we advanced. Our point is simple: the chief executive post at such expense is a huge luxury. What is wrong with a senior clerk or a manager on a much lower salary carrying out those admin roles? That is what we would like to see, but because of the Minister’s charm and persuasion, I beg to ask leave to withdraw the clause. Clause, by leave, withdrawn. New Clause 22 Written tests by the Judicial Appointments Commission ‘(1) Section 88 of the Constitutional Reform Act 2005 is amended as follows. (2) After subsection (5) insert— “(6) At no stage during any selection procedure may the Commission apply any written tests.”’.—(Mr. Bellingham.) Brought up, and read the First time. Question put, That the clause be read a Second time.
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Kelvin Hopkins (Luton, North) (Lab)Independent- Quote
- I beg to move amendment 68, page 18, line 19, at end add— ‘(9) The principal function of the Comptroller and Auditor General is to further the purposes of national audit set out in section [Purpose of Part 7] by way of investigation and report.’.
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The Chairman of Ways and Means (Sir Alan Haselhurst)Conservative- Quote
- With this it will be convenient to discuss the following: amendment 78, in clause 38, page 19, line 2, at end insert— ‘(6A) The Comptroller and Auditor General shall also have discretion to examine the accounts of any organisation supplying goods or services paid for out of public funds, which within any one contract, or any one financial year, exceed a sum to be determined from time to time by statutory instrument.’. New clause 41—Purpose of Part 7— ‘The purpose of the following provisions is to further strengthen Parliamentary control and supervision of the expenditure of public money, and for promoting economy, efficiently, effectiveness and probity in the use of such money by government departments and other authorities and organisations.’.
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- Kelvin HopkinsIndependent
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- It gives me great pleasure to speak to these amendments, if briefly. In a major piece of legislation it is important that its purposes should be clear, but the Bill nowhere specifies the purposes and aims of national audit, although the National Audit Act 1983 does so. The amendments are intended to remedy that omission.
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Mr. Alan Williams (Swansea, West) (Lab)Labour- Quote
- That is not the purpose of the Bill. The statutory powers are already in place, and the purpose of this part of the Bill is to bring better governance into the processes of the National Audit Office.
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- Kelvin HopkinsIndependent
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- I accept entirely what my right hon. Friend says, but I hope that one purpose of the Bill is to restate the objectives of audit.
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- Mr. Alan WilliamsLabour
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- indicated dissent.
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- Kelvin HopkinsIndependent
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- Clearly my right hon. Friend and I disagree, but I hope it will be accepted that the restatement of the 1983 Act would not go amiss in the Bill. New clause 41 is intended to be inserted at the head of part 7. It repeats the opening of the 1983 Act, with the addition of the word “probity”, which seems appropriate in current terms. Amendment 68 is intended to make clear the function of the Comptroller and Auditor General in relation to the purposes of national audit, and amendment 78 takes account of the modern circumstances in which private firms and third-sector organisations can receive a significant proportion of their funds—up to 80 per cent. in some cases—from the public purse. When the services that they provide were provided directly by public authorities, they were subject to the Comptroller and Auditor General or to local government audit. Modern suppliers of services receiving public money should be subject to the CAG, as plcs will be under clause 50. It is important to reassert the importance of the CAG and national audit. In the last Parliament, there was a brief, surreptitious attempt by the Government to insert a degree of Treasury control over national audit. That was seen off by a combination of Labour Members, Opposition Members and the House of Lords, and the Bill never proceeded, but it is important that we now reaffirm our commitment to national audit. After all, our primary purpose is to vote moneys for government on behalf of the people. We must ensure that what moneys we vote are spent appropriately. That is what national audit and the CAG are all about.
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Mr. David Gauke (South-West Hertfordshire) (Con)Independent- Quote
- I thank the hon. Gentleman for tabling these amendments and the new clause. I suspect that the question whether it is necessary to reassert such objectives in this Bill given that the 1983 Act, which also states them, is not being repealed, will be addressed in a moment, but the CAG’s objective of carrying out examinations of the economy, efficiency and effectiveness of public bodies is, as the hon. Gentleman says, very important. Perhaps it is more important now than ever, at a time when we will see spending restraint. The Government are spending more than ever before and, indeed, borrowing more than ever before in peacetime, so the focus must clearly be on achieving more for less. The NAO and the CAG have an important role in achieving that. Taxpayer value for money should unite us all—it should not be a partisan point—whether we are left or right. I do not think the hon. Gentleman will take it as a criticism if I say that it does not get more left wing than him. We must all ensure that public spending achieves good value and it is worth paying tribute to the work that the NAO and various CAGs have performed to achieve that. We may differ on how to achieve greater economy, efficiency and effectiveness in public bodies, and in many ways, this is a matter for great political debate—I am sure the hon. Gentleman would not necessarily share the Conservatives’ views about the importance of choice, competition and contestability in achieving better value for money. However, there is a less political role, and the NAO performs it very well, in conjunction with the Public Accounts Committee. The new clause refers to Parliament’s important role. As I said, we could question whether the amendments are necessary, but the objective of the NAO and the CAG is important. I have one or two points to make on clause 37. If there is a stand part debate on it, I will do so then.
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- The ChairmanConservative
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- Order. I was hoping not to have a stand part debate in view of the fact that, with the new clause, this is a fairly wide grouping.
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- Mr. GaukeIndependent
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- In which case, Sir Alan, I shall make those points now. This part of the Bill, as the Father of the House has said, is predominantly to do with the governance of the NAO and the CAG, and there is a combination of continuity and change in the new arrangements. I think it would be fair to provide a little background on how we got into this situation and why there was a need to look again at the governance of the CAG—doubtless the Chairman of the PAC, my hon. Friend the Member for Gainsborough (Mr. Leigh), and the Father of the House will say things to the same effect. We cannot ignore the fact that there was some adverse publicity regarding the expenses of Sir John Bourn, who was CAG for some 20 years or so. It is a great pity that there was a cloud over the last few months of his service, because he was a distinguished Comptroller and Auditor General. He did much to enhance the reputation of the National Audit Office and worked very effectively with the Public Accounts Committee. Nevertheless, there was some concern and adverse publicity over his expenses, which in many respects led to the commissioning of the Tiner review and various recommendations made as to the governance of the Comptroller and Auditor General and the NAO. I wish to make various points about corporate governance at a later stage, but two points are appropriate to address in the context of clause 37. The first is the length of term of the Comptroller and Auditor General, and the second is the appointment process. Clause 37(7) provides that the length of term should be 10 years and subsection (8) provides that it should be non-renewable. We welcome those provisions. The tension that exists in the Government’s arrangements in this area relates to independence and accountability, and that is a point to which we may return later. However, a non-renewable term of a reasonable length gives the CAG a degree of independence. The Tiner review initially suggested eight years, and we now have 10 years in the Bill. No doubt others will explain the reason for that change, but it is not enormously significant. We welcome those provisions. The issue of the appointment process has been touched on recently in a couple of debates when new Comptrollers and Auditors General have been appointed. I have had the opportunity to speak in both debates—first, on the temporary appointment of Mr. Tim Burr in January 2008, and secondly, on the appointment of Mr. Amyas Morse as the permanent CAG. The debate has centred on whether the existing structure, which has been in place since 1983—by which time the appointment was made by a combination of the Chairman of the Public Accounts Committee and the Prime Minister—is appropriate or whether Parliament should have a wider role, and remove the Prime Minister and the Executive from the process, either altogether or with a diminished role. Another issue is whether pre-appointment hearings should be introduced. This is not a new debate. In the debate that took place when Sir John Bourn was appointed, the Parliamentary Secretary to the Treasury, the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), then the Opposition spokesman, said, on the question of a greater role for Parliament: “The Labour party intends to give effect to this principle when in government.”—[Official Report, 16 December 1987; Vol. 124, c. 1201.] The argument for that approach is that we should have greater parliamentary involvement in public appointments. It is an argument that the Prime Minister espoused in his very first statement to this House as Prime Minister. It is one with which I have some sympathy, as it seems to be a more democratic approach, but there are specific arguments that apply in this context that suggest that the continuation of the present system may be a sensible approach. The first argument is that the Chairman of the Public Accounts Committee is a Member of the Opposition. That is a long-standing convention, and one that I am sure will continue. The Chairman has a substantial role in determining an appointment. In fact, by and large, as I understand it, in practice the Chairman essentially makes the selection, which is then approved by the Prime Minister. It is important that the CAG is seen as independent of the Executive, and an appointment made by a senior Opposition Member demonstrates an important degree of independence.
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- Mr. HealdConservative
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- I have been wondering whether the CAG would be the right person to be in charge of the office for budget responsibility that the Conservative party has proposed. I wonder that for exactly the reasons that my hon. Friend has outlined: the independent nature of the CAG appointment process.
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- Mr. GaukeIndependent
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- I am grateful for my hon. Friend’s intervention. That would be an interesting structure, although I would be reluctant for the CAG to perform that role. Although the CAG and whoever would be in charge of the office for budget responsibility would play an important role in budget responsibility, I would not want to complicate the role of the CAG because it is a substantial job in itself. Furthermore, the skills required of the CAG—being able to identify waste in specific programmes—involve performing a role at a micro level in identifying particular problems, whereas we envisage the office for budget responsibility working at much more of a macro level. It would be a role for an economist to assess the needs of the Government in reducing the deficit, and the progress—or lack of—made by the Government in achieving those objectives. The parallel is strong in that both roles require a high degree of independence to have the credibility required to perform successfully.
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- Mr. HealdConservative
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- My first thought was that, to assess the sustainability of public finances, we need expert economists, as my hon. Friend just said. However, there would be two other aspects of the role of the new office: to audit fully the national debt—or debts—and to enforce a long-term strategy of value for money in public spending. Those fit in well with the role of the CAG. Would there be any logic to giving him that role? I simply cast out that thought to him.
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- Mr. GaukeIndependent
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- I am grateful to my hon. Friend, and I am sure that his points will be noted. Both roles would be important. It is helpful to the Committee highlight the significance of the office for budget responsibility, and I think that we agree on the significant role that it would play—I hope—in addressing the current huge levels of borrowing. I hope that it would be important, just as the CAG has been important. On clause 37, we think, on balance, that the result that we have got to, which is largely a continuation of the previous process, is an important one. We are pleased that it remains a requirement for the Prime Minister to move the motion for the appointment of the CAG. As I said, I have had the pleasure of responding to the Prime Minister twice when he has performed that role—I am sure that he was delighted to have that opportunity too. All being well, however, such a motion should not happen very often—once in 10 years, as the Bill envisages—although it is always possible that things will not go entirely to plan. Because of the independence provided by the Chairman of the Public Accounts Committee, there is a danger that the existing independence might be diminished in those circumstances by a straight vote in Parliament—whether a vote in Committee or a vote by the whole House—given that the Government will always be the majority party. Consequently, we welcome clause 37.
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Mr. Edward Leigh (Gainsborough) (Con)Conservative- Quote
- I rise to speak in favour of clause 37, which covers the office of the Comptroller and Auditor General, and to oppose amendments 68 and 78, and new clause 41. A number of provisions already protect the independence of the post holder, including the appointment process, the length of tenure and the terms of the appointment. Let me start with some context, so that we can understand the significance of the legislation, why it is important to be clear about the purpose of the Bill and why we must tread carefully in this territory. The Comptroller and Auditor General is an Officer of the House of Commons. He is not a civil servant and is completely independent of the Government. Uniquely, he is selected by the Government and the Opposition. He reports to Parliament on the activities of the Government and his work is overseen largely by the Public Accounts Committee—the oldest Committee in Parliament, which was set up 150 years ago—which is always chaired by a member of the Opposition. Therefore, there are a number of locks throughout the process to ensure the independence of the Comptroller and Auditor General. All those arrangements are supported by complex legislative structures and significant parliamentary conventions, many of which have existed for a long time. The result of all those conventions and laws, as well as what we are talking about in clause 37, is to enable the Comptroller and Auditor General to function absolutely independently of the Government. That is what they all do. He must have complete discretion in how he carries out his functions. I worked closely with the Father of the House, after the retirement of Sir John Bourn. We were clear at all times that we must not mess with the traditional independence of the Comptroller and Auditor General. There may be an opportunity later to discuss the corporate structure and all the rest of it, but the fundamental point is that the Comptroller and Auditor General is completely independent of the Government and that he alone and nobody else—not the Public Accounts Committee and not the board of the National Audit Office—signs off the reports. Nobody else can affect his judgments. He is completely independent, and that is vital. That statutory independence, which is underpinned by the new Bill, is not a notional phenomenon, shrouded in cobwebs and dating back centuries, or at least back to Gladstone. Rather, it is real, it is current and it forms a key plank of our constitutional fabric. One only has to look around the world at what has happened in other countries to know how important it is—indeed, vital—to have an independent supreme audit office. Every country has a supreme audit office, but not all of them are as independent or effective as ours. Indeed, ours is arguably the best in the world. I am therefore pleased that the current arrangements, whereby the Comptroller and Auditor General’s appointment is proposed by the Prime Minister following consultation with the Chairman of the PAC, have endured—I say “consultation”, but it goes much further than that. Frankly, they both have a veto. This gentleman—Amyas Morse, although the Comptroller and Auditor General may be a lady in the future; we do not know—can be appointed only if the Prime Minister, who is obviously a member of the Government by definition, and the Chairman of the PAC, who by convention is a member of the Opposition, both agree. In fact, in appointing the current Comptroller and Auditor General we improved the process further. Last time, when Sir John Bourn was appointed, my predecessor, Bob Sheldon—now Lord Sheldon—was given a list by the civil service and he interviewed the candidates in his flat. It was a closed process. We now have an open competition, and this time there were a number of advertisements, and anyone could apply. The interviews were carried out at length by myself and the permanent secretary to the Treasury, who represented the Prime Minister. I would like to thank the permanent secretary for the many hours of work that he put into this. By that stage, we had already appointed the new chairman of the National Audit Office, Sir Andrew Likierman, and he was also involved in the latter part of the process. We had an open competition with a number of good candidates, and I believe that we came out with the best.
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Mr. Philip Dunne (Ludlow) (Con)Conservative- Quote
- My hon. Friend has just referred to the chairman of the National Audit Office having some involvement in the selection of the current Comptroller and Auditor General. Will he elaborate a little further on the relationships involved, in the context of the appointment of a Comptroller and Auditor General? The Prime Minister is involved, as is the Chairman of the Public Accounts Committee, but what is the role of the chair of the National Audit Office in the appointment of its chief executive?
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- Mr. LeighConservative
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- The chairman’s role was simply to advise. He is a very distinguished gentleman—he is the dean of the London Business School, and he was head of the Government resources office in the Treasury—and he simply gave me advice. Obviously, I am not going to reveal who was on the shortlist or what happened in the discussions, but I can say that, ultimately, the decision was mine and no one else’s. I listened to his advice and that of Tim Burr, the then Comptroller and Auditor General, who was also on the selection panel as he was not a candidate himself. Nick Macpherson, the permanent secretary to the Treasury, also gave me his advice. I chaired the meeting, and I made the decision: I appointed the new Comptroller and Auditor General. Then, however, my decision had to go to the Prime Minister, and I give him credit for acting promptly, because, within a week, he had approved the appointment. So he, too, had a lock on the process. Of course, it is not surprising that he approved the appointment, because Nick Macpherson was part of the process. If I had insisted on appointing someone who was obviously not qualified, the Prime Minister would have vetoed it. So we each had a lock on it, and that is a very good process. It might sound democratic to suggest that the House as a whole should vote for the Comptroller and Auditor General, but that would go against everything that I have been arguing for—namely, that the Opposition and the Government should both have a lock on the process. If the House as a whole voted on the appointment, the Government party would effectively appoint him.
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- Mr. Alan WilliamsLabour
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- Does the hon. Gentleman recollect that the one proposal that we turned down from Tiner was his suggestion that the chair should be selected by the Prime Minister and the chair of the Commission? We unanimously rejected that, because the chair of the Commission is chosen by the Prime Minister, or by the Government party, and is of the same party. For that reason, we insisted on reverting to the situation that the hon. Gentleman enjoyed.
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- Mr. LeighConservative
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- It was the same process. I am grateful to the Father of the House for his generous offer to surrender his right to appoint the chairman of the National Audit Office, along with the Prime Minister; that was what was originally proposed. We immediately spotted the problem that he has just alluded to—namely, that that would effectively mean that the Government party would appoint the chairman. The right hon. Gentleman therefore immediately, and very generously, surrendered that right. Just as there was an appointment panel for the Comptroller and Auditor General, there was also one previously for the chairman. Again, the Prime Minister, as a member of the Government, and I, as a member of the Opposition, had a lock on that process. So I think that we have the right structure. The independence of the Comptroller and Auditor General is guaranteed by a jigsaw of measures that hang together as a whole, and we should be very wary of unpicking any one part of it without careful consideration. We do not know what is going to happen in the future. There could be some kind of appalling financial scandal at the heart of the Government, for example, and it is absolutely essential that this man—or lady—is completely independent. Central to this has always been the fact that the Comptroller and Auditor General also has tenure of appointment and, like a judge, cannot be removed from office except on a vote of the entire House of Commons. The Public Accounts Commission, which I also sit on—it is, of course, separate from the Public Accounts Committee—has concluded that the current unlimited appointment was “anachronistic”. I do not think that when Sir John Bourn was appointed anyone spotted that the civil service retirement age at the time was 60: it was rigidly enforced; all senior civil servants had to retire at 60.
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- Mr. Alan WilliamsLabour
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- Will the Chairman of the Public Accounts Committee bear in mind that there is an important extra safeguard even there? If a vote of only this House were required, the Government could use their majority, which is why a vote of both Houses is required to dispose of the Comptroller and Auditor General.
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- Mr. LeighConservative
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- I should have made that clear; it is a very important point. In other words, it is virtually impossible to get rid of him. That is absolutely right. I was saying that the previous appointment was anachronistic and that no one spotted at the time Sir John Bourn was appointed that even though the civil service retirement age was 60, he could basically go on. I had a very good relationship with Sir John Bourn, who was outstanding public servant. Frankly, however, let us be honest about it, 20 years is perhaps too long. The equivalent office in the United States has a fixed single term of 15 years, which we also thought was too long. The Public Accounts Commission thus concluded that a fixed term of 10 years was appropriate. There was some argument over whether it should be eight or 10 years. I think that the Government probably favoured eight years and I would have been happy with eight years, but 10 years is a real good length of time to make one’s mark—it could span three, certainly two, Governments. It is very important that this appointment be non-renewable. We do not want the CAG to suffer the fate of all US Presidents and most new Prime Ministers where the first term is overshadowed by the need to be re-elected. This chap owes nothing to anybody. Nobody can sack him—short of he or she having a hand in the till—and nobody can get rid of him; he is there for 10 years and then he retires. We need to take great care before tampering with any of the founding legislation, which was carefully drawn to provide broad rights of access and reporting and to safeguard the independence of the CAG as an Officer of the House and the external auditor of the Government. That is not to say that no aspect of the arrangements can be improved upon. I am in favour of the changes proposed in the Bill. I think that the arrangement is being improved, but we need to take great care and to be alert to our old friends—the unintended consequences. The Public Accounts Commission has worked very closely with the Government to ensure that the clauses improve the governance arrangements of the National Audit Office. I pay tribute to the Government for adopting all that the commission proposed; there was complete agreement within it, as well. We should also pay tribute to the fact that the Government, working with the commission, have ensured that we are not going to undermine the audit independence of the CAG. The commission agreed that it was possible to separate the internal governance—this is a very important point—of the NAO from the responsibility for making audit judgments, but we recognised that to do so required arrangements that were unique among the panoply of organisational models used in 21st century Britain. What the Father of the House and myself were absolutely determined to avoid was some kind of new corporate structure in which a board could affect the independence and audit judgments of the CAG. I know that there has been some debate about this, and some worries that we were creating something like the Audit Commission—we are not. The CAG is completely independent. This board will deal only with the organisational structure of the body. The Bill thus proposes no changes that will affect the work—the real and important work—of the CAG in the audit of Government accounts or in the 60 reports on value for money that he makes to the Public Accounts Committee every year. He remains independent. He alone will be responsible for all audit judgments; he alone will maintain complete discretion in the discharge of his office. His access rights are not affected and the results of his work will continue to be reported in full to Parliament through the Public Accounts Committee.
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- Mr. DunneConservative
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- I am grateful to the Chairman of the Public Accounts Committee for clarifying the important tenets of independence that the Comptroller and Auditor General will continue to have in carrying out his day job, if I can put it that way. Will he elaborate a little further on the distinction he made a few moments ago about the role of the board and the chairman in so far as they relate to the CAG? In a conventional sense, a chairman would normally have some authority over the CAG, but it appears from what my hon. Friend said that that is not intended.
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- Mr. LeighConservative
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- I hope that I am not giving away any confidences by saying that Amyas Morse told me this week that it can be a very lonely job—and, as I have described it, a very important one—and he welcomes the advice of the chairman of the board, Sir Andrew Likierman. The Comptroller and Auditor General can go to him in confidence at any time and ask for his support and advice. However, the arrangement is unique: although Sir Andrew Likierman can give his advice, the buck ultimately stops with the Comptroller and Auditor General. The Comptroller and Auditor General has a large staff of 800 people who help him to write reports, but he puts his signature on the document, and it is his document and his alone. The board will be involved, for instance, in appointments, such as deciding who should be deputy Comptroller and Auditor General, what the travel arrangements of the Comptroller and Auditor General should be, and what should be the size of the staff. It was wrong that, under the previous incarnation of Sir John Bourn, who was a fine public servant, the Comptroller and Auditor General was a complete dictator—that was always the case; Sir John did not change anything in that regard. He not only had complete independence on his audit judgment, which is right, but appointed all the deputy Comptroller and Auditor Generals, decided the travel arrangements and everything else. In the modern world, one cannot go down that route. One must have a modern corporate structure, involving a board, as long as the board does not tell the Comptroller and Auditor General what to do in relation to his audit judgments.
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Mr. Andrew Tyrie (Chichester) (Con)Non-affiliated- Quote
- Does the Chairman of the Public Accounts Committee agree that, taking all things into account, we now have a structure that deals to some degree with the loneliness problem, and creates a relationship between the board chairman and the CAG that will enable the morale of the NAO to be not only sustained but strengthened? Does he also agree that the work of the Public Accounts Commission, and particularly of its chairman, was instrumental in enabling such significant changes to be made without damage to the morale of the NAO, at a time when the structure had a sense of fragility about it?
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- Mr. LeighConservative
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- As I understand it, morale in the National Audit Office is now very high. It went through a sticky patch—there is no point denying it—and there was bad publicity, much of it unfair, but that is now past us. Morale is high and people feel that the structure is fair and open, that people are appointed entirely on ability, and that their career is judged by a number of people sitting on the board, the chairman and the non-executive directors. I believe that we have got it right, and for that reason, I oppose the amendments, as they serve to define the Comptroller and Auditor General’s audit purpose and to open up discussion of his access rights, neither of which was covered by the review commissioned by the Public Accounts Commission that led to this part of the Bill. We do not need to define the Comptroller and Auditor General’s access rights. He has all the access he needs. Make no mistake: the National Audit Office can interview any civil servant, open any filing cabinet, and report on anything it likes. Having been Chairman of the Public Accounts Committee, I assure the House that no restraint or inhibition is placed on the Comptroller and Auditor General doing his job. Clause 37 is right, and gives him the power he needs.
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- David HowarthLiberal Democrat
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- May I say that I was immensely reassured by the speech of the Chairman of the Public Accounts Committee? It is vital that the Comptroller and Auditor General remains absolutely independent in judgment. Whatever the governance arrangements and administrative structure built up behind the Comptroller and Auditor General, his judgments—perhaps hers in the future—on reports must be independent. As the Chairman of the Public Accounts Committee said, that is built into the entire structure, the cross-party nature of the appointment and the nature of the office. I shall not pursue the argument about the overall structure of the Bill. I fully accept that the commission and the Government have struck the right balance in relation to the NAO and its board, so I shall not detain the Committee for long. I intend simply to comment on the amendments and new clause, and to ask a question about the application of clause 37 which I hope the Minister will be able to answer. I agree with the Chairman of the Public Accounts Committee that it would not be a good idea to define the functions of the Comptroller and Auditor General too closely. Any such definition might result in a restriction that we would not want to see. However, I think it worth asking about a particular aspect of new clause 41. The new clause states: “The purpose of the following provisions is to further strengthen Parliamentary control and supervision of the expenditure of public money”. One of the problems that I see with the present structure, not in theory but in practice, is that it is far better at supervision than control. In other words, it is far better at looking back than looking forward. The Comptroller and Auditor General has two roles. The job of Comptroller is the forward-looking job of ensuring that the Government do not obtain the public’s money for purposes that have not been authorised by the House, while the job of Auditor General is that of looking back to see whether that money has been properly spent. I think that, at some point, we must consider the important question whether the arrangements for the forward-looking role are as strong as they could be, and as strong as the arrangements for the backward-looking role. I disagree with the PAC Chairman about amendment 78. The hon. Member for Luton, North (Kelvin Hopkins) made clear that what concerned him was the problem of bodies which are not, in organisational form, public bodies at all but private trusts or companies of various sorts, but which are in reality carrying out public functions. That is the whole point of the discussion of contracting out. I think that the Chairman was referring to issues relating to non-departmental bodies, in respect of which the National Audit Act lays down clear guidelines on the Comptroller and Auditor General’s powers. I understand that there is no power of the kind that the hon. Member for Luton, North is suggesting in the existing legislation. The point is that there should not be anything in the way in which we set up our audit arrangements that biases the entire system in favour of contracting out. Similarly, there should be no bias against contracting out. It seems to me—and I think the amendment raises this point—that an immensely effective audit system involving great powers, which successfully terrorises public officials into compliance with their duties but does not apply to private organisations that carry out state functions under contracting-out arrangements, effectively gives those organisations a huge advantage over the state.
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- Mr. LeighConservative
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- I have taken advice on this. The Comptroller and Auditor General has statutory access to contractors for the purposes of examining the public body concerned, but the National Audit Office does not think it would be appropriate for him to have access to suppliers’ commercial records further than is needed to audit public bodies. I think that we only need to secure access to the part of the contractors’ work that directly affects his contract with the Government.
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- David HowarthLiberal Democrat
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- That is absolutely right. The purpose is thought to be only to audit the Government Department and not to have any access to the private body, but I think that is a problem under current arrangements. As I remember it—I might be wrong on this—if a Minister agrees and the body agrees, there is further possibility of an audit of a private body. I am, however, unsure whether that is often invoked. The problem that has been identified is worth thinking about, but I am unsure whether the proposed solution is the right way to deal with it, as that is a discretion at large, which might produce problems in itself.
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- Mr. LeighConservative
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- The Bill is primarily about the governance of the National Audit Office; it is not about audit rights. We in the Public Accounts Commission thought it wise for the Bill to concentrate on the governance, as that is set in concrete and is permanent, whereas audit rights can change over time. Indeed, only last week the Government announced that the NAO was for the first time to be allowed to audit the Financial Services Authority. We have also got a long-running campaign to audit the BBC. If the Bill starts getting into the territory of contracts, suppliers and so forth, that could make things quite messy and difficult in terms of an Act of Parliament that we hope will last for many years.
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- David HowarthLiberal Democrat
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- I accept that point from the Chairman of the Public Accounts Committee. In fact, many of these considerations are themselves legislative, because they are all to do with issues such as, for instance, which bodies are listed in schedule 4 to the National Audit Act 1983. There has not been a long and organised debate that can advise the Committee on this issue, but I think the hon. Member for Luton, North (Kelvin Hopkins) has raised an important point, and although I do not expect him to press his amendment to a vote tonight, I would like the Government to accept that it is a matter that it worthy of further debate.
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- Mr. DunneConservative
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- I do not intend to detain the Committee for long, but I would like to follow up the observation I made to the Chairman of the PAC, my hon. Friend the Member for Gainsborough (Mr. Leigh). He has described the process governing the first appointment under this legislation—although it has not been enacted yet, of course. He said that the chairman of the NAO was able to offer his advice to both the Chairman of the PAC and the Prime Minister, which is proper. However, I would like the Minister to explain what would happen if the NAO chairman were unhappy about the appointment being made. There seems to be no provision in this clause for formal consultation; that just happened by way of practice rather than under statute. Does that not leave the NAO open to the possibility of having a fractious appointment imposed over the head of the chairman of the body?
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- It is a pleasure to serve under your chairmanship this afternoon, Sir Alan. This part of the Bill implements the recommendations of the 15th report of the Public Accounts Commission. I would like to begin by paying tribute to the work of the NAO and the Comptroller and Auditor General. Part 7 of the Bill modernises the governance arrangements for national audit and continues the office of the Comptroller and Auditor General as an independent officer of the House of Commons, but limits the term of office to a single appointment of 10 years.
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- David HowarthLiberal Democrat
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- At this point, will the Minister clear up one particular problem with the drafting of clause 37? Clause 37(1) says: “The office of the Comptroller and Auditor General is to continue”, but it does not say that the person currently in office will continue to hold that position. Can the Minister confirm that that is the Government’s intention, and that these arrangements will not apply until the next appointment?
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Sarah McCarthy-FryLabour- Quote
- I can certainly confirm that that is the Government’s intention. After all the work the Chair of the PAC has done on the appointment of the current Comptroller and Auditor General, he would be most unhappy if we had to go through the process all over again. The Bill provides for the establishment of a new corporate body—the new National Audit Office—whose functions will include providing resources for the Comptroller and Auditor General’s functions, monitoring the execution of those functions and approving the provision of certain services. Importantly, the new NAO will be able to support and challenge constructively the CAG’s decisions without, of course, preventing him from carrying out his statutory responsibilities. I come to the proposals made by my hon. Friend the Member for Luton, North (Kelvin Hopkins). As he was not feeling too well during the Second Reading debate, he did not get on to the points he wanted to make about the national audit provisions—I hope he is feeling better today. Amendment 68 would set out in statute that the principal function of the CAG is to further the purposes of national audit, which he set out in new clause 41. Amendment 78 would enable the CAG to have access to thousands of private sector companies that supply central Government. I thank the hon. Members for South-West Hertfordshire (Mr. Gauke), for Gainsborough (Mr. Leigh), for Cambridge (David Howarth) and for Ludlow (Mr. Dunne) for their contributions to this debate. Most who spoke this afternoon are of the same opinion; we welcome the contribution that these proposals have made to the debate, but the consensus is that they are not necessary. I shall now discuss the detail, where we have been extremely fortunate that the Chair of the Public Accounts Committee was able to share his insight into the appointments process. On new clause 41, of course the CAG exists to assist Parliament in holding the Government to account for the use that they make of public funds and, in doing so, promotes the objectives that my hon. Friend the Member for Luton, North mentions. I can assure him that the Government value that work as much as he does. I cannot dispute the fact that the effect of the arrangements in this part of the Bill will indirectly strengthen parliamentary scrutiny, but that is not their primary purpose. The Government are implementing the recommendations of the Public Accounts Commission’s 15th report. In doing so, we are accepting the commission’s two driving principles. The first is the need to ensure that the CAG has authority to form completely independent judgments about the audits and value-for-money studies conducted by the NAO. The second is the need for the NAO to maintain systems of governance and internal controls consistent with best practice. When we prepared the provisions in part 7, we took the utmost care not to jeopardise the CAG’s independence in those areas. As now, the Public Accounts Commission will oversee the work of the CAG and the NAO—indeed, its role is increased by these reforms. However, it would be inaccurate to describe the main purpose of this part of the Bill as strengthening parliamentary control, because, as the Chair of the Public Accounts Committee said, its focus is rather on strengthening governance. I would add that the Government are doing a number of things to improve parliamentary scrutiny of government expenditure. Hon. Members will be aware that the Government provided a memorandum to the Liaison Committee in March containing formal proposals to Parliament for better alignment between budgets, estimates and accounts. The memorandum explained the plans to simplify the Government’s financial reporting to Parliament, ensuring that they report in a more consistent, transparent and straightforward fashion on spending plans, estimates and expenditure outcomes. I hope to assure the hon. Member for Cambridge that further work on the way Parliament supervises expenditure continues in a number of ways, including through the work of the Select Committee on Reform of the House of Commons, which is expected to bring forward its proposals shortly.
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- Mr. GaukeIndependent
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- Can the Minister explain, therefore, why the Government have, in recent years, refused to publish the whole of Government accounts? For the past two years the work has been done but the information has not been released—I believe that we are going to have to wait until 2010 for it.
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- Sarah McCarthy-FryLabour
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- I can only say to the hon. Gentleman that, as I said just now, further work is ongoing on what we can introduce. We want to be more transparent and to have a better way of ensuring that we can look at our spending plans, our estimates and the expenditure outcome. We all agree, of course, that it is important that Parliament should continue to play an active role in scrutinising the expenditure of public money, but we do not think that a declaratory provision of the type envisaged in the proposed new clause accurately reflects the purpose of the provisions. On amendment 68, the national audit responsibilities of the Comptroller and Auditor General are already set out in legislation, and within those responsibilities some matters are left to the Comptroller and Auditor General’s judgment and discretion, such as whether to carry out a value-for-money examination into a particular subject. That is consistent with his independent role in holding the Government to account. Part 7 of and schedule 7 to the Bill already draw an important distinction between the services to be provided by the Comptroller and Auditor General. The resources available to the Comptroller and Auditor General fall into two categories, those whose allocation is at the sole discretion of the Comptroller and Auditor General and those for additional but important services, which require National Audit Office approval. We do not consider it to be necessary or desirable to impose any further restriction on the way in which the Comptroller and Auditor General and the NAO choose to exercise discretion on the use of resources by suggesting that one function should be elevated to the status of a principal function. We consider that, while all the work carried out by the Comptroller and Auditor General is important, the provisions relating to the use of resources give a clear indication of where the Comptroller and Auditor General’s priorities lie. Beyond that, it is for the Comptroller and Auditor General and the National Audit Office, within the framework established by the Bill, to establish priorities. That is consistent with the independence of their roles. Before I move on to discuss amendment 78, the hon. Member for Ludlow asked me a direct question about what would happen if the NAO chair did not get on with the Comptroller and Auditor General. It is right that it is for the Prime Minister and the Chair of the Public Accounts Committee alone formally to make the appointment. The NAO chair would serve only in an advisory capacity and he would not be the one who was making the final decision.
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- Let us be practical about this. We worked as a team. I was sitting there with Nick Macpherson, the permanent secretary to the Treasury, with Andrew Likierman and with Tim Burr. Although the decision was ultimately mine, I would not have insisted on proposing somebody who was unacceptable to the permanent Secretary to the Treasury. What would have been the point of that? I do not think that I would have insisted on proposing somebody who was completely unacceptable to the chairman of the NAO. What would be the point? In the real world, those involved act together as a team but ultimately one person has to make the decision, and that is the Chairman of the Committee.
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- Sarah McCarthy-FryLabour
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- That is absolutely true.
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- Mr. Alan WilliamsLabour
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- To meet that situation, we built in a requirement that there should be a code to govern the relationship that they had to develop within the board and to govern the relationship between the CAG and the Chairman. That code has been agreed, as has a strategy, and both have already been approved by the commission.
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- Sarah McCarthy-FryLabour
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- I thank the Father of the House for that intervention, too. It is important that we have seen the practicalities of how these decisions are made and I do not think that it would be necessary to put anything on the face of the Bill.
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- Mr. DunneConservative
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- The Minister referred a moment ago to the powers of the Public Accounts Commission being strengthened by the Bill. In the context of the exchange that we have just had on the point that I made earlier, will she reflect on how that will be achieved if the new board of the NAO is enhanced or enlarged with more non-executive members and a new chairman? Surely much of the advisory role that the commission has been able to play in the relationship with the Comptroller and Auditor General will now be supplanted by the board, in which case the powers of the commission will be reduced.
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- Sarah McCarthy-FryLabour
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- I do not agree. Although we are reforming it and making the NAO more accountable, there is still a very powerful role for the commission, which will be holding these people to account. We have demonstrated what the commission has done to enable us to get to this stage. I still envisage that it will play a powerful role in the future. May I move on to amendment 78? We all recognise that the Comptroller and Auditor General should have access to the information that he needs to be able to access documents. I think that we have heard that he already has a considerable power to get to the documents that he needs, but amendment 78 would result in a considerable extension of his reach that is not necessary or justified at this stage.
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- Kelvin HopkinsIndependent
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- I give notice that I shall seek leave to withdraw amendment 68, but I want to make a few remarks in response to the debate. First, I thank my hon. Friend the Minister for her kind remarks about my health: it is improving but it is not quite there yet. The amendment has provoked a debate, and that is important. I was particularly impressed by the speech from the hon. Member for Gainsborough (Mr. Leigh), the Chair of the Public Accounts Committee. I thought it was clear, strong and impressive, and it is good to restate these matters. I know that many people in this Committee share his view; I certainly do, and my intention with the amendment was to maximise the strength of the CAG and the NAO—I did not want to restrict either of them in any way. That intention was most true of amendment 78, which the Minister said was impracticable and unnecessary. However, there was an argument to be had and a point to be made, and I thank the hon. Member for Cambridge (David Howarth) for giving what I was saying a degree of support. I am absolutely passionate in my belief that we must make sure that the strength of the legislature in relation to the Executive is maintained—and, indeed, improved, as I do not think that it is strong enough now. The roles of the CAG and the NAO play a crucial part in that. I like to think that I have provoked a useful debate, and that I have made some points that needed to be made. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 37 ordered to stand part of the Bill. Clause 38 Status of the Comptroller and Auditor General etc Question proposed, That the clause stand part of the Bill.
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- Mr. GaukeIndependent
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- Clause 38 deals with the status of the Comptroller and Auditor General. Subsection (8) highlights and signposts the provisions in clause 43 and schedule 6, and in clause 44 and schedule 7. It may be helpful to the Committee and reduce the time that we need to debate subsequent points if we address some concerns that have been expressed about the new governance structure. Those concerns have been raised in particular by Professor David Heald, who is a former adviser to the Public Accounts Commission. Perhaps, in the spirit of the hon. Member for Luton, North (Kelvin Hopkins), I can provoke a debate. Professor Heald’s concern is that the role of Parliament may well be diminished by the creation of the NAO board. In an article he stated: “This insertion of the NAO Board between the Public Accounts Commission and the CaAG creates dangers. Governments might use the chair and board as a means of curtailing the activities of the comptroller, particularly in the more judgmental value for money sphere and in relation to the outsourcing of audit work.” His concern is that that body will have some influence on the CAG. The Chairman of the Public Accounts Committee made it clear how important it is that there is independence for the CAG and how important, therefore, the appointment structure is. There is a role for the NAO in the approval of strategy and in the provision of resources. The concern is whether the Executive, through the chair of the NAO board, could influence the CAG. The other concern is that if the chairman of the NAO board is strong, there is a risk of interference. If he or she is weak, what is the point? Is this merely a distraction of management effort—of effort by the CAG—that could otherwise be focused on other things? I hope it is helpful to the Committee for me to put those concerns on the record and give the Chairman of the Public Accounts Committee an opportunity to respond, although in some respects he addressed those concerns in his earlier remarks.
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- Mr. Alan WilliamsLabour
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- Under the Bill, the CAG retains his absolute discretion in relation to his statutory duties. It cannot endanger his statutory duties at all.
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- Mr. GaukeIndependent
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- Indeed. The Father of the House states the essence of that case. The alternative case, as advocated by Professor Heald, is that there is still a body that has influence with respect to the provision of resources in establishing the strategy for the NAO, and that that body could be used to influence. The Father of the House rightly makes the argument against that and I suspect that the Committee will be satisfied by that, but it is helpful to put it on the record and for him to put the counter-argument. As hon. Members have said, we are dealing with an important organisation. Other countries often look to what we do as an example of an effective means of scrutinising public expenditure. We must get it right, because it is important both in the UK and internationally. The concern is that the private sector corporate governance structure that we are putting place may not be appropriate for the very particular needs that exist in this area. I am not endorsing that line of argument, but it should be stated. I look forward to others addressing those concerns.
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- Mr. DunneConservative
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- I endorse my hon. Friend’s tentative concerns and shall start where he finished—on the extent to which international bodies look to the NAO as a beacon of light in the scrutiny of public expenditure. I have personal experience of the issue from my time on the Public Accounts Committee and, latterly, as a governor of the Westminster Foundation for Democracy. We have entered the Westminster Consortium, a relationship with several other parties that are involved in parliamentary strengthening, and one of them is the NAO. Earlier today, we had an away-day to talk about how we can do more, working together, to spread best practice from this Parliament to other Parliaments throughout the world. It is very valuable work, and the Foreign and Commonwealth Office, the Department for International Development and Governments throughout the world recognise it as such. Although we may think that we are dealing with legislation in isolation, we should not forget that others will look at and, perhaps, imitate the structures that we are putting in place to provide for the NAO’s corporate governance over, I hope, the next decades. In that context, it is right that we raise concerns about the proposal. I do not have concerns in principle, because they were well addressed earlier in the debate by my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee. However, we must recognise that, essentially, we are introducing a corporate governance structure to an entity that is not a corporate: it is an entity with a chief executive, in the form of the Comptroller and Auditor General, who quite rightly has enshrined in statute a degree of independence and autonomy in terms of his work on audit and value for money, as my hon. Friend and the right hon. Member for Swansea, West (Mr. Williams), the Chairman of the Public Accounts Commission clearly explained.
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- Mr. Alan WilliamsLabour
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- May I clarify that it was in that very area of work, throughout the world and so on, that some of the trouble arose? It is non-statutory work. In that respect, it is true that the board can circumscribe the activities, because that is part of its role and duty; however, it must not and cannot interfere with the statutory duties.
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- Mr. DunneConservative
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- I completely understand that point and am grateful for that clarification. Indeed, as the Father of the House has just made clear, the purpose of the proposals was to deal with deficiencies in the oversight and scrutiny of two simple things—the expenses and the duration of appointment of the Comptroller and Auditor General. To deal with those two relatively minor aspects, however, we have this substantial piece of legislation, and a new panoply of corporate governance that will be injected into the NAO. All I seek to do is point out to the Minister that we are establishing a panoply of corporate governance that could lead to confusion in the NAO, when all that is required is the scrutiny of those two aspects: the longevity of appointment, about which there is no disagreement at all; and, the board’s oversight of expenses and NAO organisation, which may be rather more demanding than was intended of the organisation’s time.
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- David HowarthLiberal Democrat
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- The hon. Gentleman must have covered the point by now, but will he clarify that he did not mean that there was any doubt, from the legislation’s drafting, that the Comptroller and Auditor General’s functions of audit, examination and inspection, which are central to his job, would be in any way compromised? They are specifically preserved by the drafting of schedule 7.
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- Mr. DunneConservative
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- Indeed. If I have given the impression that I am concerned about that, I would like to correct it. The hon. Gentleman has made that clear, and I agree with him.
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- Mr. Alan WilliamsLabour
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- The hon. Gentleman is right in what he said about expenses. We virtually dealt with that by having the CAG look at the expenses proposals and come to see me about them. However, the problem of governance was not just about expenses—it was about the staff of the organisation, who, as the Chair of the Public Accounts Committee indicated, were dependent on the good will of the CAG for their advancement, salary increases and so on. There was a much wider and more dangerous governance problem that could damage the organisation.
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- Mr. DunneConservative
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- I am grateful for that clarification. I understand the need to put in place structures to help the internal career progression for senior people in the organisation, if that is what the right hon. Gentleman is seeking to achieve. I am not as concerned about what the role of the CAG will be in this new construct as about what the role of the chairman of the board will be. Of course, there is already a chairman in place; he was appointed before the Bill was drafted, so although he may have had some idea of what would be in the legislation, he took on the position without knowing for certain what was involved. My concern—this comes back to the definition in schedule 6 rather than clause 38—is about how the chairman is going to find a worthwhile function for himself in chairing a board where he has very little power other than to check the expenses of the chief executive.
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- Mr. LeighConservative
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- Perhaps I can explain how the National Audit Office will work as a corporate entity. As such, it will be constituted as a board comprising five non-executive members, including its chair, and four executive members, including the Comptroller and Auditor General, who will also be its chief executive. The board’s role, in essence, will be to develop a strategy for the office as a whole, not a strategy for audit judgments or to tell the CAG what to investigate: that is absolutely clear. The board’s role will be to secure funding for the Public Accounts Commission, to monitor the delivery of the overall strategy and to report publicly on what is being achieved. As I have already said—but it is worth putting it on the record because Professor Heald has made these comments—the CAG’s statutory audit responsibilities are completely ring-fenced; they are not transferred to the board. The board has nothing to say about or to do with his statutory audit functions. The Bill will merely ensure that in future these activities are carried out within the governance of the NAO as a whole, as a modern and robust organisation. The relationship with the CAG and the board will be regulated by code, which, under the terms of the Bill, will be approved by the Public Accounts Commission. I believe that the CAG—this is what he has told me—will benefit from the engagement of non-executives. Indeed, in so far as has been possible, the CAG has started to operate the new arrangements on a voluntary basis. The non-executives have already been appointed, and I understand from the CAG that they have already made a helpful contribution to the development of the strategy. In relation to the establishment of the NAO as a corporate entity, I am satisfied that sufficient safeguards are in place to reconcile sound governance with audit independence. I want to put on the record an important point made by Professor Heald. Let us think of the fantastical notion that the Government might put some sort of pressure on the chairman of the board to circumscribe the independence of the CAG. That is extremely unlikely. However, even if the Government attempted it, and even if the chairman listened to their advice, which is also extremely unlikely—why should he?—the CAG could ignore it. I do not know where Professor Heald is coming from. Even if there were a problem, the CAG would have the right of access straight to the commission. We are not circumventing the commission’s powers. It, not the Government, sets the budget of the NAO. Say the CAG were to make critical remarks about the Government. Would the Government have any say over the budget of the NAO? No. Uniquely for a Government body, its budget is set by an independent Committee of this House, the Public Accounts Commission, which by the way is not the client of the NAO. The client of the NAO is the Public Accounts Committee, and that is why the commission sets the budget. I am afraid that I have to put it on record—it is very important—that Professor Heald is wrong. We are not in any way circumscribing the independence of the CAG, and I am glad that we have had this debate so that we can put that on the record.
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- Sarah McCarthy-FryLabour
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- It is indeed important that we have had this debate and put that on record. Of course, the Public Accounts Commission took evidence from Professor Heald and disagreed with him. The CAG will continue to have complete independence. The recruitment of the chair is intended to enable the appointment of a strong adviser to support and challenge the CAG, but it will not be the job of the chair to hold the CAG to account. That, of course, is the job of the commission. The clause ensures that the CAG will continue to be independent of outside influence and interference, as is currently enshrined in the National Audit Act 1983, the relevant provisions of which the clause reproduces. As the Chairman of the Public Accounts Committee, the hon. Member for Gainsborough (Mr. Leigh), mentioned, schedule 7 provides that the NAO and the CAG should jointly prepare a strategy for the approval of the commission. That strategy is to set out the national audit functions, a plan for the use of resources and a maximum amount of resources to be provided by the NAO in a particular financial year. It is for the CAG to decide what resources are needed for his core statutory functions, and the NAO has to provide him with those resources. The hon. Gentleman also mentioned the fact that the relationship between the NAO and the CAG will be set out in a code of practice, which must be approved by the commission. We have had a useful debate, and we have all managed to get on record the importance of the complete discretion and independence of the CAG. Question put and agreed to. Clause 38 accordingly ordered to stand part of the Bill. Clause 39 Provision of services Question proposed, That the clause stand part of the Bill.
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- David HowarthLiberal Democrat
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- I want to ask about the necessity of this clause. The Father of the House might correct me, but I do not remember its being referred to in the Public Accounts Commission’s report. Whenever one sees a clause that creates powers to do something that has been done for a very long time, it sets alarm bells ringing. May I ask the Minister whether there is any doubt that the CAG has the power to enter into the type of agreement referred to in the clause, or any doubt about whether anything done in the past is valid?
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- Sarah McCarthy-FryLabour
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- I am happy to respond to the hon. Gentleman. The clause does not set out a new power. In the past the CAG has relied on his legal powers as a natural person and corporation sole to enter into agreements and provide non-statutory services. The clause puts that on a statutory footing, and we do not consider that that will add to or restrict the current powers of the CAG, although some of the services provided under that power will now require the prior approval of the NAO. That is under a later provision of the Bill.
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- David HowarthLiberal Democrat
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- In a way that is a rather disturbing answer, because clause 38 already states: “The Comptroller and Auditor General continues by that name to be a corporation sole.” I am still concerned about what the precise necessity is for the clause. It might be a belt-and-braces approach, but I still cannot see why it is necessary.
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- Sarah McCarthy-FryLabour
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- I think “belt and braces” is probably an appropriate description! The CAG carries out a huge range of important work in addition to statutory responsibilities: auditing international institutions; consultancy on public audit; and providing support to other Select Committees. The clause is just a general statutory power to carry out such work under the new arrangements. Question put and agreed to. Clause 39 accordingly ordered to stand part of the Bill. Clause 40 Remuneration package of the Comptroller and Auditor General
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- Mr. GaukeIndependent
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- I beg to move amendment 57, in clause 40, page 20, line 20, at end insert— ‘(10) All remuneration, allowances and expenses in relation to P must be published monthly online.’. In relation to the clause and the amendment, P refers to the Comptroller and Auditor General. As we have heard, the reform of the governance of the CAG has largely been driven, or provoked, by the difficulties regarding Sir John Bourn’s expenses. As the Chairman of the Public Accounts Committee said, there was a sticky patch. The amendment would address that in perhaps the simplest way possible—by introducing much greater transparency. There is obviously a sensitivity with regard to the CAG’s remuneration and other expenses, given that his role is to identify waste in public spending. Therefore, it seems right that he should be assessed with great scrutiny. He should lead the way in moves towards scrutiny of public spending, which should include spending relating to him. If we have time—time is short again today—I hope we can have a longer debate on the wider issue of the transparency of public spending when we discuss part 8 of the Bill, but to ensure that the CAG is above suspicion, such information should be in the public domain.
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- Mr. Alan WilliamsLabour
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- The CAG already submits his expenses to me as Chairman of the commission and publishes them on a six-monthly basis which, we are assured, goes further than for any other public servant. He is therefore already ahead of the game elsewhere in Whitehall.
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- Mr. GaukeIndependent
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- The Father of the House makes a good point—the CAG is further ahead. On the whole, we believe there should be greater transparency in public spending, and the CAG could be yet further ahead. I accept that he submits expenses to the Father of the House in his role as Chairman of the Public Accounts Commission, but by putting them in the public domain we would prevent any repetition of what happened with Sir John Bourn, even though such information goes into the public domain every six months. Our proposal is a matter of going further. As a rule, we think information on how public money is spent should be in the public domain and published online. The CAG in particular needs to be above suspicion. To avoid—I hope—the need for a separate stand part debate, clause 40 states: “P’s package is to be determined jointly by the Prime Minister and the” Chairman “of the Committee of Public Accounts before the start of the appointment.” There is a great deal of flexibility within the clause, which is welcome and sensible, because there are dangers in being too prescriptive, depending on the nature of the CAG candidate. However, we are lucky enough to have the Chairman of the Public Accounts Committee in the Chamber, and perhaps he is in a position to say something further on the thinking behind the package. For example, there has been talk about linking it to the salary of the Treasury permanent secretary or the Lord Chief Justice. Historically, there was a link with High Court judges. We have to recognise that we want to get the right person, and pay in the private sector for audit work has increased substantially over the past 20 or 30 years or so. If the CAG is not paid enough, it will have a knock-on effect on everyone else working in the NAO. It is important to get the figure right so that we get the right people.
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- Mr. LeighConservative
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- I am fairly relaxed about amendment 57. The CAG publishes details already of all his expenses and allowances. The commission had a discussion about the pay. It is true that traditionally the CAG has received the same salary as a High Court judge. We did not think that that was appropriate any more, because that is fixed and, in order to get a very high-calibre candidate, it might be necessary to pay more than that. When we put in the advertisement, we said that the package would be broadly in the permanent secretary range. That is an attractive salary, and it is useful to do it that way, because permanent secretaries are paid between £140,000 and £230,000 a year. There was some discussion about whether we should link the pay to that of the Lord Chief Justice. Personally, I liked that idea, because I am convinced—having done my job for eight years—of the very great importance of the CAG. It would have sent a message if we had made that link, but I suspect that the Treasury was not entirely happy with that. So we reached a compromise. It is not necessary for me to say in Committee what the CAG actually earns—it is published, it is a good salary and we got a high-calibre candidate. Finally, it is important that the CAG, like permanent secretaries, should not be subject to appraisal by anybody and he should not receive any bonuses. The best approach is the one that we have taken—with the Chairman of the Public Accounts Committee working with the Prime Minister to set a good salary at the level of a permanent secretary. Let us stick to that. It can go up every year by inflation, but no bonuses should be paid and no appraisal made. That is part of the CAG’s independence.
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- Mr. DunneConservative
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- I support amendment 57. It is obviously ironic that Members should be talking about the pay and rations of others today, but in this case it is appropriate for the individual who will be the primary custodian of probity in public finance to be prepared to show the way in terms of transparency about pay and rations. We are all acutely aware of the increased transparency that will apply to public figures paid from the public purse, who will have to make that information available. For the CAG to lead the way will set a good example to others in the public sector and will make his job easier. For all those reasons, this is an appropriate amendment.
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- Sarah McCarthy-FryLabour
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- Of course, we share everybody’s wishes for greater transparency, and, as has been said by many Members, the CAG has been leading the way on that. At an administrative level, the NAO already provides for advance approval of the CAG’s expenses by a non-executive member of its audit committee, with recourse to the Public Accounts Commission if necessary. Expenses are discussed with the chairman of the NAO audit committee in advance, and the CAG expenses follow, as far as possible, permanent secretary rules. In addition, since 2007, the expenses and hospitality records of all NAO senior managers, including the CAG, have been published on its websites for each six-month period. We welcome that commitment to transparency. The CAG’s remuneration package is set before he takes office and then has effect for the full term of office, subject only to uprating, which is permitted, but only in line with a predetermined formula. As was mentioned, the current range for a civil service permanent secretary is fairly wide—a minimum of £140,000 to a maximum of £273,000. In the interests of transparency, I have no objection to saying that Mr. Morse is being paid £210,000 per annum, which is mid-range. The CAG’s remuneration is reported in the NAO annual report and accounts. Given that it will change only once a year, in line with the annual uprating formula, I see no great advantage in requiring the NAO to report each month on the salary. The other information that hon. Members wish to be published is available already on the NAO website, albeit only six-monthly, not monthly. I think that six months is fine, given that there has to be advance approval for it, so I do not think that the amendment is necessary. I ask the hon. Gentleman to consider withdrawing it.
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- Mr. GaukeIndependent
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- I am grateful to the Minister for providing the information about the current CAG. Given that he was previously a partner at PricewaterhouseCoopers, I suspect that he has taken a substantial pay cut to perform this role. Nothing I say is meant to suggest that Mr. Morse has acted improperly. However, given that we are legislating on the set-up for the CAG, it would be helpful to specify on a statutory basis what the CAG should do. That point should apply more widely within the public sector. Rightly, it now applies to Members of the House. It would improve the structure and lead the way, and it would not cause any harm or unwarranted embarrassment to the CAG. I seek, therefore, to press the amendment to a vote. Question put, That the amendment be made. The Committee proceeded to a Division.
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- I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
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- David HowarthLiberal Democrat
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- I beg to move amendment 29, page 20, line 33, leave out ‘specified person’ and insert ‘Advisory Committee on Public Appointments’.
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The First Deputy ChairmanLabour- Quote
- With this it will be convenient to discuss the following: amendment 30, page 20, line 35, leave out subsection (3). Amendment 31, page 20, line 36, leave out subsection (4).
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- David HowarthLiberal Democrat
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- The amendments relate to discrepancies between the contents of the Bill and the Public Accounts Commission report. I want to give the Government an opportunity to explain the difference between the two. Amendments 29 and 30 are simply about who is to be consulted before the Comptroller and Auditor General is allowed to undertake any further employment after the end of his period in office. The commission said that the Advisory Committee on Public Appointments had to be consulted, whereas the Bill says that some “specified person” who will be “specified from time to time by the Commission” must be consulted. The Bill is therefore less specific than the recommendation from the commission. Clearly, the provision is important, and public confidence in the office of Comptroller and Auditor General must be maintained. It is possible for conflicts of interest apparently to arise in almost any sort of future employment—not just in organisations previously subject to the audit powers of the Comptroller and Auditor General, to which the rest of the clause applies, but those in the private sector. My first question is “Why has that change been made?”
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- Mr. Alan WilliamsLabour
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- The proposal relating to the advisory committee is certainly what we originally recommended. I think it was then suggested that there might be a more appropriate body at the time, and that the arrangement should therefore be left open. It was not a case of precluding what had been proposed originally; it was merely a case of leaving things open so that a decision could be made at the time. We considered the lifetime ban, along with various other options. The Treasury’s advice was that a lifetime ban would be an infringement of human rights and was disproportionate, but also that it would deter younger applicants looking 10 years ahead who might feel that their options would be severely limited when they retired.
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- Sarah McCarthy-FryLabour
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- As we have established this afternoon, the office of the Comptroller and Auditor General was set up to hold Government to account. We have legislation that enshrines in law a requirement to ensure that the Comptroller and Auditor General is, and is seen to be, independent of any and all outside influence, particularly that of the Executive. The arrangements for appointment, remuneration and removal from office in the national audit provisions of the Bill are intended to ensure that external considerations cannot influence the judgments that the Comptroller and Auditor General needs to make in scrutinising the Government’s use of public resources on behalf of the House of Commons. That sets clause 42 in context. Let me now turn to the amendments, beginning with amendment 31. Clause 37, to which the Committee agreed earlier, limits the Comptroller and Auditor General’s term of office to a maximum 10-year single term. It is likely, therefore, that a Comptroller and Auditor General could have a lengthy working life once he had left office. Mindful of that, the Government have put in place measures to ensure that the hope of future employment could not influence a Comptroller and Auditor General’s judgments while in office. That consideration was also important to the Public Accounts Commission, from whose proposals the provision derives. The CAG needs to focus all his efforts on carrying out his role without fear or favour right through to the end. Clause 42 therefore restricts a former CAG from working for the Crown or providing services to persons acting on behalf of the Crown for a period of two years after they cease to be CAG.
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- Mr. TyrieNon-affiliated
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- Will the definition of working for the Crown be the same as the definition that will be used for determining who is a civil servant under the civil service clauses of the Bill?
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- Sarah McCarthy-FryLabour
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- Off the top of my head, I cannot guarantee that, but I will endeavour to get a response to the hon. Gentleman before I finish speaking; alternatively, I will write to him. After two years, a former CAG must take advice from a person nominated by the Public Accounts Commission before taking up other employment of a kind specified by the commission. If amendment 31 is approved, the two-year ban will be removed. The effect of that will be to impose, through subsections (5) and (6), a lifetime restriction on public sector employment for a former CAG. The commission originally recommended that a former CAG should not be eligible at all to take up other employment in the public sector after their term of office. It later recommended a five-year ban. As was said by the Father of the House, the legal advice cautioned there was a real risk that a permanent ban on public sector employment would be found indirectly discriminatory on age grounds. The Government accept the importance of the CAG’s independence, but we think that any restraints on future employment must be proportionate and within the law. A lifetime ban goes much further than what is required to protect the CAG’s independence since it is hard to believe that a serving CAG could be influenced in any real sense while in office by a distant and, by its nature, highly uncertain prospect of remunerated work. Moreover, such a ban is likely to deter candidates, particularly younger ones, from applying for the post of CAG, which is not in anyone’s interests. As I have said, there is a real risk that a permanent ban on public sector employment would be found indirectly discriminatory on age grounds. Moreover, if such an infringement were found, it is unlikely that it could be defended as being reasonably necessary and objectively justifiable. A lifetime ban is therefore neither necessary nor desirable. On amendments 29 and 30, the 15th report of the Public Accounts Commission recommended a lifetime ban on former CAGs accepting any post in any body that the National Audit Office has audited or which is in the gift of Government. It was in this context that the commission considered that some conflicts of interest could arise over posts in the private sector with, for example, defence contractors or other suppliers to the public sector. The commission therefore recommended that the CAG should consult what has been called the “Advisory Committee on Public Appointments”. In fact, the correct title of the body is the Advisory Committee on Business Appointments. Subsection (2) allows the Public Accounts Commission to nominate a person to advise former CAGs on taking up future offices or appointments. The advantage of the current drafting is that it allows the Public Accounts Commission to decide which person to consult depending on the circumstances at the time. It is therefore capable of adapting to future changes, for example should the name or responsibilities of the adviser change. That advantage should be obvious to Members already since, in attempting to be more specific, the amendment names a body that does not exist. There would, of course, be nothing to stop the commission specifying that the advice should be taken from the chair of the advisory committee if it so wished. Turning briefly to Amendment 30, if subsection (3) were to be deleted, as proposed, not only would the Public Accounts Commission be unable to specify the adviser, but it would be unable to specify the description of offices, positions, agreements or arrangements. Therefore, a side effect of the amendment would be to create uncertainty about which positions are covered by subsection (2). With that explanation, I hope the hon. Member for Cambridge (David Howarth) will consider withdrawing his amendment.
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- David HowarthLiberal Democrat
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- Yes, of course I will seek leave to withdraw amendment 29, and I thank the Government and the Father of the House for the explanation offered as to the change. It makes sense for this provision to be more flexible and to take into account the chance that the appropriate body to consult might change. I shall not be pressing amendment 31 to a Division either, but the explanation that the Minister offered is slightly puzzling, in that the chances of this indirect discrimination happening and affecting anybody are remote. As I understand it, the argument put forward was that as a younger person would face a longer ban, in terms of years, than an older person, disproportionately more younger people, as opposed to older people, would be put off and that would therefore qualify as indirect discrimination on age grounds against the young. I suppose that is theoretically possible in some remote circumstance, but it does not strike me as the most obvious discrimination case that anyone would bring, especially when one considers the consequence of bringing such a case for one’s career. The reason for the two-year ban has not been entirely explained. The Minister mentioned the possibility of a five-year ban—I am not entirely clear about in what circumstances the commission suggested a five-year ban—but she did not offer any particular reasoning as to why the ban should be for two years, rather than for five. Given that the whole point of this clause is to maintain public confidence in the neutrality and independence of the CAG, if anything we should err on the side of caution.
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- Sarah McCarthy-FryLabour
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- We obviously obtained the views of the commission and considered them carefully. We think that the two-year period achieves a sensible balance between the need to ensure the independence of the CAG and the desire to allow a former CAG to continue their career in the private or public sector, if they so wish. The two-year period is based on that for Ministers who wish to take up outside appointments.
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- David HowarthLiberal Democrat
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- That explains things, and I thank the Minister. Obviously the issue here is whether someone could be made such a big offer of such a big job and such a large salary that they might be tempted by it, even with a two-year delay. I recognise that that is somewhat unlikely, even in the public sector of today. With that, I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 42 ordered to stand part of the Bill. Clause 43 ordered to stand part of the Bill. Schedule 6 agreed to. Clause 44 ordered to stand part of the Bill. Schedule 7 agreed to. Clause 45 NAO’s expenditure
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- Sarah McCarthy-FryLabour
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- I beg to move amendment 41, page 21, line 25, leave out ‘must’ and insert ‘and the Comptroller and Auditor General must jointly’. Clause 45 sets out the arrangements for the NAO’s expenditure and the approval of its estimates. Government amendment 41 is a minor amendment, which provides for the CAG to prepare the NAO estimates jointly with the NAO. The Bill already provides that the estimate, once prepared, will be presented to the Public Accounts Commission jointly by the CAG and the chair of the NAO. Amendment 41 agreed to. Clause 45, as amended, ordered to stand part of the Bill.
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- Sarah McCarthy-FryLabour
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- I beg to move amendment 42, page 71, line 20, at end insert— ‘Government of Wales Act 2006 (c. 32) 22A In paragraphs 5 and 8 of Schedule 5 after “Comptroller and Auditor General” insert “or the National Audit Office”.’. This is a minor and consequential measure. If part 7 is enacted, certain functions carried out by the Comptroller and Auditor General will in future be carried out by the new National Audit Office. The amendment will prevent the provision of an Assembly measure from modifying the functions of the National Audit Office without the consent of the Secretary of State. A similar provision already applies in relation to the functions of the Comptroller and Auditor General. Amendment 42 agreed to. Schedule 9, as amended, agreed to. Clause 50 ordered to stand part of the Bill. New Clause 24 Powers of National Assembly for Wales: Auditor General for Wales ‘(1) Schedule 5 to the Government of Wales Act 2006 (c. 32) is amended as follows. (2) In Part 1, under Field 14, insert— “Matter 14.1 (1) The following aspects of the Auditor General’s terms of appointment— (a) the period of the appointment; (b) salary, allowances and superannuation benefits; (c) pensions and gratuities payable after a person has ceased to hold the office. (2) The number of times a person may be appointed to the office of Auditor General. (3) Restrictions on the other offices and positions which may be held by the person who is the Auditor General; activities of a person who has held the office of Auditor General (but no longer does). (4) Provision requiring the Auditor General— (a) to aim to do things efficiently and cost-effectively; (b) to have regard, as the Auditor General thinks appropriate, to the standards and principles that an expert professional provider of accounting or auditing services would be expected to apply. (5) The authorisation of persons to exercise functions of the Auditor General on the Auditor General’s behalf (including during a vacancy in the office). (6) The oversight or supervision of the Auditor General or of the exercise of the Auditor General’s functions. (7) The provision or use of resources for the purposes of the Auditor General’s functions including (in particular)— (a) the employment and use of staff; (b) the procurement and use of services; (c) the holding of documents or information; (d) the keeping of records. (8) The charging of fees or other amounts in relation to functions of— (a) the Auditor General, or (b) auditors appointed by the Auditor General under enactments. (9) The restatement of any law relating to the Auditor General.” (3) In Part 2, after paragraph 6, insert— “6A (1) This paragraph applies to a provision of an Assembly Measure which— (a) is a Matter 14.1 provision; (b) provides for the enforcement of a Matter 14.1 provision or is otherwise appropriate for making a Matter 14.1 provision effective; (c) is otherwise incidental to, or consequential on, a Matter 14.1 provision. “Matter 14.1 provision” means a provision which relates to Matter 14.1 (and section 94(7) applies for the purposes of this definition as it applies for the purposes of section 94). (2) The following provisions do not apply in relation to a provision to which this paragraph applies— (a) paragraph 3 so far as it applies in relation to sections 145, 145A and 146A(1) of the Government of Wales Act 1998; (b) paragraph 6(1). (3) Subject to sub-paragraph (4), a provision to which this paragraph applies cannot— (a) modify or confer power by subordinate legislation to modify paragraph 3 of Schedule 8, or (b) give or confer power by subordinate legislation to give any role to a committee of the Assembly. (4) Sub-paragraph (3) does not limit any role which may be given to a committee of the Assembly which meets the requirements in sub-paragraph (5) (whether established by virtue of a provision to which this paragraph applies or otherwise). (5) The requirements are— (a) none of the following may be a member of the committee— (i) the First Minister or any person designated to exercise functions of the First Minister; (ii) a Welsh Minister appointed under section 48; (iii) the Counsel General or any person designated to exercise the functions of the Counsel General; (iv) a Deputy Welsh Minister; (b) the committee must not be chaired by an Assembly member who is a member of a political group with an executive role.”.’—(Mr. David.) Brought up, and read the First time.
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- I beg to move, That the clause be read a Second time.
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- The First Deputy ChairmanLabour
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- With this it will be convenient to discuss Government amendment 43.
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Mr. DavidLabour- Quote
- New clause 24 will confer legislative competence on the National Assembly for Wales. Such provisions are commonly known as framework or measure-making powers. I want to apologise to the Committee that this framework power was not included in the Bill on its introduction, as the Government have committed to doing in respect of all framework powers. I regret that the technical nature of the provision meant that it did not prove possible to finalise it in time. The Government have, however, introduced the new clause at the first available opportunity and I am pleased that so many Members attended the briefing session on the provision that I held yesterday with the Welsh Minister, Andrew Davies.
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- Mr. GaukeIndependent
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- The Minister says that the delay was due to a technical difficulty. Will he reassure the Committee that it was not due to Wales being forgotten? We know that the Government’s relationship with the Principality is not what it was—Labour is no longer the most popular political party in Wales—and I fear that this is an example of Welsh neglect.
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- Mr. DavidLabour
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- I assure the hon. Gentleman that that is not the case. Incidentally, the Labour party is back on top, as the recent opinion polls show. This measure is very technical, and we wanted to ensure the maximum amount of consultation. That has now taken place, and we are satisfied with what we are proposing.
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- Mr. GaukeIndependent
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- I shall make a less partisan point. Does this measure have any budgetary implications and, if so, where are the resources coming from?
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- Mr. DavidLabour
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- There are no budgetary implications for this Government. Any budgetary implications would be in the hands of the Welsh Assembly Government. The new clause adds a new Matter 14.1 to part 1 of schedule 5 to the Government of Wales Act 2006 in the field of public administration. It also inserts new paragraph 6A into part 2 of schedule 5 to the 2006 Act to modify the general restrictions on the Assembly’s competence. The competence conferred by Matter 14.1 would allow the National Assembly to pass legislation, known as an Assembly measure, to put in place new arrangements for the Auditor General for Wales and the Wales Audit Office. These arrangements are comparable to the ones set out in part 7 of the Bill for the Comptroller and Auditor General and the National Audit Office. However, the Assembly may decide on different arrangements within the scope of the competence conferred. In particular, the competence covers the Auditor General’s terms of appointment relating to tenure and remuneration, the number of times that a person may be appointed Auditor General, the efficiency and effectiveness of the Auditor General, the other positions that a serving or former Auditor General may hold, the authorisation of other people to perform the Auditor General’s functions on his or her behalf, oversight and supervision of the Auditor General, and the provision of resources for the Auditor General and the charging of fees or other amounts. It is right that the National Assembly should have the power to decide what arrangements are appropriate in relation to the public auditor for the devolved bodies operating in Wales. The structure of public audit is different in Wales compared with England, and the new clause gives the Assembly power to put in place arrangements for the more effective oversight, supervision and accountability of the Auditor General for Wales. At the same time, it makes sure that the independence of the Auditor General’s operational audit work is maintained. The Assembly will not be able to modify provisions in the Government of Wales Act 2006 that provide that the Auditor General is not subject to the direction or control of the Assembly or the Assembly Government. That strikes the right balance between allowing the Assembly flexibility to put in place arrangements that it considers appropriate for Wales, and preventing any erosion of the important principle of audit independence. New paragraph 6A in part 2 of schedule 5 provides for an exception to the prohibition on the ability of Assembly measures to modify certain provisions of the Government of Wales Acts 1998 and 2006. That will enable those Acts to be amended by Assembly measure, if the purpose of the amendment is about putting in place the new governance arrangements for the Auditor General. The competence would also enable the Assembly to transfer functions currently undertaken by its Audit Committee relating to consideration of the estimate of the audit reports of the Auditor General by another Committee of the Assembly. However, it could do so only if the Committee to which the functions are transferred is, like the Audit Committee, composed in a way that is independent of Welsh Ministers and the ruling Administration. The consequential Government amendment 43 amends the long title to include the proposed amendments to the Government of Wales Act 2006. I commend the new clause and the amendment to the House. Question put and agreed to. New clause 24 accordingly read a Second time, and added to the Bill. New Clause 19 Amendment of Exchequer and Audit Departments Act 1866 ‘(1) The Exchequer and Audit Departments Act 1866 is amended as follows. (2) In section 13(1) after “applies”, insert “, subject to section 15A,”. (3) In section 14 at the beginning insert “Subject to section 15A”. (4) In section 15(1) after “applies”, insert “, subject to section 15A,”. (5) After section 15 insert— “15A Authorisation by relevant committee of the House of Commons Notwithstanding any Act of Parliament or Resolution of the House of Commons, the Auditor and Comptroller-General shall not grant any credit to the Treasury under this Act unless he is satisfied that a relevant committee of the House of Commons has examined and approved the expenditure concerned for the relevant year,”’.—(David Howarth.) Brought up, and read the First time.
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- David HowarthLiberal Democrat
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- I beg to move, That the clause be read a Second time. It is something of a shame that a new clause that looks modest but would have the effect of changing our system of Government entirely comes before the Committee with only seven minutes to go before the knife. I therefore do not expect that it will get a proper airing or any proper debate tonight. The new clause deals with the control of expenditure by the House before that expenditure is made, as opposed to the auditing of expenditure once the money has been spent, which we tend to be rather better at. It is emblematic that most of this afternoon’s debates on this part of the Bill have been about the Comptroller and Auditor General in his role as an auditor, rather than in his very important role as Comptroller. The Exchequer and Audit Departments Act 1866, which is one of the great Gladstonian reforms of the 19th century, puts on the Comptroller the job of making sure that Government expenditure drawn from the Consolidated Fund is authorised by statute or by a resolution of the House. It is fundamental to the system of supply whereby the House, in theory, controls Government expenditure that the Comptroller has that job. This should matter because policy debates are intimately connected with expenditure. A great American political scientist, Aaron Wildavsky, once said that policy is expenditure and expenditure is policy. That is because a policy that does not have any resources attached to it is generally just hot air, and any spending decision is, in reality, a decision about what to spend money on, as opposed to not spending money on something else, and therefore is a policy decision. Over the past couple of centuries we have seen a great decline in the practical control of the House over that sort of expenditure decision. There is no time tonight to go through the detailed history of the decline of the supply procedure of the House. By 1896 most of the remaining power of the House was removed by the Conservative party when Mr. Balfour, who was Leader of the House, decided to change the procedure so that all the Government’s supply requirements would be decided on one day in August, just in time for the grouse shooting season to start. The main purpose of the clause is to suggest to the House—I am sure that the Government will not be interested—that it is now time to try in some way to wrest back our control over Government expenditure before it happens. An important consequence of the House’s giving up of its power over supply and expenditure is that it spends all its time talking about legislation instead. This problem is part of the wider problem of there being far too much legislation. What has filled the time that in previous centuries was taken up with discussing Government expenditure before it happened is legislation—new laws. That is what we talk about instead. I admit that the new clause would not make a vast difference in itself. We need to get hold not just of the annual process of Government expenditure, but of the comprehensive spending review—the multi-year framework which is generally a process from which we are entirely excluded. Select Committees find themselves excluded from that as well. In local government, the systems for controlling expenditure in advance are far better. Even the smallest parish council gives the elected representatives better information and more power over spending decisions than happens in the House. In the end that lack of control leads to worse policy. There is not time to go into the details of what would be different if control were different. I simply leave hon. Members with the thought that the House is withering in its power and in public esteem, and that it will continue to wither until it takes back a role in the setting of policy. That is what the control of expenditure in advance is all about.
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- Sarah McCarthy-FryLabour
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- I thank the hon. Member for Cambridge (David Howarth) for his contribution, which reflects his passionate views that the House should have better scrutiny of Government spending for future years. I know that that was one of the themes of his speech on Second Reading, in which he said that serious reform was required of the way in which Parliament relates to Government on money issues. The hon. Gentleman will know that the Government published a memorandum in March containing formal proposals to Parliament for better alignment between budgets, estimates and accounts. The memorandum explained the plans to simplify the Government’s financial reporting to Parliament, ensuring that they report in a more consistent, transparent and straightforward fashion on spending plans, estimates and expenditure outcomes. The hon. Gentleman will know that an important plank in moving towards alignment is covered by part 8, on the transparency of Government financial reporting and, in particular, the inclusion in departmental estimates of resources used by designated bodies. On 3 July, the Liaison Committee responded to the memorandum on behalf of the other Select Committees, and in its response it covered some of the same ground as the hon. Gentleman has. In particular—
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