Select Committee on Liaison First Report



Memorandum to the Liaison Committee


1.  The Treasury Committee was appointed on 16 July 2001, and held its first meeting two days later when Mr John McFall was appointed as its chairman. Like other departmental committees, our remit is to examine the policy, expenditure and administration of specified government departments (the Treasury, the Inland Revenue and HM Customs and Excise) and "associated public bodies". As have our predecessors, we interpret this to include the smaller departments responsible to the Chancellor of the Exchequer, as well as such organisations as the Bank of England and the Financial Services Authority.

2.  We have also decided to follow the practice of our immediate predecessor and at our first meeting established a Sub-committee consisting of all Members of the Committee, primarily to scrutinise the work of bodies for which Treasury Ministers are responsible. We have appointed Mr Michael Fallon as its chairman.

The Work of the Committee

3.  Because of the Treasury's role at the centre of the Government machine, our remit includes the whole economic system and the levels of public receipts and expenditure. A core element in our work is therefore examination of Budgets and of Pre-Budget Reports. We will also be looking closely at the biennial Spending Reviews, the next of which will be published later this year (SR 2002).

4.  We are continuing the practice of our predecessor in examining regularly the Monetary Policy Committee of the Bank of England, typically after the publication of Quarterly Inflation Reports. This provides us with a regular opportunity to examine the exercise by the Bank of its operational responsibility, under the Bank of England Act 1998, for setting interest rates to meet the Government's inflation targets.

5.  We have taken evidence on several occasions from the Financial Services Authority, principally in relation to Equitable Life. It is likely that the activities of the Authority will occupy us to a greater extent now that the Financial Services and Markets Act 2000 has been brought into force and the Authority is directly responsible for a wide range of aspects of financial regulation. We are currently considering how this might most effectively be done.

6.  Much of the time of the Committee is necessarily taken up in regular monitoring processes, but a balance needs to be struck between this work and one-off inquiries. These will represent an important element in our work and represent one way in which we can respond to topical issues. To date, we have conducted two such inquiries, one into the broader consequences of the takeover of the London International Financial Futures and Options Exchange (LIFFE) by Euronext, and the other into the Treasury's Review of Departmental Reports. This latter inquiry, to which all other departmental committees have been invited to make an input, relates to the oversight, which by custom rests with the Treasury Committee of the form in which the Government presents information to Parliament on its expenditure.

7.  We are continuing the practice of our predecessor in holding informal seminars to inform our work. Last October, we held a seminar to discuss how we would approach our work. Further subject-based seminars are expected to be held in the future. The conclusions of the first seminar are being developed with a view to ensuring that, over the Parliament, we can systematically cover the broad areas of our responsibilities, while still leaving scope to respond to unexpected issues.

Replies to Reports

8.  At the Dissolution, a number of replies to reports by the previous Committee were outstanding. All have now been received, and have been published as Special Reports. The Table below sets out the reports concerned and the period from report to reply.

ReportPublished ReplyReply received Time from report to reply
Third Report: HM Treasury (HC 73)1.2.01 Eighth Special Report (Session 2001-02) HC 429 30.11.018 months 29 days
Fourth Report: International Monetary Fund: A Blueprint for Parliamentary Accountability (HC 162) 13.3.01Seventh Special Report (Session 2001-02) HC 379 15.11.018 months 2 days
Fifth Report: Banking and the Consumer (HC 138) 13.3.01First Special Report (Session 2001-02) HC 198 20.7.014 months 7 days
Sixth Report: HM Customs & Excise: Collection of Excise Duties (HC 237) 26.3.01Fifth Special Report (Session 2001-02) HC 315 12.10.016 months 14 days
Seventh Report: The Government Actuary's Department (HC 236) 27.3.01Fourth Special Report (Session 2001-02) HC 267 24.9.015 months 28 days
Eighth Report: The Royal Mint (HC 239) 27.3.01Third Special Report (Session 2001-02) HC 266 5.9.015 months 9 days
Ninth Report: The Monetary Policy Committee—an End of Term Report 2.5.01Second Special Report (Session 2001-02) HC 199 20.7.012 months 18 days
Tenth Report: Equitable Life & the Life Assurance Industry: An Interim Report (HC 272) 29.3.01Sixth Special Report (Session 2001-02) HC 316 17.10.016 months 18 days

9.  Our predecessors reported[158] that "a disappointingly large number of replies have arrived outside the two month deadline (even allowing for the understanding that if the deadline falls in a recess the reply should be received by the time the House next sits)". Following approaches to the Chancellor, they were able to report that the position had improved in the course of Session 1999-2000. The data in the table suggests that the position may have worsened since then. We shall continue to work with the Treasury to seek to secure timely responses to our reports.

Obtaining evidence from Ministers

10.  The Chancellor has given evidence to the Committee once so far in this Parliament, on the Pre-Budget Report. Treasury Ministers have appeared before other departmental committees on several occasions. With the increasing prevalence of policies explicitly involving more than one Government department, it is to be expected that other committees will wish to take evidence from Treasury witnesses from time to time. Provided that this does not conflict with our own work, we have no objection to this development.

Work of the Treasury Sub-committee

11.  The Treasury Sub-committee operates under the overall supervision of the Committee, but conducts its own inquiries. It is currently undertaking inquiries into the 2001 Census in England and Wales and the Office for Government Commerce. The Sub-committee has also heard oral evidence from HM Customs and Excise, the Paymaster General, and Mr John Roques on his report into the collection of excise duties.

12.  The 2001 Census, the latest in a series stretching back to 1801, was a devolved matter in Scotland and Northern Ireland. The Sub-committee's inquiry into the 2001 Census in England and Wales is examining the adequacy of the preparatory work and consultation undertaken prior to the Census; the conduct of the Census; the utility of the planned outputs for prospective users; and lessons for the next Census. The Sub-committee expects to report on this subject shortly.

13.  The Office for Government Commerce (OGC) was established on 1 April 2000 by bringing together the former Treasury units concerned with procurement policy, practice and development with three former Cabinet Office agencies - the Property Advisers to the Civil Estate, the Central Computer and Telecommunications Agency and the Buying Agency. The OGC was created to lead a wide-ranging programme to modernise procurement in central civil Government and its top level target is to deliver £1 billion of value for money improvements from central civil Government commercial activities by the end of 2002-03.

14.  The Sub-committee's inquiry into the OGC is examining how it deploys its resources to meet its aims and objectives, and in this context: to examine its strategies and progress towards achieving its target of delivering £1 billion of value for money improvements from central civil Government commercial activities; and its role in Public Finance Initiative projects.

January 2002

158   First Report, Session 2000-01, HC 41 (2000-01). Back

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