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Mr. Davey: The Government are giving themselves total flexibility under this clause to pay grants to local Column Number: 257 authorities at the Minister's whim. There will be no parliamentary scrutiny whatever, except, as the Minister said on Second Reading when I raised this point, on the scrutiny of the estimates. I shall come to that in a moment. All sides should be concerned about this extra grant-making power that the Government are taking.Hon. Members may say that the Government pay out huge amounts of grants that are never properly scrutinised. They would probably be right to say that, but that is no reason to give the Government more powers. Clause 31 would allow the Minister to pay a grant at any time, to any authority, for any purpose, without there being any objective criteria by which elected Members in this place, or in local authorities that are not getting those grants, can see why that grant has been given. The Government can pick and choose the authorities to which they want to give grants. That already happens to a certain extent, but at least there is some scrutiny of that power. I am rather worried that the Government will use the extra power that the clause gives for purposes about which people at the audit stage may be extremely concerned. We tabled amendments Nos. 83 and 84 so that Parliament could scrutinise the grants made. The Minister said on Second Reading that the estimates procedure is available to scrutinise grants. I was surprised at that because he should know that that procedure has fallen into disrepute. Various Procedure Committee reports of the past 15 years have described as a constitutional myth the idea that the House really wants the Executive to account for spending. The estimates are debated only on the three days allowed for under Standing Orders, and we do not even debate them on those three days—we debate Select Committee reports that are attached to the estimates. When I have asked questions about the estimates during those debates, Ministers often could not answer because they had not been briefed on those matters. They had come to the House not expecting to be questioned on the estimates. The House has effectively given up the scrutiny of expenditure. We would go another step forward in that direction if we accept clause 31. I shall not labour that point because of the time. However, to assure hon. Members that I could if I so chose, I refer them to a document that I have written called ''Making MPs Work for our money: reforming Parliament's scrutiny of the Budget'', which costs £10. Alternatively, hon. Members can download it free of charge from my website, www.edwarddavey.co.uk. The Chairman: I am not sure whether hon. Members can promote their books; otherwise Edwina Currie might never have sat down. Mr. Davey: You are tempting me, Mr. Conway. For the comfort of hon. Members on the Conservative Benches, I shall not go down that road. I made the point in the pamphlet, and the Leader of the House of Commons has complimented me on some of the analysis in it—I sent him a copy, which he Column Number: 258 claims to have read—that when one compares the supply process in the House with almost all other Parliaments in the western world, especially those in the OECD, ours is an absolute disgrace. We do not analyse the Government's budget and spending proposals in any way. The last time that the House rejected an expenditure request from the Executive was in 1919, and that was a request for money for a second bathroom for the then Lord Chancellor.I told the Committee that I could wax lyrical on the issue. I feel passionately about it. That is why I cannot understand why we should want to give the Executive even more powers, over and above the huge powers that they already have. People are elected to this place to hold the Government to account for the way they spend taxpayers' money, and we have given up on that task. Frankly, the history of the matter shows that we never really bothered to take on that task in any meaningful way. I hope that the Minister will show us why we should trust him with extra powers that will mean that there will not be scrutiny of grants made to local authorities. Mr. Clifton-Brown: On this occasion I wholly support the hon. Member for Kingston and Surbiton. Mr. Phil Woolas (Oldham, East and Saddleworth): The hon. Gentleman has read the book. Mr. Clifton-Brown: I have not read the book. I do not think that it will form part of my bedtime reading, although he might convince me otherwise. Our amendments in a sense complement the hon. Gentleman's amendments and relate to what he has to say. We do not particularly like the specific grant regime, but it did at least have an element of democratic scrutiny about it. The regime that we are discussing is completely arbitrary, as the hon. Gentleman says. Clause 31(1) states, in italics:
so that is any Minister in any Department—
That seems to me to authorise any Minister of the Crown to pay a grant for any purpose that he or she might on a whim consider—to buy, as the hon. Gentleman says, a Christmas party. The problem concerns how the power is to come under democratic scrutiny, or the normal scrutiny of the Audit Commission or the Public Accounts Committee, of which I have been a member. The Minister needs to be able to deal with that point. In the existing system of special grants, under section 88B(1) of the Local Government Finance Act 1988, which is referred to in some of our amendments, the
pay a grant. Although the explanatory notes state that the Treasury must give consent, I can see nothing in the clause to that effect, so where will the money come from? Will it come from each departmental budget? If so, to what extent will we be able to learn from the Minister what must be deleted from his departmental budget? How much has the Minister allowed in the next three years for the relevant grants? Is he aware of Column Number: 259 other Departments that are likely to make grants under the clause? The provision is pretty vague, as can be seen already from the questions that I am asking.Clause 88B of the Local Government Finance Act 1998—which outlines the existing regime—states that the Secretary of State
and provides that he should state
There are safeguards. In addition to the requirement for the consent of the Treasury, the provision requires:
It also states:
and
Those conditions may
or
It is incumbent on the Minister, in introducing so wide a power in the Bill, to explain to the Committee exactly what he has in mind. I am worried, also, that the clause is very arbitrary. We have already seen the Government gerrymandering local government finances towards authorities that are likely to be of their political persuasion. They do that by resource equalisation, pooling council receipts, subsidising an authority rental account that is in deficit with another that is in surplus and by rent rebate subsidy limitations. There are a number of subtle ways in which the Government shift money about from one group of authorities to another. It may be my Machiavellian mind and hon. Members may not like it—[Interruption.] Whenever I start to get on to something contentious, the volume of noise opposite increases. The more the volume of noise increases, the more I know that I am on to the right thing. I have a suspicious mind and I worry about the fact that it is completely at the whim of any Minister to pay a grant to any local authority for anything that he wants. I bet that more grants go to Labour councils than Conservative councils and I defy the Minister to deny that.
5.15 pmMr. Goodman: To buttress my hon. Friend's point, under subsection (2) it is not merely the amount of the grant that may be determined by the Minister, but the manner of payment. Mr. Clifton-Brown: My hon. Friend is right. The more one reads the clause, which has five far-reaching subsections, the more one realises how arbitrary it is. It would be difficult for the Conservatives to make a case to vote the clause out, but I am gravely suspicious Column Number: 260 about it and I await the Minister's explanation with interest.Mr. Raynsford: Well, we really do have a storm in a teacup here. The powers are designed to cope with the deficiencies and weaknesses in the existing grant-making regime, which has been particularly irksome to local government. Local authorities have warmly welcomed the changes; indeed, they asked for the changes to remove some of the problems that very clearly exist at present. I understand the Opposition's wish to find a stick with which to beat the Government—after all, that is their role—but, in this case, had they sought advice from local government before tabling the amendments and making their speeches, they might have come to a different conclusion. The new grant-making power in the clause is intended to address deficiencies in the current powers relating to special grants and to make it easier to pay grants to local authorities without artificially restricting their use. Amendments Nos. 83 and 84 would require the grant to be made in an instrument that would be subject to parliamentary approval.
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| ©Parliamentary copyright 2003 | Prepared 30 January 2003 |
