30 May 2008
The near-revolt over the 10p tax band reveals how Parliament is beginning to exercise its powers to scrutinise government's tax and spending plans – a development vital to democracy, argues Colin Talbot
In the furore over the 10p tax band, one issue has been largely overlooked – the role of Parliament in approving (or not) government expenditure plans. Frank Field's famous amendment was not just of huge political significance, it was also of immense constitutional significance. And this significance is made all the greater because there are small but noticeable signs that Parliament is starting to flex its muscles versus the Executive branch of government.
If MPs had voted for Field's amendment, it would not have been unprecedented – but it would have been very, very unusual. MPs, of course, have always had the power to overturn governments' 'tax and spend' plans but very rarely exercise it.
Parliament was created – at least to a large extent– to allow monarchs to gain consent to raise taxes. Through the latter half of the seventeenth century, and most of the eighteenth, Parliament struggled to gain more control over tax and spend decisions by government. There was never, however, a 'Golden Age', when MPs exercised detailed scrutiny of such plans before the government implemented them, as a recent Commons' liaison committee report explains.
Parliament has always largely been restricted to a 'yay or nay' vote on the overall government package of tax and spend. Any 'nay' vote would, by convention, be regarded as a vote of no confidence in the government and usually trigger an election (or so conventional wisdom has it).
In truth, Parliament has always had the power, if it wanted to, to amend governments' tax and spending plans or scrutinise them in more detail before approving them. Such active, detailed scrutiny is not unusual in parliamentary systems of government, and is even more pronounced in presidential systems. The Welsh Assembly members and the Scottish MSPs, for example, engage in much more detailed scrutiny than their Westminster MP cousins do.
Parliament has occasionally questioned details of expenditure. Back in 1919 it voted down a supply estimate for a second bathroom for the lord chancellor, and in 1993 chancellor Norman Lamont's two-tiered rise in fuel tax duty was rejected by the House and he had to have a rethink. But any defeats for the government of the day are rare – there have only been three in the past two decades.
All this explains why, if Field's amendment had gone to a vote – but even more so if it had been passed and the government defeated – it would have been a momentous event constitutionally as well as politically. The House doesn't do that sort of thing, that's more the type of behaviour those Europeans over the Channel (or our Celtic cousins) indulge in.
So the fact that the House came perilously close to such an action is not just a reflection of the weakness of the current government and the devastating fall from grace of Prime Minister Gordon Brown, it is also about Parliament starting to flex its muscles. Most political commentators have simply failed to 'join the dots' and instead have concentrated on just one vicissitude of the opinion polls and local elections. So here's some of the dots we ought to be keeping an eye on.
On April 21, the liaison committee (comprising the chairs of all the select committees in parliament) published a report, Parliament and government finance: recreating financial scrutiny. While not exactly best-seller material, its message was important. It is time, they said, that Parliament started taking a much more active role in scrutinising governments' spending plans – especially before approving them.
The committee makes detailed recommendations about simplifying government financial accounting and estimates and also improving scrutiny of departmental spending plans and their links to objectives and performance.
In particular, it suggests that before Spending Review plans are finalised, the government should send select committees emerging views on what has been achieved against past objectives, along with ideas about new objectives and possible reallocations of resources. When the final plans are announced, much more detailed scrutiny should take place. (I should declare an interest at this point as these are the sort of ideas I have been floating to the Treasury select committee for eight years).
The glacial, but potentially massive, changes taking place in Parliament do not stop there. In 2002, Parliament established the Scrutiny Unit to help select committees, especially with financial issues, by providing the sort of technical analysis that individual committees don't have the resources to carry out. Significant progress appears to have been made in strengthening capacity to challenge the Executive.
At the same time, the National Audit Office (which formally reports to and usually only carries out work for the Public Accounts Committee) has been providing more support to other select committees. Recently, for example, after a particularly unfortunate evidence session by the British Council, the foreign affairs select committee asked the NAO to carry out a value for money audit of the BC. This wasn't unprecedented but it was unusual and very significant.
Another straw in the wind was the May 14 report of the public administration select committee. In a highly unusual move, the PASC published the government's response to its proposals to give Parliament greater control of the government's power to reorganise the civil service.
Normally, select committees just publish government replies to their reports and leave it at that. They may revisit the issues at a later stage, but this time the PASC was so incensed by the government's flat rejection of any reform that it published an immediate rejoinder, couched in very strong language.
It specifically challenged the prime minister to make good on his commitment to 'entrust… more power to Parliament'.
All of this does not add up to a revolution – or even a 'transformation', to use the liaison committee's phrase – in the role of Parliament and Executive in central government. But it indicates some ominous rumbling and even the odd tremor.
The political weakness of the current government can only encourage such tendencies – and the Conservative opposition and other parties, sensing this weakness, are pushing some of the changes themselves. It must be asked whether they would be quite so enthusiastic about pressing Parliament to overturn its self-denying ordinance about not amending government tax and spending plans if they were in power; perhaps if that prospect gets closer, they might start pulling back. But for now, the tide is running strongly in favour of Parliament.
And it is not just raw politics; the general weaknesses of the executive arm of government have rarely been so obvious. From the recent 'capability reviews' to the various administrative disasters, Whitehall has never seemed more vulnerable to the charge that it does not know best.
Will Parliament really take advantage of these circumstances to push to rebalance the constitutional and institutional arrangements between itself and government? The PASC clearly thinks the time is right for such a broad discussion and has just launched a new inquiry into 'good government'.
This inquiry is aimed at getting to the heart of a machinery of government that is, at best, experiencing serious problems making and implementing policy and, at worst, is in crisis. The PASC is not alone in raising these questions – the Better Government Initiative, a freelance operation by former mandarins and others, has raised similar issues.
All this is vital to the future of British democracy and public services. Whether it's Brown or David Cameron in Downing Street, government will remain committed to spending around 40% of gross domestic product on public services for the next few years. The widespread perception that this spending isn't working is corrosive.
A rebalancing of the relationship between Executive and Parliament is one important component of a reform package that might just untie this Gordian knot. Someone is going to have to deal with it eventually.
Colin Talbot is professor of public policy and management at the Herbert Simon Institute, Manchester Business School
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