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Standing Committee B
The Committee consisted of the following Members:
Chairmen:
Mr. Roger Gale, †Mr. Win Griffiths
Atkinson, Mr. Peter (Hexham) (Con)
†Campbell, Mrs. Anne (Cambridge) (Lab)
†Carmichael, Mr. Alistair (Orkney and Shetland) (LD)
†Connarty, Mr. Michael (Falkirk, East) (Lab)
Davies, Geraint (Croydon, Central) (Lab)
†Djanogly, Mr. Jonathan (Huntingdon) (Con)
†Hall, Mr. Mike (Weaver Vale) (Lab)
Heald, Mr. Oliver (North-East Hertfordshire) (Con)
Jones, Mr. Kevan (North Durham) (Lab)
†Leslie, Mr. Christopher (Parliamentary Under-Secretary of State for Constitutional Affairs)
Liddell-Grainger, Mr. Ian (Bridgwater) (Con)
McDonagh, Siobhain (Mitcham and Morden) (Lab)
†Pound, Mr. Stephen (Ealing, North) (Lab)
†Prentice, Ms Bridget (Lewisham, East) (Lab)
†Rooney, Mr. Terry (Bradford, North) (Lab)
†Tyler, Mr. Paul (North Cornwall) (LD)
Frank Cranmer, John Benger, Committee Clerks
† attended the Committee
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Tuesday 22 March 2005
(Afternoon)
[Mr. Win Griffiths in the Chair]
Clause 5
Setting-up date and terms of reference
Amendment moved [this day]: No. 36, in clause 5, page 2, line 21, at end insert—
‘(ia) consult, as appropriate, on the terms of reference.’.—[Mr. Carmichael.]
2.30 pm
The Chairman: I remind the Committee that with this we are discussing amendment No. 38, in clause 5, page 2, line 28, at end insert—
‘and may consult any other person or bodies as he considers appropriate.’.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): The Committee will recall that I was speaking as the whistle blew this morning. I do not know whether that entitles me to make another point, but I had just drawn to the Committee’s attention the fact that both amendments would give the Minister the opportunity to consult other parties on the terms of reference for any inquiry to be convened under the Bill. The intention is to widen the range of people who should be consulted.
I acknowledge that the Government conceded, properly, in the other place that consultation should take place between the Minister responsible and the person nominated as chairman. However, there is a great deal to be said for the consultation being as wide as the Minister can make it. This suggestion perhaps moves on from what the hon. Member for Huntingdon (Mr. Djanogly) said about openness and independence. If there is scope for consultation on the terms of the remit with interested parties beyond the chairman, it would be in the interests of the standing of the inquiry to carry that out. Currently, the consultation is fairly narrowly circumscribed by the Bill and it takes place purely with the chairman. Other parties would not have to be consulted on every occasion, but it would be sensible for the Minister to have the power to consult them.
The two amendments would have a broadly similar effect. Amendment No. 38 may sit more easily in the Bill, but there is no great distinction to be drawn between them. They represent a fairly modest extension of the Bill that I think will find favour with the Government, so I leave it to the Minister to choose which to accept.
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Mr. Jonathan Djanogly (Huntingdon) (Con): Amendment No. 36 specifies that before the setting-up date for the inquiry, as well as setting out the terms of reference and stating the number of panel members, the Minister must
“consult, as appropriate, on the terms of reference.”
However, as the Minister is already required to consult the chairman on the terms of reference, it could be argued that the amendment is superfluous. Also, we argued that the chairman should have to agree to the terms of reference, so the wording would not fit in with the way in which we look at the world in general. However, our agreement-type amendment was defeated, and if were to accept the need to consult the chairman, we could support the amendment for three reasons. First, it would reaffirm the importance of consulting the chairman. Secondly, it specifies that any consultation must take place before the setting-up date of the inquiry. Thirdly, it would allow the consultation of other appropriate persons or bodies before the inquiry began. Having said that, I shall make one small, pernickety point: it may be more desirable to position the new provision before, instead of after, subsection (1)(b)(i), because in its current position it does not reflect the chronology of events.
Amendment No. 38 is permissive, not prescriptive. It would allow the Minister to consult
“any other person or bodies as he considers appropriate”
before setting out or amending the terms of reference. As there is nothing to the contrary in the Bill, the Minister always had that option open to him, so the amendment would not change anything. It would, however, underline his option to consult elsewhere, and therefore might encourage him to do so, thereby having some, albeit negligible, advantage. Although the amendment is not objectionable per se, it could be argued that the express option to consult other people could distract from the obligation to consult the chairman. As we are arguing for more chairman involvement, we would want to avoid any amendment that would compromise what little influence the chairman currently possesses.
The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): The hon. Member for Huntingdon makes the arguments against amendments Nos. 36 and 38 for me. I was tempted to do otherwise, but now that he has convinced me, it occurs to me that I could give other reasons why we should not accept them.
Mr. Carmichael: Let us hear them because they are all crap!
Mr. Leslie: Luckily, I do not think that Hansard will catch the full flavour of the hon. Gentleman’s interjection—at least I hope that it does not.
I understand the rationale behind amendment No. 38, but it does not add anything because if Ministers consider such consultation is appropriate, they will consult, as is the current practice. I expect that they will generally consult, because it is important to get terms of reference that are workable and supported at the outset. Indeed, in the consultation paper “Effective Inquiries”, which we published last May, the
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Government acknowledged that sometimes there would be a good case for allowing a period of time between the announcement of an inquiry, and the naming of a chairman and the settling of the terms of reference, and that during that period some consultation on the draft terms of reference with interested third parties might be appropriate. That view was supported in responses and the structure of clauses 4 and 5 reflect it.
However, it is important to remember that ultimately an inquiry has higher purposes than just involving those most directly related to it. It is not set up just to serve the interests of a particular person, but to serve the interests of the public at large. Those affected by distressing events, particularly the survivors and relatives of persons killed in an event that is subsequently being inquired into, will often have very strong views on the proposed form and conduct of an inquiry, including its panel membership and terms of reference. Although it is important to the success of an inquiry to listen and to try as far as possible to address some of those concerns, it is also important for the inquiry to restore public confidence in general and to provide a measure of closure. The Minister should take those views into account as far as possible, but ultimately he should proceed in the interests of wider public policy. We would do no good if we created an expectation among those involved that the inquiry must be conducted, and the terms of reference drawn up, exactly in accordance with the wishes of those most closely involved.
Amendment No. 36 is of slightly more concern because it would compel a Minister to consult. That returns us to the potential delay to the commencement of an inquiry and also possibly opens up the issue of inviting legal challenges at the start of an inquiry if there is a dispute about whether there had been sufficient consultation. That would not be desirable.
Similar amendments were tabled in another place and withdrawn, because concerns were expressed by a number of noble Lords that there could be a propensity to go to judicial review. The Government have examined the matter in detail and agree that carefully considered terms of reference are the key to a successful inquiry, and that the need to consult will vary from inquiry to inquiry. However, as I said in relation to a couple of other things, the final decision must rest with the Minister so that we can make progress as soon as possible with timely investigations.
I do not deny that there are good, sound sentiments behind the amendments, but it would not be appropriate to include them.
Mr. Carmichael: If that is what the Minister considers to be higher purposes, we are in more trouble than we realised. He suggested that the amendments would have the effect of compelling Ministers to consult. In fact, if he has regard to the terms of the amendments, he will see that amendment No. 36 states:
“consult, as appropriate, on the terms of reference.”
That, to my mind, leaves a great deal of discretion in the Minister’s hands. If the Minister were to decide, reasonably, that no consultation beyond that with the
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chairman were appropriate, he would not be compelled to consult more widely. Similarly, amendment No. 38 makes that clear by using the phrase “may consult” rather than “must consult”. The may/must debate has exercised Committees ad nauseam in the past.
The Minister said something interesting earlier, and he is probably correct when he says that Ministers will consult. It is quite important that they do. The thinking behind the amendments, however, is that there may be circumstances in which, for his or her political aims, the Minister chooses not to consult and prays in aid of the legislation to say that that he has no power to consult beyond the chairman. The Minister will say, “Parliament has given me a power and a duty to consult the chairman, but nobody else. Although I wish to consult, I do not have the power to do so.”
Our amendments would close that bolthole for a Minister who did not want to consult for fear of hearing things that he or she might not wish to hear. That possibility is one of the higher purposes of the Bill. I am disappointed that the Minister does not agree with me. In all sincerity, however, this is not a matter on which to divide the Committee, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 ordered to stand part of the Bill.
Clause 6
Minister’s duty to inform Parliament or Assembly
Mr. Djanogly: I beg to move amendment No. 5, in clause 6, page 3, line 7, at end insert—
‘(d) an estimate of the likely cost of an inquiry’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 39, in clause 18, page 8, line 34, leave out ‘unnecessary’ and insert ‘excessive’.
No. 20, in clause 18, page 8, line 34, at end add—
‘(4) In making any decision as to the procedure or conduct of an inquiry, the Chairman must within one month of the setting-up date publish an estimate of the likely cost of the inquiry.’.
Mr. Djanogly: A major reason for drafting the Bill was to respond to the spiralling costs of public inquiries. The Government stated in their consultation paper, “Effective Inquiries”,
“that any new legislation on inquiries should include a statutory requirement on the chairman to have regard to . . . costs to public funds”.
That is not adequately dealt with in the Bill. As it stands, the chairman merely has the obligation to have regard to the need to avoid any unnecessary cost. There is no mechanism to keep an inquiry’s costs in check, so, as promised on Second Reading, we have tabled amendments to address that deficiency.
It is a well known fact that excessive amounts have been spent on inquiries in recent years. The regulatory impact assessment estimated that more than £300 million has been spent since 1990, and that was only allowing £14 million for the Saville inquiry, estimates
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for which now range from £155 million to £250 million. Viscount Goschen put those sums in context by reminding us that according to the figures produced by the noble and learned Lord Chancellor, it would cost £150 million to run the supreme court for 20 years. The figures are astounding and indefensible. The money has been spent and we must now ask how that exorbitant expenditure can be avoided.
Viscount Goschen made a convincing case for a solution. Without a budget, there can be no hope of proper cost control. Having an estimate on the public record at the outset would be a powerful tool in ensuring that the minds of the chairman and the commissioning Ministers were focused on costs. The Conservative Opposition continue to support that approach to enforce some kind of cost control on those who are setting up and running inquiries.
Amendment No. 5 would require the Minister setting up the inquiry to lay the likely cost before Parliament, thereby forcing him to take some responsibility for his decision to launch the inquiry and provide transparency in the budgeting process. It is appropriate that Parliament should know how much an inquiry will cost from the outset and provide some democratic legitimacy for the ministerial decision to spend taxpayers’ money in that way.
Mrs. Anne Campbell (Cambridge) (Lab): I have some sympathy with the hon. Gentleman because costs need to be kept under control, but I am a little puzzled about how it is possible to estimate the costs in a complex inquiry. Although no one wants costs to spiral out of control, the chairman may pursue lines of inquiry that lead to costs above the original estimates. I am worried that the amendments may curtail the inquiry unnecessarily and not lead to a proper conclusion.
Mr. Djanogly: The hon. Lady makes a fair point. I will come to the importance of flexibility, which is reflected in our amendments.
Amendment No. 5 should be read with amendment No. 6, which would require an oral statement to the relevant Parliament or Assembly, as explained earlier by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald). That would enable Parliament to have true involvement in the Minister’s decisions on setting up the inquiry—in this case, allowing debate about whether the likely costs of an inquiry are appropriate in the circumstances. We doubt that any Assembly would accept £250 million as an appropriate budget to spend on an inquiry.
2.45 pm
Once the inquiry has been set up, the Minister will have limited involvement in running the inquiry; he will not and should not have a final say about how and where the funds are spent. That would affect the inquiry’s independence, which is addressed by amendments Nos. 30 and 31. Therefore, any amendments dealing with the inquiry’s costs must also consider the chairman’s involvement in spending. Amendment No. 20 addresses that very issue. It
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requires the chairman, when taking a decision about the procedure or conduct of an inquiry, to publish an estimate of the likely cost of the inquiry within one month of the setting-up date. That would force the chairman to consider carefully the possible costs to be incurred and the most appropriate way to approach the tasks that he has been set. It would provide accountability of the chairman’s expenditure and, through public scrutiny and legitimate expectations, put pressure on the chairman to keep within the published budget.
The amendments would ensure that a budget was set at the outset by both the Minister and the chairman. It would then be open to Parliament and the public to object to excessive forecasts and scrutinise expenditure over and above the expected budget. I should point out—this relates to the point made by the hon. Member for Cambridge (Mrs. Campbell)—that the amendments do not impose a cap on an inquiry’s expenditure. We recognise that inquiries require the flexibility to follow new leads of evidence and interview further witnesses when appropriate. However, Ministers and chairmen running inquiries should not be given blank cheques to set unlimited amounts on unspecified inquiry costs.
Mrs. Campbell: What would happen if it became obvious that an inquiry would exceed the estimated amount that the Minister had declared at its initial stages? Would the inquiry have to be abandoned or would the Minister have to return to the House and make a further statement? Will the hon. Gentleman explain a little more?
Mr. Djanogly: Although we are not arguing for caps—it is not a matter of coming back for more—it is entirely appropriate that at the initial stages of the inquiry the chairman and the Minister, working together, make an assessment of the likely costs. For example, when a court case is started, one of the questions that parties ask their lawyers is how much it will cost. Just because it is a public inquiry does not mean that it should have a blank cheque.
Mr. Carmichael: In drawing the parallel with a solicitor advising a client, the hon. Gentleman raises an important point. In my experience as a solicitor, what often happens is that clients say, “If that’s what it’s going to cost, it’s just not worth it. I won’t go ahead.” Is that what the hon. Gentleman is suggesting is a desirable basis on which to conduct public inquiries?
Mr. Djanogly: No, I am not suggesting that. I am just saying that there must be some financial discipline in the process, as the amendment proposes.
It is recognised that setting budgets is not an easy task—in the private sector or in the public sector. Lord Fraser of Carmyllie noted that
“it is very difficult to give an absolutely accurate forecast of the cost of an inquiry, not least because those who have to chair it will not yet have decided whether they will allow any particular party to be represented . . . But . . . when the Minister has decided to set up an inquiry and has discussed it with the chairman, there must be at least some appreciation, understanding or calculation of who will be allowed to attend . . . Parliament should be given the
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opportunity to know what the inquiry will cost at the outset. If there can be only an estimate, that is the best that can be done.”—[Official Report, House of Lords, 7 February 2005; Vol. 669, c. 641.]
We fully support the noble Lord in his commentary.
Setting a budget is difficult and challenging in all circumstances, but particularly where there are uncertainties, as is the case for any inquiry. However, setting a budget is a necessary exercise that is routinely carried out by responsible individuals, companies and Administrations. It is unrealistic to argue that an estimate cannot be made for an inquiry. Yes, it would be difficult, but the difficulty of the task is not a good reason to waste—potentially—millions of taxpayers’ pounds.
That view is supported by the Public Administration Committee, which included in the core recommendations of its report “Government by Inquiry” that
“Ministers should announce a broad budget fairly early on at the start of an inquiry. Any increases over the announced limits would then need to be publicly explained.”
It also referred to the need to
“Set budget limits, publish costs and explain overruns”
in its proposed principles of good inquiry practice.
Mr. Mike Hall (Weaver Vale) (Lab): If I follow the hon. Gentleman’s argument correctly, he is saying that we should put estimates on the cost of public inquiries and that, although there would be no legal penalty for exceeding the estimate, those conducting the inquiry would have to explain the reasons to the general public. Does he not think that it might impede the process of the public inquiry if they were distracted from their important work in order to explain to a wider public why they overspent the budget?
Mr. Djanogly: No, I do not. It is quite acceptable and proper that, if an original estimate is given, a Minister should have to stand at the Dispatch Box and explain why the costs have trebled or whatever.
Mr. Hall: The Minister is not responsible for conducting the inquiry. The chairman or chairwoman would be the person responsible, so would it not be their responsibility to explain, and would that not distract them from the work that they had been asked to do?
Mr. Djanogly: I only wish the hon. Gentleman’s comment were correct. He will have heard me and other hon. Members repeatedly saying how the Government have much too much to say about how inquiries are conducted. Let us say for the moment that he is correct. That still does not mean that the Government should not have to be responsible for explaining why costs have overrun. If the chairman has to explain that with the Government, that is what he will have to do. These are basic accounting principles. There is no reason why people should not have an explanation when public money costs significantly overrun.
Mr. Hall: I am sorry to pursue the hon. Gentleman on this point, but is he really saying that if a public inquiry overruns its estimated costs, it is the
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Government’s fault and so the Government must explain? That is what he has just told the Committee. He needs to get his thinking a little more clear on this point.
Mr. Djanogly: I did not say that at all, as the record will show. If costs have overrun, they will have done so for a reason. That should be explained.
Mr. Hall: Who by?
Mr. Djanogly: By the Minister and the chairman.
Mr. Hall: It is not the Minister’s fault.
The Chairman: Order.
Mr. Djanogly: If I may, I will move on.
We the Conservative Opposition believe that the Government have failed to introduce statutory controls on the cost of inquiries, despite the overwhelming evidence in favour of such procedure, including in their own consultation paper. It would be a missed opportunity if we did not seize this timely occasion to address the issue of inquiries’ costs. On Third Reading in another place, the Government seemed to be in favour of introducing some form of controls on costs, at least in principle. Since then they have gone rather quiet on the issue. We therefore hope that they have now had time to consider the issue further and are about to announce some sensible new proposals.
Mr. Carmichael: We have gone from higher principles to bean counting in one small step and with effortless ease. I feel exceptionally uneasy about the hon. Gentleman’s proposals. He asked how we can best put a cap on costs of inquiries, such as the Saville inquiry, which seems to be in vogue in today’s debate. Its costs would have been reduced greatly if it had been held 20 or 25 years ago. The reason why many inquiries run to such length and expense is often that the culprit of the inquiry has refused it for so long. The Saville inquiry was always going to have to be held eventually. I am convinced that a good part of the reason why we are in such a situation is that we have allowed matters to run for so long before we gave in to the need for a public inquiry.
I want to consider the practical consequences of the amendments tabled by the Conservative party before I speak briefly about amendment No. 39. A Minister would have to go to the House or make a written statement about the estimated costs of the inquiry. That presupposes all sorts of things, such as the Minister himself or herself knowing exactly what different witnesses in the inquiry will say, how long it will take them to say it, what costs will be involved, who will be legally aided and who will be financing their own representation. I do not understand how that can feasibly and practically be carried out.
Even if such procedure were carried out, what happens if the estimated costs of the inquiry were exceeded by the costs of the inquiry in practice? Presumably, as the hon. Member for Weaver Vale (Mr. Hall) said, the Minister would have to answer for that. He would have to answer for something that was
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not his doing in the first place. Moreover, it ought not be something for which he should be answerable. If the inquiry is to be independent of the Government—the crux of everything that the hon. Member for Huntingdon said this morning—the Minister should not have any say in the costs of it. I feel exceptionally uneasy about the fact that the practical consequences of what the hon. Gentleman said are unworkable in parliamentary terms.
Having dealt with several inquiries in a previous life, I shall draw on my experience. As a procurator fiscal deputy and a solicitor in private practice in Scotland, I have dealt with fatal accident inquiries and inquiries under the Merchant Shipping Act 1995. It is impossible to estimate how long inquiries will last. Invariably, witnesses say something slightly different in the witness box from what they say in their precognition, the consequences of which can be dramatic in an inquiry that was intended originally to last perhaps for a few days, but which could run to weeks. Indeed, certain inquiries quite properly ought to run to weeks. The idea that a cap can be put on such proceedings is wrong.
I deliberately use the term “putting a cap on” costs because that would be the inevitable consequence of the direction in which the hon. Member for Huntingdon wants to take us. If, as he said, the financial discipline must be meaningful, there must be a cap, otherwise there is no point in it. To carry out an academic exercise into the probable costs, but then to wait and see what they are is a waste of parliamentary time. It is also an unnecessary constraint on, and a threat to, the independence of the inquiry.
Having said all that, there is clearly legitimate public worry about the way in which some inquiries can run on. It is right that we consider ways in which to deal with that without striking at the independence of the inquiry, with which the amendments tabled by the hon. Member for Huntingdon are concerned.
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