House of Commons - Business and Enterprise

Select Committee on Business and Enterprise Fourteenth Report

1 Scrutiny of the Department

1. On 3 October 2008, the Prime Minister appointed Peter Mandelson, then EU Commissioner for Trade, as Secretary of State for Business, Enterprise and Regulatory Reform. Mr Mandelson took his seat in the House of Lords as Lord Mandelson of Foy and Hartlepool on 13 October 2008. He gave evidence to us on 21 October 2008. This session had been arranged to examine the Departmental Annual Report, but inevitably ranged very widely.

2. Before that evidence session, Mr Alan Duncan MP, Shadow Secretary of State for Business Enterprise and Regulatory Reform, wrote to the Chairman of the Committee, expressing concern that, as the Secretary of State was not a member of the House of Commons, the House was limited in its ability to hold him to account. He claimed "The fact that there is no Cabinet level minister for the Department of Business in the House of Commons means I have concerns that a normal system of democratic accountability across the House of Commons has become impossible".[1]

3. Lord Mandelson is fully aware of the potential concerns arising from his position in the House of Lords. Even before we took evidence from him, he had proposed to the Chairman that the Committee take evidence from him regularly, and we have agreed that he will appear at least three or four times a year. We have no doubt that he will be properly accountable to the Committee, and we recognise his willingness to co-operate with us.[2]

4. Select committee accountability is important, but it is not the only way in which the House of Commons scrutinises government departments. The question then arises as to whether there should be more direct lines of accountability between Lord Mandelson and the House of Commons as a whole.

Previous practice

5. We recognise that it is far from unprecedented for a Cabinet Minister to sit in the House of Lords. Since 1979, there have been seven occasions on which departmental secretaries of state have been Members of the Upper House.

Date Name Position

May-1979-Apr 1982 Lord Carrington Foreign Secretary

Apr 1982 - June 1983 Lord Cockfield Trade Secretary

Sept 1985-June 1987 Lord Young of Graffham Employment Secretary

June 1987- July 1989 Lord Young of Graffham Trade and Industry Secretary

May 2003-Oct 2003 Baroness Amos International Development

June 2003-May 2007 Lord Falconer of Thoroton Lord Chancellor and Secretary of State for Constitutional Affairs

May - June 2007 Lord Falconer of Thoroton Lord Chancellor and Secretary of State for Justice[3]

6. Although the last two examples might be discounted, as part of the evolution of the Lord Chancellor's Department into the Ministry of Justice, and the evolution of the Lord Chancellor's role into the Secretary of State for Justice, there is no doubt that holders of significant offices have sat in the House of Lords relatively recently.

7. However, in those cases, the secretaries of state were supported by heavyweight ministerial teams in the House of Commons, and, in most cases, another Cabinet Minister dealt with departmental business in the Commons. When Lord Carrington was Foreign Secretary, not only did the Lord Privy Seal, a fellow member of Cabinet, answer Foreign and Commonwealth Office questions,[4] the FCO contained three or four ministers of state and a parliamentary under-secretary.[5] For most of that period, the junior ministers were all members of the Commons.[6] When Lord Young of Graffham was Secretary of State for Employment, Kenneth Clarke MP, Paymaster General and a member of Cabinet, answered employment questions.[7] In addition, Lord Young was supported by at least two parliamentary under-secretaries from the Commons.[8] When Lord Young was the Secretary of State for Trade and Industry, he was also supported by fellow Cabinet Ministers, first Kenneth Clarke MP, Chancellor of the Duchy of Lancaster and Minister for Trade,[9] then Tony Newton MP, as Chancellor of the Duchy and Minister of Trade and Employment.[10] In addition, throughout the period, the department had three parliamentary under-secretaries in the Commons. In all these cases, Parliamentary Questions were tabled to a Cabinet Minister.

8. There are some cases where Cabinet posts have been held by a member of the Upper House and there has been no Cabinet Minister answering for the department in the Commons. When Lord Cockfield was Secretary of State for Trade[11] between April 1982 and June 1983 the Department had two ministers of state and an under-secretary, again all members of the Commons. In 2002, Clare Short MP was supported by a single parliamentary under-secretary in her post as Secretary of State for International Development. Baroness Amos held the position from May to October 2003; it is significant that from June 2003, she was supported by a minister of state in the Commons, as well as the parliamentary under-secretary (a post which remained in the Commons). As the Office of Lord Chancellor has evolved, so has the weight of the Commons ministerial team. In October 2003, as Secretary of State for Constitutional Affairs, Lord Falconer of Thoroton was supported by four parliamentary under-secretaries in the Commons, two of whom had responsibilities for Scotland and Wales respectively. By November 2005, the responsibilities for Scotland and Wales had been moved, and he was supported by a minister of state in Commons, and parliamentary under-secretary in each House. When the Ministry of Justice was created, in May 2007 Lord Falconer was supported by two ministers of state and three parliamentary under-secretaries in the Commons, and one parliamentary under-secretary in the House of Lords.

The current situation

9. In contrast, ministerial responsibilities in the Department for Business, Enterprise and Regulatory Reform are distributed as follows:

Lord Mandelson Secretary of State for Business, Enterprise and Regulatory Reform

Pat McFadden MP: Minister for Employment Relations and Postal Affairs (Minister of State) Employment relations
ACAS
Postal policy and the Royal Mail and Post Office portfolio of the Shareholder Executive
Insolvency Service (including companies investigations)
Strengthening regional economies
Olympic legacy
Transformational government

Gareth Thomas MP: Minister for Trade, Investment and Consumer Affairs (jointly with DfID) (Minister of State) Trade policy (a shared BERR/DfID responsibility)
UK Trade & Investment (reporting jointly to the Business Secretary and the Foreign Secretary)
EU competitiveness and the Single Market
Services Directive
Consumer affairs
Competition issues

Ian Pearson MP: Economic and Business Minister (jointly with HMT)
(Parliamentary Under-Secretary)
Business sectors: aerospace, marine and defence; automotive; bioscience and pharmaceuticals; chemicals; construction; environmental industries; manufacturing, materials and engineering; retail and services
Sustainable development and regulation (including waste electrical and electronic equipment issues)
Business support simplification
Corporate social responsibility
Corporate governance
Companies Act implementation and Companies House
Export control
Export Credits Guarantee Department

Lord Carter CBE: Minister for Communications, Technology and Broadcasting (jointly with DCMS)
(Parliamentary Under-Secretary)
Communications and content industries
Electronics and IT services
Creative industries
Better Regulation Executive, including regulatory budgets
Better regulation within BERR

Baroness Shriti Vadera: Minister for Competitiveness and Small Business (jointly with Cabinet Office)
(Parliamentary Under-Secretary)
Competitiveness, enterprise, growth & business investment
Small business
Business Council for Britain
General oversight of Shareholder Executive and its portfolios

That means there is a single dedicated minister of state, Mr Pat McFadden MP, in the Commons. A second minister of state, Mr Gareth Thomas MP, is shared with the Department for International Development, and the only parliamentary under-secretary in the Commons, Ian Pearson MP, is shared with the Treasury.

10. We do not question the individual competence of Commons' ministers in the Department for Business, Enterprise and Regulatory Reform. However, the pressure of work upon them is immense; not only do they have to master their own portfolio, but they also have to deal with matters as important as competitiveness, small business, communications and the creative industries on behalf of their colleagues in the House of Lords. Furthermore, we do not see how Members of the House of Commons can effectively make their voices heard when such a significant proportion of the ministerial team is based in the House of Lords or shared with other departments. In the past, in similar circumstances, it has been usual for Members of this House to be able to seek responses from a Cabinet minister, who would be made aware of MPs' concerns directly. Given current economic circumstances—and the heightened need for Members to be able to approach ministers easily, including informally, on matters of urgency—it is particularly unfortunate that the department for business is so thinly represented in the Commons.

Possible remedies

11. It is open to the Prime Minister to rebalance the ministerial team in some way; for example, it would be possible to follow earlier precedents and ensure that a Cabinet Minister in the Commons is able to answer on behalf of the Department, and, if not formally attached to the Department, still have a post which allows him to be involved in its affairs. If this does not happen, we believe something more should be done.

12. When we discussed accountability with Lord Mandelson he suggested "you alter the Standing Orders of the House of Commons to allow Lords heads of department to come and answer questions in the Commons".[12] Although he admitted that he was "way beyond my comfort zone"[13] we believe he has identified one of the key mechanisms for accountability to the House. Moreover, although questions are an important and regular feature of our proceedings they are, procedurally speaking, relatively informal; no motions are moved or resolutions agreed. The time has come to look again at whether or not there is a mechanism by which Members of the House of Commons could, at least, put oral questions to the Secretary of State for Business, Enterprise and Regulatory Reform in the same way as they can to secretaries of state in this House.

13. The most obvious method would be to allow him to appear at the Despatch Box to answer oral questions, like other ministers. Whilst we recognise that many of our colleagues will have an instinctive dislike of the idea of a peer appearing in this chamber, we would point out that peers have entered the House of Commons before. Lords can appear before the Commons as witnesses, if they consent to do so,[14] and earlier editions of Erskine May give details of the procedure, in which Lords are seated within the bar of the House.[15] Indeed, there are precedents for peers addressing the House directly, as did Lord Melville in 1805 and the Duke of Wellington in 1814.[16] If the House could show such flexibility two centuries ago, we believe it should be able to act in a similar spirit now.

14. If an appearance in the Chamber is considered too radical, then there are other options which could be explored. We note that the Standing Orders provide for a Minister of the Crown, whether or not a Member of the House, to make a statement and answer questions upon it in a grand committee, meeting in a large committee room.[17] Again this seems to us a precedent which might be usefully adapted. It might also be possible for Lord Mandelson to appear in Westminster Hall, the parallel chamber.

15. The obvious solution, and the neatest, would be to the amend Standing Orders to allow the Secretary of State to answer questions at the Despatch Box. But this may encourage governments to appoint more members of the House of Lords as heads of department, and that would be an unwelcome and significant constitutional change. Detailed discussion about a mechanism for parliamentary questions to the Secretary of State for Business, Enterprise and Regulatory Reform is best taken forward by the Procedure Committee. However, we are convinced such a mechanism is needed, particularly at a time of such economic turmoil. We call upon our colleagues to look at this matter urgently, and upon the Government to co-operate fully in such an inquiry, particularly given the concerns expressed by the Secretary of State himself.

1 See Q 43 Back

2 See Q 35 Back

3 The Committee is grateful to the House of Commons Library for this list and much of the other information relating to the dates when particular Ministers held office. Other information is drawn from the Ministerial lists at the front of each volume of Hansard. Back

4 Ian Gilmour MP held the office from May 18 1979; Sir Humphrey Atkins MP took the office on Oct 29 1981 Back

5 At the beginning of the period there were four FCO Ministers of State, but the number was subsequently reduced. Back

6 Lord Trefgarne was parliamentary under-secretary from 1981-82. Otherwise, all FCO ministers other than the Foreign Secretary himself appear to have been MPs. Back

7 For example, Kenneth Clarke MP made an enterprise and employment statement, then closed a debate on industry and employment on 12 November (ibid, Vol. 86, Col. 444 and 526 respectively) and answered questions relating to employment on 3 December 1985 (Parl Deb, Vol 88, Col. 137) Back

8 There were three under secretaries in the Commons from September 1985 to January 1986 Back

9 From 13 June 1987-25 July 1988 Back

10 25 July 1988 to 24 July 1989 Back

11 Industry was at that stage a separate department Back

12 Q44 Back