Before I ask the Clerk to read the title of the Bill, I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing I will remain in the Speaker’s Chair, although I will carry out the role not of Deputy Speaker, but of Chair of the Committee. We should be addressed as Chairs of the Committee rather than Deputy Speakers.
Clause 1
Temporary increase in capital limit of Contingencies Fund
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following:
Clause 2 stand part.
New clause 1—Contingencies Fund: reporting in financial year 2021-22—
“(1) The Treasury must lay before the House of Commons within 15 days of the end of each calendar month in the financial year 2021-22 a report which includes a complete list of each advance from the Contingencies Fund, in each of the following categories—
(a) during the Vote on Account period, to meet urgent cash requirements (other than supporting a new service) in excess of the net cash requirement granted in the Vote on Account;
(b) to meet the cash requirement supporting an urgent service which Parliament has already approved through specific enabling legislation but for which existing provision is not available;
(c) to meet the cash requirement supporting a new service which is urgent and cannot await Parliamentary approval of both the specific enabling legislation and the necessary Estimate;
(d) to meet a further urgent cash requirement for existing services when provision for the total net cash requirement on the Estimate is exhausted; and
(e) in the case of an Estimate where expenditure is largely financed from income, advances made in anticipation of the receipt of cash associated with such income.
(2) The report under subsection (1) must include a reference to any written ministerial statement made to the House of Commons in relation to each advance from the Contingencies Fund in financial year 2021-22.
(3) The report under subsection (1) must include any relevant formal written direction to the accounting officer where a Minister of the Crown decided to continue with a course of action which the accounting officer had advised against.
The new clause is intended to ensure that the Government learn from the past year and, as I set out in my earlier contribution, not only recognise that they have repeatedly done too little, too late to protect the public’s health and the economy through the outbreak, but make serious and structural reforms to how they initiate and examine the spending of public money. The new clause would ensure that the extra financial freedoms that Parliament grants in the Bill are used in a manner that reflects the importance of transparency with public money.
I shall not repeat the arguments that I and other hon. Members made on Second Reading, but address the substance of the new clause. Our new clause is simple. Subsection (1) sets out that, in respect of each plausible category of unforeseen Government spending—urgent cash requirements for existing services; urgent cash requirements for new services, whether yet approved in principle or not; increased cash requirements; and short-term cash flow issues—the Treasury must lay before the House a report of all the advances made that month.
Subsection (2) sets out that each payment from the fund should be explicitly associated with ministerial statements, which explain the purpose of such expenditure. Subsections (3) sets out that where such payments have been carried out only on the basis of ministerial direction, the fact and nature of that direction should also be disclosed. We fully accept that on occasion ministerial directions are a vital part of how our country and political system responds quickly and effectively to unforeseen circumstances. There are occasions when the accounting officer will not be able to align urgent needs with normal accounting procedures. What matters is not the fact of the direction, but its nature.
Subsection (4) ensures that where rapid procurement decisions are taken, they provide an opportunity for the Government to improve and are assessed as such. The role of the Comptroller and Auditor General is crucial in our system of parliamentary control over public finances. There are lessons to be learned from the specific practice of emergency procurement. It is wrong to see each instance of rapid procurement as a special case.
Before I call Andrew Jones, let me just say that I am grateful for the restraint that people demonstrated on Second Reading. We have a rather extensive call list for the International Women’s Day debate that follows, so if people could show the same restraint in Committee, whether they are remote or in the Chamber, I would be grateful. A number of people withdrew from the Second Reading debate; if anyone wishes to withdraw from Committee stage, please will they do so in the normal manner, through the Speaker’s Office?
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Andrew Jones (Harrogate and Knaresborough) (Con)
I will keep my remarks as short as possible; I fully recognise that we have a very well-subscribed and important debate to follow.
I read new clause 1 with interest, but it should be rejected. On Second Reading, I outlined the transparency and accountability mechanisms already in place when funds are drawn from the Contingencies Fund. I will not repeat any of that, but what the Contingencies Fund does not need is extra layers of bureaucracy, and that is what the Opposition are seeking to bring in. The whole point of the fund is to facilitate speed of response. Adding monthly reporting to the existing reporting is not necessary, and it goes against the whole purpose of the fund.
For one year, in the midst of the greatest health crisis in a century and the consequential biggest economic crash in three centuries, the suggestion from the Opposition is more bureaucracy. What problem are they seeking to solve? Accounting officers are still accountable. Departments must still notify Parliament. The Contingencies Fund is managed by Treasury officials. The agreed procedures must be followed.
The Opposition also want to bring in extra measures when dealing with the private sector. How does dealing with the private sector reflect the cash flow in a Department? Liabilities are liabilities, to whichever organisations they are owed. Speed of response is need-based, not sector-based.
Basically, what we have here is Labour distrust of the private sector underpinning its suggestion. It is not relevant to the Bill, and it underlines Labour’s lack of relevance to the nation. That is why the new clause should be rejected.
I cannot support the Opposition’s new clause 1 because, in my view, it would do nothing but introduce an additional layer of bureaucracy where, frankly, sufficient and robust transparency and accountability systems are already in place.
As I said on Second Reading, of course accountability and transparency matter. The Bill does not take away the usual mechanisms already in place to ensure that expenditure met through the Contingencies Fund is scrutinised. Requiring private sector procurement to be referred to the National Audit Office would do exactly what businesses cry out against time and again when it comes to procurement practices. They want less bureaucracy and less burden, not more unnecessary red tape that would hinder engagement from the private sector.
To me, the new clause speaks to the intent of the Opposition and their general attitude to the private sector. It does not recognise the crucial role that business has played over the last 12 months in helping to tackle one of the greatest public health crises of our times. It does not recognise the businesses that otherwise would have been shut down—Formula 1 teams such as McLaren, for example—that adapted their processes to make ventilators; the companies, such as Burberry, that retooled to make personal protective equipment; or the companies, such as the National Exhibition Centre in my constituency, that gave up part of their business to build Nightingale hospitals to ensure that the national health service was not overwhelmed.
The new clause does not recognise, either, the big pharma companies that came up with new drugs at unprecedented rates, using innovative methods that only the private sector can come up with to vaccinate and protect the most vulnerable in our society. Frankly, it is time that the Opposition recognised the role that the private sector played in overcoming this crisis. While it is not yet done, we on the Government side of the House certainly will not forget that role.
I rise to speak in favour of the amendment tabled by the Leader of the Opposition, which hopes to improve the transparency behind emergency spending that we are being asked to sign off. When the Conservative party took office 11 years ago, it promised people transparency and responsible spending. The Prime Minister’s predecessor even told us that sunlight was the best disinfectant—could we not do with some disinfectant to rid us of the stench of cronyism right now?
One hundred and eight million pounds to a pest control firm to make PPE; £60 million on antibody tests that did not work. To top it off, a £37 billion Test and Trace system that at times did not test and did not trace. It was run not by clinicians or the NHS, but by a failed phone company executive, who just so happened to be one of the Prime Minister’s mates from the other place.
Cronyism, irresponsible spending and sweetheart deals that handed the public’s taxes to their mates are what this Government are all about—a £133 million testing contract to a Tory donor, £108 million to Serco, and a £40,000 pay rise to Dominic Cummings. Under this Government, someone who breaks the rules and fails at their job gets a pay rise; those who save people’s lives get a pay cut. If the Conservative party cannot be trusted to spend people’s taxes wisely, it does not deserve to serve our country.
The Minister asked for questions, and I am sure we all look forward to some answers. Will he tell the House why as much as £11 million was spent on the initial trial version of the NHS Test and Trace app before it was abandoned? Will he confirm whether he personally played any part in recommending contractors to the Government over the past year? We are often told by the party of Government that money cannot be found to feed hungry schoolkids, or that the healthcare heroes who looked after our loved ones during the pandemic cannot have a pay rise. We are told by Conservative peers that nurses should be grateful for the job security they have.
I agree with the shadow Minister that we need accountability and transparency, but there is already a whole framework for public spending. As others have said, all the amendment does is introduce more bureaucracy into the Contingencies Fund, without adding any value from the perspective of public accountability.
We need to learn the lessons from all this. It is an unprecedented thing that hopefully will never happen again, but we must ensure that we learn those lessons. Fortunately, there are bodies that help us learn those lessons, such as the National Audit Office, which has already done several reports into procurement.
Given that the speeches made by various Members on the Opposition Benches have been all about scoring cheap party political points, casting aspersions on the Government and Ministers and so on, I thought it was worth quoting the finding of the main National Audit Office report about the issues to which they are referring. It said:
“In the examples we examined where there were potential conflicts of interest involving ministers, we found that the ministers had properly declared their interests, and we found no evidence of their involvement in procurement decisions or contract management.”
That is the National Audit Office, which has strong powers of investigation.
I find it rather disturbing that the Opposition are trying to use this important issue just to score cheap political points. I suppose I should not; I am a new politician, and I should get used to it. What I find most concerning about the Labour party is its clear disdain for the private sector. It is using this issue to criticise private sector manufacturers. The speaker before me, the hon. Member for Luton North (Sarah Owen), for example, criticised companies that were trying to produce PPE. We did not have a PPE industry in the UK at the start of this—we imported it all—and I welcome the fact that lots of companies that had not made PPE put in the effort to develop it and then supply it to the national health service. That is to be welcomed.
The hon. Gentleman has talked a lot about money going out into the private sector, but a lot of this contingency money has gone into the public sector. The key point is, as my hon. Friend the Member for Luton North (Sarah Owen) highlighted, that it is taxpayers’ money. Surely the hon. Gentleman agrees that we should have clear oversight and regular reporting of how taxpayers’ money is being spent.
I agree, and I welcome the points that the hon. Lady makes. I did say in my speech on Second Reading that I welcome the fact that the Labour party have this new-found interest in value for money, because I absolutely believe that taxpayers’ money is not the Government’s money. It is taxpayers’ money and it should be treated as such. As I said earlier, we have sufficient mechanisms for accountability and transparency. We do not need this new clause, and I will not support it.
I would like to speak to new clause 1. First, I am grateful to the Financial Secretary for putting the record straight. It was a reflection of the fact that there was no Opposition Minister on duty. It is suboptimal to have an Opposition Minister speaking by video link: Members have no opportunity to challenge some of his statements, many of which I thought were absolutely out of order. You are obviously the judge of that, Chair, but to call Ministers corrupt, as other Members have in this debate, or to accuse them of cronyism, is basically bringing this House into disrepute.
Yet again, we have the Opposition’s obsession that everything public sector is good and everything private sector is bad. It is simply outrageous. It goes back to that sturdy horse analogy. It is pulling the whole wagon, whether it be vaccine companies or indeed our GPs. Our GPs have done a wonderful job disseminating the vaccine to so many people, and it is heart-warming to go to those centres and see that. GPs are private practices. The health service has never been totally public sector, and we should recognise that. We should recognise the benefits that the private sector brings, just as the public sector clearly brings huge benefits, too.
I agree with my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) that this new clause would simply bring an unnecessary added layer of bureaucracy. I absolutely support the need for accountability and the proper assessment of where taxpayers’ money is spent—we absolutely must be responsible about that—but I do not know where it would end under the new clause, because much of the money that we have provided to deal with the coronavirus crisis has been provided through the private sector, not least the loans through the banks. The hon. Member for Luton North (Sarah Owen) seemed to think that there were no checks on that process, which is clearly not the case. Banks go through a lot of checks, even when the Government are guaranteeing loans, so that is simply not correct.
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(4) If a report under subsection (1) mentions in relation to subsection (2) or subsection (3) anything in connection with procurement from the private sector, the Treasury must refer the matter to the Comptroller and Auditor General for a preliminary opinion on the regularity and propriety of the procurement referred to.
(5) Nothing in this section affects access by the National Audit Office to any documents as provided for under section 8 of the National Audit Act 1983.”
This new clause is intended to enhance accountability to Parliament for as long as the increased flexibility of the Contingencies Fund is in place, and in particular to provide an additional check on the regularity and propriety of any procurement decisions which lead to advances being required from the Contingencies Fund.
Subsection (5) reflects the premise of subsection (4) and ensures that there is no conflict with the wider role of the National Audit Office. I very much hope that the Government will feel able to accept the new clause in the spirit in which we propose it.
The Financial Secretary will be aware of the many extraordinary and frankly irregular arrangements, which have been explored in the court and in the media recently, for the disbursement of public money in the past year. I will not take the Committee through the full annotated catalogue as time is so limited, but I will mention just two of the most egregious examples to emphasise our concerns.
First, there was the contract given to Randox Laboratories for £133 million in respect of tests. Randox is a company that we understand is advised by a Conservative Member. The Department of Health and Social Care ordered that 750,000 of those tests be withdrawn from use for safety reasons. Secondly, at least £150 million of a £252 million face mask contract with Ayanda Capital seems to have been wasted owing to the unsuitability of one type of mask in the order. We understand that the contract included FFP2 masks, which did not meet requirements for use by frontline healthcare workers because they had ear loops instead of head loops. The sum of £150 million pays the salaries of some 4,000 nurses. That fact alone should make clear why it is so important for public money to be spent on improving the lives of those we serve.
The new clause sets out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money, and ensure that we have more money to spend on the things that matter to us all. With such concerns in mind, I ask the Committee to support the new clause.
While I am on the subject of intent, I commend the Government for their aspiration to reform procurement rules. The Green Paper put forward by the Government puts value for money and transparency right at the heart of the United Kingdom’s procurement rules. The Government buy around £292 billion-worth of services from the private sector. Their proposed reforms will allow UK procurement rules to be more modern and flexible, allowing the Government to consider things such as social value, including economic, social and environmental factors.
These new measures will also allow competition for Government contracts under £4.7 million for public works and £122,000 for goods and services to be limited to small businesses, whether they are voluntary, community or social enterprises. Fundamentally, that will improve the quality of suppliers’ output, and it will also increase competition, ensuring that taxpayers get a better deal while our small and medium-sized businesses have greater access to Government procurement contracts.
That intent can only be applauded, in contrast to the Opposition’s desire to make the process clunkier, more difficult and less accessible.
On accountability, as has been said, Ministers cannot choose to use the Contingencies Fund. That is managed entirely by Treasury officials, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the National Audit Office, and the Treasury. Such rules can be found in the Estimates Manual. Finally, business is and can be a force for good. We would do well to recognise that.
The public have a right to know how their money is being spent. Covid contracts handed out to Tory friends and donors have now risen to almost £2 billion. Such money could have provided free school meals to each of the 1.4 million children in poverty, including nearly 4,000 children in Luton North. If there is money for the Prime Minister’s mates, there is money to feed hungry kids. If we can find £30 million for the bloke down the pub, we can find money to give nurses, and every other healthcare worker, a pay increase.
Conservative Members will say there was no choice at the start of the crisis and that it was an emergency, as it was. However, there is always a choice. Instead of turning to established PPE providers from the UK safety industry, Ministers chose a deal that handed £30 million to the Health and Social Care Secretary’s mate from down the pub. That is a cruel and blatant failure by this Government. The Bill asks us to sign off up to £266 billion in emergency loans by the Government. That might be necessary, but it is unnecessary for such a number to go unchecked.
It is our job as MPs across the House to hold the Government to account. The public expect better and for us to spend their money properly, which is why Labour has tabled this amendment. We are not saying that the Government should not do everything in their power to help people in an emergency; we are saying that they must never forget whose money they are spending, and who they need to answer to in the end: the British people.
The drugs company in my constituency, AstraZeneca, did not do any diagnostic testing. That was not what it did; it had no arm doing that. It said, “Right, we will learn how to do this”, and it did it. It set up a whole arm to do diagnostic testing. It did that at no profit, and that is now a huge part of the testing industry in the UK. It also agreed to produce the Oxford-AstraZeneca vaccine at no profit to itself and to give that to the developing world on a not-for-profit basis throughout the pandemic.
That is a private sector company, as is Pfizer, which produces the Pfizer vaccine, and Moderna, which does the Moderna vaccine. All these are private sector companies coming to our rescue and to the rescue of other countries around the world when we need it, and that is very much to be welcomed. I wish the Opposition would pay tribute to the efforts of the private sector, often working in collaboration with the public sector. It is a partnership.