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AMENDMENT OF THE LAW

The hon. Gentleman is a good, hard-working member of the Committee and I value his presence. In our last report, we argued that the end of an economic cycle provides the ideal opportunity to review and clarify the operation of the rules. No doubt, when the Chancellor appears before the Committee a week on Thursday I shall be alert to the hon. Gentleman’s desire to ask a question at the appropriate time. In the case of the golden rule, the Treasury Committee has questioned whether it could be more forward-looking, to reflect tensions between fiscal planning, which looks forward, and the dating of the economic cycle, which looks backward. The evidence we have received, not least from the Governor of the Bank of England, suggests that we should be more forward-looking. The Committee has sought clarification from the Treasury of how it proposes to interpret the sustainable investment rule in the next economic cycle. Clarity on the issue will enhance credibility and strengthen the framework, and will help one and all in ensuring confidence in the whole system. On the prospects for public expenditure and the role of the comprehensive spending review, my right hon. Friend the Chancellor announced a tight envelope for the CSR in his Budget. However, he can expect much attention from the Treasury Committee in the months leading up to the announcement of the comprehensive spending review, especially in regard to allocations to Departments, and understandably so. It is important not to lose sight of the framework of public sector agreements and delivery agreements that are intended to underpin the spending settlements. Public service agreements have sought to link increased expenditure with programmes for reform and targets for improvement. Frameworks for reform and continuous improvement are all the more important in the context of a period when public spending is expected to fall as a proportion of gross national product. When the Chief Secretary to the Treasury appeared before the Treasury Committee, he informed us of plans for fewer but better PSA targets. That is encouraging, but Parliament, and Select Committees in particular, should be involved in the formulation of those targets to see that they are clear, measurable and linked to the resources available. I ask the Government to work more closely with all Select Committees to ensure that that is the case, because insufficient work has been done in that area. Along with the Chairman of the Public Accounts Committee, I am looking at the issue of financial reporting by the Treasury to Parliament. Financial reporting is complex; indeed, some would say that it is gobbledegook in many cases. If we cannot trace the money and we do not have that parliamentary accountability, confidence is reduced. The Treasury can expect further contact from me and the Liaison Committee on this issue in order to simplify the financial reporting to Parliament so that we can inform the House of where the money is and where it is going. There is also the issue of the importance of education expenditure, and the delivery of capital expenditure in education in particular. The Chancellor made that very much the centrepiece of his Budget. The themes that I have just referred to demonstrate the challenges in education spending. The Chancellor is right to stress the centrality of education expenditure. An educated and skilled work force is important if we are going to respond to the global competitiveness agenda in front of us. But I suggest that extra resources are not enough. It is the responsibility of the whole Government, including the Treasury, to ensure that the money made available is spent to deliver the objectives. At the last pre-Budget report hearing, the Chancellor appeared before the Treasury Committee. Members of the Committee, not least my hon. Friend the Member for Leeds, East (Mr. Mudie), questioned Treasury officials and Ministers thoroughly on what they do to ensure that the money allocated is spent. The answers received, particularly in the context of the ““building schools for the future”” programme, were not always convincing. I warn the Chancellor that when he comes before the Committee, that theme, in terms of education and new schools, will be raised. What about the money that is being allocated to those schools? When are they being built? When will they be completed? Those are simple questions and we wish to have the answers to them, particularly when the Chancellor comes before the Committee next week. More money for education is welcome, but attention needs to be paid to the capacity of schools, local authorities and Departments to deliver allocated spending, particularly in the context of capital programmes. Mention has been made about money going to front-line services by means of efficiency savings in the Chancellor’s Budget statement. There is a need for transparency in demonstrating the success of the efficiency programme across Government. The Gershon efficiency programme is the most ambitious programme of its kind under any Government. The Chancellor today announced new figures on the progress being made, which is encouraging. However, the Treasury Committee has found it hard to match up the assertions of massive efficiency savings, achieved without reductions in service to the public, with the experience on the ground in areas such as Jobcentre Plus. Many of us in the Chamber have had representations from our constituents who work in the Jobcentre Plus area. It is also hard to correlate reported efficiency savings in Departments such as the Home Office with other evidence on effectiveness and financial management. In the last pre-Budget report, it was mentioned that the Home Office has achieved 95 per cent. of its targets on efficiency savings. That was at the same time as the Home Secretary called it a Department that was not fit for purpose. That just does not add up and therefore there is more need for transparency and clarity. Challenging targets for efficiency savings in the years up to 2011 have already been set, but the Government need to attach priority not only to managing the new efficiency programme within government, but to ensuring that it is reported in ways that ensure parliamentary and public confidence in its delivery. I come to the importance of environmental considerations and the economics of climate change in Treasury policy, now and in the future. The Chancellor is right to put environmental considerations at the forefront of the Budget. He is also right to stress the role of incentives, as well as taxation, in changing behaviour. The carrot-and-stick approach works more than anything. Taxation can be a blunt instrument in an environmental context. That is clearly true for aviation, where both current and proposed taxation instruments have been criticised. When representatives of the aviation industry appeared before the Committee during our inquiry into environmental taxation, they were not very clear or persuasive about what they were doing in this area. It is time for the industry to raise its game and to participate fully and constructively in the public debate, rather than heckling from the sidelines. After all, the industry is not in the emissions trading scheme in the European Union until 2011. It does not pay taxation on its fuel, unlike the ordinary motorist or businesses in the country. It has a window of opportunity between now and 2011, when it will go into the emissions trading scheme, to show its metal and to show what it is going to do in terms of the environment. I make a plea to the Government to ensure that there is a fair price for carbon in the emissions trading scheme. There will be a lot of lobbying going on in the next few years, but if we do not ensure a fair price for carbon in the emissions trading scheme, the merits of that scheme will be lost.