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Work of the Committee in 2005–06

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Work of the Committee in 2005–06 House of Commons Treasury Committee Work of the Committee in 2005–06 Third Report of Session 2006–07 Report, together with formal minutes Ordered by The House of Commons to be printed 16 January 2007 HC 191 Published on 26 January 2007 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Treasury Committee The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury and its associated public bodies. Current membership Rt Hon John McFall MP (Labour, West Dunbartonshire) (Chairman) Mr Colin Breed MP (Liberal Democrat, South East Cornwall) Jim Cousins MP (Labour, Newcastle upon Tyne Central) Angela Eagle MP (Labour, Wallasey) Mr Michael Fallon MP (Conservative, Sevenoaks), (Chairman, Sub-Committee) Mr David Gauke MP (Conservative, South West Hertfordshire) Ms Sally Keeble MP (Labour, Northampton North) Mr Andrew Love MP (Labour, Edmonton) Kerry McCarthy MP (Labour, Bristol East) Mr George Mudie MP (Labour, Leeds East) Mr Brooks Newmark MP (Conservative, Braintree) John Thurso MP (Liberal Democrat, Caithness, Sutherland and Easter Ross) Mr Mark Todd MP (Labour, South Derbyshire) Peter Viggers MP (Conservative, Gosport) The following members were also members of the Committee during Session 2005–06: Lorely Burt MP (Liberal Democrat, Solihull) Damian Green MP (Conservative, Ashford) Susan Kramer MP (Liberal Democrat, Richmond Park) David Ruffley MP (Conservative, Bury St Edmunds) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. The Committee has power to appoint a Sub-Committee, which has similar powers to the main Committee, except that it reports to the main Committee, which then reports to the House. All members of the Committee are members of the Sub-Committee, and its Chairman is Mr Michael Fallon. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) from Session 1997–98 onwards are available on the Internet at www.parliament.uk/parliamentary_committees/treasury_committee. A list of Reports of the Committee in the present Parliament is at the back of this volume. Committee staff The current staff of the Committee are Colin Lee (Clerk), Fiona McLean (Second Clerk and Clerk of the Sub-Committee), Adam Wales and Aruni Muthumala (Committee Specialists), Lis McCracken (Committee Assistant), Michelle Edney (Secretary), Tes Stranger (Senior Office Clerk) and Laura Humble (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Treasury Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5769; the Committee’s email address is [email protected]. Media inquiries should be addressed to Laura Humble on 020 7219 2003. Work of the Committee in 2005–06 1 Contents Report Page Summary 3 1 Introduction 5 The scope of the Treasury Committee’s work 5 Purpose and structure of this Report 5 2 Overview of work 7 Themes of our work and subjects covered 7 Visits 8 3 Performance of the core tasks 9 Introduction 9 Task 1: Examination of policy proposals 9 Task 2: Identification and examination of certain policies 11 Task 3: Scrutiny of draft bills 12 Task 4: Examination of departmental documents and decisions 12 Task 5: Examination of expenditure 13 Task 6: Examination of Public Service Agreements and targets 14 Task 7: Monitoring of associated public bodies 14 Task 8: Scrutiny of major appointments 16 Task 9: Examination of implementation of legislation and policy 17 Task 10: Informing parliamentary debate 17 4 Working practices 19 Follow-up activities 19 Other new approaches 21 Staffing and wider support 21 Relations with HM Treasury and other public bodies 22 General 22 Government replies 23 Looking to the future 25 Conclusions and recommendations 26 Annex: Tables 27 Appendix 1: Letter from the Paymaster General to the Chairman of the Sub- Committee 34 Appendix 2: Memorandum of evidence received by the Committee for its inquiry into the 2006 Budget 35 Formal minutes 38 2 Work of the Committee in 2005–06 Work of the Committee in 2005–06 3 Summary This Report gives an account of the work of the Treasury Committee and of its Sub- Committee in 2005 and 2006. The Report identifies four main themes of that work: • A continuing priority for scrutiny of key elements of economic policy, including fiscal and monetary policy; • A growing emphasis on the international dimension of economic policy, including the effects of globalisation; • A wide-ranging examination of the capacity of public policy and the financial services industry to respond to the needs of the financially-excluded and those with less experience of financial products; and • An increased commitment to scrutiny of the administration of the Chancellor of the Exchequer’s departments other than HM Treasury, with a particular focus on the effectiveness of HM Revenue & Customs in fulfilling its increasing range of duties in the area of income distribution as opposed to revenue collection. We analyse the extent to which our work has fulfilled the core tasks of departmental select committees. We then describe important aspects of our working practices, including endeavours to promote the implementation of recommendations in Reports of the Treasury Committee in the last Parliament. Finally, we make observations about how relations between the Committee and HM Treasury could be strengthened. Work of the Committee in 2005–06 5 1 Introduction The scope of the Treasury Committee’s work 1. HM Treasury is the United Kingdom’s economics and finance ministry. It is responsible for formulating and implementing the Government’s financial and economic policy.1 Our duty to scrutinise such wide-ranging responsibilities ensures that the scope of the Treasury Committee’s work is similarly wide. Our work encompasses examination of fiscal and monetary policy, study of the operation of financial services markets, and their impact on consumers in particular, and consideration of the operation of the several departments and public bodies which report to the Chancellor of the Exchequer. These include HM Revenue and Customs, which is now responsible for a substantial element of the welfare state as well as performing the traditional revenue and duty collection functions of its predecessor departments. Purpose and structure of this Report 2. The concept of annual reports by select committees originated with a Report by the Liaison Committee published in March 2000 which advocated a more systematic approach by select committees to critical examination of their own work and its impact.2 The Treasury Committee in the 1997–2001 Parliament reported on its work in December 2000, surveying activities of the Committee and its Sub-Committee during the Parliament which began in 1997 to that point.3 The Treasury Committee in the 2001–05 Parliament reported on its work in the early months following its establishment in a memorandum to the Liaison Committee.4 Subsequently, in respect of each calendar year from 2002 to 2004, the then Treasury Committee published an annual report on its work early in the following calendar year.5 3. The main purpose of this Report is to provide an account of the work of the Treasury Committee in the current Parliament from its appointment until the end of 2006. In addition, in order to provide continuity, some mention is made of the activities of the previous Committee in the last months of the 2001–05 Parliament. The work of that Committee formally came to an end with the dissolution of Parliament on 11 April 2005.6 The membership of the Committee in the present Parliament was determined on 13 July 2005 and we held our first meeting the following day. 1 www.hm-treasury.gov.uk 2 Liaison Committee, First Report of Session 1999–2000, Shifting the Balance: Select Committees and the Executive, HC 300, paras 51–55 3 Treasury Committee, First Report of Session 2000–01, Work of the Treasury Committee and Treasury Sub-Committee, HC 41 4 Liaison Committee, First Report of Session 2001–02, The Work of Select Committees 2001, HC 590, Appendix S 5 Treasury Committee, Fifth Report of Session 2002–03, Annual Report for 2002, HC 491; Treasury Committee, Fourth Report of Session 2003–04, Annual Report for 2003, HC 386; Treasury Committee, Third Report of Session 2004–05, Work of the Treasury Committee in 2004, HC 335 6 The last meeting of the House of Commons in the 2001–05 Parliament was on 7 April 2005; the then Treasury Committee held its last meeting on 5 April 2005. 6 Work of the Committee in 2005–06 4. Chapter 2 of this Report provides an overview of the current Committee’s work to the end of 2006. In chapter 3, we analyse the activities of the Committee thematically in relation to the “core tasks” assigned to select committees, and departmental select committees in particular, by the House of Commons and the Liaison Committee. Chapter 4 deals with the Committee’s working practices and relations with the Treasury. Work of the Committee in 2005–06 7 2 Overview of work Themes of our work and subjects covered 5. There were four main themes to the work of the Treasury Committee and its Sub- Committee in 2005 and 2006: • A continuing priority for scrutiny of the key elements of economic policy, including the conduct of fiscal policy
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