UNREVISED PROOF COPY Ev 3 HOUSE OF LORDS MINUTES OF EVIDENCE TAKEN BEFORE THE SELECT COMMITTEE ON THE CONSTITUTION CABINET OFFICE INQUIRY WEDNESDAY 17 JUNE 2009 LORD BURNS GCB and SIR RICHARD MOTTRAM LORD LIPSEY, LORD McNALLY and LORD DONOUGHUE Evidence heard in Public Questions 75 - 106 USE OF THE TRANSCRIPT 1. This is an uncorrected and unpublished transcript of evidence taken in public and reported to the House. 2. The transcript is not yet an approved formal record of these proceedings. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk to the Committee. 3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Clerk to the Committee. 4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee. 5. Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT Telephone Number: 020 7233 1935 WEDNESDAY 17 JUNE 2009 ________________ Present Goodlad, L. (Chairman) Morris of Aberavon, L. Norton of Louth, L. Pannick, L. Peston, L. Quin, B. Rodgers of Quarry Bank, L. Rowlands, L. Shaw of Northstead, L. Wallace of Tankerness, L. ________________ Memorandum submitted by Sir Richard Mottram Examination of Witnesses Witnesses: Lord Burns GCB, a Member of the House, former Permanent Secretary, HM Treasury (1991-98), and Sir Richard Mottram, former department Permanent Secretary and senior official at the Cabinet Office, examined. Q75 Chairman: Lord Burns and Sir Richard, can I welcome you most warmly to the Committee. Thank you very much for coming. We are being televised and recorded so could I please ask you to formally identify yourselves for the record. Lord Burns: I am Lord Burns. Sir Richard Mottram: I am Richard Mottram. I used to be a civil servant and worked three times in the Cabinet Office. Q76 Chairman: Thank you very much indeed. Can I kick off by asking which key constitutional issues you think the Committee ought to have in mind in our inquiry into the role of the Cabinet Office and central government? 2 Sir Richard Mottram: I think there are four of probably slightly different character and importance, but the first is, and you will probably spend quite a bit of time on this, the relationship between the Prime Minister and the Cabinet and the roles of Cabinet committees and departmental secretaries of state. There is a whole cluster of issues there which it seems to me are important. The second is the impact of evolution, which perhaps we are only now really beginning to see the full effect of, where we have devolved Governments of a different political party from the Government in Westminster, and I think that has important implications. The third area I touched on in my evidence, which I certainly think is important but whether it qualifies as constitutional I do not really know, is the relationship between ministers, special advisers and civil servants because all of that I think has developed in different ways in departments and in the centre and could further develop in ways that are “constitutional”. Lastly, I would just touch on the relationship between the executive and the legislature because, although this has not always been the case, now in the Cabinet Office you have the leaders of the House of Commons and the House of Lords, and so the agenda going forward on the relationship between the executive and the legislature and how we might somewhat change the balance and make the whole process of legislation more effective and so on. All of that will now rest, I think, inside the Cabinet Office and more clearly I think is seen now as a central function of some importance. Lord Burns: I did not work in the Cabinet Office; I only worked in the Treasury. My perspective on this was the Treasury’s relationship with the Cabinet Office and how we worked together in terms of the design of government strategy and the financing that went along with that. The issue that I was most familiar with which might very broadly be described as a constitutional issue is the first of those that Sir Richard mentioned, which is how far should the centre be about the design and co-ordination of government strategy and the monitoring of progress against that strategy, and how far should the centre itself get into 3 the executive activities of departments; to what extent, when it was trying to deal with cross- cutting issues, it should find itself in the lead on questions and how far it should be pulling together the contributions of other departments. It is always a very difficult borderline, but the issue of the capacity at the centre I think does have a lot to do with how far it has a co- ordinating role and how far it has a role which is rather wider than that. I suppose I saw over the time that I was in the Civil Service a move from the first a little bit more towards the second. Q77 Lord Morris of Aberavon: Could I ask in particular, Lord Burns, about the role of the Treasury. Man and boy I am used to so many bills being put forward and clauses with a consent to the Treasury. The Treasury is part of the centre. Has it increased or decreased in influence? My memory goes back to the 1960s when I was a junior minister looking after equipment in defence and, whilst we were very good at second-guessing things which were easy to understand, in transport or in nuclear power, huge projects of that kind, your ability to second-guess was somewhat limited. Lord Burns: The role of the Treasury, of course, if you look back over 100 years, has changed to some degree but I do not think it has changed significantly in terms of its overall importance or impact upon government. Once upon a time most of the heads of finance in the departments of government were Treasury people who were out on secondment. The Treasury really kept a stranglehold then not only in terms of the figures but also in terms of the people. What has happened, of course, over time is that the departments have developed much more capacity themselves in terms of finance. An issue I had as permanent secretary during much of the nineties was trying to find a balance between the extent to which the Treasury was involved in the nuts and bolts of this and the extent to which they would be second-guessing and looking at every line of expenditure in great detail, and the extent to which we were really trying to spend more time on the priorities of government, what you 4 might think of as the strategic objectives of government, and trying to develop relationships with the Treasury so that there was more power left with the departments about the use of the money. Whenever times are tough, whenever it becomes difficult, whenever there is pressure upon expenditure, I am afraid the Treasury tends to exercise its muscle, and, of course, it has muscle. I have to say that I think it is very important that it should have because in a system where you have got a lot of departments which have themselves a lot of legal powers, where very often they have their own agendas which they wish to pursue, someone has to be able to hold the finances together in a way which meets the Government’s overall financial objectives. It is a very flat form of organisation, I suppose, in modern management parlance. You have got a huge Cabinet. The methods by which decisions are taken about priorities are not always as clear as they might be and the Treasury is having to play an important role in making sure that out of that process you get something where total levels of expenditure are consistent with what it is the Government wants to achieve. It tends to go a bit in waves, I would say, the role of the Treasury, its influence and the way it conducts it business, depending upon the general economic climate. Q78 Lord Rowlands: How much do you consider 1997 to be a kind of watershed? How much of a change took place post-1997, or were these trends already existing? Sir Richard Mottram: I think there were some significant changes post-1997. Just to say a word about pre-1997, if we are thinking about the relationship, let us say, between the Prime Minister and the Cabinet, rather like the point that Lord Burns was making about the Treasury, I think that fluctuates. If we think about the Thatcher years versus the Major years, that was a very different relationship, so these things change. What I think happened after 1997 was that there was a shift in the power of the Prime Minister relative to departmental secretaries of state and there was a shift in the power of the Prime Minister relative to the Cabinet, and I think there was a shift in the Prime Minister’s interest in the mechanisms of 5 collective government and all the machinery and paraphernalia that went with that. I do not think Mr Blair was very interested in that.