Finance Committee, 04 Apr 2000

Meeting date: Tuesday, April 4, 2000

Official Report 117KB pdf

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Bills (Financial Provisions)

On Monday, all members should have received a paper entitled "Financial provisions in Bills". Given that we have received the paper only recently, members may want to look through it. Sarah Davidson will say a few words on it.

I will merely run through the salient points, as members have the paper before them. At the end of the previous discussion of this subject, the clerks were asked to consult our colleagues on subject committees to ascertain whether their committees expect to consider financial provisions as part of the legislative process. This note is a report on our discussions, which confirmed our initial view that consideration of financial provisions by subject committees is part of the legislative process. The report offers the committee a number of options that could be proposed to the Procedures Committee that would clarify or change existing arrangements for the scrutiny of financial provisions in policy legislation.

Do members have any comments?

Could Sarah run through the options that are outlined in the paper?

The first option would cover when the Finance Committee wanted to be the committee that carried out in-depth scrutiny of the financial provisions relating to particular policy legislation. At the moment, the standing order is not clear on what the committee should do to that end; it merely states that it should consider the provisions. The proposal is that standing orders should be amended to make it clear that in those circumstances the Finance Committee should examine the financial memorandum. Other considerations would flow from that: the committee would have to discuss the extent to which it wanted to take evidence from stakeholder organisations and how it meshed in with subject committees at the pre-legislative stage and stage 1 when doing that.

The second option would cover when the Finance Committee wished to leave the in-depth scrutiny of financial provisions to subject committees, but to require them to do it rather than simply to leave it open to them to do it. Currently, rule 9.6.3, which is reproduced at the end of the paper, requires subject committees to report on the policy memorandum. It could be proposed that they should also be required to report on the financial memorandum.

The third option is similar in intent, but would leave within subject committees' discretion whether they reported on the financial memorandum—in other words, standing orders would not be changed to require them to do it.

The final option would cover when the Finance Committee wanted to keep a handle on what was happening, particularly where that affected a budget that had already been agreed by the Parliament. Under this option, whenever a bill, if passed, would have significant implications for a budget already scrutinised and agreed by the Parliament, the subject committee involved could refer the matter to the Finance Committee for a report. Our intention was to set out a range of options for consideration by the committee.

I suggest that we support options (b) and (d). Option (b) would require the subject committees to consider the financial provisions in bills when taking evidence on them. Option (d) would give us the right to intervene if there was a problem. Because we have asked subject committees to consider their budgets in more detail and have taken a hands-off approach, they are in a better position to carry out this function than we are.

I support that.

There is a great deal to be said for that.

I would support Rhoda Grant's suggestion, so long as we clarify what "significant implications" means. Would we need to put a figure on that?

Do members have any suggestions for how we define "significant implications"?

Why do we not say "any implications", or is that too open? How is "significant" defined?

We could define it as implications for another department's budget. If there were implications only for the budget that the committee is shadowing, it would know what those implications were—they would be within its departmental spend, so to speak. If another departmental budget was going to lose money as a result of a particular measure, the matter should be referred to us, so that we can oversee the process and find out from the other committees involved what the implications for them are likely to be.

That would be a sensible approach when bills have a significant impact on somebody else's departmental budget.

I am slightly concerned by option (d). It says that

"the subject committee could refer the Bill to the Finance Committee".

Should not it be "should" or "would"?

Can we pull this together? It is suggested that we say that when considering bills and putting together stage 1 reports, subject committees must also report on financial memorandums, but that when a bill has serious financial implications for a parliamentary committee's subject area, that committee should refer the bill to the Finance Committee.

Does that mean that if a committee recommended the passing of a bill that reduced the budget for its subject area, that bill should be referred to us? Surely it should.

A way of approaching it would be to say that it should be referred if the bill required an in-year budget amendment. In other words, departmental budget movements in either direction should be referred to the Finance Committee. That would cover both situations.

Yes. Thank you. That is where the clerk's expertise comes in.

I am happy with that. Is the committee happy?

Members indicated agreement.

We are going to move into private session to consider the fifth and last item on the agenda this morning, which is on the research budget, so I ask anyone who should not be here to leave.

Meeting continued in private until 10:52.