Economy, Energy and Tourism Committee, 08 Oct 2008

Meeting date: Wednesday, October 8, 2008

Official Report 271KB pdf

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Council of Economic Advisers (Invitation)

Item 4 concerns our invitation to the Council of Economic Advisers. The original intention was that Sir George Mathewson should attend the committee's meeting of 8 October, but for various reasons—I do not need to go into detail—that has not proved possible. There is an exchange of correspondence on the matter between the First Minister and me. It would have been particularly useful if Sir George Mathewson could have been here today for our consideration of some economic aspects of the budget. As part of the budget process, it would have been useful for us to hear what the Council of Economic Advisers is advising the Government in relation to the budget. The correspondence to which I referred has been included in committee papers for information. If members have views on the matter, they are free to express them.

It is disappointing that Sir George Mathewson has not seen fit to respond positively to the committee's invitation, which has been lying with the Scottish Government since July. That causes me some concern. It is a reasonable expectation that anyone who is engaged in any way with public service should see accountability as a primary part of their duties. When the Council of Economic Advisers was established, that was specifically and explicitly described as one of the roles that Sir George would play on behalf of the council in relation to committees of the Parliament. Since we issued our invitation this year, questions have been raised about the quality of advice that has been given to the First Minister on Scottish economic matters and about the consistency of his views on current banking and financial issues with those of members of the Council of Economic Advisers, as their views appear to be at variance with one another. It would have been particularly helpful—today of all days—for us to have heard from Sir George on that point.

When I was looking at the papers for today's meeting, I glanced up to see that Sir George Mathewson was on television enunciating his views on the performance of the UK Treasury, to which he is not an adviser. That happened yesterday—the day before the date on which he was invited to give evidence to the committee. It struck me as odd that he was so willing to make known his views on the performance of the Treasury. He was critical of the chancellor in ways that I found quite surprising, given his role in relation to the Scottish Government. At the same time, he finds it impossible to agree to attend a meeting of a parliamentary committee to which he has already spoken. We are surprised and disappointed at that. There is cause for us to pursue the matter and to seek not only his attendance at an early meeting of the committee but his agreement that it is part of his remit to describe the quality of advice that he is providing to ministers.

To take the politics out of the issue, I note that the annual report of the Council of Economic Advisers will be published in early November. Given how long it may take this situation to play out, it may be appropriate for Sir George Mathewson to appear before the committee on 19 November, as has been suggested. It is up to us to ensure that we get that timetable.

I wonder whether comments in the current hothouse atmosphere might deflect us from the fact that a timescale for the Council of Economic Advisers was agreed last October. Given that the annual report is about to be published, surely that would be a good time to hear from the council.

I am not sure that this kind of tit-for-tat situation, with one body accusing the other of not responding, helps anyone. For example, in his response dated 25 September, the First Minister claims that the clerk did not respond

"until early September … to the Scottish Government Secretariat's initial response".

We really do not want to go down that road.

I do not recall deciding after our previous session with Sir George Mathewson to call him before us again before the council's first year was up. I know that we said that we certainly wanted to speak to him again. Given that, for whatever reason—and I do not wish to get into whose fault it was—he did not get the invitation until well after July, it would have been very difficult for him to come before us before November. We should simply accept that we are going to see him in November, make the best of it and not get bogged down in who was right and who was wrong with regard to the correspondence.

I remind you that in the work programme that was agreed on 10 September it was decided that we would seek to have Sir George Mathewson at this meeting.

I was talking about last year—

Indeed, but I do not want to get into a debate about what happened last year. All I am saying is that on 10 September the committee agreed a work programme that included an evidence session with Sir George Mathewson at this meeting.

I know that, convener, but he could not come because he did not get notice. No one agreed to send the letter in July, inviting him to this meeting. I certainly did not; after all, we were in recess at the time. It is important that we get these things in perspective.

Well, that matter had obviously been agreed by the convener at the time.

By and large, convener, your letters capture and take care of most of the issues. If, as it appears, Sir George Mathewson received the invitation too late and simply could not make it to today's meeting because of a pre-existing commitment, we cannot really complain about it. A commitment has been made for 19 November, so we should take that opportunity.

In general, though, you are right to say that, if necessary and where it can be arranged, we should be able to call on witnesses to attend meetings at short notice. As you said, we did not agree that we would not call back a representative from the council until the annual report was published; I believe that we said that that would be a good time to call someone back, but there has to be some flexibility. If the committee wants information, it should be able to request witnesses to attend.

On this occasion, it appears that Sir George Mathewson got the invitation late and was too busy to attend. I certainly accept that at face value.

I am not blaming Sir George Mathewson for not being able to attend today. It is clear that he had a prior commitment. However, in my letter to the First Minister dated 19 September, I suggested that another member of the council or indeed the First Minister himself could attend in Sir George's stead. I find it slightly unfortunate that the First Minister did not respond to that part of the letter.

Indeed. I entirely accept the point that if the Scottish Government failed to pass the invitation on to the chair of its Council of Economic Advisers, the blame lies with that decision, not with Sir George Mathewson.

I am disturbed by how much all of this reminds me of our recent debates on the Energy Technologies Institute and on how things that might seem very clear and straightforward can get lost in the thicket. It would have been very good to hear what Sir George Mathewson had to say about, for example, the role of short selling in what has happened to HBOS and the Royal Bank of Scotland. However, despite the committee, convener and the clerk taking the necessary steps to get Sir George to attend this morning, problems with the Government's mailing system mean that that will not happen until the middle of November. Given that we are in the eye of the storm, that is unfortunate, and we should make that view known to Government. After all, when a parliamentary committee contacts Government and says, "This is what we'd like to happen," it should reasonably expect the Government to expedite the request.

It is important that we let the Government know our view on the matter. This is a point of principle. I accept that an error was made, but the fact is that we are in a crisis and we must be able to call witnesses before the committee. I agree with Lewis Macdonald that we should set out our stall and say that we hope that this does not happen again. It is unfortunate, to say the least, that we now have to wait until 19 November.

It certainly is unfortunate, not least because in our consideration of the budget we have decided to focus on how the Government intends to deal with the current economic situation. The best people who can tell us about the advice that is being given to Government sit on the Council of Economic Advisers, and I would prefer it if someone from the council came before us during rather than after our consideration of the budget.

On that basis, I recommend that we write again to the Government to ask whether someone from the council—or, if he prefers, the First Minister—can attend one of our meetings between now and the end of the budget process. If no other date is available, I am willing to include the meeting of 12 November, given that our report will not be finalised until then. Obviously, if that is not possible, we will have to accept the offer of 19 November, but the committee would be better served by a member of the council coming before us before then.

Are members agreed?

Do we have to finalise our deliberations by 12 November?

Yes. The report has to be with the Finance Committee thereafter.

I do not disagree that it would be good if someone from the Council of Economic Advisers could attend before we finalise our report on the budget on 12 November. However, I do not think that we should go down the road suggested by Lewis Macdonald and start blaming the Government. That would mean that we would have to look at the Government's claims that it did not receive a response from us "until early September". That is sterile ground.

I am not getting into any of that. I am simply suggesting that the committee write back to the Government, saying that it would allow us to get the best out of our consideration of the budget if the chairman or another member of the council gave evidence to the committee on the council's advice to Government before we conclude our deliberations on the budget. I assure members that I will be as diplomatic as possible.

Are members agreed?

Members indicated agreement.