Select but not strong

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The Independent Online
Fine organisations, our Commons select committees. But sometimes it is embarrassingly obvious they are doing their best with extremely limited resources.

This has long been clear because, too often, committee members ask soft questions, fail to follow promising leads and distract themselves by scoring political points off each other. Television coverage of committee hearings has been exposing these faults ruthlessly.

Some committees are better than others, and much depends on the persistence of their chairman; but their fundamental problems are limited resources and high workloads.

It seems unlikely that much will be done about it. The committees have become more ambitious in recent years, but the way they work has changed surprisingly little in the quarter of a century since MPs decided to hold regular public hearings on industrial, technological and economic issues.

This inaction is a pity, since the committee system is one of the obvious ways to make quangos, regulators and - if it ever becomes properly independent - the Bank of England more accountable for their actions. A growing number of MPs would like to see this happen. But the idea is not sensible for select committees in their present shape.

For example, direct reporting to Parliament is one of a number of possible ways to increase the accountability of the Bank, if the Government gives it a statutory independent role in setting monetary policy. But the idea that an independent Bank should be accountable to a Commons treasury committee rather than the Chancellor of the Exchequer is faintly ridiculous.

Within its limitations, the select committee is a good one, but it does not have the political clout nor the technical expertise. Governors of the Bank of England can run rings round a committee.

Another area where direct accountability might be desirable is the Securities and Investments Board, the senior City watchdog. The regulatory system has seen big changes under three separate chairmen, each of whom has developed his own idea of what the Financial Services Act means.

The most recent shift has been to dilute the influence of the financial industry in the Personal Investment Authority, the junior body that aims to control the personal savings market.

Right or wrong, the industry feels vulnerable, as it is regulated by a system in which it sees weak accountability. Andrew Large, the present SIB chairman, has tried to encourage debate about how the board should operate. He calls this accountability, but he may be confusing it with openness.

Mick Newmarch, chief executive of the Prudential, was scathing about this contradiction in his evidence to the treasury committee. He said 'an amorphous sense of accountability to the general public would encourage the development of regulation on subjective, not objective criteria; this is wrong'.

The fact is that the SIB chairman is appointed by the Chancellor with the agreement of the Governor of the Bank and reports to the Chancellor in private. MPs may question Mr Large as much as they like but they can only exert power indirectly, and usually without much success, by trying to influence a Chancellor who has the Treasury's resources at his command.

ROLE MODELS

A third promising area in which Parliament could take a greater role is monopolies and competition policy. It is possible Britain may eventually shift towards the German model, with the Office of Fair Trading taking on some of the functions of the Monopolies and Mergers Commission.

MMC inquiries are carried out by panels of external members, and they are not always as consistent or thorough as they should be. A full-time professional investigation body would probably do it better, but would accountability to a minister be enough? Select committees could have a role to play, but in their present form would not be up to the job.

One role model much canvassed over the years is the US Congress, whose committees have large secretariats and great influence over the passage of legislation and appointments to public posts. But US committees would not transplant here since they deal at arm's length with an administration of presidential appointees, not party politicians, in a different political framework.

But there are home-grown options. In the UK, there is one committee noticeably more influential than the rest. The Comptroller and Auditor General reports to Parliament through the Public Accounts Committee. It scrutinises the way government money is spent on the basis of reports by his department.

If other committees had access to specialist resources, not necessarily on the same scale, they might rise to the job of making the Bank, SIB and other organisations more accountable. And the committees themselves might become less party political if they were seen to have real power in their own right.

In the 1970s, influential advocates of enlarging the role of select committees - such as Dick Crossman, the Labour minister whose diaries chronicled the Wilson government - argued long and hard for greater back-up. But they were defeated by parliamentarians of the left and right who believed nothing should be done to weaken the role of the floor. Little has changed since then.

But with new and powerful bodies emerging to influence the economy and the financial world, and growing concerns over their accountability, perhaps it is time to look at this again.

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